Fred Mifflin

[Peacekeeping, November 27th, 1995]

Mr. Speaker, I thank the hon. member for his question.

As he knows, while the peace accord was signed, from the Dayton, Ohio discussions it appears it will be some time before the accord is actually ratified. He would be aware that there are a lot of perturbations going on in Bosnia with respect to the details of the accord itself, such things as the width of the corridor in northeastern Bosnia, the disposition of war criminals potential and also the difficulty with the management of the Sarajevo situation.

On behalf of the Prime Minister and the ministers of defence and foreign affairs, I can guarantee the hon. member that there will be a debate. The opposition parties will have their input. But I cannot say when this debate will take place. I hope it will be soon, but it cannot take place until the accord is actually agreed to.

[Treatment Of Municipal Sewage, November 21st, 1995]

Mr. Speaker, I thank the hon. member for his question and his comments.

I say at the outset that many, if not all my constituents, are going to be surprised to see me stand up and answer a question on prairie farmers and the Canadian Wheat Board, but as you know the duties of a parliamentary secretary are many and varied, particularly during the adjournment debate.

The Canadian Wheat Board Act and Canadian Wheat Board regulations, as the hon. member knows, state that any export of wheat and barley requires an export licence issued by the Canadian Wheat Board. The law is very clear on this point.

The Customs Act, administered by Revenue Canada, is applied in support of the Canadian Wheat Board program, requiring exporters shipping wheat and barley to the United States to first obtain an export licence. It is very clear.

Proceeds from the sales of the unauthorized exports are not deposited into the Canadian Wheat Board pooling accounts. Therefore, when this occurs, producers who comply with the wheat board export program receive no benefit and are hurt by the resultant loss of the potential export opportunities engendered by the legal freelancers, as pointed out by the hon. member.

Within the democratic system of government in Canada there are other ways to work for change without deliberately engaging in unauthorized and illegal activities which may create unnecessary problems with the management of our international trade relations.

The western grain marketing panel process was put in place so that grain farmers, industry and other shareholders, could have an opportunity to participate in a number of grassroot forums to discuss the current grain marketing system, including the Canadian Wheat Board.

On behalf of the minister of agriculture, I would advise those who are dissatisfied with the current marketing system to participate fully in the western grain marketing panel and its process to improve the system and to do what the hon. member is suggesting is a more orderly method of conducting business.

[Treatment Of Municipal Sewage, November 21st, 1995]

Mr. Speaker, this all relates to Somalia and the airborne. The hon. member is clearly misguided in his attempts to discredit the Minister of National Defence and the government.

The Reform Party platform of using specious arguments and half truths for partisan gain has done nothing to help Canada deal with the issue at hand.

By contrast, the Minister of National Defence and the government have acted forthrightly and effectively. I believe this is what Canadians are seeing and what they are asking for. They are rejecting the disparaging arguments being put forth by the Reform Party.

Let us look at the facts. It was this government that called for an inquiry. More specifically, it was this member as opposition defence critic who asked for the inquiry two and a half years ago, not the Reform Party. It was this government that ensured the inquiry would be public. It was this government that made the commitment to make Canadian forces members available to the commission when they were called upon to testify. It was this government that encouraged people with any information that may be of interest to the commission to go forward to the inquiry. It was this government that ensured the Somali inquiry was provided with complete and accurate information and that relevant documents were made available to the commission.

DND and the Canadian forces have and will continue to co-operate fully with the commission that has been established. Not all our actions have been easy. The public rightfully demanded that the government address this serious issue in an expedient manner, but this had to be tempered with prudence. Where others may have attempted to score quick political points, we stayed the course waiting for the Westray mine decision so that justice would not later be undone as a result of a legal technicality.

These actions point toward leadership, integrity and a willingness to get things done. There is nothing to sustain the utterly fallacious and ultimately destructive arguments being put forward by the Reform Party. We will certainly not be goaded into taking ill advice and precipitous action. We are monitoring the commission proceedings. Canadians can rest assured that appropriate actions will be initiated when and where they are warranted.

Now is the time to let the commission do its work. We look forward to hearing the recommendations of the commission. In summary, the Canadian forces have a long and proud heritage that we are not prepared to discard. I suggest that the Reform Party shares this sentiment.

[Supply, November 21st, 1995]

Mr. Speaker, I want to respond by making a comment on the hon. member's presentation.

I congratulate him on coming from a great part of Canada, the Chicoutimi area. I know the area quite well. I used to spend parts of the summer there with my family staying at the Club de chasse in Tadoussac. I fished on Lake Tadoussac at the mouth of the Saguenay. It is a very beautiful part of the world.

With respect to the tenor of his comments, some of the things the member said may sound sensible and logical. Perhaps in different times we nurtured the idea of Canadian content when we could afford it. It was a luxury. I point to the St. Laurent class destroyer, to the DDH280 and to other acquisitions that had total Canadian content, with some exceptions of boiler equipment and other auxiliary machinery.

All countries are cutting back. In the course of my duties as parliamentary secretary over the last two years I have had the occasion to meet with the secretary of defense if the United States, the minister of defence of the Federal Republic of Germany, the minister of defence of Holland and other defence ministers. If there is one thing we have in common it is that we are cutting back. There is a peace dividend. The cold war is over. While we are peacekeeping and fighting brush fires which are real wars in that sense, the scale is different.

In the last decade the Department of National Defence has given up $21 billion and 21,000 men and women in uniform, 45 per cent of its civilian workforce. It has reduced the reserves from 29,000 to 23,000 in two years. We can no longer do what we used to do and I did not find that factored into the equation presented by the hon. member.

I know he did not intend to mislead. To talk about principles, theories and things that would be nice if there were no limitation on funding is one thing. However, if he would look at the reality of the situation, at the issues that dictate procurement policy in national defence, he might come up with a slightly different approach. I want to ensure the hon. member has factored that into his equation.

It is the same with conversion. The answer to conversion is not a massive infusion of money. Canada cannot afford that. Let us try to do like other countries have done with initiatives and other ways of doing it, as I suggested earlier in my presentation were presented by the Minister of Industry and the minister of public works.

[National Defence, November 21st, 1995]

Mr. Speaker, in response to my hon. colleague, I have to tell the House that the interdepartmental committee on household goods removal has sought to deliver household goods in a more cost efficient manner.

The committee, in consultation with industry and all members of the House from four different parties, has developed an approach that basically responds to and is approved by the Bureau of Competition. It develops a strong potential for saving, increases the level of competition and access by new entrants, and moderates the implementation risks involved.

I am pleased to inform the House that this is a better method of moving. I think it is agreed to by all members. I thank all those who co-operated in the consultations.

[Supply, November 21st, 1995]

Madam Speaker, I am delighted that the hon. Parliamentary Secretary to the Minister of Industry put that question. I must tell the House that we did not consult before.

The best example I can give him is the announcement made a week ago last Wednesday by the Minister of National Defence with respect to the acquisition of the capability for 15 search and rescue helicopters.

It allows the aerospace industry to be totally flexible in the way it goes about responding to this request. It can either provide helicopters by saying that it thinks those are the ones that are the best, and if it is assessed, that is the way it goes or the Canadian companies can say that they will lease helicopters. Having leased or bought them, the maintenance of the helicopters can be contracted out using the aerospace industry in a manner that perhaps was not conceived before and the inflexibility of this cumbersome system that I described in my presentation did not allow. More flexibility means more efficiency and better use of Canada's considerable aerospace industry.

[Supply, November 21st, 1995]

Madam Speaker, I thank the hon. member for his question. I recognize that he has agreed with some of the things we have said, as he did in the special joint committee.

I emphasize that the changes I have just related to him and to the House are not yet a year old. I assure him from the bottom of my heart that the name of the game is what is the most cost effective way of doing business. He is right in pointing out that we have done things differently depending on the kind of contract we have. However, that points out the flexibility in the system.

We no longer have to go through a system of hoops, milestones and baggage difficulties because it says so in the manual. It is done differently depending on which is the best way to do it and what is the most cost effective way of doing it.

The best example I could give the hon. member for Charlesbourg is to tell him about one area of technology, which I know he understands, so I will relate it to him very briefly.

In 1985 the Canadian navy had less than 350,000 lines of code. I am talking about software now. A decade later the number of lines of code in software in the computer and command control systems and technology transfer systems has increased by a factor of 30. It has just under 10 million lines of code now.

The member knows what that means with respect to software managers, the number of people who work in the software production areas and who are involved in maintenance and producing programs.

Different ways have to be found to do this. Some work may have to be contracted out as was done in one case. The member alluded to the case of Paramax. I think he was satisfied with the number of witnesses that were heard who indicated the difficulties we had with that and in other areas. That is one area to which I would like to respond.

However, this system is still evolving. The examples that he used indicate that we are prepared to do things differently and hopefully in the right manner. We may not get it right 100 per cent of the time, which is always the case when we are making a change. But we know that we have the major thrust right.

I want to respond to comments the hon. member made earlier and to clarify, in case there is any doubt in his mind, with respect to the submarines. He sat on the special joint committee. I am not going to read the recommendation because it is very clear. I can almost do it verbatim. The special joint committee said that, reluctantly, as much as it believes Canada needs a third dimension in surveillance of the oceans, which are the same size as the country, a submarine capability is needed to replace the aging submarines now. They are at the end of the line.

Pretty soon the capability to have people serve in submarines will be lost because the submarines will be gone. Therefore the capability will go with it. The report said, reluctantly, that Canada could not afford to spend the $5 billion needed to get four new submarines. However it did say that because Canada is a maritime country and because it really needs this third dimension to see beneath the surface as well as on and above the water, that if there was an opportunity to buy four submarines that were fairly modern, advantage should be taken of that.

As it turned out the British navy had retired its new submarines, the Upholder class. They are not old submarines. One of them has never been used. How can Canadian content be put into an opportunity buy? The committee agreed and said that its members did not specify a particular country. As it turns out it was the Upholder class in Britain, but it could have been other classes. It was not specified. The committee members did not restrict themselves. They said: "If we can get something at a bargain price that somebody else does not need any more, then buy it". It is like a major capital equipment garage sale. I wanted to clarify that.

[Supply, November 21st, 1995]

Over a decade. That is a lot. In the last two years since 1993 there has been a reduction of $7 billion from the department. That is from 1993 to 1999 and is in the 1993 budget. In last year's budget there is another $2.8 billion. I am talking about a lot of bucks here and a lot of jobs. I am talking about a lot of corner cutting which has to be done to make do with the money we have to buy the equipment we need. We cannot do business as usual which is the point I am making here.

First of all, we have put emphasis on extending the life of equipment whenever cost effective and prudent. With respect to new equipment, the acquisition will be only for purposes considered essential to maintaining the capability of the Canadian forces and for the widest range of defence roles. We want the equipment to do as much as possible without compromising the role and the major purpose of the equipment. We want to get fewer types of equipment, which is now the case, and to purchase equipment that is easier to maintain.

With respect to planned acquisitions, in 15 years capital equipment alone was cut by $15 billion. I talked about $21 billion but that involved other reductions in base closures and that kind of thing. That is a lot of money.

The Department of National Defence had to adopt a better business practice where greater reliance was placed on the just in time delivery of common usage items to reduce inventory costs. Also, in direct response to the recommendation made by the joint committee, the department increased off the shelf procurement of commercial technology which meets the essential military specifications.

The Department of National Defence has embarked on a program to enhance its partnership with the private sector. The most recent and best example of this is the way we are going about the acquisition of our 15 search and rescue helicopters, which does indicate a tremendous partnership and co-operation with the private sector. We have built in a lot of flexibility to the private sector.

Where business case evaluations demonstrate potential for increased cost effectiveness, support activities currently conducted in house will be transferred completely to Canadian industry, or shared with private industry under various partnership arrangements. This again speaks of more flexibility, cost effectiveness and efficiency.

We are also continuing to seek new ways to support our operational forces. If we can contract out to maintain the equipment, that is quite satisfactory to the department. I could quote

examples but because of the time I will finish the main thread of my presentation.

In Canada today, 60,000 people are employed in high technology industries, such as aerospace and electronics, which are directly linked to defence procurement. These linkages extend beyond the production of defence equipment to include technological spinoffs into commercial products and access to international markets.

The challenge of lower R and D and capital spending, as I alluded to earlier, and more off the shelf purchasing will be to maintain and improve the industrial impact of those expenditures which remain. To this end, it is the intention of the Department of National Defence to work with Industry Canada and Public Works and Government Services Canada toward harmonizing industrial and defence policies to maintain essential defence and industrial capability.

In general, the government will seek to foster defence conversion despite what the motion suggests. We are going to foster conversion not by a vast infusion of money, but through other initiatives which the Minister of Industry has espoused in very clear terms in this House during question period and in major speeches he has made. I am surprised there is so much doubt on the other side.

We are looking at overall industrial growth and the international competitiveness of Canadian firms consistent with our international trade agreements.

To summarize, what we did before may have been all right when we had the budget to do it, when there was the threat climate to do it and when circumstances permitted. All of the circumstances have changed. We can no longer do business as usual. We have had a major overhaul in the way we do business: in procurement, in life cycle management, in life cycle maintenance.

I look forward to the rest of the debate today to see if we can pick up some more ideas to further enhance what I believe is already tremendous progress in this area.

[Supply, November 21st, 1995]

The original requirement.

I do not want to belabour this, but the case in point was the EH-101. It was a good helicopter, but it was too good for what was needed at the time. It was designed for the cold war. By the time the selection process had come to an end, the cold war was over and the requirements had changed.

Where did we go from there? We had many discussions in the special joint committee on national defence, in which I was honoured to play a role, along with other colleagues of the House. There was some disagreement, but I thought the work of that committee was conducted very co-operatively. The report was hailed as a good report from the bottom up. In 10 months of study the committee consulted over 1,200 Canadians and every kind of group which was involved and interested in national defence, from the positive to the medium to the negative. We took into consideration all of their concerns.

One of the major areas we spent time on was the procurement of equipment. Major equipment groups, defence preparedness groups, Canadian defence associations and the military equipment requirement industry came and spoke with us. Our conclusion was not in support of the motion the opposition has put forth.

In the major discussion one of the things we focused on was that the procurement function was central to the operation of any military service. If we do not have equipment we cannot really have a decent force. This is especially so in the modern era where weapons systems are becoming more complex, more sophisticated and more expensive, not just because of the escalation in money but also because of the escalation in complexity and sophistication.

The design and the delivery schedules extend over 10 to 15 years. I used the example of the Canadian patrol frigate. I think the

first one was delivered in 1988 and we will be delivering those ships until 1996. That is an eight to ten year delivery schedule.

The factor that was considered in the special joint committee was the regrettable tendency for the Canadian forces to overspecify the requirements and generally to use every procurement opportunity as a chance to design and build the very best weapons system possible. Best was the enemy of good enough.

The second point we focused on was that there was a stringent set of oversight and accountability requirements imposed over the years and probably for good reason by the Treasury Board.

Together these factors produced a bureaucracy and a system for the management and control of federal procurement that has grown out of all proportion to the real needs of the Canadian forces, out of proportion to the size of the Canadian forces which over the last 10 years has been reduced both in size and in budget. I will mention some figures on that in a few moments.

Our recommendations were threefold. We believed that a significant reduction in the unnecessary superstructure was long overdue. The recommendation was made that first of all the government make a public commitment to purchasing military equipment off the shelf and that it avoid the complex, slow moving custom designed procurement and production processes that characterized too many capital projects in recent years, some examples of which I have given.

In this spirit the procurement policies of the department and the Canadian forces should show a bias toward the purchase of commercially available products whenever possible, be it Canadian or offshore.

The final recommendation, and we felt strongly about this, was that the deputy minister and chief of the defence staff working with the officials of other concerned departments should take immediate steps to modernize and streamline the procurement process. The parliamentary secretary for industry and the parliamentary secretary for public works will be commenting on that this afternoon.

The white paper stemmed from our special joint committee. In the white paper a considerable effort was devoted to looking at capital equipment. The opening thoughts were that we had to change security environment and we had to change fiscal circumstance. This demanded that national defence radically restructure its plans to purchase capital equipment.

To put it more succinctly, if we add up all the reductions, in the last decade national defence has had funding reduced by $21 billion which is a lot of money over a decade and 21,000 people in the regular force which is a lot of people. I have not counted civilians and I have not counted the reserve force.

We cannot give up that amount of funding for whatever reason and expect to do business as usual.

[Supply, November 21st, 1995]

Madam Speaker, before I begin this debate I want to thank my hon. colleague from Broadview-Greenwood for his usual intelligent, logical, non-political intervention in this debate, which I think is slowly starting to rise in its level of intelligence. He has introduced some sense and some logic and some good debatable points into this debate. Because I have such respect for the points he has made, I am not going to reinforce them in my presentation.

I want to start with the motion to provide a backdrop for my debate this morning:

That the House condemn the government for having dropped the Canadian content requirements in the contracts for the purchase of military equipment and refusing to set up a genuine program for the conversion of the military industry, thus endangering the Canadian aerospace industry located in Montreal.

Coming from Her Majesty's Loyal Opposition, I would expect that it would take into consideration not just the aerospace industry in Montreal but the aerospace industry in Canada, and indeed all the military industry in Canada. You cannot talk about the military industry and relate it to one province. We just do not do business that way in our country. The hon. members know that as well.

I will give a personal experience, which will provide the thread for my thesis. My thesis essentially is that we can no longer continue to do business the way we have been doing it. The climate is not the same. The military climate is not the same and the fiscal climate is not the same. We have changed, and we have changed for a reason. If the hon. members opposite would follow the logic of my presentation, I give them forewarning that this is the general pattern.

In my previous incarnation I had the fortune, or some would say misfortune, to serve at Department of National Defence headquarters. For an operational officer in any branch of the armed forces, this is not considered the highlight of one's career. One likes to be out in the field driving ships, tanks, airplanes, or whatever the case may be.

My first tour, which was rather traumatic, came in 1967, my first time in Department of National Defence headquarters, or Canadian forces headquarters, as it was then called. One of the first projects I became involved in was a replacement ship for the 20 St. Laurent class destroyers that were built in the post-war period.

I have to say in deference to the issue, and I would be less than honest if I did not, that they did have Canadian content and were considered to be among the best in the world. It was a different time, a different environment, different circumstances-post-war. In 1967 the debate for the replacement of those destroyers had begun. Not only had it begun but it had been going on for some time, maybe a couple of years.

If you can take a snippet of this point in history, the genesis had been set for the four gas turbine general purpose frigates, or DDH-280s, as they became known. There were four special ships in the making, but they had a long time to go as well.

In 1967 the debate had already begun on a replacement for the 20 post-war destroyers. On December 22, 1977, ten years later, a

cabinet document approved the construction of the Canadian patrol frigates. That was in December 1977.

I will now report that the last of that class of frigate will be commissioned next year. Actually HMCS St. John's will be commissioned in St. John's, Newfoundland on June 24, 1996, and the last of that class will be commissioned in Cornwall, HMCS Ottawa , in September 1996. After approval in 1977, the last to roll off and be commissioned will be practically 20 years later. That is a long time. That is 30 years from the conception to the last of the class delivery. I do not care what anyone says. I do not care what province they are from. I do not care what they represent or what discipline they belong to. That is too long.

During the cold war we produced equipment for something that might happen. It is happening today. There are 50 wars going on and we are involved in some of them. We cannot have equipment for tomorrow; we have to have it for today. We cannot go on planning for 30 years, expecting and not delivering.

If they do not want to heed what the Parliamentary Secretary to the Minister of National Defence and Veterans Affairs has to say, I refer them to none other than the auditor general. In his 1993 report he essentially reinforced more eloquently and more specifically the points which I have made. He found three major difficulties with the present procurement system in national defence.

There were 550 major capital projects under way at one point in time. A capital project was in the vicinity of $100 million. That in itself is a challenge.

I am going to repeat this because if I heard somebody say this in the House I would say that they were wrong by a multiplier of 10. The first difficulty which the auditor general found was that it took 5,550 days from the time a capability deficiency was discovered in the inventory of capital equipment in national defence until Treasury Board approval. Not delivery, approval. It took 5,550 days which is 15 years. The system is cumbersome. The number of man hours used in that process would indicate why national defence headquarters was so large and why there was so much difficulty in reaching agreement on the kind of equipment we needed.

The second difficulty was that one of the major pieces of baggage the defence program management system had was the business of content and industrial regional benefits which were always built into the program. As my hon. colleague for Broadview-Greenwood has pointed out, that is no longer permissible under the free trade agreement.

The difficulty was that in trying to build in regional industrial benefits and offsets, quite often the major contract was averted. The major project which was proceeding apace, logically and reasonably, despite the time frame involved, got thrown off course because of an interjection which was too far downstream to be brought into the original concept of the contract. That threw the system off. The end result was that we did not get the best equipment for the money spent. Yes, it was rationalized, but the auditor general did not believe the rationalization was reasonable.

The third major difficulty which the auditor general found in 1993 was that because of the length of time it took to produce Treasury Board approval for the equipment and because of the dynamic instability inherent in the system, by the time the product was produced it did not necessarily relate to the threat or the deficiency which existed 15, 20 or 30 years before.