Public Accounts Committee on March 6th, 2023

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Chair. I wasn't aware we were going to get another round.

Mr. Matthews and Rear-Admiral Waddell, I'm looking at the Senate report from a couple of years back, talking about the AOPS. Their comment was that they can't operate in ice a metre thick, they are slower than a B.C. ferry, they can only operate in the summer and they need the Coast Guard to escort them in northern waters.

Do you think that's an accurate assessment of the AOPS? If so, should we be continuing to build these if they might have very limited use for taxpayers or for the navy?

[Bill Matthews]

Thank you, Madam Chair.

I will start, but I think the navy is best placed to speak to capability.

They are ice-capable. They are not icebreakers. The navy is quite anxiously looking forward to the receipt of the rest of the AOPS. They find them quite useful in terms of some of the infrastructure they can provide and some of their capabilities.

Go ahead, Rear-Admiral Waddell.

[RAdm Steven Waddell]

Thank you.

I have a couple of points in reply. The navy is enthusiastically bringing this capability into service. The sailors are excited about the platform. They are excited about the missions we are sending them on. We have been very pleased with the performance thus far of this new class we're introducing into service in terms of their capabilities in ice, and the endurance, range and persistence they're able to provide.

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm sorry for laughing. All I've read about is them breaking down and having problems with water filtration and other issues, but they're pleased with the performance so far.

Let me ask about the cost issue, Mr. Matthews. Again, I'm going to refer back to our last committee meeting on this. PSPC said in their opening statement that costs are dropping for the AOPS. Of course, we saw it reported that there's going to be another $780 million added on since the last update.

Are the costs dropping for the AOPS contracts, or are they going up?

[Bill Matthews]

Nancy may have some information to provide here.

[Kelly McCauley, Conservative, Edmonton West, AB]

I realize that we are getting more efficient on building them, etc., but it's a simple question. Are costs going up, or are costs dropping?

[Bill Matthews]

The efficiency in production is basically ahead of schedule in terms of the dividend you would expect for building ship five versus ship one. That is indeed happening.

Nancy, I'm not sure if you have specifics on cost.

[Nancy Tremblay]

Thank you very much. I can confirm that the cost of ship four is expected to be 57% of the cost of ship one.

[Kelly McCauley, Conservative, Edmonton West, AB]

The PSPC stated the cost of the program is going down, but are we cutting...? It's a simple question. Are taxpayers cutting a bigger cheque or a smaller cheque for the program? They announced—I think in January—that they were up an extra $780 million. Is that a drop?

What I'm getting at is that I'm concerned about PSPC coming and testifying one thing in this committee, but the reality seems to be going a different way.

[Nancy Tremblay]

If I can, I'll add that it's 57% of expected costs for ship four compared to ship one. However, I can speak about the fact that there have been increasing costs due to inflation, disruptions in supply chains and shortages in the workforce—

[Kelly McCauley, Conservative, Edmonton West, AB]

I'm aware of all that. Again, the bill is an extra $780 million. I'm just expressing my concern that PSPC comes before this committee—and, therefore, taxpayers—and says that costs are declining, but they're clearly not.

Transport, I want to ask you something very quickly. From the report, 6.59 states that you “completed an obsolescence study on the aircraft used for Arctic surveillance.... No strategy has been put in place to renew the aircraft”.

Is what the AG has reported correct?

[Arun Thangaraj]

Prior to the commencement of—or I guess during the audit—we worked with the Coast Guard to look at a strategy to replace the Dash 7s and to find out what that solution is. That work should be reporting out this month, and then we'll have a way forward on what the replacement for the Dash 7s should be.

In the interim, as I noted, we are procuring a large inventory of spare parts to ensure—

[Kelly McCauley, Conservative, Edmonton West, AB]

The agency's comment is “No strategy has been put in place to renew the aircraft”. Is that just because the study was done in 2021 and Transport hadn't got around to it?

[Arun Thangaraj]

That's correct. We are currently looking at that right now.

[Kelly McCauley, Conservative, Edmonton West, AB]

Do you accept that, Mr. Hayes?

[Andrew Hayes]

I accept that they are looking at it right now. Our point was that concrete action needs to be taken to renew equipment that's ending its useful life.

[Kelly McCauley, Conservative, Edmonton West, AB]

When will we see that concrete action, then?

[The Vice-Chair, Liberal, Jean Yip]

We need a very short answer, please.

[Arun Thangaraj]

We will have the report this month.

[Kelly McCauley, Conservative, Edmonton West, AB]

Would you share it with us?

[Arun Thangaraj]

Yes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Wonderful. Thanks very much.

Thanks, Mr. Hayes.

[The Vice-Chair, Liberal, Jean Yip]

Thank you.

We'll go to our last person today, Ms. Shanahan, for five minutes.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

I want to thank the witnesses here. This is the second of two hearings that we're having on this OAG report on Arctic surveillance, and it's been very interesting. We've certainly learned a lot.

My question now is actually going to Environment Canada. I'd like to learn more, especially anything that you haven't had the opportunity to bring to the committee here today on your activities in the north and the Arctic in terms of weather and environmental predictions.

[Chris Forbes]

I might turn to Ken to provide a bit more, since he's the expert in this area. As I say, in terms of weather and prediction, we have short-term work that we do. Ken can talk a bit more about our presence in terms of how we do that in the north to help both communities and partners, both on land and over the water. Then we do long-term research that can help on a bunch of fronts.

Maybe, Ken, I can let you provide a bit more detail.