Debates of Nov. 18th, 2010

Opposition Motion—National Defence

[Kirsty Duncan, Liberal, Etobicoke North, ON]

Madam Speaker, the point is that we have not had an open competition. Had we conducted an open competition, we absolutely wanted regional development and would have been guaranteed dollar for dollar from Industry Canada.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Mr. Speaker, I am pleased to participate in today's debate. I want to point out, first of all, that the Liberal Party supports the replacement of the CF-18s.

Obviously the replacement is absolutely critical. This party has stood and continues to stand in support of our military. It was in 2005 that the Paul Martin government brought in the largest amount of money in support of the defence department, $15 billion.

This issue is really about process. It is about how this has developed into what the government is now claiming to be an agreement in which we are to purchase 65 F-35s. Obviously it is to protect our north and guard our sovereignty, all of which we agree with. However, I think the process is at the core of this debate. The process did not involve any government effort to negotiate a better price for Canadian taxpayers.

Currently we have a $56 billion deficit in this country, and the government is going to borrow up to $16 billion-plus for this new fighter aircraft. Who is going to pay for these? Obviously it is the taxpayers, and clearly it is at a time when we do not have those dollars.

The process did not follow the very rules that the government is sworn to uphold, which the government used to quote when responding to our party when we were in government.

This process not only pretty much guarantees we are going to be over-paying for the CF-18 replacements for the next 30 years; it also undercuts industry's right to guaranteed benefits, particularly on the economic side, for Canadian industry.

This, of course, is not the process the government is supposed to follow when making these types of major procurements. Let me quote from the Treasury Board guidelines, which lay out the proper process the government should have followed when making this procurement, and which our national experts have spent decades developing to ensure that we get the best deal on purchases like this.

In section 9.45 of the Treasury Board guidelines it clearly states that competition remains “the cornerstone of the Canadian government procurement process”. It is the most effective and most efficient way of achieving the goals of government. “It gives suppliers the incentive to bring forward their best solution to the operational problem at a competitive price, as well as respond to more effective requirements in support of other national objectives”.

What happened in this case? Clearly the government took an end run on these guidelines. For four years now, the government has increasingly ignored the competitive process. So it is not just in this case of the F-35s.

Do not take my word for it. I would like to point out statistics we heard before the defence committee last month from the man who used to be in charge of the department's procurement section. He said the following.

Statistics show that under the previous Liberal government of Paul Martin in 2004, only 8.8% of defence spending was spent through untendered contracts. In 2005 this number still remained relatively low at 14.6%. But in 2006 we saw the beginning of a drastic increase under the Conservatives. That year 27.3% of defence spending bypassed the competitive process, a number that increased again to 31.9% the following year. Compare that to today, when 42% of defence contracts Conservatives signed last year were without any competitive process. It is 42% uncompetitive.

It is no wonder we have racked up the largest deficit in Canadian history. Again, we are not going out and getting the best price. We are simply sole-sourcing. This is obviously costing all of us, members of the Canadian public, the taxpayers, a significant number of dollars.

That is what competition is there for. It is to get the best price, to make sure the Canadian taxpayer is getting value for dollar. This party has talked about value for dollar with regard to this issue from the beginning. That is a responsibility the government has chosen to ignore.

The other reason is to make sure we get the best equipment available to us. Never is this more important than when we are talking about military procurement for our men and women in the air force. We want to make sure they have the best tools available. Again, without an active, open, transparent and fair competition, we do not know that.

At the defence committee we heard from Boeing. We heard from other competitors, who clearly indicated this was not a competitive process, who indicated they can provide value for dollar, in fact less cost to the taxpayer. Yet the government has chosen to ignore that, and we have again a sole-source contract. That obviously is of concern to this party. It is of concern to me as the vice-chair of the defence committee.

I would point out that the government keeps talking about next generation fighter aircraft. Next generation is actually a catchphrase. It is a marketing slogan that has been used in order to talk about this particular aircraft.

It is incumbent upon all parliamentarians to make sure we do get value for dollar. It is incumbent upon all parliamentarians to ensure that the process as outlined in Treasury Board guidelines is followed. If that is not followed, then we cannot be sure that we are getting the best price for Canadian taxpayers, and we clearly are not sure.

The debate and discussion that I have heard from the government is that the JSF was developed. There was a so-called competition between Boeing and Lockheed Martin in the United States. I would point out that now the American government is quite concerned about the cost overruns of this jet, as are the British and other countries.

One of the things we have not been able to glean from the government is why it thinks this is the best aircraft in terms of the needs, the capabilities we need as a country for the Arctic, as an example. Is this the aircraft we absolutely need?

We will continue to debate this. It is unfortunate when this was announced by the minister. This was announced in July, in the summer. The Conservative government has a tremendous record of announcing things outside the purview of Parliament. We heard that last week with regard to the issue of our soldiers being involved with training in Afghanistan. Budgets have been presented outside of this institution. That erodes the role and the authority of members of Parliament. That is why the defence committee has taken up this particular issue and why this party has put forward this important motion today. We want to discuss this issue.

The fact is that cost overruns have to be, and continue to be, a major concern. We do not even know what the operational life costs are going to be in terms of this aircraft. My friends across the way will say that we did not have that with the CF-18s until four years after the fact. The costs we are looking at for this aircraft alone are the most we have ever paid, and obviously those additional costs go well beyond $18 billion; they could go to $25 billion or $30 billion, by some estimates. Obviously when the British and others are saying they should maybe scale back and look at this whole component again as to whether or not they can afford it, that is an issue.

Winslow Wheeler, who is a renowned defence analyst and someone who has been around the United States Congress for more than 30 years, pointed out a number of deficiencies with regard to this aircraft. We are obviously going to be looking at that. Some members of the defence committee will have an opportunity to go to Texas to talk to the manufacturer and ask some of those tough questions.

I want people to understand that we certainly are asking questions and we are going to continue to ask questions, which is why it is important that we go to Texas and talk to the manufacturer. We will be able to ask not only the manufacturer but hopefully Boeing and others in terms of what information they can provide, because this contract will not officially be signed for about three years. It is important that we do that. My friends across the way have agreed to do that. We are looking for value for dollar. We want to make sure we get the right aircraft. We are going to continue to ask questions on operational capability, about whether this is the right aircraft, particularly for the north as a single engine versus a dual engine plane.

Make no mistake about it. We support replacing the CF-18s. The issue is whether or not we can afford what is being proposed by the government and whether or not the F-35 is the plane for our forces.

[Laurie Hawn, Conservative, Parliamentary Secretary to the Minister of National Defence]

Mr. Speaker, I do work with my hon. colleague on the defence committee and, by and large, we have a pretty good working relationship and we get things done. However, I do need to challenge him on a couple of things.

First, I want it to be clear that the amount of money we are talking about really starts in 2015-16, not today, and it is spread over a period of 20 years.

The $3.2 billion that members keep talking about that we would save if we had a competition is a complete fantasy number pulled out of the air by someone who used to be the ADM of materiel five years ago, rather than listening to the person who has been the ADM of materiel for the past five years who is currently working with the MOU and all the allies and, frankly, has much more credibility.

The member also talked about sole sourcing. In 2004, we were not at war like we are today. Arguably, we were at war with Volkswagen jeeps, which is the kind of equipment that the Paul Martin government and the Chrétien government before him had equipped us with. When a country is at war, there is a certain urgency for equipment requirements for safety on the battlefield. That is what we have been providing and that is one of the reasons for sole sourcing.

I would like to challenge the member on that $3.2 billion. Where is the justification for that, other than somebody's opinion?

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Mr. Speaker, I never mentioned the $3.2 billion. That number did not come out of my speech so I will not respond to that specifically.

However, I will respond to the fact, which was the central thesis of my speech, that Treasury Board rules were not been followed and that, today, 42% of those contracts are sole sourced. How do we know we are getting value for the dollar when 42% of all the contracts are sole sourced?

As my colleague indicated, I do work very well with him. However, in terms of equipping the armed forces, when we went into Afghanistan in 2001, no one, not even the military, could predict what we would run up against. In 2005, however, we did provide the largest expenditure toward the defence department in the history of this country. We brought in Coyotes and the kind of equipment that the forces have today, and the forces have that equipment because of what the Martin government brought in at the time.

I know a little revision to history works well in some quarters but it does not work well here.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I have listened to this debate with great interest and I noted the question to the hon. member about when a country is at war. I have found the debate thus far on this topic and the whole discussion incredibly myopic.

The last I noticed, and nobody has pointed out to me otherwise, since I have been elected I have not been able to vote to go to war. From my understanding, the government has announced, without any vote, that we will no longer be engaged in the war in Afghanistan. In fact, it probably will be over sometime next year, if we stick to the current policy.

If we will not be at war any more, there is an obvious question. In this time of profound economic decline and major recession in this country, and based on a poll that just came out where 71% of Canadians said that the money could be better spent on acting on climate change, not on waging war, surely this money could be better spent to support our armed forces because we are moving into the Arctic. Why not invest in a major way in search and rescue and surveillance?

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Mr. Speaker, search and rescue is another issue with which the defence committee is seized. Yes, there is no question that we do need search and rescue aircraft, but we also need aircraft to patrol the north in terms of the protection of our sovereignty, which I do not think anyone would argue with.

The issue is the type of aircraft that we need in terms of the capabilities for warfare 10, 15, and 20 years down the road. Is it the kind of aircraft we needed 20 years ago? Clearly not. In terms of support for troops on the ground, the type of aircraft that will be used will be different from what it was 20 years ago.

Could the money be better spent? Again, it goes to back to the Treasury Board guidelines. The way we would find that out is if we were to have an open, fair and transparent competition,. However, there is no question that her point on search and rescue aircraft is definitely something we have been pushing the government on.

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, I am pleased to join in the debate today on the Liberal opposition day motion regarding the F-35 contract.

With respect to this particular contract, I want to go back to the estimates debate in the committee of the whole in this House on May 27. At that point in time, theMinister of National Defence was in the House answering questions, along with officials who were advising him. We had an issue with respect to a question I asked about what was to happen with the replacement for the F-18s.

Early in the debate, the minister said very clearly that there would be:

...an open, competitive, transparent process that [would] see us receive the best capability, to provide that capability to the best pilots in the world.

Later on in the debate, on page 3064 of the May 27 Hansard, he came back to say:

Mr. Chair, I will come back to that in an instant. I just want to be very clear on the record that the reference to the next generation of fighter aircraft does not preclude a competition, and an open and transparent one. In fact, the joint strike fighter program thus far has provided Canadian industry with access to high technology industry opportunities. [And we] have already [had] contracts with a total estimated value of over $325 million.

That is consistent with the statements that were given to the defence committee by Alan Williams, the former ADM materiel, who said that the participation in the joint strike fighter program was not a decision to purchase that particular aircraft. The decision to engage in the joint strike fighter program was to participate as Canadians, with other countries, to develop and design a new jet fighter. However, there was no commitment to actually buy it.

What we now have is the government taking the position that there was a competition back in 2000. It does not understand why the opposition motion is asking for a competitive bidding process to choose a replacement for the F-18. It is pretty obvious why we are asking for one. It is because that is the way defence procurement is supposed to take place. In fact, that is what was promised by the Minister of National Defence here in this House on May 27.

It seems that there has been a bit of a pattern going on over the last little while. The House of Commons went into recess for the summer and, lo and behold, in the middle of the summer, on July 15, there was a press conference, with a prototype F-35 in the background. An announcement with big fanfare was made that Canada was committing to buying 65 F-35 jet fighters with kind of an unannounced cost. However, the media quickly came to the conclusion that we were talking about a $16 billion program that the taxpayers of Canada were expected to pay for, without any competition, based on an announcement made by the government over the summer, after making a commitment in this House to having an open and transparent competition.

What was wrong with that? What was wrong was that the basic procurement principles and very basic government operations where we decide, first, what it is we want and what it is we need, and then we go about trying to find it, were not followed.

Once again, in defence procurement, the starting point is supposed to be what is called a statement of operational requirements. In a statement of operational requirements, the military does not go to the departmental officials and say that it wants to buy a Chinook, that it wants to buy a particular aircraft or that it wants to buy a particular item.

The starting point is supposed to be what our needs are for an aircraft, whether it be a search and rescue fixed wing, a helicopter for operations in Afghanistan, or a fighter jet, a patrol jet, a patrol plane or whatever it is, and then what we need it for and what we want the equipment to be able to do.

This statement of operational requirements is a complex process and it often involves, in some cases, many years of study and analysis by experts within the Department of National Defence. In fact, the statement of operational requirements is often sent out in draft form to potential suppliers for their comments and review and then comes back to the department to be finalized. When the statement of operational requirements, which shows what the need is and what the capabilities are, is finalized, then a tender document is put together for a competition.

The document would show the industry our requirements and then the industry would put together a bid as to whether it can meet these requirements, what the cost would be, what the delivery times would be and so on, although some of those would obviously be within the tender documents.

What happened here? I am sure the government is quite within its right to talk about the process of the development of the joint strike fighter but that was a separate project. It did not commit Canada or any other nation, including the U.S., by the way, to buy any of the planes at any time. The memorandum of understanding is about the development and provides for the acquisition of these planes and for long-term maintenance contracts and participation in the contracts for supplying the supply chain for the production. That is a separate item from the defence procurement process which was developed, defined and designed to give our armed forces what they need at the lowest cost to taxpayers, meeting operational requirements and needs.

We have been told that the defence department was advised back as early as 2006 that the joint strike fighter was what it wanted to have and what it needed and yet we find out from the defence committee hearings that the statement of operational requirements was not actually developed until the spring of this year. The statement of operational requirements appears to have been finalized somewhere around April or May of this year, at the same time as the minister was saying that there would be an open and fair competition.

Then we had a decision in July to have a sole source of the F-35 by Canada under that program. So far, we have had witnesses from Boeing come to our committee and, based on what has been made available to our committee and publicly in terms of the capability requirements, say that they could meet those needs. Through their capabilities, they wanted to be a part of that program and they could have bid on this jet but they were denied that opportunity.

We also had representatives from a French manufacturer who also said that their company could meet the needs of the statement of operational requirements.

We will hear arguments from the other side, which we already heard in the committee, that their planes are not as good as the JSF or the F-35, that this one is not as good as that one, that that one is more expensive than the other one, and so on.

All of that should not really be the subject of debate in a parliamentary committee or in this House. That is something that is done through a sophisticated professional process designed to ensure not that someone can score political points in a committee or in this House, but that the factual capabilities, the actual numbers, the real tests, are being examined when a decision is being made.

We have not heard from all the potential bidders, but it is pretty clear from what we have heard so far that discussions stopped with these other manufacturers at a certain point. In fact, they were not given an opportunity to disclose to the Canadian government the full capabilities of their own aircraft. So there was really no basis to make the kind of comparison that could have and should have been made when making a decision of this nature.

That portion of my remarks has to do with the process itself. The process is clearly flawed. We are talking about spending, when all is said and done, as much as $16 billion of public funds, devoted to a particular aircraft to replace the F-18. That is part of the issue that this particular motion focuses on.

There is another part of the issue that I want to address, and that is, do we need this particular aircraft versus other possibilities for Canadian defence requirements?

I did not mean to be flippant when I said it, but I think it does capture the essence of my argument and the question that was raised, that one does not need a Maserati to drive to work and we do not need a stealth fighter to patrol Canada's Arctic or east coast.

That begs the question, what are our actual defence needs and do those defence needs require what I have called “the latest and the greatest”? It may well be, when all is said and done, that the F-35 is the most capable fighter jet available in the world today to do any number of things, but are those any number of things the things that we need to have done?

I think that kind of exercise is one of strategic analysis that ought to be available to this Parliament and to the committee, an analysis of Canada's plans for the future and how we plan to engage in international operations. Do we need the kind of capability that's there?

For example, in a major international conflict, will Canada's contribution, if that is what we choose to buy, actually make any difference in an international operation when we compare Canada's 65 jets as potentially part of an operation with the Americans who may have 2,500 or 3,500 jets?

The last time the jets were engaged in activity, the real issue was finding space at airports to land them, because access to aerodromes and airstrips was restricted and only a certain number could be accommodated. Is it really necessary for Canada to have this capability as part some international effort?

Who are we going to be fighting against? We heard it said that we do not know, we are making plans for the next 30 or 40 years, and the only thing we can really do is to say that we will get this because it is the best available today.

Is that really what Canada needs to do? The only way to find that out is to have a significant type of military strategic analysis made available for debate. That is normally done through a defence white paper that analyzes the various options for Canada and sets forth recommendations as to how the Canadian Forces ought to be configured, what kind of equipment it should have and what its needs are. It makes an argument that all of us can have a look at.

I have heard the Canada First defence strategy called an equivalent to that, but in my view, that is very inadequate and superficial. I do not mean to dismiss it entirely, but it amounts to a shopping list of new equipment and refurbishment of the equipment we have. It does not hang together as a strategy, but rather, a suggestion that we should acquire this, that, and the other type of equipment over the next while.

We had a fleet of F-18 fighter jets. We lost another one last night, unfortunately. These have been operating for more than 20 years, some as many as 30 years. They received what was called a mid-life refurbishment, which was only completed in March of this year. They were part of the defence of Europe during the cold war. They were used as a military air presence in Canada, particularly over Canada's coastal waters.

During the cold war, the Russians were constantly testing Canadian defence responses and these jets were the ones scrambled to be present and show that we were paying attention and that we knew when somebody was active. With the techniques of satellites and other sophisticated technology today, surveillance by itself is not really the issue. The issue is the ability to respond. But what are we responding to?

In the case of Russia, if they care to make them airborne, which they do occasionally, we are responding to technology from the 1950s, long-range bombers that are run by propellers. They take many hours to get to Canadian airspace or even near it. Is that something that we need a stealth fighter to deal with? Is that something that we need the very latest of technology to deal with? I do not think so.

There are those who scoff at that and one of them is the Parliamentary Secretary to the Minister of National Defence, who is a former fighter pilot himself. He will say that fighter pilots want to have the latest technology, everything that is available, because that is what they should have, and there is an argument for that. However, there is also an argument that says Canada does not have to play the same role in international military activities as other countries. We can define the role that we wish to play. We can decide what we need.

So the second part of my argument as to what needs to happen before we make this kind of commitment is to have a thorough review of the actual needs of Canada and the requirements for Canada's participation in military activities. We need to patrol our coasts, we need a fisheries patrol, we need to have a presence in the Arctic and throughout the country, but do we need this very expensive jet fighter to fill that need? Can the needs of Canada be met with something less expensive with a different configuration?

Those are the kinds of questions that we in the NDP have asked and challenged the government on and to date have not received a satisfactory answer. We support this motion. Yes, there ought to be an open competition. However, before that takes place, there also ought to be a thorough review and debate about what Canada actually needs in the air over the next while to replace the F-18s.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I had the pleasure of sitting with my colleague briefly on the committee in late summer regarding this particular issue.

One of the witnesses he mentioned briefly was one of the potential competitors in what was supposed to be an open competition, as purported by the minister but later on that story changed. It quickly changed from “Yes, there will be a competition” to “Oh, but there was a competition”, and in the time between the two, it did not really happen.

I would like him to comment on some of the testimony that stuck in his mind regarding the potential of competition and some of the other manufacturers who came to the committee.

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, we heard from the Boeing representatives and we heard from the French manufacturers of the Rafale. They said that they fully believed they could deliver a competitive product and meet the needs of Canada. They felt they were left out of the loop, that they were not even spoken to and that they did not get the attention they would have expected if there was to be an open competition. This speaks to the motion before us. If there is to be a choice, and obviously a choice has to be made, it should be based on a level playing field, where those in the business have an opportunity to compete.

One of the things I find disturbing is we have been told there cannot be a competition without getting out of the MOU. That was part of the approach the government used to fend off the suggestion that there could be a competition. This is not the case. We can still have a competition. We can still ask others to come forward with their projects and the decision can be made on what is the best choice for Canada without getting out of the MOU.

[Laurie Hawn, Conservative, Parliamentary Secretary to the Minister of National Defence]

Mr. Speaker, there are so many things and so little time. Yes, we heard from Dassault and we heard from Boeing. Do we expect people to say that they cannot meet it? Of course they will say they can. That is why we have hired and paid experts, military and civilian, over years to look at these kinds of issues. Dassault admitted that its airplane would be $50 million more expensive than the F-35. That is enough right there.

If we hire and pay these experts, military and civilian, for years and years to look at things like this, at very highly classified levels, when they give us the answer, as happened in nine other very advanced countries, and if we go through that very rigorous process and at the end of the day not listen to what they say, what is the point?

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, clearly the decision as to what is more expensive and what is less expensive can only really be found out in the bid.

However, to answer the parliamentary secretary's second question, it is the process that we are questioning. The same kind of process was not followed here, which does provide the level of rigour that we have been told exists within the Department of National Defence, the same kind of board challenges that we were told was an important part of procurement.

The Auditor General criticized the Department of National Defence for its failure to use those efforts in another project and unfortunately the same rigour is not being applied here. Therefore, this is a process problem and it is a question that can only be resolved by an open competition.

[Paul Dewar, NDP, Ottawa Centre, ON]

Mr. Speaker, I thank my colleague from Newfoundland for his insight and his work on this file.

I also want to ask him a question about the stealth, but I suppose this is about the stealth of the motion today as opposed to the other stealth that has gone on in this place and the agreement to go ahead with the extension of the mission in Afghanistan.

We now find out there was a deal between the Liberal Party and the Conservatives to extend the mission in Afghanistan and to spend $1.5 billion extra dollar on a military mission. Could he enlighten us as to why the Liberals did not want to come forward today on a motion about the extension of the mission? We could have had a debate about all of these facets, including the stealth fighter, and about the mission in Afghanistan, the extension of a military mission and a vote.

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, I think the hon. member for Ottawa Centre is right. The issue of this week is not specifically about the F-35. The issue of this week is government taking unilateral action to extend the military mission by three years at a cost that the Conservatives acknowledge to be $1.6 billion.

The Parliamentary Budget Officer said in 2008 that a three year mission with 1,000 troops would cost in the range of $3 billion. Why is that not the subject of a motion by the Liberals on their opposition day instead of this? It is a significant expenditure of public dollars that heretofore has required a vote in the House, but we will not get one. We are getting a vote instead on this contract.

[LaVar Payne, Conservative, Medicine Hat, AB]

Mr. Speaker, I listened intently to my hon. colleague who is on the same committee as I. I find it quite interesting that he talked about Boeing when actually it could not answer any questions. I am flabbergasted by the fact that he suggests Boeing was even in the competition.

However, I would also note that he asked why we would need stealth. He tends to forget, during this debate and in committee, that in fact the Russians and the Chinese also have stealth aircraft.

If Canada is part of NATO, which we are, and we expect our fighter aircraft to be participating in that, and if we do not have the F-35 stealth aircraft, is he suggesting that we put our Canadian military fighter pilots in harm's way? I can assure members that without that stealth, they would be great targets for whomever we might have to go up against. I would like to hear the member's comments on that.

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, we are on the same committee and we heard from representatives of Boeing. They said that as a result of the failure of the Canadian government to engage them in this process, they were unable to provide the information that would be required for Boeing to participate in the competition. That was the problem.

As far as stealth goes, as the hon. member knows from our committee hearings, there are varying degrees of stealthiness, if I may use that term, and this is a factor for consideration in any purchase of an aircraft. I agree with him on that.

We do need to have equipment that can meet whatever challenges in which we might be engaged. We do need to have a full understanding and a full representation of the options and challenges. It needs to be laid out so a proper decision can be made, not just taking one particular issue and saying that proves we obviously need to have this F-35. That is not the way this is done. I do not think it should be done in the House either.

[Lynne Yelich, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, I want to quote the ADM who said:

In terms of the joint strike fighter MOU, we have to be clear that in order to run a competition, Canada would be forced to withdraw from the MOU. I would point out that that is because the MOU precludes that countries have agreed not to apply the normal IRB process. A Canadian competition would have to entail the normal IRB process, and you cannot do that within the MOU.

It has to be understood that some of the comments made were actually out of context.

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, I think the ADM did agree that we did not have to get out of the MOU to have a competition. He was concerned about being able to make a judgment between those offering IRBs and the joint strike fighter program, which is of a different nature. There can still be a competition that determines which aircraft we want and a decision can be made based on the information received.

[Rona Ambrose, Conservative, Minister of Public Works and Government Services and Minister for Status of Women]

Mr. Speaker, I will be sharing my time with my friend, the member for Lotbinière—Chutes-de-la-Chaudière.

I am pleased to have this opportunity to express my unwavering support for Canada's purchase of the F-35 Lightning II fighter jet. I am proud to support this procurement because it is the right thing to do. I am also proud that our government is doing what is necessary to rebuild the armed forces. I am also proud that our government is providing Canada's men and women in uniform, the same men and women in uniform who put themselves in harm's way every single day on our behalf, with the best equipment they need to do their jobs.

We are buying the aircraft that we need to keep Canadians safe in their homes and to protect our interests abroad. I am proud that our government is standing shoulder to shoulder with our allies, participating in the joint strike fighter program.

I am also proud that our government is affording the Canadian aerospace industry with an unprecedented opportunity to take part in a global supply chain that will sustain and create good jobs for decades to come.

I am astonished as to why hon. members of the opposition are opposed to this decision. They insist on referring to this as a non-competitive process. However, the fact is the opposition knows that a rigorous and extensive competition was held in 1997, because those members were in government at the time.

A consortium of allies launched the effort to find an affordable, multi-role, next generation stealth aircraft. Canada was part of the intense and exhaustive competition to find the best company to build the joint strike fighter aircraft from the beginning. In fact, we participated without any obligation at the time to purchase the aircraft.

The reason we have made our commitment now, rather than waiting is extremely important, so let me be clear. By committing to make the purchase now, we allow our Canadian aerospace to have priority access to win lucrative contracts for the entire global supply chain, numbering some 5,000 aircraft. Estimates based on just the approximately 2,400 planes that our partner countries are buying show targeted opportunities of around $12 billion for Canadian companies. Imagine the figures if that is extrapolated to 5,000 aircraft.

The plan laid out in the Liberal motion would eliminate the priority access that our Canadian companies now enjoy at every moment when subcontracting for the fleet is under way. I cannot think of a more devastating policy decision than what the Liberals are proposing. Frankly, the motion is unintentionally a plan to throw thousands of Canadians out of work, but thankfully the government is protecting these jobs and allowing these industries to prosper. I hope the NDP will join us in voting against this motion as I am sure it too wants to support aerospace jobs in places like Winnipeg and throughout the country.

Let me return to the competition that we were a part of from the very beginning. This is important because it allowed us to buy next generation interoperable fighter planes at the lowest possible cost, providing the best possible value for Canadian taxpayers. Because there has already been a competition and because it was the right process to follow, a process consistent with my department's fundamental principles of fairness, openness and transparency, we see no benefit for Canadian taxpayers in having another one, particularly when we know for a fact that only the F-35 can meet our operational requirements. Another competition would be a waste of time and a waste of resources.

As the Minister of National Defence has explained on many occasions, his department has determined that the F-35 is the right aircraft at the right time for the best possible price. It is the only aircraft that will be interoperable with our allies fleets.

I bring up the subject of the Canadian Forces decision because it is important to bear in mind the requirements that drive the procurement process. The procurement process does not drive the requirements. The Department of National Defence is the expert in what a modern armed force needs. Under the Defence Production Act, I as Minister of Public Works and Government Services, have the authority to purchase defence supplies on its behalf. My department's role is to validate the identified requirement and ensure that the procurement is conducted according to the rules with the fairness and transparency Canadians demand, while maximizing value for money. We have done that.

We made a commitment two years ago in Canada first defence strategy to replace Canada's fleet of CF-18s. Make no mistake about it. The CF-18s are some 30 years old. They must be replaced and the Canadian Forces will begin retiring them by 2017. That is why we are working toward a 2016 delivery date for the first aircraft to be delivered to Canada. As we know, we cannot just drop by the hangar at the corner and buy a fleet of latest generation fighter jets. It takes careful planning and it takes a long lead time.

Again, I strongly disagree with the claims that this process has not been a competitive one to date. I cannot agree that we should start over at the cost of what would be billions to Canadian industry, especially when the Canadian Forces will have to begin taking CF-18s out of service in just seven years.

This decision to buy the right aircraft at the right time will allow national defence to start its planning for its introduction and use. Canada's military men and women have already lived through too long a period when their ability to do difficult dangerous jobs was impeded by procurement delays and no one wants to put them through that again.

The Canadian military was exhaustive in its analysis of its needs and it has made the right decision. It needs a fifth generation stealth fighter aircraft that is interoperable with our allies. It is my department's job to get it for the military and to get it at the best price to be had.

Yes, this represents a significant expenditure, but that is only one side of the picture. This is also an investment not only in Canadians' peace and security and Canada's reputation as a trusted ally, but in our defence and aerospace industry.

This investment promises the creation of well-paid, knowledge economy jobs right into the middle of the century, and it is far from an empty promise. The mere $168 million we have spent to date has already led to more than $850 million in contracts for Canadian companies, research labs and universities, the very drivers of a modern knowledge-based economy.

The expertise and innovation that this investment will spur will be spread throughout the country. For example, I recently visited Avcorp Industries in Delta, British Columbia, which has now signed an agreement for the production of a component of the carrier model of the jet to be used by the U.S. navy, an agreement that may represent over $500 million U.S. to this British Columbia company.

Another excellent example of the downstream benefits of this investment may be found in places like Kitchener, Toronto, Dorval, Longueuil and Laval, where the aerospace company, Héroux-Devtek, is hoping to secure possibly a quarter century of work for its employees through a successful bid. I have met with and spoken to this company and it is extremely excited and hopeful about our F-35 decision and its opportunity for jobs.

The vice-president of analysis, Teal Group, Mr. Richard Aboulafia, has estimated the JSF program will capture more than half the world's fighter production by 2019 and Canadian companies will be in on the ground floor. Mr. Claude Lajeunesse of the Aerospace Industries Association of Canada has said that the program will positively affect the Canadian aerospace industries for decades to come.

These industry leaders fully understand the magnitude of the benefits that will arise from this investment.

Therefore, I am proud that Canada's is working with its allies by ensuring interoperability, equipping its brave military personnel, keeping its citizens safe and securing the health of major industries.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I want to talk about the traditional way of procurement. I am reading the Auditor General's report about costs, about life cycle costs and how these are managed. One of the issues the Auditor General brings up with the medium to heavy lift helicopters is that some of the costs have escalated.

Getting back to the fighter jet, we have also heard from other countries, such as Australia, that the costs are escalating.

She talked about the fact that it was the cheapest plane available, but I am not sure if we know that yet. I would like the minister to clarify the position about these life cycle costs and how confident the government is that these cost overruns will not end up like what the Auditor General has said about medium to heavy lift helicopters.

When the minister talks about procurement and guarantees, I am not sure if we are entering a new realm of what is actually guaranteed or not, and I appreciate the work that is being done. According to an article by the European Union about Israel, it says it has guarantees of the installation of Israeli systems for the first batch of planes to be delivered. There is an agreement to put in $4 billion worth of Israeli systems—

[The Acting Speaker, Conservative, Barry Devolin]

The hon. Minister of Public Works.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Speaker, in regard to issues around cost overruns, the hon. member should know that when we talk about purchasing the F-35 and the 65 Lightning II aircraft, the U.S. government has agreed to cover all of the cost overruns related to the development of the aircraft.

In regard to other costs, when we look at purchasing through the consortium and through the joint strike fighter program, because we are on the ground floor, purchasing is part of this group of nations and we actually receive a discount of 8% upfront, so we are getting the best possible value for Canadian taxpayers.

When we look at efficiencies, we are buying through a consortium. When we look at future potential for maintenance contracts that will be competed all around the world, Canadian companies will have an opportunity to compete on these very lucrative contracts. We estimate the costs for maintenance to be equivalent to the maintenance costs of the CF-18. We think the costs might be less, because there will be such an opportunity to leverage the numbers we are looking at with the consortium around the world. Being part of this is actually a huge leveraging opportunity in our procurement process.

If it is different. It is better, much better. When we look at how we normally procure military equipment, being a part of a group like this will do nothing but benefit our aerospace companies, but also the Canadian military in terms of costs moving forward.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I would like to ask the minister how many final assembly plants there are for the F-35 fighters. Are they all in the United States or are there any outside the United States?

I recognize there are a lot of other contracts being let in other areas, and I know that Manitoba certainly has one, but if she could give us that information as well, I would appreciate it.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Speaker, I would be happy to do that.

What the hon. member should focus on, and what all Canadians need to know, is how much Canada has been a part of the development of this aircraft. If people get an opportunity, I would recommend that they visit the website for Lockheed Martin and look at the schematics of the F-35. They will see in the shaded component areas that talk about Canadian companies that this aircraft has literally been developed by Canadian companies. These companies are scattered geographically and regionally all over this country.

As I said, to date we have invested only $168 million in the development of this aircraft and it has resulted in $850 million to date in contracts for Canadian companies. That is at minimum, of course. When we look at what industry is predicting with the purchase of only 65 of these planes, we have, at minimum, an opportunity for $12 billion in investments in Canadian companies. This is a huge opportunity.

I would suggest that the hon. member listen to people in the aerospace industry, such as John Saabas, the president of Pratt & Whitney Canada, who have affirmed their strong support for the purchase of these aircraft for Canada's military, and Paul Kalil, the president of Avcorp, which has already received a $500 million U.S. contract to build tailpieces for the U.S. variant for the navy.

This is a great opportunity for what we know to be a very successful aerospace industry here in Canada, and there is only better news to come.

[Jacques Gourde, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and to the Minister of National Revenue]

Mr. Speaker, I am very happy to rise today to debate our opposition colleague's motion concerning the F-35 stealth fighter jets.

I would like to begin by saying that I have the utmost respect for our colleague's questions. Like me, he wants to ensure that Canadians get the most out of our government's defence and aerospace investments and the resulting spinoffs. I want to reassure him today.

As usual, our government has done its homework and made the best possible decision to get the greatest possible benefits for the Canadian Forces, Canadian businesses and communities, and the Canadian people.

I believe that all of us in this House would agree it is time Canada had modern fighter jets to defend our sovereignty and properly support our various military operations.

Our current fleet of F-18 jets have served us well, but they are past their prime and need to be replaced over the next seven years. That is why we cannot afford to do nothing. It is our duty as the government to take action and make informed decisions, and that is what we are doing as we embark on the process to acquire state-of-the-art fighter jets.

On July 16, 2010, our government announced its intention to purchase 65 F-35 aircraft at a cost of approximately $9 billion. The first aircraft should be delivered in 2016, just before our current F-18s are mothballed.

There are a number of good reasons why we decided to go with this choice. First, the F-35 is the only one of a new generation of fighter jets that will give us interoperability with our main allies until the middle of the century. Experts are clear that in this ever-changing world, where nations from all around the globe are increasingly joining forces on more and more complex missions, that is a definite advantage when it comes time to coordinate our actions in various theatres of operation. We are talking about major allies such as the United States, the United Kingdom, the Netherlands, Italy, Turkey, Denmark, Norway and Australia, with whom we frequently collaborate.

Second, considering that Canada is a partner in the joint strike fighter program, the acquisition of the F-35 also represents excellent news for the Quebec and Canadian defence industries. Because of our commitment to purchase this aircraft, the Canadian aerospace and defence sectors will have priority access to the competitive processes for the entire F-35 global supply chain.

This could translate into access to contracts for the production of no fewer than 5,000 aircraft throughout the world. We are talking about markets worth approximately $12 billion and more than 65,000 hours of work for people, which could benefit Canadians. And that is just for the aircraft purchased by our allies. Potential markets are even greater. I believe that this will be of great benefit to us. It represents an important advantage that rebuts the arguments underlying today's motion.

Furthermore, when we add to the mix the know-how and capabilities of Canadian industry, which can compete with the best in the world, we have every reason to look to the future with optimism. Our government is convinced that purchasing these fighter jets will open the door to important markets for Canadian businesses. This large door will be slammed shut on Canadian companies if we renege on our commitment.

It is important to remind members that Canada's participation in the joint strike fighter program has already had results. Since 2002, a total of 85 corporations, research laboratories and universities throughout the country have obtained contracts worth approximately $830 million owing to our involvement in this program. And that is probably just the start. For example, one week after our announcement last July, Avcorp, a Canadian company in British Columbia, signed an agreement for the production of the outboard wing of the F-35 carrier variant used by the U.S. Navy.

This agreement could represent over $500 million U.S. in revenues over a period of 10 to 15 years. Furthermore, it could help create about 75 direct and indirect jobs.

In Mississauga, Ontario, Honeywell International has signed a contract to develop a power thermal management system for the F-35 Lightning II aircraft.

As a Quebecker, I know from experience that my province will not be outdone. Quebec has a solid reputation for excellence in the aerospace industry that goes beyond our borders. All over the world, experts agree that Quebec has established itself as a key player in this industry.

In Mirabel, in the Laurentians, L-3 MAS was chosen to support Lockheed Martin in the development and implementation of a Canadian F-35 sustainment plan in accordance with the needs and direction of the Government of Canada. L-3 MAS will continue its collaboration with Lockheed Martin throughout the system development and demonstration phase of the program to highlight the support capabilities it can provide for the Canadian fleet of F-35s. Those are just a few concrete examples of the spinoffs our investments will have for the country.

As pointed out by the CEO of Héroux-Devtek, which has factories in Dorval, Longueuil and Laval, winning a bid in the F-35 project could help create jobs for his employees for a period of 20 to 25 years.

That is the advantage of participating in a program designed to allow NATO allies to procure the most technologically advanced fighter planes at the lowest price. This also proves, beyond a shadow of a doubt, that the Canadian government is making sure that Canadians get the best value for their money. Most importantly, however, this announcement also shows that our government is firmly committed to rebuilding the Canadian Forces and to ensuring the safety and security of Canadians in the future, while providing sustainable economic benefits to our major industrial sectors.

Our airspace is one of the largest in the world. We must do everything we can to ensure that it is fully protected. The F-35 is an ultra-modern, fifth generation aircraft that will allow us to do just that, while respecting our foreign policy and national security objectives. Furthermore, it the only aircraft of its kind currently available to Canada that can be built by an allied country and from which we can expect to receive tangible spinoffs.

Those are the undeniable facts that must be taken into consideration. We must face reality. Our F-18s are aging and will soon be outdated. The status quo is not a viable option. We have no choice but to make a decision now if we want our armed forces to be able to continue their essential activities and operations, both in Canada and overseas, in just a few years' time.

Not so long ago, in 1993 in fact, history taught us that cancelling a military procurement contract can have devastating economic repercussions and a very negative impact on the ability of our armed forces to properly carry out their duties. Our government has no intention of making the same mistake. It cost us too dearly the first time.

That is why I urge my colleagues in the House to reject this motion today and to support the government in its decision to give the Canadian armed forces modern fighter jets that measure up to the task, and at a reasonable price.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, with an agreement to be worked out by 2013 as far as the maintenance costs are concerned, I would like to ask the member exactly what he envisions as the life-cycle costs of each and every one of these F-35s. Perhaps the hon. member would like to shed some light on that subject.