Madam Speaker, I am pleased to take advantage of the opportunity provided by this motion to speak of the role of Parliament in the procurement of goods and services for the Canadian forces.
I must begin by stating clearly that the government is opposed to the motion calling for a standing committee of the House of Commons to hold public hearings on every proposed procurement of goods or services by the Canadian armed forces valued at more than $100 million. In order for hon. members to clearly understand why, I would like to describe the present procurement process.
This process, which has been in place for many years in the Department of National Defence and in fact in all departments, is an important instrument of public scrutiny. I would like to speak as well of the potential impact of the proposed change on the expeditious delivery of the necessary equipment to the armed forces.
The procurement of equipment, goods and services is of vital importance to the success of the Canadian forces. The quantity and type of equipment purchased has a direct influence on the forces' capacity to fulfil their role, which in turn influences where and how they can be deployed by the government.
The 1994 white paper on defence defined these roles as protecting Canada, co-operating with the United States in the defence of North America, and contributing to peace and international security.
These are important jobs and I know I speak for everyone here today when I say that the Canadian armed forces have delivered an exceptional calibre of service in everything from their contribution during last year's ice storm to the present operations in Yugoslavia.
However, in order to maintain this level of excellence, the Canadian armed forces must be able to count on the appropriate equipment at a fair price and when they need it. The procurement process of the Department of National Defence complies with Treasury Board requirements. When possible and feasible, all large dollar contracts are put out to tender in an open and transparent manner.
All capital projects are included in the annual budget tabled in the House and all major government projects, that is those over $100 million, containing an element of risk, are examined by the Treasury Board and by cabinet. Because major government projects also affect several departments, they must meet strict conditions and national requirements.
Not surprisingly, there is a comprehensive procurement process for major government projects, starting with the identification of needs and continuing through to delivery of the product. It is also transparent and fair. I will describe this process briefly.
The Canadian forces may need a particular good or service for several reasons. Repairing some of its equipment might not be cost-effective. Operational changes might make different equipment necessary. Technological advances may necessitate the updating of equipment or, again, a strategic analysis may lead to the identification of new requirements.
When a need is identified, a preliminary list of potential solutions is drawn up, and costs are estimated. Next, options are analysed, feasibility studies done, scenarios tried out and, finally, risks are assessed. The cost evaluations are then refined, and various aspects of the study are reviewed by the Treasury Board secretariat and by a senior advisory committee in charge of contracts comprising the heads of various departments.
This committee must make sure that the proposal receives the attention of senior managers, is covered by broad government policy and is in keeping with the government's objectives.
The proposal and procurement strategy are then reviewed by cabinet, and, if it is deemed acceptable, receives approval in principle. At this point, Treasury Board looks at the proposal with a view to a preliminary approval, and this step is followed by the procurement process. Once the strategy has been approved, a call for tenders is put out.
The Minister of National Defence again presents the proposal to cabinet, taking different factors in consideration this time, including the reconfirmation of the need, the underlying justification, the implementation plan, the global cost and other aspects.
If the procurement strategy has already led to a call for tenders, cabinet would also approve the choice of a bidder at this stage. Once a decision has been made, the proposal moves to final approval by Treasury Board.
The contract is awarded by another department—Public Works and Government Services—which ensures an independent, fair and transparent process. I must add here this practice is unusual among Canada's allies.
It should be noted that the government's major procurement proposals often contribute to other objectives, including regional industrial and economic spinoffs, business opportunities for small business and economic development for native peoples.
The involvement of many other federal agencies and departments ensures that the major government's projects are carried out according to the policies and goals of the government and of the people of Canada.
This process has a significant impact on the Canadian forces, from financial management to defence planning operations. We should not consider any change that could inhibit the ability of the Department of National Defence to provide our Canadian forces with the tools they need to fulfil their missions.
There are at least three reasons for which the House should not support this proposal. First, a number of departments, including DND, have already taken measures to improve the procurement process so that Canada can get the best equipment at the best price.
The Department of National Defence has shown innovative spirit to ensure that our country has a multipurpose combat-capable force, at a fair price. For example, the decision makers have looked at the possibility of acquiring products sold on the market, since military equipment that is made to order is very costly and takes a very long time to get.
Moreover, two recent procurements, one involving 100 utility tactical transport helicopters and the other one 15 Cormorant search and rescue helicopters, are evidence that the Canadian forces can be provided with excellent material at a very good cost and take delivery much more quickly.
There are other innovative procurement processes that involve new financial arrangements. The acquisition last year of Upholder class submarines from Great Britain is an excellent example of innovative procurement. What maximizes the value of this transaction for Canadian taxpayers is an 8-year interest free loan-purchase. In addition to the Canadian forces getting the submarines for one quarter of the price of new ones, this project will generate economic spinoffs of some $350 million for Canadian businesses.
I could go on, because I have other very interesting things to say, but I see that my time is up and I must give the floor to someone else.