Public Accounts Committee on Nov. 19th, 2020

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

Madam Chair, one of the things that has been reported as a major restraint on being able to disperse these vaccines when they start arriving is freezer space and freezer capacity and having those located in the right place. The Pfizer product they're talking about needs to be stored at -75°C.

Will National Defence be expected, using the defence procurement act, to acquire that type of freezer capacity to help with the logistical distribution of COVID-19 vaccines?

[Jody Thomas]

We haven't gotten into that kind of a request or discussion that I am aware of. We do have an RFP, or a request, out now on Canada Buyandsell to look at some storage capability, but that's for internal Canadian Armed Forces use when we get to the point of vaccinating our own troops.

In terms of national requirements, we've not been asked to participate or take any action that I am aware of, unless it's happening in the working group. I'll ask General Cadieu.

[The Chair, Conservative, Kelly Block]

Thank you very much.

We will now move to Mr. Sorbara for five minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Madam Chair.

Welcome, everyone.

First, I want to say thank you to the Canadian Armed Forces. During the COVID-19 pandemic, a number of them were at Woodbridge Vista, a long-term care facility in my riding, and performed duties that were exemplary.

I want to thank them.

When I read the Auditor General's audit, I went through the details of the audit objective. I'd like to turn my attention to what the audit objective was in terms of this being an “independent assurance report”, if I can use that term, and go back to what this committee is focused on.

Deputy Minister, in your opening comments, you had this reference in your notes:

In February 2020, National Defence awarded a contract to Price Waterhouse Coopers...to identify potential options to modernize our supply chain network design. I note that a review of this scale has not been undertaken since early 2000.

I found that very surprising. For most organizations, their supply chains are a critical component of the organization's success or failure—if not the most critical—be it a retail grocer or National Defence. Can you maybe elaborate on the terms of reference for the contract? I'm surprised that I'm not hearing something to the extent of what supply chain technology is utilized now in National Defence, if it's SAS or SAP or whatever technological....

Can you speak to that, please? Thank you.

[Jody Thomas]

Madam Chair, I don't know the name of the particular technology we use. I agree that a review of our supply chain system is well overdue. Leaving it for 20 years is far too long; technology has changed multiple times in that time frame. This is well overdue, and we will need to have an evergreen process to review it going forward.

I'm going to ask Mr. Crosby to give you the details of the contract. If he doesn't have them, we will get them to you.

[Troy Crosby]

To answer the question about the system we rely on, it's based on an SAP program. We call our system the “defence resource management information system”. That is going to be modernized, moving towards an S/4HANA solution, which really drives, ultimately, the timelines we were speaking about earlier in response to some of the questions.

The review that's going on right now with PricewaterhouseCoopers is really looking at optimizing the transportation system. They've looked at about five million data points to model that and to find a way of optimizing the solutions. That's one part of the solution.

As the deputy minister has said, there are other elements we've touched on, such as automatic information technology. We're about to sign a significant contract for bringing bar-coding to many of our items on a priority basis. Then, of course, there's the work around our business processes and making sure that our people are well trained and professionalized and that we are providing them with tools to get that work done, with all of this happening in parallel and under the supervision of multiple levels of governance across the department.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you for that explanation. That was excellent information pertaining to the audit, and some of the material within the audit.

To the Office of the Auditor General and to the Auditor General, it's great to see you again. It's wonderful to be on this committee. I've sat on finance, public accounts, and a few other committees during the last five years for which I have a great deal of respect.

I have a question in terms of this review of the Canadian Armed Forces relative to the armed forces of other G7 nations, because benchmarking is very important for me. Is there any sort of comparison that is done, or that we can look at? It's easy to look at one organization and say how it's doing, but it's great to also extend it out to see how it's doing relative to its peers or other comparables.

[Karen Hogan]

I will ask Nick to chime in, in a few minutes, in case he does have some additional information.

Whenever we undertake any audit, we always look to best practices, whether they be across our country or in other places.

I am not exactly sure to what extent that was done when it came to looking at other defence departments across the world, or other companies that manage supply chains, so I will turn to Nick to see if he can provide some additional insight on that.

[Nicholas Swales]

We did not do any comparative work with other organizations at any level of detail. We were focused on what reasonable expectations were for the Canadian Armed Forces themselves, and the results we got from that.

[The Chair, Conservative, Kelly Block]

We're going to move to our two-and-a-half-minute rounds.

We'll begin with Mr. Blanchette-Joncas.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

I have many questions. I find our colleagues' questions and the witnesses' comments very good. I heard Ms. Thomas talk about automating and updating systems. I also looked at Ms. Hogan's fairly comprehensive report. However, one thing missing from the report is the source of the issue. What caused all these issues?

The report contains many observations and recommendations. There's even an action plan. There seems to be goodwill on the part of the Department of National Defence. However, I'm trying to understand what led to all these supply issues that have been going on for years.

Ms. Hogan, can you shed some light on this?

I'm trying to understand how the current situation came about, despite the action plans, the recommendations, the analyses, the close monitoring that we're prepared to do and the transparency of the Department of National Defence, which also wants to report to us more often.

[Karen Hogan]

I believe that the department is in a better position to answer this question and to explain the cause.

You must understand that a supply chain is complicated. It's complex. It's even more complex when you include the logistics of delivering materiel across the country on ships, or abroad. We've noticed that the department has an action plan and that it's starting to make progress.

Again, in terms of the cause, I think that the department should answer the question.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Can the department respond?

Look, it's a bit like a weed. If you just cut the top off and you don't remove the root, then you don't get to the source of the issue and the weed will grow back. I can see that the issue has been going on for years and that there are action plans and goodwill. However, in reality, we're just continuing, and meanwhile...

This is no small matter, Ms. Hogan. When I looked at the figures, I almost lost it. We're talking about the Canadian Armed Forces, National Defence, people who must respond to disasters. Military units receive spare parts, uniforms and rations late half the time, meaning 50% of the time. High-priority items needed to meet critical operational requirements were delivered late over 60% of the time. That's even more than half the time.

What can you tell us about this?

[Jody Thomas]

I'm going to respond, and then I'm going to turn to my colleagues.

The answer is both complex and simple. It is a massive system. We move 26,000 types of items across 19 missions in 25 countries. There have been boutique solutions for particular problems across the Canadian Armed Forces, but we've never had an end-to-end solution.

Why? Well, we've had manual systems. We've had very early database systems, but they've been individual things. They've become boutique; they have been siloed. As a result, mistakes are made, and items are lost. There have been some attempts to rectify that over the years, but on occasion, the urgent overtakes the fundamental institutional aspects of this department.

We now have an end-to-end joined-up approach with all parts of the department and the Canadian Armed Forces defence team. It has certainly been helped by the Auditor General's observations, which spurred us on to more activity, but we realized this had to be done before the audit.

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Thomas. I'm sorry that we don't have time to refer to the other witnesses.

I need to move to Mr. Green, for two and a half minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you, Madam Chair.

I believe we're synchronizing our timers now.

On March 13, 2020, the chief of the defence staff activated phase three of the pandemic response under Operation Laser, yet this morning, we've heard in testimony that the National Defence folks don't know the extent of the role that National Defence will play in the COVID vaccine distribution.

The Liberals are already suggesting that distribution will happen in Q1 of 2021. What is your timeline to be ready for distribution?

[Jody Thomas]

I'll ask General Cadieu to jump in. We will be ready when we're asked to be ready. There are multiple kinds of vaccine out there. Whatever the Canadian Armed Forces is asked to do, we will ensure that it's logistically and operationally possible. I don't actually think there is a correlation between this audit and our ability to distribute the vaccine, if I can be completely honest.

[Matthew Green, NDP, Hamilton Centre, ON]

Ms. Thomas, in my opinion, the fact that you have a 50% failure rate on prioritizing materiel, and all of the things that are identified in this audit as being problematic to your ability to distribute basic military things, given the pandemic we're in, have a direct correlation to your readiness.

I'm happy to hear from your colleagues, but it's concerning to me that the Liberal government is committing the military to be part of distribution systems, yet the military doesn't seem to know the role that it's playing. It creates confusion and undercuts the confidence.

[Jody Thomas]

I think the military will know the role its playing when it's asked to play a role. We haven't yet been asked to play a role in vaccine distribution.

It's just like the long-term care facilities. That was a brand new operation for the Canadian Armed Forces. They went in. They did a recce. They trained people, and they executed perfectly. I have absolutely zero doubt that this would be any different.

[Matthew Green, NDP, Hamilton Centre, ON]

Within Q1 of 2021, will your military be prepared to distribute whatever COVID vaccines are made available?

[Jody Thomas]

As General Cadieu said, it would be a combination of public and private distribution. It will not come into our supply chain. We would be a transport vehicle. We will help organize the logistics of bringing the vaccine into Canada through the lead at the Public Health Agency of Canada, and we would do anything else that is asked of us.

General Cadieu, do you have anything to add?

[MGen T. J. Cadieu]

Madam Chair, we are currently supporting thousands of Canadian Armed Forces men and women deployed on 20 operations around the globe. We do that very successfully. Any time we can improve our supply chains to better look after our men and women—

[Matthew Green, NDP, Hamilton Centre, ON]

I appreciate your mandate, Mr. Cadieu, but you haven't been asked for help to date on the supply of COVID vaccinations.

[MGen T. J. Cadieu]

The Public Health Agency is currently leading the COVID-19 vaccine task force and the planning effort behind that. The Canadian Armed Forces are contributing to the logistical planning for that effort. It's a very complex problem. That estimate is ongoing. It will take some additional time before we can determine what the potential role for the Canadian Armed Forces might be.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you.