Public Accounts Committee on Dec. 3rd, 2018

[Patrick Finn]

It is across all of our fleets, and how we do it is when the costs mature through our force development process. The $1.2 billion is an incremental number. It is the additional funds that we will need to keep the current aircraft maintained. Through “Strong, Secure, Engaged”, we've developed a process in force development that says that as we look at different capabilities—so it's not unique to this—as we look at our Victoria-class submarines or other fleets, it's the same process. We go through the option analysis that has been under way for years.

Again, the RCAF, the air force, has been leading that. As it develops the what, our chief financial officer and others then look at what the cost of it is and how it fits against our envelope, our accrual envelope and what it is that we do. We can report all of the costs, the $1.2 billion. Elsewhere in the audit they talk about the $3 billion incremental for the entire fleet. As we mature what it is that we're doing, there will be some decisions based.... The general talked about having radars or not having radars.

We will develop the costs. We will look at it from an affordability perspective, from a relative perspective. It will go through our governance, and it will be reported and made public.

At this point, what it is that we would upgrade has not landed. Therefore, we have not developed the full cost of it. Therefore, we cannot report it as of yet, but it would be a part of our process, sir, across all of our fleets.

[David Christopherson, NDP, Hamilton Centre, ON]

All right. I'm trying to understand.

Does that mean that it's within the $3 billion?

[Patrick Finn]

No, sir. It is not within the $3 billion, which is—

[David Christopherson, NDP, Hamilton Centre, ON]

Sorry. Again, I'm just a layperson.

You put down $1.2 billion as our cost. If there's going to be incremental cost based on some of the things that you've mentioned, up to $3 billion, I ask you if the $3 billion includes combat readiness, and you say no. I am no further ahead. I still don't understand why it's not in the $1.2 billion or why it's not within the $3 billion. I'm not getting a straight answer.

[Patrick Finn]

Sir, because—and thank you again for the question—what it is that we're specifically going to do is to concentrate our upgrades. We are engaging allies in what's already under way. For example, the U.S. military, which is investing in some of its F-18s, will continue to operate these, as will other key allies. What will they upgrade and do?

Because we actually haven't landed what the specific upgrades are, we have not fully costed them.

[David Christopherson, NDP, Hamilton Centre, ON]

I'm sorry...not even a notional line item somewhere? I assume that this is kind of expensive stuff. I assume it's high tech and very expensive. If you want to be accountable, open and transparent to Canadians and to Parliament—that is, your ultimate boss—then shouldn't you include a number that you know it's going to be big, but you just don't have the exact number?

[The Chair, Conservative, Kevin Sorenson]

Mr. Christopherson, our time is up, and I'm going to give you more time. However, because this number is in the Auditor General's report, I'm wondering if you may also want to ask Ms. Thomas why the combat readiness—because she references that it doesn't include combat readiness—wasn't spelled out clearly in that report.

[David Christopherson, NDP, Hamilton Centre, ON]

Right out of my mouth, Mr. Chair....

[Casey Thomas]

In terms of answering why the $1.2 billion doesn't include combat capability, those were some of the questions that we asked during the course of our audit. One of the answers that we were given was the fact that over the years and over time, National Defence has expected a replacement fleet to be in place. Therefore, as it carried out its work, it was looking at what it needed to do to extend the fleet to keep it flying, but it didn't include combat capability in its estimates.

[David Christopherson, NDP, Hamilton Centre, ON]

I want some clarification.

[The Chair, Conservative, Kevin Sorenson]

Okay. Be very quick.

[David Christopherson, NDP, Hamilton Centre, ON]

The dollars that would have been in there were not in there in large part because they thought they didn't have to do the calculation for that distance of time because they were going to get replacement aircraft. Do I have that?

[Casey Thomas]

I think so. I want to make sure that I understand your question properly—

[David Christopherson, NDP, Hamilton Centre, ON]

I appreciate that.

[Casey Thomas]

—and not put words into one another's mouths.

[David Christopherson, NDP, Hamilton Centre, ON]

No.

[Casey Thomas]

I think that, over time, National Defence has expected a replacement fleet. Therefore, it has looked at what it needs to do and, over the course of time, has not included combat capability in its—

[David Christopherson, NDP, Hamilton Centre, ON]

There you go. Quite frankly, gentlemen, for the pressure I put you through, a lot of the answer seems more political. At least, the politics of this horrible, political file are putting our defence staff in a terrible situation. That's the point I'm making on this. Normally, that's not the case, but in this case, Chair, at the end of the day I really see the culprit as the politics and the horrible state of affairs in replacing our fighter jets.

Thank you for your indulgence, Chair.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Christopherson.

Mr. Fuhr.

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

Thank you, Chair.

Just to circle back on the recruitment training aspect. Is the two-tier system being considered at all? I know that in the U.S., pilots are up or out—you get promoted, or you're out. In the British system, you can either be a career pilot, or you can be a pilot officer.

Is that one of the many things that you're considering, at this time?

[LGen A. D. Meinzinger]

It's not a specific initiative, but you may recall the OCTP program. Certainly, we're very inclined to consider the enrolment of individuals, a small cohort perhaps, under the old OCTP officer to cadet training program, now known as CEOTP program for individuals who come into our service without a degree. The plan would be to allow those individuals to fly for perhaps 10 years, and then at that point, ask them whether they want to get a degree or not. If they do wish to get a degree, we will look for a way to do that, perhaps through RMC. If not, then certainly you would likely find your most senior ranking to be maybe a flying major.

We don't have a formal system, but we're looking at how we might remodel in some of the OCTP flow, in terms of the intake into the RCAF.

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

That's an excellent idea. Some of the best pilots I flew with in the military went through the OCTP program.

With regard to the airplanes we're looking at getting, I saw a couple of numbers. We talked about 18. I saw for a brief time it was 18 and seven—seven for parts. I know parts are an issue as they draw down the production of parts. Is it 18 and seven spares, or is it just 18?

In addition to that, does the $500 million include the purchase and the upgrades? Those upgrades are, to the best of my knowledge, seat and NVG lighting, and then obviously probably some cosmetic work. Am I on the right track with regard to what needs to be done and the cost?

[Patrick Finn]

Thank you very much for the questions.

On the first one, it is 18 flyable aircraft. We have said up to seven additional ones, for spares. We will likely not go that far. The Royal Australian Air Force has been very forthcoming. In fact, they've provided us with a broad number of aircraft to look at, as well as a large number of spares.

Rather than bring aircraft to Canada and then disassemble them, we have actually gotten enough major assemblies for them that it will likely only be a couple of additional aircraft. That's what we'll look at. Again, the additional ones would be as required for spare parts, without just burdening ourselves with it.

The $470 million actually includes a number of things, as you indicate. It's the aircraft themselves and their upgrades. We want to do what we would call a repair and overhaul of all the engines. We're going to go through our checkpoint tree for structure. We want to make sure we're covering all of that, to make sure that it happens. The first aircraft will come in the late winter to spring. They will have flyable hours on them already. As you've indicated, some of the immediacy is for configuration management and training, the NVIS lighting and the ejection seat.

There are other aspects of the $470 million. With some things, we're resituating ourselves for future fighters. For example, we're looking at moving the test establishment from Cold Lake to actually having a federal government centre of excellence here in Ottawa. That's included in it.

We're contemplating a number of the upgrades—and we've talked about it—around interoperability and some of the other things. We've included those costs in it, so that we can be very forthcoming and indicate the initial maintenance checks, tests, evaluation and upgrades that we will do, as well as some of the upgrades we envisage, as a result of introducing these aircraft and growing the fleet.

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

I know you read in the press a lot about people who don't typically understand that fatigue on an airplane actually matters. It's probably one of the biggest driving points for how long this airplane is going to be able to fly.

Could you comment on how Canada and Australia have been sharing data on these airframes? Could you comment on how we put so much time, money and effort into making sure we understand where these airplanes are with regard to fatigue, and why that's important? Obviously, the laymen will say that this is going to be the leaky-sub syndrome all over again, which I don't think is a great comparison. I'd like to hear your comments on that.

[Patrick Finn]

We have worked very closely with Australia in understanding the fatigue. Some of the experts are absolutely here in Canada. That's already been said. I was speaking to some of them late last week. The centre of excellence for F-18 fatigue in the world is here in Canada, at Mirabel. The U.S. Navy actually send aircraft, some of their F-18s, for maintenance in Canada as a result of that expertise.

We have tested aircraft to destruction to make sure we have a full understanding, a full model, and we have a really good understanding of the fatigue life. We cycle them through heavy maintenance at a rate at which we see less fatigue than we're expecting, which is a good thing. It's less cost but it's also safer.

We know that the Australians operate their aircraft in a more corrosive environment with their bases, with salt air and other things. They have a very strong maintenance program. We sent people down to do a very detailed analysis. They also gave us access to all of the data that's held here in Canada for all of their aircraft. The detailed models for structure of all of their airplanes are actually held here in Canada, and we have then been able to access all of that. There are slightly different configurations, but even within our fleet, some of our aircraft arrive at different blocks, as they're called, and therefore, there are changes. But if there is ever a case....

You can compare it with the submarines, which I lived. There were only four of them in the world, and it was “bring them to Canada and bring them into service” versus this fleet, which is quite ubiquitous and which will be used, as I've indicated, in the 2030s by a lot of our allies. There is still a lot of demand on L3 by the U.S., the Spanish and others, not just us. The entire community is asking how they can continue to operate them safety and effectively and what upgrades we can do.