Evidence of meeting #41 for Public Accounts in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cost.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Robert Fonberg  Deputy Minister, Department of National Defence
André Deschamps  Commander, Royal Canadian Air Force, Department of National Defence
François Guimont  Deputy Minister, Deputy Receiver General for Canada, Department of Public Works and Government Services
Simon Kennedy  Senior Associate Deputy Minister, Department of Industry
Michelle d'Auray  Secretary of the Treasury Board of Canada, Treasury Board Secretariat
Kevin Lindsey  Assistant Deputy Minister, Chief Financial Officer, Finance and Corporate Services, Department of National Defence
Dan Ross  Assistant Deputy Minister, Materiel, Department of National Defence
Tom Ring  Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

9:30 a.m.

Conservative

Daryl Kramp Conservative Prince Edward—Hastings, ON

Okay. Thank you.

Just—

9:30 a.m.

NDP

The Chair NDP David Christopherson

I'm sorry, Mr. Kramp. We're at 5:04. Your time has expired.

Monsieur Ravignat, you have the floor, sir.

9:30 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Thank you, Mr. Chair.

Thank you for being with us today. My question is for Ms. d'Auray.

Is the Department of National Defence exempt from any Treasury Board policies with regard to relevant costs over the useful life of equipment?

9:30 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Michelle d'Auray

Mr. Chair, the Department of National Defence is subject to the policies, as any other department or agency.

9:30 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

When we're talking about the relevant costs over the useful life of equipment, would you calculate them at the Treasury Board on the basis of 20, 30, or 36 years?

9:30 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Michelle d'Auray

Mr. Chair, when we have received submissions from the Department of National Defence concerning the timeframe for the costing of a life cycle, 20 years has been deemed to be an appropriate timeframe. It is set by the Department of National Defence.

Going beyond 20 years is considered too high-risk to ensure that the value in contracting with industry would be sustained, or the costs would be going beyond the 20-year mark. So that, for us, is considered to be reasonable, and as the Deputy Minister of National Defence indicated, all of the submissions to date that have been presented to the Treasury Board have used a 20-year cost estimate.

9:30 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

With regard to the types of costs, were all types of costs related to the lifetime of the equipment taken into consideration by the Department of National Defence, according to Treasury Board guidelines?

9:30 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Michelle d'Auray

Mr. Chair, just to be clear, as I indicated in my remarks, the project for the F-35 has not come to the Treasury Board for consideration for its acquisition. So we are not in an acquisition stage at this particular juncture, and therefore we have not been analyzing or considering the cost of the acquisition at this particular juncture.

As the government's action plan indicates, however, we will review and commission an independent review, so that before the proposal comes to the Treasury Board for consideration, there will be a framework that will be setting what those costs should contain.

9:30 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

With regard to the government's seven-point plan, what will be the role for Treasury Board going forward?

9:30 a.m.

Secretary of the Treasury Board of Canada, Treasury Board Secretariat

Michelle d'Auray

There are two specific functions that are attributed in the action plan. The first is that we will commission, as I indicated, an independent review of DND's acquisition and sustainment project assumptions and potential costs. Then, prior to the proposal coming to the Treasury Board, the cabinet committee, for consideration, we will review and apply the full due diligence for compliance to Treasury Board policies.

9:30 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Thank you.

My next question is for Monsieur Guimont. Thank you for being here.

What was in that short letter from the Department of National Defence that gave you the confidence that PWGSC should not be involved?

9:30 a.m.

Deputy Minister, Deputy Receiver General for Canada, Department of Public Works and Government Services

François Guimont

The letter was addressed to Mr. Tom Ring, so I'll let him address the specifics of the content.

9:30 a.m.

Tom Ring Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Thank you.

Thank you, Mr. Chair, for the question.

As Monsieur Guimont said in his opening comments, our supply manual requires that the client department—the technical authority, in this particular case—give us written confirmation that in a sole-source case the equipment they're planning on acquiring is the only one that meets their requirements, and that was what the letter said.

9:30 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

As briefly as that?

9:35 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

I don't know precisely how many words were in the letter—

9:35 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Okay. Thank you.

9:35 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

—but it contained the validation and verification that we sought so that we could indicate—

9:35 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Thank you.

Mr. Chair, I'd like that letter to be tabled for the committee.

9:35 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

That can be done.

9:35 a.m.

NDP

The Chair NDP David Christopherson

Very good. Thank you.

9:35 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Who signed off on the sole-sourcing of the F-35 on the basis of that short letter? Also, who sent the letter from DND?

9:35 a.m.

Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

Tom Ring

The letter was sent to me from Mr. Ross, the assistant deputy minister of materiel.

9:35 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Let's turn to the recommendations made by the Auditor General—

9:35 a.m.

NDP

The Chair NDP David Christopherson

Very briefly, sir.

9:35 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Could you just give me this in a nutshell? When did PWGSC inform the OAG that they disagreed with the conclusions of paragraph 2.8?