National Defence Committee on Nov. 7th, 2023

[Troy Crosby]

I think I recall the work on the response to the Order Paper question. If I recall correctly—and please correct me if I'm wrong—there was a time element to it. To be clear, the model that was developed for doing the life-cycle cost estimate for the F-35 was actually put together quite a number of years ago.

That model has withstood the test of time and is the one that was updated to provide the around $70-billion estimate that was disclosed earlier.

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

In terms of the Order Paper question, I did not ask for the time restraint. It was placed upon the response given by the department.

[The Chair, Liberal, John McKay]

Thank you, Ms. Mathyssen.

Mr. Bezan, you have five minutes.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Mr. Chair.

I'd like to welcome our witnesses back to committee.

I want to go down the path a bit on the maritime multi-mission aircraft.

PSPC published a timeline on this, so 2021-22 would start the options analysis, 2023-24 would start the definition, 2027-28 would start the implementation of the contract, 2032-33 would be the initial delivery of the first of the aircraft, and the last of the new aircraft would be delivered in 2037-38.

However, if you look at what's happened, in February 2022, you guys did the request for information from potential contractors with an April 1 deadline. By March 2023, you guys had already sent a letter of request to purchase the Boeing P-8s.

What happened, because we're not on the same timeline that was originally laid out? I'm not against speed. I think speed is one of the things we've been talking about here. It seems to be that some steps were missed.

[Simon Page]

Thank you for the question, Mr. Chair.

I'll start and maybe I'll give the floor to Mr. Crosby to complement the answer.

The phases you mentioned are project phases. These come from the Department of National Defence. They're the option analysis, the definition and the implementation.

In PSPC, we start pretty much every procurement effort with a requirement. That requirement usually comes with a set of technical requirements, as we know them, for a specific piece of kit. It usually comes with some funds and an availability window—i.e., when is the aircraft needed?

As you mentioned, things can change. Sometimes speed is a factor. For this case here, it was not so much about speed, but the context that changed for DND. It conveyed to us a new window and we acted on—

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

What was the impetus or the catalyst to change the window, Mr. Crosby?

[Troy Crosby]

The timelines that we're working toward or that we're anchored around are based on the life of the CP-140 Aurora as it is right now. The reality is that there isn't a specific date on a calendar in the future when the CP-140 will suddenly no longer be able to fly or operate. What we see is a degradation in capability over time and an increase in the threat environment over time.

We're working toward a milestone that isn't terribly precise, despite the fact that there's an exact date put on it. The milestones are set to guide us in our work, and then we adjust based on what we think we can actually achieve.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

There's a new term that I've heard starting to circulate around the Canadian Armed Forces and DND, which is “urgent operational requirement”, or UORs.

Would this qualify as a UOR?

[Troy Crosby]

This would not be a procurement that I would typically assign as UOR. In the case of our operations in Latvia, the Canadian Armed Forces has recognized an urgent operational requirement based on operational experience in Ukraine.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Based on what we know in Ukraine and what we know in Latvia, and some of the weapons systems we need on the front lines in Latvia, is there a UOR under way for shoulder-launched missiles?

[Troy Crosby]

There is an air defence UOR under way for PAXM. Think of an anti-tank capability, but it's more than that. There are a couple that might meet your description.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Would there be sole-sources involved in this? Do they require a national security exemption? More importantly, how are we testing these systems to ensure that we are getting the best kit for our Canadian Armed Forces?

[Troy Crosby]

Mr. Chair, in these cases, all three of the urgent operational requirements that are under way right now to support Operation Reassurance are competitive.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

We're competitive, but are we also doing the testing?

There's supposed to be the aerospace engineering test establishment, the quality engineering test establishment and the naval engineering test establishment.

Are we going through those processes to ensure we are buying the best possible weapons and equipment for our Canadian Armed Forces, or are we skipping over that and just going with what's written up nicely on paper?

[Troy Crosby]

Mr. Chair, what we're aiming to do is to bring in the service-proven capabilities that our allies already have in service.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

I again will impress upon our witnesses that the work they do is now more important than ever.

When you look at the dangerous world we live in, we have to buy equipment faster and get it in the hands of our military so that we're prepared for the worst-case scenario.

[The Chair, Liberal, John McKay]

Thank you, Mr. Bezan.

As a point of clarification, you talked about three UORs. I heard you talk about two. What's the third one?

[Troy Crosby]

The third one is the PAXM UOR which is a.... I can't remember what the acronym stands for, Mr. Chair, but I can get that for you. Think of it as an anti-tank weapon, but it has more applications than just the tanks.

[The Chair, Liberal, John McKay]

Thank you.

Mrs. Lalonde, you have five minutes.

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

Thank you.

I want to again thank our witnesses who are here and coming back to see us today. I have a couple of questions, so I'm going to try to stay as succinct as I can.

We know that in addition to some of the concerns of domestic challenges—flood, wildfires and other natural disasters—we're also experiencing different international pressures, such as the war in Ukraine and now the conflict in the Middle East, in Gaza.

I would like to hear from each of you, particularly if you can speak to how your department balances the pressures of meeting the urgent operational requirements while also continuing to meet the procurement needs at the same time.

[Troy Crosby]

I can start, Mr. Chair.

As Mr. Page has pointed out in the past, it starts with the definition of the requirements.

My organization and the materiel group at National Defence don't develop the requirements. That's done by the services—the army, air force, navy, special operations forces. They determine the urgency, and if something comes up that wasn't already in our work plan, there's a conversation internally about allocating the right human resources and subject matter expertise to be able to prioritize the work to put the procurement into the system—if I can put it that way. We then communicate that to PSPC, in the cases where the contracting authority will lie with the Minister of PSPC to progress. We work alongside them.

With that, I could maybe segue to Simon.

[Simon Page]

I thank the member for her question, Mr. Chair.

I would add that one of the overriding objectives of defence and naval procurement is to ensure that there are no capability gaps. We must always have the necessary capabilities for the men and women of the Canadian Armed Forces. That’s not easy, given the wide range of capabilities. We always have to be on the lookout for all the things we want to do and all the needs we have to meet. One of our ultimate goals is to make sure there are no gaps.

To complete what Mr. Crosby said, I would add that, during events such as the ones the world is currently experiencing, there are concerted efforts that must be properly prioritized. We put the right resources in the right place and make sure we do things in a targeted way.

Mr. Crosby talked about ammunition requirements, and we also have vehicle requirements right now for Operation Reassurance in Latvia. We’re reviewing this in a targeted way, and if we can take a little more risk than usual, we will.

[Mary Gregory]

Thank you for the question.

Our department works very closely and collaboratively with our procurement partners. We're available to apply the policy as needed. We regularly engage through our governance processes, and our policy is fairly flexible.

We determine application on a case-by-case basis, which applies to certain types of military procurement over $100 million. There has been a lot of conversation about munitions supply. That's managed separately. The policy is not generally applied to munitions. However, we're available to participate as needed, and as quickly as needed, as things become urgent.

Thank you.

[Samantha Tattersall, Assistant Comptroller General, Acquired Services and Assets Sector, Treasury Board Secretariat]

I'll situate the role of the Treasury Board Secretariat. After you have the requirements, you do the procurement. If there are Treasury Board approvals needed, we work closely with PSPC and DND to make sure that those come forward at an expedited pace. As this committee's already discussed, sometimes we put in place exceptional contracting limits that will also facilitate the speed at which things can occur.

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

Thank you.

From there, is there a recommendation that you could help us with as we navigate our process to identify where regulations and processes can be improved to help you with the challenges, both domestically and internationally, with the pressure that's sometimes on each department?

Mr. Crosby.