National Defence Committee on June 16th, 2023

[Christine Normandin, Bloc, Saint-Jean, QC]

Thank you very much.

I'd like to take this opportunity to thank the two witnesses for being here.

You touched on the defence procurement strategy, which is already about 10 years old. I know that some countries have one, and they review it systematically.

Should we do the same thing to have better continuity of supply, to be more flexible and quick to react, and always act at the right time rather than reactively when something happens?

[Alan Williams]

Do you want me to go first?

Thank you for your question. I will answer in English; it will be easier for me.

Defence procurement has to be the result of the government's policy direction on defence. The government should be standing up and saying, “This is the role we see the Department of Defence playing in Canada and the world.” Then, turn to the military and the civilians in DND and say, “Based on that articulation of the mandate we want you to fulfill, what is the implication for procurement? What are the goods and services you need to acquire, and what is their cost?”

Periodically, the military has produced different [Inaudible—Editor]. “Strong, Secure, Engaged” is a recent one, and they continue to do this. However, that linkage isn't made in a rigorous enough way for you to identify one from the other. Why that is so important is because, if the military comes back and says, “This is the cost”, the government then has to make a decision. If the cost is much higher, they have to be prepared to modify the role and mandate they see the military performing, or say, “We're going to give you x billions of dollars so you can do what you say you need to do to fulfill the role we think you should fulfill.”

First of all, we don't do that rigour. We don't have the kind of 30-year articulation that I'm talking about, so we operate in a vacuum with projects going forward and being delayed, and with no one knowing exactly what the status is. I think that's where the big problem lies.

[Christine Normandin, Bloc, Saint-Jean, QC]

Do you want to add anything, Mr. Perry?

[Dr. David Perry]

I would just say, quickly, that I think there needs to be much more focus on actually implementing those policies. They don't change hugely. There's very little follow-through on the actual implementation of them. There's not enough attention to detail when new policies are being published about the capacity to actually deliver the things in them that the government is committing to, regardless of political stripe.

[Christine Normandin, Bloc, Saint-Jean, QC]

Thank you very much.

I'd like to hear your opinion on the munitions supply program. It's been almost a year and a half since the invasion of Ukraine began, and we know that there are still supply issues. Canada is unable to provide Ukraine with ammunition despite the fact that there's a program here that was supposed to remain operational in peacetime.

Have we effectively managed this program and other similar programs that were established so we could react quickly to international events and fulfill our role as an ally?

[Dr. David Perry]

I think we're underutilizing our own defence industrial base. I go back to my comments earlier that we don't have enough production capacity across NATO to meet the demands of Ukraine and re-equip ourselves as well as our allies. Ammunition in particular is an area where there seems to be a chronic shortage right now. Lots of our allies are stepping up to try to meet that.

I would note that the European Union's bureaucracy seems to have been able to land on a plan to start re-equipping...with ammunition before we have. Without disrespecting the European Union, I think we should find it a little embarrassing that they've been able to get their act together before we could. I think our ammunition capacity nationally, along with some others, is one that's being underutilized. There's a lot more potential for us to work collaboratively with more of a strategic plan, as Alan was saying, to better use our own national production capacity.

[Alan Williams]

I agree totally with David, and I would especially echo that we now have proof, with what's going on in Ukraine, of how incapacitated we are. It's not just munitions; it's armoured vehicles. You can go through the whole list of things that we ought to have been able to respond to, but we've been negligent; we've been depleted. Again, it's because we do not have a comprehensive linkage plan that supports what we say we're going to do, buttressed with the money to do it, so we're getting what we should have expected all along.

[Christine Normandin, Bloc, Saint-Jean, QC]

I'll continue along the same lines, Mr. Williams.

You mentioned the importance of transparency. You talked about the F‑35s and the procurement process. A number of companies, including Saab, have complained that the dice are loaded. For the light-duty vehicles manufactured at Roshel, we saw forward contracts and a lack of transparency.

Is this lack of transparency still an issue, especially when it comes to forward contracts?

This is even more serious in that it's not in any minister's portfolio.

[Alan Williams]

The F-35 is essentially a done deal now. At the end of the day, we are going to get a great jet. The process has gone on for 12 or 13 years, which is absurd, but that is running to a conclusion. I would echo—I don't have any obvious proof, but again—if there were one minister accountable, properly briefed and understanding, I don't think we would have gone through this mess.

One of the things that strikes me, and this is from a bureaucrat, is that one of the key roles of an ADM is to keep our ministers out of trouble. I would say that the ministers I worked with from both parties were wonderful people who wanted to help the department get the job done.

Frankly, what we've seen for decades now are major procurements where ministers, rather than being thanked, are being lambasted for the inadequacy of the process, taking decades to do something that should be done in two, three or four years. Why has that happened? I think that needs to be.... You have to wonder why ministers were set up, frankly, to fail, because these processes are unbelievably negligent.

[The Chair, Liberal, John McKay]

Thank you, Madam Normandin.

We have Ms. Mathyssen for six minutes.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Thank you, Mr. Chair.

Thank you, both, for appearing.

In terms of this streamlining and creating one minister, we've talked about this in committee quite a lot. Often it's the politics that get in the way. In terms of where a new government, a different government, will come from, how would that streamlining impact that problem, or how would you talk about fixing that problem?

[Alan Williams]

That's the obvious problem.

It's easy for me to articulate how to get it done. It's not complicated. I've outlined it. The fact that it hasn't gotten done is all political. Usually, it could be viewed as one minister wins, and one minister loses. That's why my suggestion has always been that the best time to do it is during the course of a campaign where you're going to appoint new ministers. At that time, it's not taking something away from a minister and giving it to somebody else. I think that's the best time to do it.

You're correct, however. It's just political, and as I've said, there's no reason not to do it. It saves money. It saves time. You get better performance measures, so I'd look to this committee to strongly advocate for it, as has the Canadian defence industry. The Prime Minister has asked for it to be done, and it hasn't been done. The Parliamentary Budget Officer also espouses it. You have everybody saying it should be done, but it hasn't been done.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Just to add to that, is there a way to take it out of that political side, but maintaining the transparency and accountability that a minister is supposed to have?

[Alan Williams]

Well, that's the whole point. You don't have accountability now. You cannot turn to a minister and ask that minister to fix defence procurement, because it's split. You can't do your job. Putting this in place gives you a chance to get the job done—at least a chance.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Mr. Perry.

[Dr. David Perry]

I have a different perspective.

I'd just say it seems like it's more important that this matters to the Prime Minister. If it does, that flows through into the direction given to the bureaucracy reporting to him or her and the Privy Council Office —just to go back to Ms. Gallant's question. That's why I was suggesting that some structure in the PCO would be an effective way to structure this.

If it is something that matters to the Prime Minister.... Fundamentally, if the first minister doesn't care, then the rest of the government will respond accordingly. I would again say that I don't see much evidence that it matters to this Prime Minister, and it didn't matter that much to the last one either.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

We just completed a health study, and there were lots of conversations about the lack of data within that. This idea comes to me that it's all linked. If we don't collect the data within either procurement or health matters, if we don't track.... There's a true lack of understanding of what each job within the military needs, what they do, how their body reacts, whether it's from a health response or how they deal with it from a mental health sort of response. There's no tracking of that in terms of surveillance systems, what have you.

We talk about women, for example, needing specific kit and not getting the special fitting correct. Can you talk about that? It seems to me that that data, and that lack of data, is the same in terms of whether we understand what a person has to go through in their daily duties, whether they're sitting at a desk and they're support, or they're on the front lines. Is that the same in terms of what needs to be streamlined for procurement as well? Can you expand on that?

[Dr. David Perry]

My answer would be yes, it's the same general issue. Actually, with procurement, it's in some ways simpler, because despite the fact that the forces are dramatically under strength, there are tens of thousands of troops. There are only a couple of hundred big procurement projects, so surely you can keep track of under 200 projects without having to contract out for a supercomputer to help you with that. It's harder to maintain information on tens of thousands of troops, but we don't seem to make much effort to track a reasonably manageable number of projects with any degree of fidelity.

[Alan Williams]

I would also add that if you look at National Defence's audits and evaluation in December, you see that they highlight the lack of gender-based analytics. They themselves understand that going forward this has to be a critical component of procurements. It seems to me that implementing that should be a simple thing to do, frankly. It's not overly complicated. Understand that you have a diverse group of men and women, and understand that you have to procure the things that suit each one of them appropriately—and with proper measures. You measure that, as you would measure everything else.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

With less than a minute, Mr. Williams, you specifically wrote about sole source versus open source and this miscommunication or this misunderstanding that it actually saves time. Could you expand on that a bit?

[Alan Williams]

Sure.

Very briefly, when you run a competition, all the terms and conditions that anybody would have to comply with are set in that document. When you in fact respond as a bidder, you're acknowledging that you will comply with all of them. Once the winning bidder is selected, there's very little negotiation to be done.

Conversely, if you sole-source, then none of those things are decided upon and, in fact, the leverage is held by the bidder. You've said that you think they can do it. You haven't run a competition, and you can't be sure, but you're going to give it to them anyway. Negotiations can take months, if not years, to finalize a process.

If you do a process, that's fine. When I was there, in fact, I got it down from 16 years to nine years, because with the vice-chief we said to the men and women in the department...two years to prepare an SOR, two years for me to get it into contract, and then five years for delivery.

You can, in fact, speed up the process if you do it smartly.

[The Chair, Liberal, John McKay]

Ms. Mathyssen, it's amazing how less than a minute becomes more than two.

[Alan Williams]

I apologize; that's my fault.

[The Chair, Liberal, John McKay]

No, it's her fault.

We have 25 minutes' worth of questions in the next round, and we have less than 20 minutes to do them in, so the only way we can do that is to take a minute off everybody.

Mr. Kelly, you have four minutes.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you.

Mr. Williams, your point about a single ministerial accountability is very well taken. What about the Prime Minister, though? If the Prime Minister has a lack of focus or interest in procurement, the Prime Minister is going to be a problem. Are there structural ways that could be at least mitigated? Let me ask you to comment on the idea of a procurement secretariat within the PCO.