Thank you very much, Mr. Chair and members of the committee. We very much appreciate the opportunity to appear in front of you today. I have with me subject matter experts. I would add it's a real pleasure to be here with our colleagues from PSPC and, of course, the Auditor General. We speak regularly, as you can imagine. There's lots to discuss.
We are honoured to be here today to represent the Department of National Defence and the Canadian Armed Forces.
As you may know, we employ about 120,000 people and we are represented from one end of Canada to the other. Our numbers recently rose with the arrival of the Canadian Coast Guard.
We're very pleased to have new colleagues in the form of the Coast Guard, and of course, the Communications Security Establishment is also part of our department.
I'm sure you're all well aware of the increases in our budget recently after the commitment of the government to spend 2% of Canada's GDP this fiscal year on defence.
I wanted to point out that this money does not go solely to our department; it goes to various departments. We are responsible for a large portion of that budget, but not all of it.
We also think of the amount of money we spend as all of it going on major capital projects. Just for general reference, about 80% of our budget goes on regular operations, salaries and that kind of thing. Only about 20% is spent on capital projects, of which this F-35 project is one.
Given the gravity of our mandate, we must ensure that we are getting the best value for Canadians' money. I know this is something we're all worried about. This future fighter capability project is no exception. It is a massive undertaking for the Royal Canadian Air Force. There's the acquisition of the 88 aircraft themselves but also, as the auditor has outlined, there's the training that's required, the weapons, the spare parts, the facilities and much more. Through this project, we're making sure the RCAF has the capacity it needs to carry out the mandate that's been given to it by the Government of Canada. We very much appreciate the work of the OAG and parliamentarians in supporting us in this mission.
I think you know that the global threat environment has changed in the last few years. The work has taken on a new urgency since this project first began. The numbers that the OAG was reporting were established before the pandemic and before the Russian invasion of Ukraine. We can see that the defence and security environment is much more volatile and unpredictable than it has been at any other point in recent memory. Our adversaries work independently but also increasingly in co-operation with one another to sow chaos, discord and uncertainty.
This, combined with rapid technological advances in traditional and non-traditional military domains means that we’ve had to redouble our efforts to equip our military with future-ready technologies.
That includes ensuring we can meet our obligations to both the North Atlantic Treaty Organization and the North American Aerospace Defense Command, concurrently. Quite simply, our current fighter, the CF‑18 Hornet, no longer meets our needs.
While the aircraft has served Canada well for the better part of four decades, the CF-18 Hornet is now nearing the end of its lifespan and cannot keep pace with the challenges facing it, with either our allies or our adversaries. Some of them are being retired as early as this year. The fleet, as you know, must be fully replaced by 2032.
In early 2023, following a fair, transparent and open process, the government announced that it had finalized an agreement with the U.S. government and Lockheed Martin for the acquisition of the aircraft to help fulfill this requirement.
This aircraft will enable us to remain closely interoperable with our allies—most NATO allies have procured the F-35—and it will also deliver significant economic benefits for Canada. This was part of the original agreement and remains our top consideration. Canadian firms have already benefited greatly from this acquisition.
We have made firm financial commitments for the first eight aircraft, as well as to guarantee the delivery of long-lead items in support of the production of the first 12 of our initial tranche of 16 aircraft.
These Canadian-owned aircraft will be delivered to Luke Air Force Base in Arizona, as the Auditor General said, beginning in 2026, and used to train our pilots on site and our technicians. This training phase is essential to ensure our aircrews are ready before the first jets, which should be delivered in 2028, arrive in Canada.
To receive those aircraft, we are building new fighter squadron facilities at Cold Lake and Bagotville. Design work and site preparation are progressing well. Indeed, construction is already under way. Key elements such as underground infrastructure, site access and security fencing have been completed.
The future fighter infrastructure will provide the space and security standards needed for maintenance, operations, administration, mission planning and simulator training. Although permanent facilities will not be completed before the first aircraft arrive, the Royal Canadian Air Force has developed an interim operations plan that will use existing facilities and temporary secure structures.
Beyond the two main operating bases—those are the ones in Cold Lake and Bagotville—we are also modernizing power, runways and our quick-reaction alert facilities across the country through the defence of Canada fighter infrastructure initiative. These upgrades—for instance, to power—will also benefit the local communities.
As we continue to advance the future fighter capability project, we remain deeply committed to stewardship, rigour, transparency and accountability.
Since the initial estimate of $19 billion, project costs have increased to reflect global economic conditions. We had the pandemic supply chain conditions, of course, and as I mentioned, the invasion of Russia in Ukraine also distorted the defence industry supply chain around the world. Of course, inflation has also been high over the last few years.
However, there has been no change in scope. The changes to the budget have nothing to do with a change in scope. We have stuck to our original plans.
We are still on track to acquire 88 aircraft, along with the associated infrastructure, training and maintenance services. We are always working to incorporate expert recommendations and apply lessons from past procurements to ensure more discipline in our project and risk management.
Canadians deserve assurance that this generational investment is delivering the best capability and value for money.
Mr. Chair and committee members, it's pivotal to bolstering our continental defence and essential to safeguarding our sovereignty and upholding our obligations to our allies and partners around the world.
We look forward to your questions.
Thank you.
