National Defence Committee on Oct. 24th, 2023

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

Thank you very much for being here, Professor Taylor and Ms. Ross. It's nice to see you.

My first question is for the both of you.

You both talked about how long the procurement process is, from the time that the requirements are defined and the parameters are set for the request for proposals to the time that the final product is delivered.

Is the process just as long the other way around? From the time that the end user can provide feedback on the quality of the product and specify needed improvements, does it take just as long to work through the process? Is that a problem either of you see on your end?

[Prof. Trevor Taylor]

There are two aspects to this. One is that when equipment gets delivered, a high-technology new kit, there are often small, or sometimes not so small, defects in it that get fixed by engineering processes either in government or in the company. That's quite normal. You don't expect a big, complicated piece of kit to work absolutely perfectly from day one. We do our best, but it happens. Sometimes, if the shortcomings are really serious, then there's a big row, but that's relatively uncommon.

The other part of it, though, is that in this day and age you should know that certainly platforms that you acquire are going to need fairly regular, constant updates on them, so this term “open system” is becoming commonplace. It means that you can make improvements without taking the whole machine apart, that it's a relatively simple process to do. With software, that's often relatively easy. Sometimes it's more difficult with things like integrating new weapons onto a platform and so on.

There is fixing the immediate faults, but also recognizing that a thing that's going to be in service even for a decade is going to need in-service improvements and that you want some assurance that it is an open system.

I could give you some examples, but six minutes doesn't allow that. If you write in, I will send you some examples.

[Dr. Alexis Ross]

I'm not sure that I understand the question, based on the discussion we just had.

Would it be okay to repeat it? I want to make sure I am giving you what you're looking for.

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

Actually, I'm going to throw something new in there.

You talked about working more with industry and non-traditional suppliers. When the end user, the military, say, wants to recommend improvements to a system or product post-delivery, is the supply chain able to promptly address the issues and recommended improvements?

[Dr. Alexis Ross]

I understand now.

I would echo what Dr. Taylor said about a modular, open-system approach. It was one of the key pieces of acquisition reform we attempted in this last round of reforms.

Also, I will note that if the requirements are written in a certain way, in a correct way, it provides better opportunity to truly attain what the end-user is looking for—the end-user and the acquisition community being, of course, two different communities.

I'm not sure we have much more time than that, so I will leave it there.

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

Thank you.

Professor Taylor, I want to revisit something you said about acquisitions often having multiple objectives. You mentioned national unity in relation to Scotland.

Is there enough transparency around procurement processes that have various objectives? Are improvements needed so that the public is more aware of non-military objectives associated with a procurement process?

[Prof. Trevor Taylor]

The Ministry of Defence and the government are quite open about their policy stances, and you can read about them in policy documents. Whether the general population wants to take on this burden is quite a different matter.

What we have done in the U.K. is that.... Where they feed into the formal acquisition, procurement processes very much come to the fore when you try to do a competition, because you have to provide what we call an assessment scheme. I think in the U.S. it's an evaluation scheme, but the purpose is the same. You have to tell the bidders how much weight you're going to give to different considerations.

In Britain, certainly today, we have the idea of a levelling-up agenda. That's to say doing things for the economically poorer areas of the U.K. and various other things like environmental considerations, but also the extent to which it will contribute to prosperity. If you put those two together, it can be allowed up to 20% in the evaluation schemes that are put to contractors. So they know. They have an idea of what they have to offer. Contractors treat that as really heavy.

[The Chair, Liberal, John McKay]

Thank you, Ms. Normandin.

Mr. Angus, you have six minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

Last winter, I was in Berlin meeting with the social democratic government. We were in meetings and, at one point, one of the officials stopped, looked around the room and said, “Who would have imagined that we would be in a massive European tank war in the 21st century?” The Ukraine war has upended everything. We are scrambling, coming into the second winter, to supply all manner of needs, from coats to surface-to-air missiles, Leopard tanks and light armoured vehicles.

Ms. Ross, what strain has that put on procurement and the need to be able to suddenly shift gears dramatically, in terms of what we're supplying in the military realm?

[Dr. Alexis Ross]

Thank you.

The situation in Ukraine has been enlightening for the defence department, in terms of how it manages its relationships with industry in particular.

If we look at the example of munitions and the munitions industrial base, what we're seeing today is that much of the materiel we are utilizing and providing to Ukraine—such as 155-millimetre rounds of artillery—are things we don't buy consistently or spend a lot of money on, compared with the rest of the materiel we purchase throughout the Department of Defense.

The consequence of that is an inconsistent demand signal to the defence industry. Without purchase orders and money coming in on contract, companies will not usually invest their capital in facilities to have the production capacity for something the Department of Defense is not buying regularly. As such, they optimize their production lines. With the goal of efficiency and value, they ensure they optimize and reduce these lines. The effect is that, when we ask them to suddenly produce more—in this example, 155-millimetre shells—they are not able to immediately start producing more. It takes time to have that throughput go through the industrial base.

In this case, the ramp-up was several months. At the beginning of the response to Ukraine, it was well cited in news articles that some munitions were taking upwards of two years for their estimated arrival time. The Department of Defense was concerned with that and looked very closely at why that is.

As I said, there is often a symbiotic relationship between the defence-industrial base and the customer—in this case, the Department of Defense.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I think it adds a lot of pressure here in Canada. We are a small player. We do international deployments but, in my region—which is a large constituency in northern Canada—if you ask my citizens what the number one military need was this past summer, during catastrophic climate fires.... We didn't have Hercules aircraft to lift people out of the fire zones. We're using our military for floods, fire and all kinds of domestic needs. I think it's a similar situation in the United States.

We're trying to respond to Ukraine, because we have a very close emotional and historical relationship, but we're having to provide materiel that has probably not been considered necessary since the fall of the Berlin Wall. We also have some of our allies, like Hungary, not doing anything to help. This puts us in a difficult position when it comes to supplying the needs to stop the Putin war machine.

Do you see things starting to improve, or do we have to shift gears in terms of friendshoring? Do we have to shift who does what, so we actually get supplies to Ukraine?

[Dr. Alexis Ross]

With enough advance notice, we're able to adjust the industrial base. I can't speak to the other countries' industrial bases, but I can speak to the U.S. industrial base. With enough advance notice, we're able to produce the materiel we need. In fact, regarding the items going to Ukraine, such as munitions—I'll keep using this example—the Department of Defense awarded several contracts that have ramped up production to very large amounts. I think it's nearly 85,000 or 100,000 rounds per month, which is a dramatic increase over what we were seeing at the beginning of our assistance to Ukraine.

There is much work being done, but there are always opportunities to do more. I think the Department of Defense is routinely looking at friendshoring, as well.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

Well, we certainly have General Dynamics in London, Ontario that can provide light armoured vehicles. We may not be able to compete on the Leopard tank front, but we could turn that around fairly quickly.

Again, it's a question of whether we need a broader strategy of all the allies saying what is going to be supplied and how we do it fast, because coming into the second year of the war, we really have to put a stop to the Putin war machine.

[The Chair, Liberal, John McKay]

Answer very briefly, please.

[Prof. Trevor Taylor]

Well, Alexis, if I may call you that, you made the chief points. The defence industry sizes itself according to the level of demand, and in the U.K., too, we're boosting munitions production capacity.

I think there's an important point, which is that, the simpler the product—and an artillery shell is, let's face it, a fairly simple product—the more it can be automated and the easier it is to increase production capacity in an acceptable way. The more that increasing production capacity involves employing a lot of people, then, as soon as that war demand disappears, you have to decide what you're going to do with those people. You can leave a machine working eight hours a day for five days and switch it to 24 hours, but you can't take a person who's working eight hours a day and turn that to 24 hours; you have to employ more people. Alexis got it; it's really difficult.

[The Chair, Liberal, John McKay]

Unfortunately, we are going over time, and we can't employ people overtime in this committee, either.

We have 25 minutes of questions, and we have 20 minutes of time, colleagues, so five minutes just became four.

Mr. Kelly, you have four minutes.

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

Thank you.

Dr. Ross, if I may continue on the production of artillery shells, we've had testimony at this committee that in Canada we have not increased our production of 155-millimetre shells since the beginning of the war. We've been told many of the reasons you've explained about why it's difficult, yet, in the United States, if I understand your testimony correctly, you said that artillery shell production has already increased. I don't know what it might have been 18 months ago, but you said it has now gone to 100,000 per month.

What can you tell this committee about how to get critical material like 155-millimetre shells up and running? There's a mothballed factory north of Montreal that, until fairly recently, produced this item on a larger scale, but nothing has broken through to enable us to get that production increased.

[Dr. Alexis Ross]

I think a major element to this is our workforce. As Dr. Taylor mentioned, it is critically difficult, once you have laid off, mothballed or reduced production, to ramp back up a skilled labour workforce. You can't just pull a person off the street and start having them do some of these hazardous projects. There's a degree of training involved and artisan craftwork for some of these things. We don't have a very large skilled labour workforce of welders, for example, in the United States.

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

In your testimony, you just said, if I understood you correctly, that the production has increased, and it has not in Canada, so I'm wondering what was successful and how you in the United States were able to overcome these obstacles, even if it took a matter of months, to get the contracts in place and get the production going.

[Dr. Alexis Ross]

The call went out for munitions probably in the spring of 2022, if I remember correctly. In the course of the last year and change, much work has been done between the Department of Defense and its prime suppliers in the ammunition industrial base to attempt to find all of what I would call the bottlenecks. These are usually workforce and long-lead items, individual components of the munition that are hard to find or hard to produce. A lot of dedicated work went into finding second sources of supply for those long-lead items and getting the production facilities open and scaled up.

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

We heard about how Senator Sullivan's testimony at Congress had quite an impact on a number of people in Canada. He spoke about the shortcomings in Canada's holding up its end of continental defence.

NORAD modernization is an example of very close partnership between Canada and the United States. I'd like you to comment on the necessity for NORAD modernization and whether you can identify anything for this committee or Canadians on how Canada can best uphold its responsibilities for NORAD modernization.

[The Chair, Liberal, John McKay]

You have 20 seconds or less.

[Dr. Alexis Ross]

Actually, I can do this really quickly. I'm not familiar with Senator Sullivan's statements, and I'm not really an expert on NORAD modernization, so I'd not hazard to even comment.

[The Chair, Liberal, John McKay]

Thank you, Mr. Kelly.

Next is Madame Lalonde.

[Marie-France Lalonde, Liberal, Orléans, ON]

Thank you very much, Mr. Chair.

Professor Taylor and Dr. Ross, I want to thank you for joining us today, especially in your respective time zones, as I understand it.

In the last few meetings we had on this study, some witnesses discussed the importance of improving our defence procurement by simplifying the processes and certainly streamlining the layers of policy that impede procurement. Based on your experience, what is the most important lesson governments should learn from discussions to help face the current challenges in actually simplifying and certainly streamlining the procurement processes?