Scott Simms

[Business of Supply, November 18th, 2010]

Mr. Speaker, no.

[Business of Supply, November 18th, 2010]

Mr. Speaker, I do not want to go to the extreme. I want to pick up on a comment I made earlier and it ties into what my colleague said.

I do not see a great deal of evidence where we are completely dictated to in this particular situation. I understand the fact that we did have a role to play at the genesis of this.

The problem is these things are tailored on a $16 billion-plus contract. It has to be tailored toward specific needs. I am skeptical that this global supply chain is going to answer everything that we require. That is what concerns me the most, which is why I am hoping we engage in this debate. It is why I think it is beneficial to have people in this House who have more experience than I do with this, as my hon. colleague does. I cannot compliment him enough.

Nonetheless, I still need these answers that in my opinion are required about this new way of doing procurement, when we know from the evidence that the cost will likely be larger than we anticipated.

Do the airmen and airwomen have the right equipment? Are we making the right purchase on this particular equipment, given the requirements of our climate and our terrain? That is what we need to do.

Unfortunately this process leaves me a little bit skeptical. Are companies getting security?

[Business of Supply, November 18th, 2010]

Mr. Speaker, all my best to the member's grandfather.

It is a valid point about the future direction of this. Again, I can speak to search and rescue because I have dealt with this for quite some time. I am no search and rescue expert, but nonetheless I have been exposed to search and rescue operations quite a bit.

I assume that right now the government is going back and forth about the requirements of what is to be fixed-wing search and rescue. There is no doubt that the Hercules and the Buffalo need to be replaced, whether it is with the C-130J or some other variant of that is one thing. Let us take a look at that issue for a moment. There does not seem to be any Canadian companies in contention for that. From what I understand, some Canadian companies are capable of providing that. At least that is what they say. Obviously the companies are going to talk about themselves in a way not to rule themselves out.

When it comes to military requirement, it seems to me that the search and rescue piece on fixed-wing seems to be going through many rigours and many processes until they find out what is required for fixed-wing search and rescue.

I am not so sure if this is happening with the F-35s. I fear that the long-term requirements are dictated to us, and that is what concerns me about this. It is not overt in the sense that we have to buy off the shelf, but nonetheless if we are part of a global supply chain—

[Business of Supply, November 18th, 2010]

In fact, I have, Mr. Speaker, many times. In doing so, again, I go back to the process.

Let me get to the first point that the hon. member mentioned. I did not mean to confuse the Chinook/Sea King issue. What I was getting at was the procurement process by which this happened and the fact the costs are never in line with what we initially say they will be. Therefore, it would be disingenuous for us to talk about these final dollar amounts when in fact evidence proves that it could be inflated to a greater amount.

I talked mostly about search and rescue. We have a shortage of pilots right now with the Cormorant, which is a major issue. We have a major issue with the Cormorant itself. Some of the studies say that an optimal level of Cormorants would be 20. Currently we have about 14. Sure I would like to have more, but I know the money is not limitless. We have to look into the fixed-wing search and rescue issue. I think we will do a study on that later.

I understand the work the hon. member did on the F-18 issue and I appreciate what he has said. He has a greater insight to the workings of military than I do. However, I am asking the question that should be asked within the Parliament, and which Canadians want to know, about the security of the industry and if they are getting value for the dollar?

[Business of Supply, November 18th, 2010]

It certainly looks that way. I know it is something we engaged in quite some time ago, back in 2003-04, and we certainly felt the need to buy them.

He talked about writing a cheque for $16 billion in this particular case, which included the initial purchase of the aircraft and then the maintenance thereafter, the life cycle costs, taking us up to when the F-18s expire. It seems to me, from what the Auditor General tells us, that these costs could become greater. As a point of debate, we should be looking at the very essence of what we need to do to get the best equipment, the equipment that serves the military in the best way possible, and do it at a price that is brought down to a level that we can afford.

We entered into this agreement back in 1997. The Liberal Party did not decide to purchase the aircraft back in 1997. We entered into the SDD. The Liberal Party participated in the development process. In 2002, the Liberal minister of defence said that, “Ottawa is not prepared to commit to buying the JSF planes thus far”. I am sure the government would agree with me thus far. The Liberal government at the time invested $150 million in the joint strike fighter project, mainly for industrial and technological benefits.

I have never been in on the minutia when it comes to procurement, like the hon. member across the way, and I respect him for that service. My understanding, on the surface as it may be, is that in an IRB the point is to guarantee that we get the best IRB available, dollar for dollar expenditure, so we get guarantees that the people, the companies and the industries can count on.

I know work is being done. I know the government will point out to me that we have already secured many contracts. However, he did say at one point that industry loves certainty. I cannot think of anything that is more certain than the process by which we engage in the IRB. To do that, however, we must look at the way the competition was held. I will get to that in just a moment.

We talked about the search and rescue component of this. Right now the Buffalo aircraft, as it exists on the west coast, these planes are flying around on the west coast and going through the mountains. They have been discontinued. We are scouring the earth for parts. I know they have been refurbished but the refurbishment will continue for quite some time. Certainly these things should have been retired recently.

If the process for fixed wing search and rescue aircraft had been done right, as was described by the minister and which was guaranteed in 2007 to actually at that point make a go of this, we could have had them by 2012, but that will not be the case.

The expediency of the F-35 process boggles my mind, especially when all of a sudden the fixed wing search and rescue aircraft seems to be trailing well behind the pack.

We called in several departments and found there had been disagreements between departments. The National Research Council has been called, almost like a referee perhaps but I am not really sure. The requirements seem to be there for the government to take advantage of and certainly there for it to make a purchase of fixed wing search and rescue aircraft. I am not quite sure what has bogged this down. I am not sure what requirements are needed or why the NRC was called in to do this. Maybe the process is too vigorous when it comes to fixed wing search and rescue aircraft. The excuse seems to be that the government wants to get it right. I agree that we need to make this right but I question the F-35s. Did we get that right?

The announcements that have been made thus far when it comes to the procurement, equipment, suppliers, people in the business and my hon. colleague quoted someone from the industry, I understand that. I think it is a fantastic opportunity for them to be involved in this global supply chain.

What I wanted to see here was whether this was done right, whether this was the process by which we are able to secure, as my hon. colleague called it, certainty within the industry.

The global supply chain is something that is new, at least that is what I gathered from my visit to the defence committee. When we look at all the articles around the world, Israel, United Kingdom and certainly in the United States, we see that they too want to be part of this global supply chain. I agree. I think we should be a part of that.

However, If we do this, we need to create the certainty that my colleague talked about, and I do not know if this particular method gives the certainty that we are striving for. I sincerely and genuinely hope he is right. I hope we will be the strongest player out there for this global supply chain. We have the potential to do it.

My colleague also mentioned experts in the field who came back and said that this was the right plane. It almost seems like we go through a process where everything is under cover of the night and then boom, we need to do this now. We have an announcement, with a plane in the background, and the minister sits in the plane, so on and so forth. I get that.

Several years ago, the Conservatives said that they would go through the right procurement process that was there and yet in July it became a story that they had done it. I am not sure if this is a change of direction for the military or not but it concerns me. I am concerned about the global supply chain. I understand there are people who are getting it done. I congratulate them for being a part of this process and manufacturing the parts for thousands of F-35s. However, I need the certainty that I am not sure this process is giving.

When I hear the government say that it did make the choice back then, there is ample evidence here in articles and from experts and assistant deputy ministers that prove that was not the case. We were not a fundamental part of that decision. I find it hard to believe that we were, which is what scares me about this. We should be part of the decision because we need the certainty for our aerospace sector.

I have an aerospace sector in my riding that so far is not cashing in on this particular project. However, that is not what bothers me because some day it will. The certainty that I think we might be missing out on, which scares me, is why I am looking out for the aerospace sector in Gander, in my home riding. In the future, it will be that major player.

I just want to pass on a few comments that were put together by some experts in the field who did a lot of work and research on this.

I have some comments by David McDonough, a doctoral candidate at Dalhousie University and a visiting researcher at the Centre for International Policy Studies. He offers quite a bit of research and says:

One only needs to look at the recent report by the Auditor General Sheila Fraser, which criticizes the ballooning costs and attendant delays in both the Cyclone and sole-sourced Chinook helicopter acquisitions. Similarly, defence contractors recently informed the government that it could not build three Joint Support Ships for the amount that DND had budgeted.

Therein lies the concern about cost, as I mentioned earlier. We seem to be throwing around a definitive number about the cost and yet the experts are pointing out and past circumstances dictate that perhaps that will not be the case.

When Senator John McCain came here, he said that he too was worried about the spiralling costs of this project. At what point do we get involved in that process? I am genuinely asking that question. What are we on the hook for?

I sincerely hope the government can point out to me where it is I am wrong.

The final airplane costs: First, it remains to be seen whether the F-35 will also be required to undergo expensive modifications to make it sustainable to operate in Canada's unique environment. Was that discussed at the SDD. Was that discussed at the genesis of this program? Was the fact that we have a unique climate discussed?

One article I have here talks about one engine or two. It reads, “The new F-35 has only one, and that is enough”, the defence minister says, “but Canada chose its current fleet of CF-18s precisely because they had dual engines”.

It goes on to state:

As the Cold Lake Air Force Museum’s website notes, Ottawa selected the Hornets “mostly because of twin-engine reliability” in case one failed during flights between Canada and Europe or sucked in a bird during low-level operations.

Now that was one of the concerns at the time but I am assuming that was not entirely the case. It cannot be that simplistic. I would like to put my colleague at ease.

However, were these questions posed? Were we in on the ground level at that point, at the SDD, to ensure these planes could be tailored to what we needed? I will not even talk about the fact that we are chasing Russians out of the Arctic, which we are not. From what I understand, the cold war did end, and the TU-95 Russian bomber, I mean, seriously.

The F-35 purchase price might still significantly increase if the total number of jets manufactured is smaller than expected. Of note, Great Britain has already switched to the cheaper F-35C model and reduced its purchase from $138 million to $50 million and there is no guarantee that the United States will not follow suit.

Those are some of the concerns that we have. There was a $4 million guarantee on equipment that was achieved by Israel. What is the nature of that guarantee? Is that something that we are able to achieve being part of this global supply chain? I should hope so.

Despite alarmism that is often generated by Russian nuclear armed bombers, this threat is only actualized in the event that Russia threatens a significant nuclear attack on North America. The primary means of dealing with this possibility is not by a robust air defence systems in which more advanced F-35s would offer a definite advantage but rather by early detection and warning.

My hon. colleague asked if I knew what was in it. I probably do not know what is in it but I do not think our F-35 will make a big dent in reducing the harm that was inside that particular Russian plane. However, here is the situation. Why can we not get these solid answers that we are looking for? I think we are making some valid points here about the process by which we go through in procurement but we are not getting answers.

My hon. colleague, who was a minister in cabinet back in 2004-05, raised a valid point. What does what a fighter pilot did, and I respect what he did, have to do with the fact that we are in the middle of debate talking about the issues that the Canadian public wants to know about.

I would ask my colleague from northern Saskatchewan to refrain for just a moment because at the end of the debate he might find himself engaged in it and I understand that he is not a fighter pilot. I am interested in hearing what my colleague has to say because I hope he can prove me wrong on this. That is the benefit of having him here in the House.

The 2006 agreement for developing the controversial F-35 stealth fighter jet contains a withdrawal clause that would allow a new government to end Canada's participation with no penalties and appears to contradict the government's claim that Canadian firms involved up to now would suffer.

The ADM stated:

Any Participant may withdraw from this MOU upon 90 days written notification of its intent to withdraw to the other Participants.

That is contained within the memorandum of understanding signed along with the U.S., Australia, the United Kingdom, Turkey, the Netherlands, Italy, Norway and Denmark.

It further states:

For Contracts awarded on behalf of the Participants, the withdrawing Participant will pay all Contract modification or termination costs that would not otherwise have been incurred but for the decision to withdraw; in no event, however, will a withdrawing Participant's total financial contribution, including Contract termination costs, exceed that Participant's total share of the Financial Cost....

I do not think that we find ourselves in a situation where we are drastically put way back to the point of 1997 when we were searching for a replacement for the F-18.

I will summarize by pointing out that the process by which we are engaged here creates a lot of questions. I think that we as a Parliament need to be more forthcoming in what these answers should be. I have that aerospace sector that wants to be a part of the future of this country but to do that I need to know that the certainty that my colleague talks about is there.

I hope these answers can be borne out in this particular debate.

[Business of Supply, November 18th, 2010]

Thanks very much. I am being complimented.

How that is juxtaposed with Afghanistan, I struggle to understand.

He also mentioned that we cannot just buy aircraft off the shelf. It is my understanding that the C-17 was pretty close to being off the shelf.

[Business of Supply, November 18th, 2010]

Mr. Speaker, I would like to thank my colleagues in the House for allowing me this opportunity to speak on this issue as there is a base in my riding, in Gander, and I proudly represent 103 Search and Rescue Squadron.

We have been talking about this particular issue for quite some time. As we go through this issue, there is no doubt about what the government is saying about the idea of a brand new process by which we go through procurement. I talk about working within the MOU, as was outlined by the parliamentary secretary. I do not doubt that is the way we are travelling and the way we are going to do this in the future as being part of a global supply chain.

The only way I disagree with my colleague is that he talked about reincarnation and coming back as a pilot. If he is reincarnated and comes back, he will be sitting in a room with two remote controls as they will likely be UAVs, or uninhabited aerial vehicles, which work so well in Afghanistan. By that time, that is probably what will be in the sky for all of these particular vessels. However, I digress.

Nonetheless, we have pilots, airmen and airwomen, and they serve bravely. I know them. The base in my riding does not have fighters. It does not house the F-18s, but it does have Cormorant helicopters, and members of the air force live in my riding and proudly serve as helicopter pilots for the Cormorants.

When it comes to the equipment itself, over the past 20 years, yes indeed, there have been cost overruns and cheques were written that we did not want to write. Nonetheless, the cost overruns dictated that we had no choice. For that there is a lot of blame to go around.

My hon. colleague mentioned a decade of darkness. Well, over the past five years, an Auditor General's report was produced that talks about what is to replace the Sea Kings and about the Chinooks. Some of the points made in this particular Auditor General's report are quite stinging, indeed. It talks about medium to heavy lift helicopter acquisition, directed procurement and some of the things that went wrong. It also talks about the navy, the joint supply ships, and how we had to go back to the drawing board with that one.

The past six years, although I would not call them a decade of darkness, certainly have not been bright, have they? I would ask the House to engage in a debate. I would ask the parliamentary secretary about some of the points. I want to bring up some of the things he mentioned in his speech.

He juxtaposed the acquisition of the F-35s with the mission in Afghanistan and the gist of the missions in Afghanistan. I do not seem to understand how the two are juxtaposed with each other. If memory serves me correctly, the F-18 was used in Kosovo.

[Business of Supply, November 18th, 2010]

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.

[Business of Supply, November 18th, 2010]

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—

[Business of Supply, November 18th, 2010]

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.