Proceedings of the Standing Senate Committee on National Finance
Issue 44, Evidence, June 18, 2002 (Afternoon meeting)
OTTAWA, Tuesday, June 18, 2002
The Standing Senate Committee on National Finance met this day at 1:00 p.m. to examine the Administrative Contract at the Goose Bay, Labrador airfield.
Senator Lowell Murray (Chairman) in the Chair.
[English]
The Chairman: We are resuming our consideration of matters affecting the Canadian Forces base at Goose Bay, Labrador.
We now have witnesses from the Government of Newfoundland and Labrador. They are Mr. Goudie, Mr. Doug Smith and Mr. Peter Woodward.
Mr. Doug Smith, Assistant Deputy Minister of Intergovernmental Affairs, Government of Newfoundland and Labrador: Honourable senators, it is indeed a pleasure to have the opportunity to speak before this committee today.
In opening, I would like to express to you the regrets of our respective ministers, the Honourable Ernest MacLean, Government of Newfoundland and Labrador Aboriginal Affairs; and the Honourable Tom Lush, Minister for Intergovernmental Affairs. Both gentlemen had planned to be here today to testify before this committee; however, they are engaged in the House of Assembly debating the Voisey's Bay deal and could not be spared. They have asked me to extend to you their regards.
While I have this opportunity, I would also like to thank this committee for its recent report on the effectiveness of and possible improvements to the present equalization policy, which was issued in March this year. As you are no doubt aware, Premier Grimes has endorsed the report and I understand that both the business communities and the labour communities in Newfoundland and Labrador have also done the same.
I trust that in your report on the Goose Bay contract and RFP, which was to be released yesterday, you will have an opportunity to influence the Government of Canada's policy with respect to 5 Wing Goose Bay in a manner that will be positive for the workers of Happy Valley—Goose Bay, the Department of National Defence, Canada's military, allies, the training at 5 Wing Goose Bay, and the province.
Before addressing the RFP, I would like to provide some context with respect to the base at Goose Bay and the importance of Canada's military presence in Newfoundland and Labrador.
As you may be aware, Newfoundland and Labrador has a long history of supporting the military in this country. Throughout the Second World War and the Cold War, many bases were built. Subsequently, forces have withdrawn from a number of them. Notwithstanding that, Newfoundland and Labrador's strategic location along the northeast corner of the North American continent continues to provide an important base and support for life-saving search and rescue operations, assistance to Canadian and foreign naval activities and Air Force training for many of Canada's closest military allies.
These installations provide the livelihoods of thousands of families, and it is fair to say that the military's presence in the province continues to provide some much-needed economic diversification for our natural-resource-based economy. The military has been and continues to be an integral part of the social and economic fabric of our province. The importance of this relationship and the commitment to the military has not been forgotten by the people of our province, as is evidenced by the strong enrolment of Newfoundlanders and Labradoreans in the Canadian Armed Forces. In March 2001, residents of our province represented 9.6 per cent, that is, 5,595 active members, of the regular forces of the Canadian military. In addition to these, hundreds of other Newfoundlanders and Labradoreans serve in Canada's reserves, cadets and the Canadian Rangers in order to safeguard the interests and sovereignty of our country. Since we have less than two per cent of Canada's total population, our contribution has been rather significant.
Newfoundland and Labrador has been and will continue to be front and centre in the defence of this country. We feel, however, that it is unfortunate that, notwithstanding this steadfast commitment to the military, the Department of National Defence continues to spend only one per cent of its budget in the province. This is the lowest per-capita spending ratio in all of Atlantic Canada and one of the lowest in the country.
The Government of Newfoundland and Labrador places a high degree of importance on the continued presence of Canadian allied militaries in our province. This is especially true with respect to Goose Bay. Indeed, the military file represents one of the most important areas monitored by the Intergovernmental Affairs Secretariat. Today, 5 Wing Goose Bay is operated by the Canadian Forces to support military training for the air forces from Germany, the Netherlands, the United Kingdom and Italy. In 1993, approximately 1,500 people were employed at the base, including civilian, military and seasonal personnel and subcontractors. In 1994, when a comprehensive white paper directing the department to undertake major spending cuts and to operate with fewer resources, fewer people and less infrastructure was released, DND was obliged to adopt better business practices and, where feasible, transfer all in-house support or non-core activities to the private sector. The practice was termed ``alternate service delivery,'' or ASD. Since then, there have been significant reductions in the workforce. For example, in 1993, there were approximately 500 Canadian military employees at the base. Today, there are approximately 90. In 1993, there were approximately 1,000 civilian permanent and seasonal employees, while today there are only approximately 400. The reduction in positions through the ASD was intended to improve the cost efficiency of operating the base and, in turn, result in a cost savings to our allied partners, thereby ensuring the long-term viability of the base.
The province is still looking for indications, however, that the sacrifices made under ASD have resulted in a more cost-effective program for our allies.
In December 1997, DND announced that Serco Facilities Management, a Canadian subsidiary of the UK-based Serco group, was to be awarded the contract to provide the non-core infrastructure support services to Canadian and foreign flight training at 5 Wing Goose Bay. During the summer of 1999, tension resulting from contract negotiations at the base culminated in a strike by Serco employees that paralyzed much of the allied training. An agreement was eventually reached, and since that time a period of labour peace has ensued. However, concerns regarding the rights of employees under the next contract have emerged in the town of Happy Valley—Goose Bay.
The current contract with Serco expires in 2003. DND is now in the process of seeking an 11-year renewal that would see the successful bidder maintaining civilian services at the base until 2014. We were pleased to note in Mr. Young's presentation this morning that the current RFP will now clearly state that, in order for the bidder to be successful in the evaluation process, it will have to demonstrate that the wages and benefits offered to implement the contract are sufficient to prevent a disruption in service due to labour unrest. Any future labour unrest could seriously jeopardize the future of military flying at 5 Wing Goose Bay.
The overall economic impact of military flying activities at 5 Wing is extremely important. In Goose Bay, it accounts for 1,350 person years of employment, adds $67.9 million to the GDP and contributes $21.45 million to government revenues. That is the Government of Canada's take-back from this.
In the province as a whole, it accounts for 1,728 person years of employment, $90.1 million added to our GDP, and $28.5 million contributed to overall government revenues.
These figures can be obtained from the Institute for Environmental Monitoring and Research report of October 6, 2000, which we would be happy to provide to the committee.
As a result of this important investment the base has made in the community of Happy Valley—Goose Bay and in the province as a whole, our provincial government takes its responsibilities to assist and promote the continuation of environmentally sanctioned military training in Labrador extremely seriously. In support of this, the Government of Newfoundland and Labrador has transferred provincial Crown land to the federal government to support military activities such as practice bombing activity and simulated camera target training. Most recently, we have authorized the transfer of an additional 2,000 square kilometres of land to the federal government in order to permit allies an opportunity to launch enhanced practice bombs from higher altitudes and at greater distances. Where possible, the province has made every effort to assist the military and make Labrador an attractive location in which to train.
In addition, the province has taken a variety of measures to enhance the quality of life for allied personnel posted to Goose Bay. The Government of Newfoundland and Labrador has provided the children of allied personnel with access to the province's primary education facilities free of charge, while families of allies permanently posted to Goose Bay have received complimentary medical coverage under the provincial health care plan. Likewise, the province has set up a program whereby the provincial portion of the harmonized sales tax is waived on the purchase of automobiles by allied personnel, on the condition that these vehicles are eventually shipped back to their home countries in Europe.
The province has made these contributions not out of any sense of obligation but, rather, as a measure of its support for military activity in Labrador and in recognition of the significant economic contribution that the base in Goose Bay makes to the community and to the province as a whole.
I would like to thank you for your indulgence with respect to my remarks thus far, but it is important to provide you with the necessary context. Newfoundland and Labrador makes, insofar as it is able, a substantial contribution to the military in Canada. We get something very positive in return — namely, the economic opportunities provided by the presence of the base at Goose Bay and the allied air forces that train there. We would like that presence and these opportunities to continue and to grow.
However, we have reasons to believe that we may not get our wish. The air forces of Great Britain, Germany, Italy and the Netherlands train at Goose Bay under the auspices of a memorandum of understanding that expires in 2006. Over the past few years, they have indicated that their commitment to allied training at Goose Bay may be weakening. With the end of the Cold War and budgetary cutbacks within their own national governments, the investment in the military, as in Canada, has been scaled back dramatically.
Moreover, it is now clear to us that the Department of National Defence is not committed to 5 Wing Goose Bay as anything other than a NATO training facility. It has not yet taken the kinds of actions that will aid in maintaining the allied presence. Indeed, a presentation developed by the Goose Bay Office indicates clearly that while DND spends in excess of $25 million a year in Goose Bay on the Canadian Forces, and I quote from their presentation, it ``doesn't need, doesn't use and doesn't want the base.'' Notwithstanding the roughly $75 million of annual allied investment in Canada, the implications of DND spending $25 million of its own budget at Goose Bay each year, without getting any training benefit for its own military, has meant that Goose Bay has not been a priority for decision-makers within Canada's military. The fallout from that kind of neglect has been clear.
Last fall, the Royal Air Force announced plans to reduce the number of its permanent personnel in Goose Bay from approximately 120 to about 20. The Italian Air Force has delayed the planned construction of a new multi-million- dollar hangar, and it is not clear whether it will ever be constructed. Recently, the Royal Netherlands Air Force has indicated it is re-evaluating its military activities in Goose Bay and that it may consolidate its North American operations in the United States. The results of this evaluation, as you have heard earlier, should be known this summer.
From a Canadian perspective, it is clear that some of the factors at play here involve the decisions and priorities of foreign governments. However, the province remains concerned that Canada and the Department of National Defence need to do more to aggressively promote the valuable opportunities for military training that exist in Labrador.
Military activity at 5 Wing Goose Bay is jointly coordinated by the base in Goose Bay and the Goose Bay Office here in Ottawa. The base is responsible for managing the daily military operations of the allies, while GBO manages the environmental protocols and acts as a liaison for the long-term marketing and planning of the military activity.
Additionally, 1 Canadian Air Division, located in Winnipeg, also plays a significant role in the activities of the base. We have seen examples where these agencies have had difficulty in coordinating some of their activities. It is also worth noting that questions have arisen from time to time concerning the location of the Goose Bay Office, particularly in the town of Happy Valley—Goose Bay, where it is felt that the distance from its industry partner, Serco, and from the operational realities of the base, are undoubtedly management issues that may be constraining efforts to grow the business at Goose Bay.
While there have been some improvements in the base infrastructure, much more could be done to ensure that NATO air forces are provided with a positive and efficient environment in which to conduct training. Housing could be improved, along with the necessary training aids and equipment. A more concerted effort needs to be made to provide NATO air forces with the equipment and services that will allow them to conduct effective, efficient training with state-of-the-art military hardware, rather than simply offering them airspace for training, which has largely been the situation to date.
The allies have indicated that the low-level flight training that has traditionally been conducted in Labrador may no longer be sufficient to warrant their interest in Goose Bay. We believe that it is essential that both the federal and provincial governments seize the current opportunity to modernize and enhance the training value available to allied militaries at 5 Wing. Clearly, this must be done in discussion with our allies, so that efforts are not expended in vain.
The province and the Goose Bay Office at DND have been making progress in this regard. However, I believe that the future of the military in Labrador is very dependent on both levels of government working much more cooperatively and with municipal stakeholders and the industry to ensure that the cost of allied training is kept reasonable and the quality is enhanced.
Frankly, Newfoundland and Labrador needs to be convinced that Canada is committed to maintaining the base, improving the services and facilities and selling the operation to existing and potential users. More extensive Canadian military deployment at the base would be strong evidence of that commitment. In this regard, I would point out to you that Canadian Air Forces do not train at the base. The need for a more regularized Canadian Forces presence at Goose Bay was illustrated following the events of last September 11, when the Canadian government deployed CF-18s to Goose Bay from Bagotville within hours of the crisis in order to protect Canadian airspace. It was fortunate that no additional threats entered our airspace then, as the time required to send Canada's military to the perimeter could have resulted in some further tragic consequences.
The renewal of the civilian contract at 5 Wing offers the federal government, through the Department of National Defence, a significant opportunity to partner with the private sector to enhance the quality and scope of military operations in Labrador. With the opening up of the program to industry, private enterprise will be able to take part in investment opportunities at the base, such as building and leasing new hangars or financing military technology and scoring systems. With a third party involved in the equation, a portion of the financial burden of modernization currently borne by DND and the allies can be taken up by the private sector. We believe it is important that the next contract provide an opportunity for and encourage the successful bidder to participate in marketing the base to new users. These opportunities were not encouraged in the last contract, and as such, Goose Bay has remained an anomaly within the Canadian foreign military training program.
In Western Canada, as we understand it, the federal government has had a generally positive experience with the NATO Flying Training in Canada Program — the NFTC program. This program is a fully integrated, undergraduate and graduate fighter pilot training program designed for nations interested in NATO-standard flying training. The NFTC program is operated out of military bases in Western Canada at Cold Lake, Moose Jaw and Portage la Prairie, through the collaboration of the Government of Canada and Bombardier.
Overall responsibility for the NFTC program rests with the Government of Canada. DND provides program management, existing infrastructure and instructor pilots.
Bombardier supports the NFTC as prime contractor for the international aerospace industry and is responsible for the provision of services and equipment, including aircraft. The province believes that 5 Wing should be assessed as a candidate to participate in the NFTC program, or, at least, operations at the base in Goose Bay should be modelled on that framework, which has allowed Western Canada to attract new foreign militaries to its facilities.
The service contract should be structured to allow for this approach, and the apparently successful NFTC program suggests there are opportunities for DND to capitalize on the business experience of the private sector and to partner financially with it in areas such as international marketing, capital construction and technology acquisition. Such opportunities should be closely examined for application at Goose Bay.
Goose Bay also offers unparalleled opportunities for other types of military training. Survival training, supersonic flight training and helicopter operations have all been raised as possibilities. These need to be investigated thoroughly to determine their military and environmental feasibility in Labrador.
Mr. Chairman, and members of the committee, the Government of Newfoundland intends to do its part to ensure the continued operation of the base at Goose Bay. Minister Lush has written to the new Minister of National Defence requesting a meeting to discuss this matter and has suggested that the province and DND should work even more closely together, given the impending expiry of the current MOU and the need to negotiate a new one. We have also suggested that a formal process be put in place to allow us to plan, in conjunction with local stakeholder groups, for the best possible future for the base.
Goose Bay is currently in year 7 of a 10-year MOU, and although work has begun with DND to enhance some elements of training at Goose Bay, we fear that the future of allied training in Labrador is not a priority for them. Given the valuable and critically important investment that the military makes in Labrador, the province is concerned about DND's silence on the future of 5 Wing Goose Bay. This file will continue to be a major priority for our government, and we look forward to your report as a constructive contribution to its advancement.
Senator Doody: Thank you, Mr. Smith, for a well-delivered dissertation. I heard somebody refer to your accent. I can assure you, sir, that I understood you perfectly. Some of these other people have accents, but we in Newfoundland and Labrador always speak excellent English.
Mr. Smith, we have heard from others this morning about what they sense to be a lukewarm commitment from DND to Goose Bay. DND would be happier, somebody suggested, if the 5 Wing were pulled out completely and they were no longer involved there.
If the Canadian military does pull out, does that mean that the training facility will cease to exist? It sounds ridiculous. Why should we have a military facility for the training of other nations, albeit allies? Nonetheless, that was the inference I gathered from the testimony thus far.
Mr. Smith: I do not believe that it could work without the Canadian military presence. Military speaks to military. They understand one another. They understand one another's operational needs. We believe there is a significant opportunity for a greater public-private partnership. However, we could not operate this facility effectively without a Canadian military presence there.
Senator Doody: That means that the Government of Canada has to make a firm commitment to maintain their presence in Goose Bay for the operation to succeed. Without that military presence, I would suggest that Goose Bay's economic future is far from rosy.
Mr. Peter Woodward, Chair, Premier's Advisory Council on the Economy and Technology, Government of Newfoundland and Labrador: I think it is fair to say that many harsh comments have been made about the Department of National Defence this morning. DND's reluctance on the issue of Goose Bay comes from the fact that they are facing their own budget constraints. They spend $20 million every year on Goose Bay. In particular, the Air Force is looking at doing things like mid-life updates on their F-18s. They would like to find a way to siphon off that $20 million they have currently committed to Goose Bay into projects on which the Canadian military places a higher priority. I think they even have internal problems. I think GBO very much wants to promote Goose Bay, but its own department is saying, ``We do not want to spend $20 million in Goose Bay. We have to find a way to upgrade our F- 18s, and we could do two upgrades a year with the money we are spending there.'' That is where you get into the departmental bureaucracy. We in Goose Bay always talk about Goose Bay making money, but we actually feel that Goose Bay does not cost the Canadian taxpayers any money. DND certainly looks at it as being a cost to its budget.
Our military, through its presence in Lahr and Baden over a long period of time, developed a familiarity with the Germans. They expect to see other militaries. I think the other militaries regard the fact that we do not train in Goose Bay as a major frustration. How can they justify their continuing presence in Goose Bay when Canada itself does not use the premises?
Senator Doody: Mr. Smith suggested that the infrastructure on the base needs some renewal and upgrading. If this were done, perhaps it might be easier to attract more clients to the training facility.
How extensive has Canadian investment in the Goose Bay infrastructure been over the past few years? Perhaps Mr. Woodward might be in a better position to handle this one as well.
Mr. Woodward: It is my home, as you are well aware.
The Canadian Forces have spent some money on Goose Bay, but I would say that the allies have borne in excess of 90 per cent of the capital infrastructure costs, either through the Canadians or directly. If the Canadians made investments, they recovered the cost from the other allies. For instance, if you came to Goose Bay, you would note that most of the structures, while they have all been upgraded, are leftovers from the American presence. The exception is the Germans, who have spent $50 million on building a new hangar to house their own airplanes.
Senator Doody: That was a few years ago.
Mr. Woodward: You will see the nose dock hangars that formerly housed the KC-97s. The Germans spent approximately $5 million on each one. They have spent close to $150 million in Goose Bay, including on social facilities, dormitories and barracks, since their arrival in 1982-83 on a permanent basis.
The Dutch are slower than that, but they probably spend in excess of $20 million. The Italians, in their short presence in Goose Bay, have spent $10 million. A lot of money is constantly being spent, and Canadian construction companies are benefiting from that work. Even the cost of runway enhancement is recovered from the allies through a formula that DND negotiates with them.
Senator Doody: Would it be fair to assume that if the Canadian treasury invested more money in infrastructure, it might serve to attract other NATO or allied clientele to the base?
Mr. Woodward: The French have experimented with our facilities. The Italians, of course, as Frank Young alluded to this morning, came, experimented, left for several years and came back. The French came last year with their Mirage fighter jets and spent the whole summer. I think they enjoyed their flying, but they did not find the flight training levels they were looking for. They wanted to train with the Germans, which was not possible for them this summer.
They decided they would not come. Why they do or do not come is often complicated. I believe the French were looking forward to flying many more high-level sorties this year and the Germans told them that they were not interested in that type of training this summer. Then the French said if the Germans were not going to do that, they were really not interested in being in Goose Bay.
We have had Norwegians and Danes training in Goose Bay over the years. The proximity to Europe is a major reason. Being able to give them 100,000 square kilometres of space in which to fly is a big advantage. We have a lot going for us; however, dealing with foreign militaries and their budgets these days is complicated. The Germans have built a $200-million base down in Holloman. I understand that had a lot to do with former Chancellor Kohl, the former president of the United States, and the re-utilization of a base that they were retiring. Those things also have a major impact.
Senator Doody: We heard something this morning that I thought was quite disturbing, which is that the French had asked to move into Goose Bay, have their own facility as well as the use of the training facilities, and it was suggested that there was no room. It was later clarified that there was no physical room on the ground to accommodate the personnel. That is why I asked if investing some money in infrastructure might perhaps help to attract other clients.
Mr. Woodward: Some of that comes from outside the GBO. We often get requests from foreign military transiting Goose Bay to use the facilities. From time to time there may not be barrack facilities available, or the people responding to the request may not be keen because it will create all kinds of work for them. Those things happen.
There is currently a significant amount of ramp space and things of that nature available in Goose Bay. There may be an issue with respect to hangar facilities. You heard about the Italians supposedly building a new hangar, and how that has been cancelled. The reason is that the RAF is downsizing to a certain degree and had a large hangar that they no longer wanted, which the Italians have taken over.
There certainly are many facilities, although some enhancements may be needed. The real enhancements we need are to the flying areas, to allow them to do all types of different flying. The issue of low-level flying was discussed. One of the reasons that low-level flying is not as important now is that the war arena has switched to the Mediterranean, where people do not have sophisticated radars that need to be avoided. What they do have is something that can be carried on the shoulder and used to shoot down a fairly sophisticated airplane. If a plane is flying along at 100 feet, there is not much chance of avoiding that. Hence, we are seeing a move to 15,000 feet, where there is a much better chance of avoiding that type of weaponry.
Senator Rompkey: I could not help noticing the reference to equalization. When you consider the amount that will be coming back, $20 million does not seem significant. However, I wanted to ask you to put Goose Bay in perspective. We have three paper mills on the island. How does the base at Goose Bay compare with either of those in terms of employment and GDP?
Mr. Smith: I cannot tell you for certain, senator, but I believe the GDP contribution of the base would exceed any two combined.
Senator Rompkey: It is worthwhile putting that in perspective.
Senator Forrestall: Does that include the value of the wood itself?
Mr. Woodward: Yes.
Senator Rompkey: I just wanted to compare it to the forestry sector. We could compare it to fishing or mining. I wanted to make some comparison in terms of contribution to the economy.
The relationship between the government and DND in maintaining, marketing and enhancing the base was mentioned. Could you tell us more about that? Would you like to be more involved? Do you feel you have been consulted? Is the province always aware of what is happening?
Mr. Smith: Senator, if you had asked me that question a year ago, I would have had a different answer for you.
We feel that there have been significant improvements in our relationship with the Goose Bay Office over the past year. We have both worked hard to try to keep one another in the loop. That being said, we recognize clearly that this is a federal government operation. The ultimate responsibility rests with the Department of National Defence. The decisions are theirs to make.
While improvements have been made, we do believe that there is room for more. We are willing to work closely and cooperatively with our colleagues at the Goose Bay Office, at 5 Wing, at 1 Canadian Air Division, and certainly at the Department of National Defence.
We also feel that the community itself, the town council, the union and, of course, the chamber of commerce have an important role to play in the consultation process on the future of Goose Bay. We intend to continue to improve upon that work. We feel that GBO is making best efforts at the moment, but there is room for improvement on all sides.
Senator Rompkey: When you were asked whether Goose Bay could survive without the military, you essentially said no. However, you talked about a different partnership.
We have been searching for an alternative. Let us assume that the current arrangement is not necessarily the only possible one. What would you see as an alternative arrangement for operating Goose Bay that would include some participation by the military?
Mr. Smith: As I said in our presentation, the NFTC model appears to be a good one. It has been quite successful in Western Canada. It has enhanced training opportunities for the Canadian military, as well as providing good opportunities for our military allies to train with us. It is a successful example of public-private partnering, where Bombardier is an effective partner in the process, providing equipment, support and marketing expertise that allows the program to grow and expand.
We feel that that would be a good model, whether we actually link directly to the NFTC program or modify it to work in Labrador specifically.
Mr. Woodward: It is important to note that the NFTC program was developed because our Air Force was shrinking and they were looking for the critical mass that would allow our pilots to continue to train to the level of proficiency needed to fly F-18s. Bombardier came up with a proposal to train foreign as well as Canadian pilots. Most recently, the Czech Republic has signed on to do its flight training in Western Canada.
To a certain degree, that is a competing interest for Goose Bay, as is Cold Lake. When we first saw the foreign militaries coming to Canada in the early 1980s, they did all of their flying in Goose Bay.
Gradually, as our own military was pulling out of Germany and looking to liaise with the NATO countries, they started to invite them to Red Flag, which is an exercise they hold every year in Cold Lake.
In the early years, we saw many German airplanes going to Cold Lake, but they did not impact on the flying in Goose Bay. The airplanes would land in Goose Bay and then go on to Cold Lake. In recent years, as the resources of NATO countries have been drying up, the same airplanes have now stopped flying to Goose Bay and go to Cold Lake. The Dutch Air Force, for instance, would have come to Goose Bay for a period of two to three weeks this spring, and they have now gone to Cold Lake for six weeks. They are not flying in Goose Bay again until the beginning of July.
Suddenly, we are at the point where the Cold Lake initiative, which was originally no threat to Goose Bay, is now sharing the same clients. The economic stimulus that Goose Bay enjoyed has now moved to Cold Lake. They have laid everyone off for six weeks until they return.
That is happening with the Germans as well. Typically, the Germans would fly 24 airplanes throughout the season. This year, they are only flying 12 because they have relocated 12 airplanes to Cold Lake.
If Goose Bay did not exist, I am not sure whether the Canadian Forces would have an opportunity to invite them to go to Cold Lake, and whether they would go. I do know that currently, Cold Lake is draining away what was traditionally an activity in Goose Bay. That would be a conflict for GBO, because DND is looking for people to fly in Cold Lake to provide the critical mass to make their air force proficient, but GBO is trying to promote flying in Goose Bay.
Senator Kinsella: Is there a campus of Memorial University in Goose Bay?
Mr. Woodward: There is. It is called the Centre of Northern Studies.
Senator Kinsella: Has the province explored aeronautics or sciences that are related to air transportation as an area for technical training and development in the Goose Bay area?
Mr. Woodward: The extent of the university's involvement is environmental mitigation. There is approximately $2 million a year, most of it funded by the allies, to do environmental studies and various wildlife and water studies in Labrador. They would typically contract out with university professors and scholars.
Senator Kinsella: What about a community college or technical training? Is there such a campus?
Mr. Woodward: There is a campus there. It would primarily support heavy equipment training for people who are working on the airfield and things of that nature. They do some electronics training for radar operators. Not only the Goose Bay military, but also the North Warning System uses that.
Senator Kinsella: As I understood the testimony of some of the witnesses this morning, what we have there is $1 billion worth of assets. With that kind of an investment, in almost any sphere of activity, the shareholders would want to see the managers being creative, innovative and forward-looking in achieving the maximum return on that capital.
Is the Goose Bay marketing strategy as creative and assertive as it should be? I suspect there are questions about the marketing of that facility. Is there a problem with the management model and the marketing? Would you be supportive of some kind of new federal-provincial working group or task force on marketing Goose Bay?
Mr. Smith: The short answer to that, senator, is yes indeed, we would be supportive of such a working group.
Senator Kinsella: Would you be open, as the provincial partner, to convergence of the various economic development initiatives that are occurring in Newfoundland and Labrador, everything from the production of crude to the exciting things that are being done at the university in cutting-edge research? Thus, we might get out of this one- customer mindset and explore much more research on new kinds of military applications in the first quarter of this millennium.
There seems to be a significant amount of looking backward. Apart from a few comments about laser-guided weaponry ordinances this morning, we have not heard about what is happening in terms of both military and civilian applications.
I should like to hear what we should be doing at both levels of government, and not leave it to one ministry to try to come up with maximum usage of a $1-billion infrastructure.
Mr. Woodward: Other things have been happening in Goose Bay that were not mentioned today. I know there have been expressions of interest in developing UAVs, or unmanned aerial vehicles, that do not carry missiles or explosives, but are used for espionage and to carry chaff into war arenas.
There are competing interests. DND would be the first to admit that they would rather Goose Bay were somewhere else. They tend to have a tremendous problem getting their own people to go to Goose Bay. I believe that has a lot to do with the fact that it is an air force base with no airplanes. Why would anyone who is a career-mover in the air force want to go to Goose Bay? Guys who fly F-18s complain about being tied to a desk. They certainly would not want to go to Goose Bay for four years, because there is no opportunity whatsoever to fly a plane.
However, initiatives are being considered. The UAV would be one, because it would allow you to fly for long distances over areas with no population. There are lots of opportunities out there for training people, for developing new skill sets through universities and colleges, of which we are currently not taking advantage.
We have a tremendous facility. There are hangars in Goose Bay that can house DC-10s.
There are no other hangars in Eastern Canada that accommodate a DC-10. Those are the kinds of facilities we have. It is my hometown and I think it is a wonderful place, but unfortunately, not everyone thinks that. Many Newfoundlanders come to Goose Bay and want to extend their postings. To be honest with you, the last four German colonels who came to Goose Bay have all asked for extensions. The last one posted there was the only one not granted an extension. His biggest beef was that he only spent three years at Goose Bay rather than the five years that he wanted.
Senator Kinsella: Have there been any satellite launches from Goose Bay?
Mr. Woodward: The only place that I know of where they are launching satellites is the Churchill area. That is not to say that Goose Bay would not be an ideal place. The weather in Goose Bay is one of its most attractive aspects, given the fact that we are actually 100 miles from the ocean.
Senator Stratton: I should like to return to your opening statement, Mr. Smith. They closed down the base at Portage La Prairie years ago. The Canadian Headquarters of the RCAF were at the Winnipeg International Airport until a couple of years ago, when they moved the Commander of Air Command and Chief of Air Staff to DND HQ in Ottawa. Most of the commanding generals end up retiring in Winnipeg because of its history; once you get them to Winnipeg, you cannot get them to leave.
They closed CFBs in Manitoba at Portage la Prairie and Gimli; and Germany moved out of CFB Shiloh, so they moved the Princess Patricia Canadian Light Infantry Unit there. I would imagine that similar closures and moves have occurred in Newfoundland and Labrador?
Mr. Smith: Yes and no. In fact we have never had a strong Canadian military presence in the province. There used to be a fair presence at Goose Bay quite some years ago. The military presence in our province has been mainly foreign military. Most notably, the Americans are at Ernest Harmon Air Force Base in Stephenville, Newfoundland; we have the Naval Air Station, Argentia, on the south coast of the island; and, of course, we have Goose Bay. As you are aware, the Americans have left. We are aware of and sympathetic to the fact that the Canadian military has its own budgetary problems and is looking to rationalize its base structure wherever and however it can. They are trying to do their best with the limited resources available.
Our experience is similar. All militaries in the western world are paring down and rationalizing. The inevitable consequence for communities that had bases is a downturn.
Senator Stratton: The exception, in my experience, was the closure of the Portage la Prairie base, which was a fairly significant training base for the air force. They closed it and it went private. They were able to diversify quite successfully. Have you looked at that reality coming down the track? Have you had the opportunity to look at success stories that have occurred across the country after bases closed? Have you seen examples of the entrepreneurial spirit of local residents who have turned those bases into success stories? Are you looking at that potential, or should you look at that potential?
Mr. Smith: It is fair to say that we should be looking at it. I am not aware of any work that has gone on in that respect, no.
Mr. Woodward: It is important to note that while you might think of Goose Bay as supporting only low-level flying training for other NATO countries — and DND will say that — you must also recognize that the search and rescue helicopters at Goose Bay are also in a training mode. The people who fly those helicopters actually come to Goose Bay fairly green, in most cases, and receive their training there.
The cost of uniformed people at Goose Bay is shared with the allies, and those people are also receiving training, in some cases. Some of them are not even at Goose Bay but, rather, they are being posted to short-term assignments in places such as Bosnia and Afghanistan. That happens regularly. The official comment on what DND gets out of Goose Bay may be, ``absolutely nothing.'' However, I can assure you that it would be difficult to replace the helicopter training that goes on in Goose Bay. I do not think they could even replace it at Cold Lake, Alberta, given the terrain, the severity of winter and all of the activities that are occurring there. That currently runs at about $7 million.
Senator Banks: What happened to Argentia? When the Americans were there, it was a huge naval station. What is it now?
Mr. Woodward: Nothing. They spent the last 10 years cleaning it up.
Senator Banks: Nothing happens there?
Mr. Woodward: Inco is planning to build a smelter on the site.
Senator Banks: The base has been empty and useless?
Mr. Woodward: There was a clean-up of the base. Most of the buildings have been razed. At Argentia, nothing is happening except for the development of an industrial park.
Senator Banks: If I fly into Goose Bay, how do I then get to Voisey's Bay?
Mr. Woodward: Take a Twin Otter and fly north for 192 miles. If you are thinking that Voisey's Bay may replace some of the military activity, keep in mind that all of the activity at Voisey's Bay only employs 200 people, with an additional 200 people on their two weeks off, for a total of 400 people. All of the movement of goods in and out would be done either by air, for the smaller, support items, or by boat. Most of it would totally bypass Goose Bay.
Senator Banks: Despite what we heard this morning, the impact on Goose Bay, as an airport facility for the Voisey's Bay development, will be minimal. Is that correct?
Mr. Woodward: I should not say that the impact would be minimal. It could amount to as much as one Dash 8 per day, whereas we currently have the equivalent of seven or eight Dash 8s per day, plus 10 or 12 Twin Otters flying in and out.
It could be considerably more during construction years because of the level of activity. Once we go into production level, the crew changes and the cargo in and out of Voisey's Bay could be carried by one Dash 8 per day.
Senator Banks: Following on Senator Stratton's question, we heard earlier that 70 per cent of the air traffic at Goose Bay is civilian.
Mr. Woodward: Yes, that is correct.
Senator Banks: It is not military.
Mr. Woodward: That is correct.
Senator Banks: Does that include foreigners in training there?
Mr. Woodward: That is correct. You have to understand the nature of the base. Fourteen small airstrips run along the coast. Senator Rompkey was fortunate enough to know about these first-hand because he was a member when they were built. Until that time, we were running floatplanes only.
Each day, we have seven Twin Otters that leave upwards of twice a day. If you multiply 14 landings and takeoffs of Twin Otters by 365 days per year, you will soon find out that Twin Otter traffic equals the 5,000 to 6,000 sorties of military traffic, if you measure a Twin Otter as being the same as a Tornado taking off and leaving.
To say that civilian activity equals military activity, there is no question. The only dilemma is that you are only counting that as being a takeoff and landing. A Twin Otter only needs a 2,000-foot gravel strip. We do not need 11,500 feet of paved runway that is 250 feet wide to land a Twin Otter.
Senator Banks: However, as we found out on September 11, it was handy to have it there.
Mr. Woodward: Yes, it was. I can assure you that, without Goose Bay it would be difficult for much of the trans- Atlantic traffic to go.
Senator Banks: What I am leading to is we have heard a lot about what a useful thing Goose Bay's physical infrastructure is as far as air traffic is concerned, how important it is, what a boon it is and what a huge potential it has for development.
For the sake of the argument, I will assume that if the Canadian military had access to the same level of facilities that they have there now, and could keep 93 personnel there so that the Italian officers could speak to a military officer, they would be happy to pay rent of, let us say, $10 million or $12 million a year rather than paying $20 million a year in upkeep.
There are many airports across the country, Portage la Prairie is one, that are good examples of communities going to the federal government and asking to take it over. They can do better, they are on the ground and they can sell it better, and they will because it is not the federal government's main concern. Is there anything like that in the offing?
Mr. Woodward: There is an issue around that. If you look at the 90 people in uniform in Goose Bay, you will see that DND follows a certain protocol. They have their own chaplains and base exchanges. When you call something ``5 Wing Goose Bay,'' and say it is a base and put a colonel in charge, he is looking at a certain number of people who will report to him because that is the way the military works.
Senator Banks: They would be just as happy to pay you rent the same way as the airlines.
Mr. Woodward: There would be a significant savings if you took that protocol structure out and went a different way. The only dilemma is that, when it comes to fighter pilots talking to each other, you do not train anybody at the Memorial University to talk to a fighter pilot from the German Air Force.
Senator Banks: You misunderstood me. I am talking about maintaining the same military complement, performing the same functions, in the same buildings, at the same time.
Mr. Woodward: There are allies that claim we could easily get by with less people on the base than the 90 that are currently there, and subsequently there would be savings.
Senator Banks: I am talking about leaving the 90 there. I am not talking about changing anything, except who runs the place.
If you found out that the military would be just as happy as a tenant as they are a proprietor, would it not make economic sense for the Province of Newfoundland and Labrador to introduce an initiative to take the base over, make it profitable, and continue to have the exact same military presence, but as tenants rather than landlords?
The Chairman: I do not think the witnesses are authorized to do a deal today on behalf of the Government of Newfoundland and Labrador.
Senator Banks: I was hypothesising.
The Chairman: Let us see what they have to say.
Mr. Woodward: Senator Banks you are making some people in the room smile from ear to ear.
Mr. Smith: You are also making others nervous.
Senator Banks: I know this is not a good analogy, but if you want to attract people to a resort, you must build the infrastructure first. If we need more places for people to live, we must have them there first. It is hard to attract people when you tell them it will cost them $150 million to build a decent barracks, as opposed to the government renting out the facilities that are there. I hope that will be taken into account when the question of the continued operation of the place is raised.
Mr. Woodward: The fundamental problem with Goose Bay is that we are only using one-third of its capacity. We have a billion dollar structure that can easily handle 18,000 sorties a year.
Senator Banks: Could you not market it better than the DND?
Mr. Woodward: There would be fewer conflicts with Cold Lake and places of that nature. We would not care what happened in Cold Lake, we would be out marketing Goose Bay and saying, ``We are prepared to do whatever you want in Goose Bay.''
Senator Bolduc: Senator Banks, do you want to privatize the military establishment?
Senator Banks: No.
Senator Bolduc: It is a military base. That is the first criteria.
Senator Banks: However, 70 per cent of its air traffic is civilian, and, as we have heard today, there are other things growing up around it that are not military. There are all kinds of private operations around it.
Senator Forrestall: I want to ask some questions about the caribou herd. Labrador's total population is approximately equal to the crowd at a Blue Jays game, half the population of Kanata. I want you to say something that forcefully tells me that that is important. This government has, for its own reasons and purposes, and finances has been one of them, procrastinated to the point where the people will simply fold up and die.
I do not think the Province of Newfoundland and Labrador wishes to buy a billion dollar asset. They might rent it for a couple of years with no strings attached and try to market it. I am concerned about the people in Happy Valley—Goose Bay because they must wake up in the morning or go to bed at night worrying whether they will be there in five years.
Mr. Woodward: It is a very unnerving time. Everybody in Goose Bay knows there is a chance that the Dutch may leave, and they know that the other allies do not want to spend more money than they are already spending, so they may be faced with picking up the additional cost of the Dutch. This makes the 1350 people who depend on the base for their livelihoods very nervous.
Yes, we have a base that is worth $1 billion. We paid one dollar for it. All of the enhancements done to it, with the exception of some environmental clean up, were paid for by foreign governments. We have 100,000 square kilometres of air space that no one else wants to use. Currently, we get 1,350 jobs from it. We put in approximately $20 million to support it, and that comes from DND's budget. As a return from that, the people in Goose Bay pay $23 million in taxes. I know Senator Banks will tell me that everybody in Canada pays taxes, but $23 million comes back from those people who pay taxes because they are gainfully employed.
Senator Forrestall: You are stating the obvious. Will you be privy to a review of the requests for proposal? Will you be able to have an input at that stage?
Mr. Woodward: No.
Senator Forrestall: Have you made contact, government-to-government about the importance of the unrest that is there?
Mr. Woodward: I think it happens daily. We thank this committee for allowing us to bring it to the forefront again. It is difficult to find a forum that wants to listen, because bases have been closed everywhere. There are very few bases in Canada where we put in $20 million and another government put in $75 million on top of it.
Senator Forrestall: I am concerned about our role in NATO. We have just closed the long runway at Shearwater. Happy Valley—Goose Bay is the last long runway in Eastern Canada. Is there another runway east of it?
Mr. Woodward: The runway in Gander is not bad, but nowhere else has 11,500 feet.
When the ILS went down in Goose Bay last year for a month, American Airlines, Northwest Airlines and United Airlines screamed their heads off because they no longer had an alternate runway. If Gander weather was flat, they no longer had an alternate. Senator Doody knows how often Gander weather is flat.
Senator Forrestall: Not very often.
Mr. Woodward: Fifty-six days every winter.
Senator Forrestall: If I can ask a final question about the herd because Senator Rompkey and others mounted a defence with respect to the herd and flying. What is the state of the herd? Has it grown in the last 10 years or has it shrunk? Has it been impaired by the presence of low-level flying?
Mr. Rex Goudie, Assistant Deputy Minister of Labrador and Aboriginal Affairs, Government of Newfoundland and Labrador: No, it is still very healthy. As you are aware, we have environmental monitoring that researches the effects on caribou. There is no indication that low-level flying has a negative impact on caribou. As was referenced this morning, the research project itself in using helicopters probably causes more negative damage to the caribou herd than the low-level-flying program.
Senator Banks: What is the size of the herd now?
Mr. Goudie: A recent census that was done would indicate that the herd is some 350,000 to 400,000 animals.
Senator Forrestall: How many were there 10 years ago?
Senator Rompkey: Five years ago there were about 700,000.
Mr. Goudie: The reduction has more to do with the limited range than with low-level flying.
Senator Bolduc: Has the Government of Newfoundland and Labrador discussed with the federal government, in particular with Defence, North American strategic needs? Where does Goose Bay fit into that? Are they indifferent to the closure of the base?
My second question: Have you had any discussion with the Department of Transport insofar as commercial international transport is concerned? Are all of the American companies and the European companies indifferent to the closure of that base?
Mr. Smith: First, we are not at this point contemplating closure of the base; we are contemplating the expansion of activity at the base — at least we are hoping we will go down that road, although we are worried. My minister wrote to Mr. Eggleton when he was Minister of National Defence, and has recently written to the new Minister of National Defence requesting a meeting to discuss these issues. That meeting has not yet occurred. However, we plan to raise this with the minister and with his senior officials.
With respect to the North American defence posture, it is our view that the strategic position of Newfoundland and Labrador post September 11 has come back to the fore. In the Cold War and in the days when we worried about Russian bombers coming in on us, it was an important point. Now, it is not Russian bombers, but hijacked civilian aircraft that are the concern. In any event, we think that having an active and well-trained Canadian squadron on Canada's East Coast would serve this country well.
As Mr. Woodward just mentioned, the Department of Transport is clearly aware of the absolute need to have Goose Bay there as an alternate landing site for North Atlantic air travel. We have not been in discussion with them on this. We take it as a given, and we hope the federal government does as well.
Mr. Woodward: It is also important to note that, while the Canadian Forces do not use Goose Bay for a training base, they have a forward-operating location there. They have built four hangars to house F-18s; they have a place to store armaments; and they have an OPS centre. Last year, after September 11, they deployed airplanes to Goose Bay. On a regular basis, if there is a threat, the airplanes come from Bagotville to Goose Bay because of the proximity to the coastline and our international borders. My understanding is that the CF has a NORAD commitment to keep that in place and operational in the event that NORAD says, ``We need some airplanes on the edge of our borders.''
Senator Banks: This morning the colonel said ``no'' in answer to the question of whether we have an international commitment with respect to that facility.
Mr. Woodward: He said that with respect to civilian transportation?
Senator Banks: That is correct.
Mr. Woodward: However, with respect to the military and our relationship with the NORAD base in Colorado, these four hangars, the missile storage areas and the OPS centre were all built in the 1980s. Once a year, they deploy F- 18s to Goose Bay just for the purpose of demonstrating their NORAD capability and, on a regular basis, they deploy them to Goose Bay when they want to fly with the other allies.
Senator Bolduc: In one way it is a good thing because you are sure that the Department of National Defence will put in $20 million to $30 million a year. That is your insurance.
Mr. Woodward: I would like to think that, but their official opinion is that they have no use for Goose Bay.
Senator Doody: My question is supplementary to one of Senator Kinsella's some time ago relating to the academic extension of Memorial University to the Goose Bay area. I remember that Seacorp at one point had an intensive operation at Lake Melville, Hamilton Inlet and the Goose Bay area generally where they did some amazing research in terms of tide movements, water salinity and how deep it freezes in that area. Some of it was quite startling in fact. Have they discontinued that work or was that just a one-shot program?
Mr. Woodward: Most of that research was in connection with winter shipping, using the MV Arctic for aluminium smelters and using the Lower Churchill, which is 50 miles from Goose Bay, as a source of power for a large aluminium smelter. Of course, we have Alcoa back now looking for a thousand megawatts of power. There is a potential for that to start again. With a road being built into Goose Bay, the issue of shipping during the winter is not as imperative as it once was.
Senator Doody: I had a colleague in the Newfoundland House of Assembly who told me that the aluminium smelters were a method of converting cheap electricity into metal ingots.
Senator Rompkey: I wanted to follow up on the interesting line of questions that Senator Banks opened up and give Mr. Woodward a chance to tell us more. Suppose that somebody else owned the facility and rented the it to the same people who are there now, both Canadian and non-Canadian; does that make any sense? Should that idea be pursued?
Mr. Woodward: One thing that came up this morning that was not expanded on was the issue of utilization of the asset. DND does not compete with private interests. For instance, they have 700 rental housing units, and they are in the process of tearing down one-half of those units because they are not prepared to privately rent them. Even though in the last 10 years they have renovated each one of those units to the tune of $100,000, they are in our in the process of tearing them down.
That is true for almost all of the properties on the base. DND looks at it as being public property. There are rules that govern the use of public property so as to not compete with private interests.
The union talked a bit about that this morning when they said that Serco had their hands tied. When Serco bid on the contract originally, they had plans of looking at the Voisey's Bay development. The Goose Bay contract was a way to get their foot in the door with respect to other developments. Within a couple of months of their winning the contract, they found out that DND was not going to allow them to use any public assets to compete with private enterprise.
Potentially, you could utilize the assets on the base for other things. Under the present public policy that we have in Canada, you cannot use Crown assets to compete with private enterprise. There is a reason for that.
If you looked at disposing of those assets to private enterprise, they may put them to better use. You might also refer to what is happening in Alaska with international carriers of freight having a large airfield and the potential for large airfield assets to be used in other ways. You could look at using the location to refurbish aircraft, which is happening at the former Summerside base. There are ways of doing it.
Senator Bolduc: In Myrtle beach, South Carolina, for example, the United States has a fairly big military base that was used for commercial purposes as well.
Senator Banks: That is done all over. I asked the question because we formerly had a very large air base in Edmonton. It was the other 11,500-foot runway. It no longer exists. The very considerable military presence in Edmonton is now served by aircraft that land at the Edmonton International Airport, which is owned and operated under the aegis of Transport Canada by the Edmonton Municipal Airport Authority. It rents the facilities to the military. It is not an outlandish approach.
Mr. Goudie: We requested, as a province, as did the town and chamber, that we include in the new RFP that the service provider be allowed to attract other activity, whether it be military or non-military. That would reduce the cost to the allies.
I have not reviewed the new RFP. However, I would like to think that DND and Public Works adhered to our recommendations and suggestions that the RFP be modified to allow the service provider, which is not allowed at present, to get involved in using the asset to attract other levels of activity.
Senator Rompkey: There is one point I want to have put on the record about the airport commission in Goose Bay. I want to know how it has worked. Do we have more international traffic now than we had before? If not, why not? What are some of the obstacles to attracting international traffic? Goose Bay is on a great circle route. Many planes would like to land there. If you go to Europe, you quite often fly over Goose Bay.
I would like to have something on the record about the airport commission and its role.
Mr. Woodward: The airport commission was formed approximately five years ago. It was basically in line with Transport Canada policy to divest themselves of civilian airports. Over the period of the past five years, it has been in a breakeven position. It has made and lost money. However, after five years of working, it is breaking even.
It has a budget of about $1.5 million to $1.6 million per year. It pays $750,000 per year in rent to the Department of National Defence for the terminal and some of the tarmac space. That is its contribution to clearing snow and runway maintenance.
It has worked well. It earns about $500,000 per year from international landing fees — airplanes that are coming and going internationally and landing in Goose Bay.
It is probably the best news story that Transport Canada has on the subject of divesting itself of airports. No doubt, it partially functions well because it has the ability to rent from DND at the rate $750,000 per year, and its other expenses are about $750,000 per year for a total budget of $1.5 million. If it operated independent of DND, it would probably incur an additional $750,000 in expenses per year. Using Stephenville as an example, it would probably need a budget of about $2.2 million to $2.3 million to survive.
It benefits from cohabitating with DND. It has been successful. There are no airport improvement fees in Goose Bay. Rent from its tenants pays for many of the costs. A significant amount comes from airplanes that are going overseas that land in Goose Bay and pay landing fees.
Senator Rompkey: Are there more airplanes, and if so, what is the increase?
Mr. Woodward: At one time there were more airplanes. There has been a decline since September 11. Many of the heavier airplanes used by the bigger airlines are now being parked because they have less traffic. Subsequently, they park their older airplanes that have less range and fly their newer airplanes on which they have expensive leases and do not need to land anywhere.
The Chairman: Thank you, Messrs. Woodward, Goudie and Smith.
Senator Forrestall: What does it cost you for extra for security?
Mr. Woodward: The airport commission pays its own security, but it has combined its security with its janitorial and maintenance expenses. It contracts out for a group of people who do all of those things. The guy on midnight security is also the guy who does the janitorial work.
The Chairman: Thank you very much, gentlemen.
Our next two witnesses are from the town of Happy Valley—Goose Bay and from the Labrador North Chamber of Commerce. With your approval, I would like to invite those witnesses to come to the table together.
You should not assume that their positions are identical on any or every issue. However, I thought that, since they are coming at this from a community perspective, we might have them at the table together in the interests of time.
I said, ``with your approval,'' and I am receiving a vigorous affirmative nod from Senator Rompkey, and that is enough for me. If it is all right for him, it should be all right for the rest of you.
Colleagues, Mr. Dennis Peck is Director of Economic Development for the town of Happy Valley—Goose Bay. Mr. Dave Hunt is President of the Labrador North Chamber of Commerce. With Mr. Hunt is Mr. John McGrath, an economic consultant with some interests in the area of which we speak.
I will ask Mr. Peck to give us his opening statement first, and then I will go to Mr. Hunt, after which we will open the floor to comments and questions.
Mr. Dennis Peck, Director of Economic Development, Town of Happy Valley—Goose Bay: Honourable senators, I have provided a copy of my presentation, which I believe is being handed out now. I only met with council on Thursday evening in order to determine what they would like said. On Friday afternoon, I was volunteered to attend. Therefore, I am moving forward as best I can.
I am pleased to be here representing the Town Council of Happy Valley—Goose Bay. His Worship, John Hickey, sends his regards. The mayor and council agree that reviewing the contract for site support services for operation and maintenance of 5 Wing Goose Bay, as well as the draft request for proposals to renew that contract, is of vital importance. The effectiveness of this contract approach to deliver operational services to 5 Wing Goose Bay must be critically assessed. As you know, 5 Wing Goose Bay was the alternative service delivery experiment for the federal government. Now is the time to review the results of that experiment.
Today I hope to place into context the importance of 5 Wing Goose Bay to the community of Happy Valley—Goose Bay as well as to express our concerns with the request for proposal. I would also like to add that since some points in the request for proposal were made this morning, some of my concerns have been addressed. However, I have not seen the new RFP, so I do not know the details of it.
The Town of Happy Valley—Goose Bay is very concerned that the RFP, as drafted, may well jeopardize the future of our community. Happy Valley—Goose Bay, home to some 8,000 persons, is a single-industry town. That industry is military training at 5 Wing Goose Bay. While it is true that Labrador has incredible potential, of which the recent announcement for the Voisey's Bay mine mill project is but one example, none of these projects is of a scale that matches, much less replaces, the economic activity already in place at 5 Wing Goose Bay. Without opportunities to effectively retain and grow the business of military training, we fear the worst for our community. Military needs are never static; we must ensure that neither are our approaches to our clients' needs.
To emphasize the importance of 5 Wing Goose Bay to our community, our province and Canada as a whole, I would like to present the following quote from a recent research document prepared for the Institute for Environmental Monitoring and Research. This document is unpublished and as yet unreleased. However, as the town sits as a member of the board of directors to this institute, we receive the data prior to its publication. The institute monitors the low-level training program's compliance with the environmental impact statement for the program. The institute also conducts research related to the LLTP. The research being quoted is an annual analysis of the economic impact of the LLTP. This is peer-reviewed research and is of the highest standard. It finds that:
Low level flying activities at 5 Wing Goose Bay accounts for 1,480 person-years of employment in Labrador, adds 72.64 million to Gross Domestic Product (GDP), and contributes $26.80 million to government revenues. Considering the whole of the province of Newfoundland and Labrador, 1,880 person-years of employment are created, $96.68 million is added to the GDP, and $35.68 million is contributed to government revenues. This is up significantly from the 2000 study. Economic effects on Quebec are minimal, other than the purchasing of some goods and services for the Base.
It is unfortunate that Mr. Young is not here. He would add that the numbers were up last year. It was a very busy year. It also reflects that there are dynamics to be taken into consideration within this industry.
This document will eventually be published on the institute's Web site. The 2000 analysis is now posted.
This level of activity is significant. No other development in the region, existing or planned, comes close to matching the value and importance of 5 Wing to the Town of Happy Valley—Goose Bay.
In comparison, the Voisey's Bay mine mill project, at its peak, will see 800 positions in Labrador. This being after the mine moves into the underground phase of operations in approximately 20 years. For the first 20 years, only about 400 full-time positions will be created in Labrador. Of these, the Voisey's Bay mine environmental impact statement projected that approximately one third of those positions will be housed in our region. This includes the communities of Northwest River and Sheshatshiu. While announced as a ``massive project,'' as far as the community of Happy Valley—Goose Bay is concerned, Voisey's Bay will not replace the LLTP.
The community of Happy Valley—Goose Bay is well aware that the low level training program is the foundation of our economy. Our future is tightly woven with the future of the base. We have supported the base through the low times of the mid-1970s when the United States Air Force pulled out, to 2001 when 5 Wing experienced one of the busiest flying seasons ever.
We are clearly aware that training needs are very fluid and that we must be able to respond quickly and effectively.
It is the question of effectiveness that is at the centre of today's presentations. From the town's perspective, if the measurement of effectiveness is cost reductions, these largely happened before the ASD process. There has been limited movement on that front that we feel can be solely attributed to the ASD approach. If the measurement of effectiveness is improved management, again we must question the success of the ASD process in achieving this goal — and I will comment more on that later — if it is making the business stabilize and grow, again we feel that this goal has been missed.
When we look at the last five years under the regime of the ASD program and read the RFP, we feel we have every reason to believe our community's future is threatened. The town bore more than its fair share of pain as the federal government moved its ASD agenda forward. In 1986, the community had 909 federal employees, not including RCMP and CBC as well as some smaller groups. In 1992, that number was down to 771, and in 1999 it was down to 208. The loss of 700 jobs in a community of 8,000 is significant by any measure. While 312 people are now employed with Serco, over the last census period, our town's population dropped 7 per cent. The experience at 5 Wing with ASD prompted the federal government to state that it will not proceed with a similar process at any other installation. Yet, we continue to live with the results of this program.
We continue to hear of the call to cut costs and be more cost-effective and competitive. I think you heard that repeatedly from DND this morning. In response, we feel it is important to state that the LLTP is not a cost to the federal government. The federal government invests approximately $20 million per year at 5 Wing. The tax revenue generated by the low level training program is greater than that each year. The stimulus to the economy as a whole is significantly greater than the investment. In reality, the operations at 5 Wing are an expenditure by the Department of National Defence, but they do not see any revenue generated by the program. There should be no doubt that 5 Wing Goose Bay pays its way. It pays its way with foreign money coming into Canada. To my knowledge, this is not something to which any other base can lay a similar claim.
Expenditures at 5 Wing should not even be couched in terms of being a cost. It should be viewed as an investment and a fully recovered investment. It must be framed in terms of an investment in a community, an investment in Canada's defence capabilities, and an investment in the shared defence capability of Canada's allies. National defence is much more than just a cost of governance.
With direct reference to the RFP, the Town of Happy Valley—Goose Bay has many concerns. We have presented these concerns to the Ministers of Defence and Public Works and Government Services, but we have had no response to date. Having said that, with the release of the new RFP, I am not sure what has been incorporated into it and what has not. Some of what I am saying may be part and parcel of that document.
There should be no confusion that the bidder will retain 100 per cent of the existing workforce as a mandatory minimum. Existing wages and benefits will be guaranteed for the existing workforce. We feel 80 per cent of management staff will be from the local area or the existing workforce within five years of project acceptance. A training and work plan will be provided. There will be details of how these objectives will be achieved. As well, in clause 3(b)(iii), local procurement of supplies and services must meet a required and negotiated percentage of local procurement.
There appear to be no incentives for bidders to propose ways and means to enhance the operation by direct marketing or building infrastructure that could add incentives to attract new participants or new civilian businesses to the airfield. The RFP must include both incentives in terms of bonus points for proposals and incentives in the contract for bidders that can and do attract or are willing to invest in attracting other participants or new or enhanced economic activity, for example, cold weather testing, and particularly those activities that can use the facility in the off-season, to offset the costs of year-round operations. I would add that, yes, we are colder than Cold Lake.
There appear to be no incentives to undertake or explore or implement other technology that could result in O&M reductions without dropping levels of service. There are, however, energy cost-reduction environmental program incentives that serve as models for such opportunities.
Assessment of the bid must include consideration and bonus points for a staffing plan that would create additional jobs. In addition, there must be incentives for bidders to invest in the local economy and for increased job opportunities in non-traditional fields. This should be feasible in an 11-year contract. Such an incentive could mean real opportunities for local training and training that can piggyback on the Voisey's Bay Mine and Mill Project and even the Lower Churchill Hydro Project; the environmental fields of study being one of the more obvious disciplines where there are overlapping training and job opportunities. This represents a clear opportunity for the federal government to provide over and above the annual incentive provided for in the RFP. Such an incentive could result in a great local and regional benefit. The status quo is not acceptable, and the RFP should be drafted to encourage a growing industry.
The base promotion component must include partnering with local initiatives — for example, the town's efforts — to ensure that there are not counterproductive efforts or common interests unknowingly working against each other.
I have provided a full list of other concerns that were raised by council and some of our other partners.
Not all is bad with the RFP. We strongly support the goal of lengthening the contract period to 11 years. A longer contract will create the confidence needed to invest in the community, the base and their employees. All of us will benefit from this decision. This all leads us back to the challenge presented by Senator Rompkey, that is, ``...to ascertain the effectiveness of this method of base operations in Canada in providing services for both military and non- military training activities.''
We consistently hear that effective management is compromised by the micromanagement of the contractor by DND. I believe you heard a number of presenters this morning speak to that. The most striking example for me was when the town installed a six-inch pole on the base for a stage's power drop. It was six inches in diameter, not six inches in height. It took six signatures on a form to get permission to dig the hole. It took weeks to arrange for a power drop that eventually took us an afternoon to arrange with the local power company, when we simply ran out of time. The implementation of effective management structures is paramount to the success of this process.
The environmental impact statement for the low-level training program noted that it cost 1.5 times more to have a job done by a person in uniform that to have a civilian do the same job. This presents a simple strategy: Have the maximum amount of work conducted by civilians versus uniformed personnel. In fact, we would suggest that the option should be explored of a total civilian operation at 5 Wing Goose Bay. This will not only reduce cost but also generate a more effective operation. Working at Goose Bay would be a career decision and a commitment, not a three- year posting. We suggest that this approach may be the best way to achieve an effective change in the program.
There are opportunities for effective investment at 5 Wing. The level of return to Canada as a result of the current investment in the base clearly illustrates the advantages of this approach.
Many call for the federal government to consider a level of investment more closely linked to the level of the total return via taxes to the two levels of government or linked to the total value of the GDP created by the base's activities. Either option speaks to a higher level of investment to reflect the proven positive returns generated to date.
There are many opportunities to introduce new technology to the training program. Air combat manoeuvring instrumentation and electronic warfare threat systems, as recently employed at Cold Lake, represent such opportunities.
There are opportunities to introduce new training, supersonic and high-level activities have been reviewed. Helicopter training and off-season training opportunities could also be added to the mix. In any scenario, the contractor needs to have the ability and incentive to pursue such options.
It is critical to the future of our community that all reasonable opportunities to enhance the quality of the training experience at Goose Bay are explored. We feel that the contractor must be given the freedom to market and invest, and that the contract must include these elements as key targets of success. Vested interest is the best incentive, and that is lacking in the current arrangement.
Complementing this approach is the town's tentative support for the concept of a single marketing entity within DND to market military training in Canada. We say ``tentatively,'' because we are unaware of the details of this initiative but understand that it is being explored by DND. To be effective, any such initiative must be allowed to pursue opportunities vigorously. It is a natural fit to then allow the contractor to be a full partner in such an initiative. NATO flight training in Canada is an example that could be expanded upon. Here, the contractor is the driver behind the success or failure of the project.
Hand in hand with this initiative is the need for a greater presence of the Goose Bay Office in whatever form it may evolve into as a result of the above-noted initiative in Goose Bay. There needs to be a tight liaison between the contract managers and the users and between the contractor's marketing efforts and the initiatives of the department as a whole. There is a need to link the success of Goose Bay directly to those charged with its future.
Last, to echo the sentiment repeatedly heard within the community: The lack of a presence of Canadian Air Force F-18s at Goose Bay continues to be questioned. The opportunities to participate in the squadron-level training available at 5 Wing Goose Bay needs to be fully explored. Nothing could speak more directly to the government's commitment to 5 Wing than the permanent presence of F-18s at the base. Nothing is more disappointing than to read in the local newspaper that Canadian F-18s stopped over in Goose Bay on their way to Europe to train. The reason given is that they need to go to Europe to train with our allies because they cannot get that experience in Canada. Yet, they stop at Goose Bay where the very allies ask, ``Why not train with us here?'' Attached is that newspaper article.
There are operational opportunities at Goose Bay. We are not convinced that they have been fully explored by Canada's defence establishment. Goose Bay is simply not part of the formula. If asked for one key part of the puzzle of how to improve the effectiveness of the efforts made to date, that would be for the operational opportunities to be taken advantage of fully.
Finally, I would like to thank you for your time in meeting today. I sincerely hope that our concerns and suggestions will help you in considering this very important matter. In particular, I should like to thank Senator Rompkey for his leadership on this issue.
Mr. Dave Hunt, President, Labrador North Chamber of Commerce: Honourable senators, thank you for the honour of allowing me to address your august group.
I am a long-term resident of Happy Valley—Goose Bay specifically, and northern Canada generally.
Most political leaders, government organizations, commercial enterprises and employees interested in the airport located at Goose Bay, Labrador, are dissatisfied. All are searching for leadership leading to a plan that would offer a high probability that the airport will remain operationally and financially secure for the foreseeable future.
Every body involved in Goose Bay is acting in accordance with its own specific mandate, while no one is planning for the overall future of the airport. The Department of National Defence inherited the airport from Transport Canada and public works respectively about 15 years ago in response to the growing use of the airport by other NATO air forces, and at a time when Canada was working hard to promote the facilities at Goose Bay as a site for the NATO fighter weapons training centre.
To this end, millions of dollars have been spent on environmental impact studies to ascertain what effect this training would have on the people, the wildlife and the flora of one of the last pristine wildernesses in Canada. The EIS report said, in essence, that with careful monitoring, which is currently being provided, long-term negative effects would be minimal.
After the collapse of the Soviet threat in 1989, there is no longer seen to be a need for a NATO training centre, and DND has since viewed Goose Bay as an economic development burden that drains resources from higher priority military requirements in Canada, especially as the military budget shrank drastically.
Consequently, DND has followed a course intended to reduce its financial commitment, mainly by transferring costs to the NATO allies, as well as contracting civilian airport management. The removal of ``redundant to current needs'' assets has had the immediate effect of reducing the amount of the grants in lieu paid to the Town of Happy Valley—Goose Bay, while straining the resources of the town as it attempts to handle the large amount of trash created by the destruction of these facilities. This has created unwanted tension between the town and the operators.
At the same time, the NATO allies themselves, experiencing reduced national funding, a shrinking military threat from traditional adversaries and increased costs at Goose Bay, are taking every possible measure to reduce their costs. We fear that these trends may lead the NATO ally to cease operations at Goose Bay in future for the following reasons.
First, while governments, federal, provincial and municipal have worked to maintain the current situation, they have taken no significant measures for future development, lacking the will, the motivation, the resources and the expertise to plan this development.
Second, commercial enterprises, while exploiting current opportunities, are reluctant to reinvest for future development. This is likely because they have no confidence that the airport operation will be viable long enough for them to have a reasonable chance to recoup their investments.
Third, employees, both government and commercial, while seeking assurance that they will retain jobs, seem unwilling to share the risks involved in seeking longer-term viability for the airport operation. This resulted in an unfortunate strike, and the threat of others. They have seen the base go from about 1,000 employees to about 400 under the ASD program. Their anxiety is understandable. The ASD has been a disaster for Goose Bay, a disaster over which we had no control as it was instituted, with little or no input locally.
Fourth, the company contracted to manage the airport has taken a hard-line approach to reducing costs and is concerned mostly with making a profit during the life of the contract, as they must rebid the contract every few years. They have no incentive to increase the use of the base. The two-year overlap of Serco, the management company, and the MMOU, the multinational memorandum of understanding, which governs the presence of the allies, makes it very difficult for a businessman to plan when this happens. Should the base close, they will merely pack up and leave for other tasks. This option is not available for most local residents and businesses. I was in business in Goose Bay when the Americans left as a major player in 1976, and I saw many small businesses go into the tank.
In a nutshell, while opportunities may exist for the Goose Bay airport, none of the current actors is looking for those opportunities, testing them, proposing them or implementing them. The airport will eventually fail if this situation is allowed to persist.
As a businessman, and representing businessmen as President of the Chamber of Commerce, I feel that, as a first step, we should do the following. First, we should compile an inventory of marketable features for the airport, this to include possible future investment opportunities with full consideration of new technologies.
Second, we should consult all interested parties to obtain suggestions for enhancement of all the current facilities to make the Goose Bay airport more attractive to present clients and other possible users.
Third, we should investigate functions that could be located at the airport, cost them out and, in consultation with the customers, consider the investment needed.
Fourth, we should consider the development of a revamped management structure for the airport wherein the Goose Bay Airport Authority would play a larger part in the total operation of the facility. At present, it is merely a bill collector for passing customers. Successive arrangements for management have hindered development of this potentially key military asset rather than promoted it.
While DND, through its Goose Bay Office, which is situated in Ottawa rather than Goose Bay — a sore point with our chamber — has control of the future of the air base, but seemingly it has no mandate or expertise in the field of economic development, which is so sadly lacking, to ensure our future. This must change. We must create a comprehensive development plan that would include all those with economic interests in the airport, which might lead to Goose Bay becoming a contributor to military readiness for Canada and key allies, a contributor to economic prosperity in the region, and a contributor to NATO.
I am a businessman. Tell me what you want and I will consider how I can provide it. The same process should be followed for the development of the Goose Bay airport.
In spite of the announcements on Voisey's Bay and considerations of future hydro projects, the economic engine for central Labrador has been and will remain the air base. Let us build on what we know and have faith in the future. As was said in a movie about faith in the future: ``Build it and they will come.''
I have a book for you but, unfortunately, I left it at the other office. I will give it to you later on.
Senator Stratton: I believe you were present during the previous presentations when my premise of my question was: There are some success stories across the country about the closure of bases and how some of those bases, having been given to the town or group of entrepreneurs for a dollar or whatever, have been highly successful. Studies have been done in Western Canada about rural areas and why some towns and villages are successful and others are not. Overriding both of those issues, the success stories always come from the private sector, from entrepreneurs, who ultimately provide the drive for success.
As I listened to your presentations, particularly that of Mr. Hunt, I thought you were talking about yourself, in essence: That is what the chamber should be doing, not someone else. Would you not want to plot your own entrepreneurial vision of the future for this place? The potential is there, should that base cease operations.
Mr. Hunt: Senator, you are absolutely right. We have met and talked with the former Minister of Defence, Mr. Eggleton. We brought some of those things to the table. Even our own chamber has talked about them.
Basically, we need to sell a base as a base. Senator Banks mentioned earlier that DND should be a tenant and we should rent to DND. That would save the federal government a significant amount of money.
We are thinking that, in one sense, the whole base should be rented out. We should be able to say to all NATO countries, ``Come on down here; we have facilities for you,'' and rent it like a hotel. If they want the month of June, we can plug them into the month of June. It is all rentable. This can be done. It can be done in a business sense. We have to study it and we have to get a good group together, maybe a corporate group, that could handle something like that.
Mr. Peck: I also wish to respond to that question. I heard that point being raised earlier. There are success stories where communities took charge of their own future and ran with it, but there are just as many failures on that level, too. It is not all, ``Gee, look how good they did. They ran with it. Why can't everyone do that?'' Each had its own circumstances and conditions that created its success. Some of those success stories were due to a change made by the federal government, that is, where they went from, say, an air force base to a federal tax office being located near the site of air base. Yes, they did do it on their own but they also had a substantial hand in the process.
My first response, when someone says, ``Would you like to do it?'' is, ``Damned right, we would like to do it ourselves.'' Of course, we would like to be in charge of our own futures and not have it in someone else's hands. How to do that, though, is a big question. How to do that while dealing with foreign militaries is a tricky question. They may look at it quite differently from us in terms of a business exercise, when they come here to train.
I do not have all the answers. My biggest concern is that right now, I am looking at an ASD process that was offered to us as an option to help us retain the business, and I think it has failed. It has not been successful. Many of the cuts in costs that were talked about — the large cuts in costs — were done before the ASD process actually was initiated. They went through a 25 per cent cut in the employment on the base before the ASD, and they thought they had achieved what had been asked of them. Every time they turned around, yet another cut was asked for.
It goes hand in hand. There are opportunities here for our future in that we can take care of it, but we must also have the right environment to be successful.
The Chairman: Would it be different today if they had not gone with the ASD process?
Mr. Peck: As we look back at it five years from now, I wonder we will see the ASD process as a complete waste of time. We may not see anything different. There may be the same people working on the base, doing the same jobs, but there may be less confusion in terms of what the responsibilities are and who is doing what. It may be simpler for the allies in terms of some of their responsibilities and how they get things done.
The Chairman: From the perspective of the chamber, what difference does it make to you whether it is the ASD option or some other option?
Mr. Peck: Certain approaches bring with them the whole culture of that approach. If the DND does things the DND way, it may not be an effective business model. It depends on where the base will go and where we would like to see it going.
The Chairman: Do you want an effective business model or a DND model?
Mr. Peck: I am not sure. They do not necessarily have to be at odds with each other.
The Chairman: I agree.
Mr. Peck: I am not sure it is true to say that DND is completely unable to be successful in business. I do not think DND should be looked at solely as a business enterprise, because it is not.
The Chairman: Do you think your town would be better off if they had not gone ASD? Is that what you are saying?
Mr. Peck: That is probably true. I think it would have been better had there been an ASD process that had given a contractor flexibility to be what a business is, which is to make a business grow. I have had contractors come in and speak to me on the next contract. They said, ``If this is just an exercise in maintaining the number of jobs there now and maintaining the business, why would we want to be involved? All we are looking at then is a lowball figure. However, if we are looking at something that can be made to grow, we are interested.''
Senator Stratton: We have gone through this process across the country. In particular, I talk about Portage la Prairie in Manitoba, the closing of the Gimli Air Force Base and the recent closing of the Kapyong Barracks in Winnipeg. It was talked about for years. In other words, the message was being subtly delivered over the years. This sounds like déjà vu all over again, as Yogi would say, with the recognition of that message being sent ever clearer. That makes you nervous, I would expect. It would behoove you to go and look at the success stories, knowing there are failures, but looking at success stories.
Mr. Peck: I went to Portage la Prairie last year and Cold Lake two years before that. In fact, I took representatives of the province with us, and the Goose Bay Airport Corporation came with us. As far as I am concerned, Portage la Prairie is a great model. They have one goal, which is to make money, and they are doing it. They are providing the service people want.
Senator Banks: Senator Stratton and I do not always agree, but on this we do. I think you have to go further, as Senator Stratton has said, and the chairman asked almost facetiously whether you want a DND model or a business one, but that is, in fact, a serious question. I have fierce arguments with people who ask, unthinkingly I believe, ``Why does the government not operate like a business?'' God help you if the government operated like a business, least of all, the military. That is not their job. They cannot operate like a business. The perfect indication of that fact is that, within the military — and I am not putting down the military; they have a specific job to do — within the constraints of that job, those houses, which have just had $100,000-worth of updates done on them, are surplus to their needs, so they tear them down to reduce the payment in lieu of taxes, perhaps, or so as to avoid the cost of maintaining them. The military does not operate like a business. It must not operate like a business. It will never operate like a business.
Mr. Hunt, when you went through a list of things that you said needed to be done, exactly right, 100 per cent, but I would suggest that you do not ask the Department of National Defence to do those things because they will not do them.
I suggest that you cannot do much about the fact that there is now going to be a new contract with whomever that will provide the operation of the services on that plant. It is too close. It is coming down the tracks at 90 miles an hour. It is done, whoever it is and whatever that contract says. I hope that you will look forward and ask, ``What will happen when that 10 years is over? Let's have an agreement in place so that, on that day, the airport authority, not a commission — you say it is an airport and not a military base — will take it over, and run it.'' Then those things that you say need to be done can be done. Otherwise, they will not be done.
Senator Doody: My question is for clarification. I heard today, and it makes sense to me, that 5 Wing or the Canadian military presence of some sort is essential to the economic survival of this airport facility. If the Canadian military presence disappears, it will be extremely difficult to attract the other participants in the training programs, et cetera, even though the Canadian military themselves do not train there.
I also heard today that privatization of the operation is the right way to go — turn it over to private enterprise and rent the facilities to whoever wants to use them and that it be done in a businesslike manner, which also makes sense to me.
Do you have any guarantees or any reasonable cause to believe that the Canadian military could be enticed to come there as a tenant rather than as part of their own military infrastructure? If one is essential, it would be difficult to take that quantum leap without having that first essential pretty well copper-fastened, to use an expression that I have not heard for a while.
Mr. Peck: I have been working in government for some 20 years. I can make any decision my council makes sound reasonable and rational. There is much that the military does that is done under political direction. Therefore, they can be anywhere they are told to be, and it sounds logical. It depends on who is delivering the message. They can always say there is no operational requirement to be there because they are not there. That is pretty obvious because they are not there.
Is there absolutely no operational opportunity in Goose Bay for the Canadian military? I find that hard to accept because our allies who have been flying there for a long time. They think it is one of the best places they have ever been. Are they all wrong? I do not understand it, particularly, as we change to new technologies and they are interested in being there for that. It is the cutting edge of technology. Who is wrong? I do not understand that part.
Senator Doody: That is what I am asking. Can someone clarify the situation for me? It seems to me it is essential that a military presence anchored by the Canadian military be in Goose Bay to make it a viable, reasonable and sensible operation.
It also seems to me that, under the private direction of a private enterprise, it might well be done more efficiently. Without building block one, the Canadian military, the business enterprise would have little to build on. Is that reasonable or not?
I heard many times here this morning that the Canadian military are anxious to find a reason to get out of there, that they do not want to be there. I find that to be a tragedy. Is there some reason to believe that private enterprise could convince them to do things differently from they way they do it under their own military strategic planning or their budget constraints, for that matter?
Mr. Peck: If we were in the circumstance where all the bases were private and they were all competing with each other, then you may have a fair question. When you have only one base that operates as a business and it has to compete with others that are not run as a business, I am not sure how you can answer that.
Senator Forrestall: Shearwater, which is not far away, is going in the same direction.
Mr. Peck: I do not think it is as simple as saying that a business will run it more effectively than anyone else, so it will be a go. I do think there are many opportunities for business models to be used much more effectively than they are being used. I gave you the example of the approval process we have to go through when we want something done on the base. It is insane. Mr. Hunt would never run a business that complicated. I mean, he would for a week and then be out of business. It cannot sustain itself.
To turn the it over to private business and then ask it to compete with the base that is not run that way and does not have to worry about certaub concerns and issues, would not be fair.
Senator Doody: I was not thinking of competing with the base but of attracting the customers you need to make the operation viable. That seems to me the gist of the matter.
Mr. John McGrath, Labrador North Chamber of Commerce: I think that it would operate just as well without the military there except for areas of protocol. That would certainly be needed. However, I think that we could hire people who have the experience, and I am speaking of readily available ex-military people, fighter pilots especially, who would know how to work with these people and how to satisfy their needs.
Up until 1992, the commanding officers there were fighter pilots themselves. After that, they were not fighter pilots, and the people that I spoke to up there speak of the fighter pilot culture, and that is certainly there. I have known and still know many of these people. That culture exists. They would be available.
Senator Doody: You think it can be done.
Mr. McGrath: I think it can be done. In terms of protocol, you might need a colonel and a secretary.
Mr. Hunt: If you could convince DND they would save a lot of money, they might come on to a program like that. There is no question about it. They spend $20 million, and they do not want to spend that money.
Mr. Peck: May I speak to the $20 million out of DND's budget? We keep getting that thrown in our faces. The senator can correct me if I am wrong, but I think that, before the $20 million was in DND's budget, it came from all the different departments that were spending money there, and it was pooled. Perhaps what would happen to that money should be questioned, should Goose Bay be closed. Would, all of a sudden, DND have $20 million more in its budget? I do not think it is DND's money in that sense. It is simply a convenient budget place to put it for the expenditure for this commitment to our allies at that base.
Whether it comes from that budget in the future should be questioned too, because there may be more efficient ways to use that same money from other departments that is more appropriate than it coming out of DND's budget. That is a real sore spot with DND. They keep saying that they are losing $20 million and they need that money somewhere else. I do not think it is their money in any sense. It just happens to be in their budget for convenience.
Senator Doody: I was trying to get at that this morning. I was asking about the private use of the airport and so on, but the question always came back to DND.
Senator Banks: Could we ask the clerk or researcher to inquire as to whether DOT has any commitment whatsoever with respect to expenditures or budget lines for the operation of Goose Bay Airport?
The Chairman: Certainly.
Senator Rompkey: I have a comment on the point Mr. Peck raised. It is an area of research for us to determine how the $20 million was arrived at, where it came from and who authorized it in the first place. It goes back into the 1980s. If we looked through cabinet decisions we could perhaps find out more about that.
The reality is that the Department of Transport and the Department of Public Works both used to be in Goose Bay but neither wanted to take any responsibility for the base. It was DND who eventually said they would operate the base and the money was provided for that.
With regard to the question: Does Transport or Public Works have an interest or commitment in Goose Bay at the present time, the answer is no. As far as I know, NAV CANADA operates the tower, but I do not believe other significant government departments have operations there.
It would be worthwhile for us to determine how the decision was taken, where the money came from, and what were the terms of allocating that money to Goose Bay.
Senator Stratton: I get the sense, since September 11, that that base is now quite strategic, is it not? Would you not think that, as a result of that event, the runway and the infrastructure are important?
Mr. Peck: When the base was established in the Second World War, it was put in that location because it was considered to be an extremely strategic location in terms of our relationship with Europe. That has not changed. It may be even more strategic because of the increase in civilian traffic over the High Arctic. We are close to even more traffic. Why would this not be a good location for long-range search and rescue? It has direct access.
There are many days when you can look up in the sky over Goose Bay and, if the jet stream is in the right place, you see nothing but aircraft and jet streams. You might see 20 to 30 at any one time. It is smack in the middle. It is no accident that it was put in that strategic location.
Senator Banks: My question is for Senator Rompkey or anyone with the information: Are we right in assuming that the tower at Goose Bay Airport is operated by NAV CANADA, including for military traffic?
Senator Rompkey: No.
The Chairman: We are informed that Serco operates it on behalf of the Department of National Defence.
Senator Banks: Are the air traffic controllers military air traffic controllers?
Mr. Woodward: They are civilian. There are three civilian towers in Canada. One is at Moose Jaw; one is at Portage La Prairie; and the other one is at Goose Bay. Serco operates all three.
Mr. Peck: Under the new RFP — it is actually part of the new RFP — the air traffic controllers would be relocated into Montreal. In regard to the technology coming in there, we are behind in terms of what is going on. That 11-year cycle, as was mentioned, should put us ahead.
The Chairman: We have your comments — both in your opening statement and in the material you have left with us on the RFP — as well as your concerns and suggestions.
Honourable senators, we have had a good day. We have heard from DND, from the union, from the province and from the community. Next we will hear from the member of Parliament. I will now invite Mr. O'Brien to come to the table.
Welcome. Mr. O'Brien is an experienced parliamentarian. He will have heard what we heard during most of the day. I am sure he has considerable value-added information to give us, as well as an overview from a person who has been elected to represent the interests of that part of the country. We are pleased to welcome you to our committee. I believe you know that parliamentarians, as these senators are, are skilled and adept at eliciting further information from witnesses during questioning. I would invite you to make an opening statement, after which we will have a free-for-all.
Mr. Lawrence O'Brien, Member of Parliament for Labrador: Honourable senators, a lot of experience and knowledge from within our province is present in this room. I particularly want to thank Senator Rompkey for making this happen. I also want to thank all senators for showing the interest in this subject and working through it today. I would also thank the research staff who will aid in the preparation of the report and bring this issue forward.
I have also invited the Standing Committee on Defence of the House of Commons to participate in this subject matter as well. From talking with the Chair, I expect that in the fall the Standing Committee on Defence will travel to Goose Bay to discuss the same issues.
The report of the Standing Senate Committee on National Finance will be will be a most helpful document, not only to the Government of Canada to work with but, as part of the that process, but also to the committee of the House of Commons.
I would thank the other witnesses who made presentations here today — from the Department of National Defence staff, Mr.Frank Young; from the Union of National Defence Employees, Mr. Randy Ford; as well as representatives from the province.
I would be remiss if I did not mention Mr. Peter Woodward in particular because he brings with him tremendous knowledge. I notice you zeroed in when Mr. Woodward was at the table because he has a vast knowledge of this matter. He probably has the greatest knowledge of this issue of anyone in the Lake Melville area.
I would also make mention of the chamber president, Mr. Dave Hunt, and the others folks from the province, Mr. Goudie Mr. Smith, and Mr. John McGrath, who has a longstanding relationship with Goose Bay, and the former Assistant Deputy Minister. Mr. John McGrath has been an honorary colonel at some point in time, so I am sure his genuine interest in Goose Bay airfield has been noted.
Mr. Peck made a tremendous presentation. I take my lead primarily from the town. I work closely with the Town of Happy Valley—Goose Bay in trying to put forward the perspectives on this particular file.
I will skip over some parts of my presentation because I believe you have a copy of it of before you. I will not get into the history. The history of the airfield started in 1941. I could show on a graph of the ups and downs of Goose Bay airfield. I will not get into the low-level flying issue except to say that this present era started around 1980 or so, when Senator Rompkey was the sitting member of Parliament for the area.
There is no question in our minds that military flight training has been the lifeline of the base, and I share the comments of Mr. Woodward and others that, while we cherish Voisey's Bay — and I was part of the signing ceremony — there is no way that Voisey's Bay can replace the flying activity at Goose Bay. We need that flying activity. It is the cornerstone of our economy. Voisey's Bay provides us with a bit of extra fat to help prop up the business community and the local economy.
There are definitely concerns about how we as a government are managing and funding the base and honouring our commitments to our NATO allies.
Alternate service delivery is something that I do not want to live through again. I went through a very distorted part of my life when dealing with alternate service delivery, both personally and politically. I was a newly elected member of Parliament in 1996. I had to race through an election in 1997. You can see the 14 months was driving for the next term, only to come into a new mandate and be faced with a smack in the face, as far as I am concerned, dealing with the ASD process in Goose Bay. To add to my own particular personal woes, I had a bit of a health problem right in the middle of this, while I was faced with the whole political and economic whirl of activity in Goose Bay caving in on us big time.
We are brave soldiers. We are focused, but sometimes we have tunnel vision, which helps. We have stayed the course. We stemmed the tides. We mounted the waves and we did it all. We did what we had to do to get ourselves through the ASD process in Goose Bay. Many is the time I talked on the phone and in person, as I am sure Senator Rompkey and others did as well, with regional ministers, the Minister of National Defence, the Prime Minister and others to try to right what we considered to be the great wrongs of the ASD process as it was being unleashed on a wholesale basis, something which never happened in Canada before and has not happened since. It will probably never happen in that way again. It happened in Portage la Prairie, and it is happening now with supply. The minister stated to us on many occasions — and I think Mr. Hunt was with us when he mentioned it on one occasion — that we have to right some of the wrongs done in the ASD process as related to the way it was unveiled in Goose Bay.
We are now going into the second term of this government, and we are now putting the experience of the first ASD behind us, and looking at ``Generation 2.'' We are looking at the second RFP, request for proposal, for a new operator. We have learnt a lot. Canada has learnt a lot. The Government of Canada and the Department of National Defence and I think the operators of this type of an operation have learnt a lot. We are bringing some experience to this. We have to build positively on that experience because we have dealt with many of the negatives.
The problem with the ASD process was that it was a top-down process that did not take local conditions, labour requirements or the overall interests of the base into account. It was done largely through a bureaucratic process. I am not against bureaucrats. I was one for many years. I was a director, and many times I acted in the position as an assistant deputy minister with John McGrath, so I do have an appreciation for them, but I can tell you they also get blindsided. It is part of the process of saving money, going through our $40-odd million deficit starting in 1993 and doing what the government did so well, which is reducing the budget and getting us into a surplus position. In some cases, the bureaucrats were blindsiding us, and perhaps blindsiding themselves in some way.
We got to where we are. I question how much money it actually saved the Government of Canada. I do welcome what I heard Senator Rompkey or one of you say earlier about how we arrived at this $20-odd million annually. How is this arrived at? I share the view that it has been thrown back in our face time and again. ``Do not be too hard on us, because we put $20-odd million into this.'' Come on. When you look at that $75 million of foreign money and we are injecting $20 million into what is on Canadian soil and with Canadian uniforms and so on, we have to stand tall and keep our eyes wide open. I am glad that was mentioned.
I mentioned the RFP, and I notice the new one is out now. We had a major issue recently on it. Others have mentioned it, as will I briefly. There was 70 per cent retention as compared to 100 per cent retention of the labour force in the RFP, and now we are talking 90 per cent, so we have made some substantial gains here in terms of putting that point forward.
The previous Minister of National Defence, Mr. Eggleton, heard us clearly when we made our case following the draft proposal that came out, and it was reflected in the new one. I am pleased that the government of the day, in particular the minister of the day, saw the light of day and reflected that, because we do not want to go through another strike.
I went through 42 days of hell in the strike of 1999. I did it in 1998, and it was torture, and again in 1999. It was extremely painful to go through the summer of 1999. The allies were just about ready to pull out of Goose Bay, in my view, and I have to give a lot of credit to several ministers for helping to straighten this matter out. Senator Rompkey was of assistance in this, as was the regional minister, Fred Mifflin, whom many of you know, a man with much military experience himself as an admiral in the navy. Of course Minister Eggleton helped get this back up and running and get the negotiations going, get the deal settled with the union, and get the allies settled. It was torturous. We are hoping now it will correct itself.
The new request for proposal has to be a good deal for the allies, but in my perspective, and this is important, it will not be much good to us if we do not get the MMOU or things put into perspective going into the 2006 replacement of the current MMOU. If we do not get a good deal going there, if we do not get the right kind of flavour, we will not have to worry about a RFP. An RFP is important, but it is just the beginning. The important part of the RFP is ensuring that we have the right language in it in terms of procurement. I share the views of many that there are flaws in the current one. Settling down and satisfying the human resource side of the RFP is important.
Finding a contractor or a service provider to help grow the base is extremely important, and that has been reflected in the new language in this RFP. That was certainly not in the last one and it is important to our direction for the future.
The ASD process, as we know it in Canada, honourable senators, has a certain value. NAV CANADA, with its privatization, has gone through a series of ASD processes. The ASD process has helped to streamline the direction Canadian society is headed. It has helped to cut the cost of major deficits that we were incurring. It is one of the major factors that has helped to put us in a surplus position. I am not trying to be negative on all counts, but I want to look at the balances — the pros and cons of the processes. When it is done in a blindsided way, it can have a negative effect. Thus far, I think we have managed, in retrospect, to turn things around.
Turning to the subject of management problems, one of the points that you have been discussing, as a Finance Committee, is receiving value for money. It is an important point that will be reflected in your report, and it must be put in perspective. It is important that the committee put all of this into perspective — research into the $20 million and how that levels the playing field.
We must ensure that our allies are satisfied. If the Dutch leave Goose Bay, or if they stay, it would be for their own reasons, and it would not be because of something negative on our part. If they amalgamate their North American operations, I would hope that, at the end of the day, it would not be because of negative output from anything we have done as a government. We must learn our lessons from this. While the different allies have their own ways of doing things — management schemes and checks and balances — we must try to ensure that we listen to them, so that we provide the appropriate formulae and calculations to suit their needs. If we do not satisfy their needs, first and foremost, we will not get to first base. Often, I believe that the communications between the Department of National Defence and the allies break down. We must try to create a good, sound communication link so that we are all operating on the same wavelength. We do not have to agree at all times, but we should at least understand each other. Sometimes that communication breaks down.
The general consensus in Labrador and in the Happy-Valley Goose Bay area is that the Goose Bay Management Office, which is located in Ottawa, has done little over the past decade to manage the decline. There is a great deal of concern about this particular file. Personally speaking, I am not sure if their efforts have been good, bad or indifferent.
I have talked to Mr. Bruno and Mr. Young. The public consensus in our hometown is that the jury is out. We would love to see some kind of liaison aspect, at least in the local scene, and to be fully informed on an on-going basis about the input-output of the Goose Bay management office. That is a major point of importance for us, and how it can reflect the local needs in our hometown.
One small example of the top-down style of management showed up in the recent changes to all the street names on the base. That was totally ludicrous, speaking personally. It was done without consultation and it cost money. A German commander now resides on ``Spitfire Alley.'' This change was totally unnecessary. You have heard of other such examples from other speakers. I hate to say it but I will: Small things can amuse small minds. Sometimes that is exactly how I feel because it gets in the way of doing the right things at the right time for the right reasons.
Negotiation with the Goose Bay Airport Corporation is a function of the Goose Bay management office. Again, that is a bit of a nightmare for me, as a member of Parliament, trying to secure a ground lease when the process has come to a standstill. It is to the detriment of civil aviation on the airfield. I certainly will not try to upstage Mr. Hunt or Mr. Woodward who both sit on the board of the Goose Bay Airport Corporation. They know this file much better than I know it. However, I can tell you that their frustration, in terms of trying to reach agreement on a ground lease, is exactly the same as mine. It is long overdue. There have been too many interruptions. There have been too many signals going to the wrong places. It is simply a nightmare that we do not need. We should be long beyond it, but we are still caught right smack in the middle of it. This is why we believe the Goose Bay Management Office is simply not working for us. If it is working for us, then we have been left out of the process. Any of the presenters today will tell you: out of sight, out of mind. We all know that feeling.
There is no significant GBO presence on the ground at Goose Bay. In conclusion on this point, GBO has a poor record of liaison with the town, with our NATO partners and with the broader Labrador community, including Aboriginal peoples. All of this results in a lack of trust. People do not know what GBO and DND are doing for Goose Bay, but they do wonder what they are doing to Goose Bay.
In respect of Canada's commitment at Goose Bay, there is a valid perception that we are not doing our part. The sense is that we are sending bad signals about our faith in the base and the flying program, with the demolition of base facilities.
I heard Senator Stratton mention this. If Mr. Woodward operated a business in this way, I am sure he would be thrown off the board of directors. If he spends millions of dollars to put in new windows, et cetera and one year later he tears it all down, that just does not add up, to me. We were happy to see DND building the infrastructure, but then the new commanding officer arrived and took it all away. Then, the town's grant in lieu slid away as well. It seems that we are being hit on many accounts.
There will be many repercussions for the town with just the landfill and the dumpsite alone. The taxpayer of our town is expected to pay the cost of tearing down those huge buildings and putting the debris into the landfill. That may be seen as some small comment in passing, but it is a very important point to remember.
The pilots of the CF-18s stationed at Bagotville, train with our allies at Goose Bay. The people I represent, my constituents, find it to be a very sore point. It is very natural for the Government of Canada to have a flying program for a number of weeks in the summer that has the entire infrastructure in Goose Bay, and the two squadrons are out of Bagotville. They fly very close to our town because they go up around the lakes and almost over Labrador territory, but they stop short of being stationed at Goose Bay. There is something fundamentally wrong here at a Department of National Defence level that allows this to happen. I believe on one occasion the allies were charged for Canadians flying around Goose Bay. It does not add up in my view.
Military and diplomatic officials from NATO countries at Goose Bay keep asking me and others, ``Where is Canada?'' I have heard many COs say that they would like to see us flying here, to show the good faith and all that. They ask, ``Why aren't you training with us in Labrador?'' These are the kinds of questions that keep coming up. We throw our hands up. We have no answers. I am as frustrated as the next person. I say what I have to say to whom I must say it to. However, getting the type of response we would collectively like to get is not always the way it turns out, but we must keep on trying.
DND's marketing efforts for Goose Bay always seem to pale in comparison to similar efforts for programs at Cold Lake. They are giving all they have got. The Chief of Air Defence and all of his associates have Cold Lake on the radar, and it is a big radar — the latest in technology. I am not against Cold Lake, I support it and Canadian activity there.
The Government of Canada owes it to the various regions of this country to do things on balance. We used to do it that way at one point, but now we are starting to shy away from it. From a Government of Newfoundland and Labrador perspective, from where I sit as a member of Parliament for the province, and particularly Labrador, the percentage of military spending in our province is very low in comparison with other parts of the country.
There is a feeling of stagnation. Can we find other allies? I will not repeat the comments made by Mr. Woodward, as he understands the issue of training of the French and others far better than I do. However, we must allow the base to grow. We must have things to sell it with. We must be able to do that without resisting too much change. We need change as well. We need to deal with some of the different levels of flying and be more flexible than we are in terms of trying to meet the needs of the other possible flyers at Goose Bay. We could extend the training day or season or promote other military activities such as cold weather exercises. We see some of that, but certainly not enough. We need to grow it much more.
Goose Bay is not being properly promoted. I return to what I believe is one of the pitfalls of the Goose Bay management office, especially compared to other CF and NATO installations worldwide. That is a major issue for us.
The Chairman: Mr. O'Brien, I think I will stop you there. I am getting a lengthening list of senators who wish to intervene. You will find that what you left unsaid will be brought out in the question-and-answer period.
Senator Cook: You stated that Goose Bay is not being properly promoted especially compared to other CF and NATO installations worldwide. Do you have any examples?
Mr. O'Brien: No, I do not have many examples. However, there is one example of a base in the United States where the Dutch are looking to go now to amalgamate their North American services.
There are many other attractive points that are being considered and it is being costed in a different way. The base in Goose Bay is costed across the board. Whether you fly it or not, to a degree, you are charged for it. That creates some discrepancy. That was the formula arrived at in the MOU. Some of the flying in other North American bases, like the one in the United States that the Dutch are considering, has a more specific cost attached to it. It is based on the type of flying and the number of flights. We do that to some degree in Goose Bay, but it is costed in a different way. We are more generally costed as opposed to being more specifically costed.
Senator Cook: If the money we spend on the GBO for this purpose is not being wisely spent, we must look at spending this money elsewhere and more wisely. Have you stayed awake at night looking for options? What do you see in the realm of the possible in terms of spending our money elsewhere and more wisely?
You refer to ``we.'' Who are ``we''? Is it DND; is it the town?
Mr. O'Brien: Goose Bay is not being properly promoted, especially when compared with other CF installations, such as Cold Lake. There are a couple of others in Western Canada, Portage la Prairie, Moose Jaw, and so on.
If the money we spend on the GBO for this purpose is not being wisely spent, we have to look at spending it differently. It is costing millions of dollars for GBO to operate. The Goose Bay Office says they are spending all of their time on the Goose Bay file. I will not disbelieve them on that.
There is certainly a view in Goose Bay that we are not getting the kind of return in terms of the promotion, the sound contracts, and others, that warrants the money that we are putting into it versus what we are getting back. That follows from the points I made earlier, that whether they do what they say they are doing or not, the local perception is negative.
If they are doing it, I think they need to do a better job of sharing it with us and getting us more involved.
Senator Cook: Mr. Chairman, I only bring the experience of the day to this question. Is it within the realm of the possible to widen the net of the Goose Bay Office in order to bring in other stakeholders, the people who are concerned about the future and the viability of Goose Bay? Would it be an option to bring them in, so that we would have a larger group which could pool resources, marketing skills, and expertise to do that which you would have done in this?
Mr. O'Brien: Let me give you an example of what I am talking about. I came in here on November 28 with the full executive of the union, and we sat down with the minister and we gave him a detailed report. We came back again in March with the president of the chamber, led by the mayor of the town, Mayor Hickey. We went through a long list, again, of the points we wanted to deal with.
I have never seen a follow-up to that. Then the RFP came out and we did not like it. On behalf of my constituents, I end up with the minister again, getting some changes that are reflected here.
I believe that if GBO were on their game, they would be noticing all the things we were trying to say. They would be researching it. They would be following it up and responding to us while, at the same time, showing the kind of endeavours they are making worldwide and any pitfalls they fall into relative to not making gains. We are not seeing any of that. It leaves us with a degree of frustration. That is the bottom line.
Senator Cook: From what I have heard here today, it would seem to me that the wisdom is not at the table. If there were some way that they could get at the table with GBO, maybe you might have an option or two to look at.
Senator Forrestall: There are many ways of twisting the American arm. One way would be to look seriously at the offset from the Sea King acquisition program, which is bound to be — if we ever get it — an American effort. Why do we not, as part of the offset say, ``We do not want your billion dollar offset, but what we do want from you is flying training at Goose Bay''? We must find some way to tweak their nose. It is not a question of their not wanting to help us. They do not even think about us. However, there is a carrot. I throw that out as a suggestion that is worth following.
Mr. O'Brien: Absolutely.
Senator Forrestall: It should be followed. You have a new minister: You should tell him to move that office to Happy Valley. They are your people. You are responsible for them. If it is out of sight, it is out of mind. It is not really in your sights because it is buried over there in the building. You do not hear from them; you do not see them; you do not have a cup of coffee with them every morning. Ideas come into the back of your mind, you file them there and you never get back to them.
Mr. O'Brien: That is an important point. Some of the issues that I relate to very much are fishing and the defence base at Goose Bay. For instance, if we were to try to sell more shrimp, which is always an issue with us, we need to market it.
Senator Forrestall: They are getting smaller.
Mr. O'Brien: Yes, they are getting smaller. I could get into that issue, but that is for another day. Right now we are starting a major marketing campaign in the United States on northern shrimp. The same situation applies in that case.
Mr. Woodward knows this issue thoroughly. I have had many chats with him on this issue. We could be here all day talking about why the Americans are not showing interest. I think you made a very good point. It relates to the lack of ``trust'', if that is the right word. We do not seem to be going forward to sell ourselves properly.
The Americans built the base and invested about $1-billion investment in the infrastructure. With the latest Afghanistan issue, instead of the Americans using Goose Bay to refuel or to stopover, they are doing it offshore. I do not think we are doing a proper promotional job in trying to expand the base. The Americans are part of that.
Senator Cook: What would it take for you to get the Goose Bay Office, that I naively thought was located in Goose Bay, out of Ottawa down to Goose Bay? Surely that would be a first step where they could have some face-to-face dialogue. What would it take, Mr. O'Brien?
Mr. O'Brien: It would take the will of the minister, and we do not have that yet. The new minister has agreed to come to Labrador. We are working on that file right now. Certainly I am sure he will hear all that he needs to hear, including this report. As the record grows, hopefully the minister will respond in due course.
Senator Rompkey: I wish to thank Mr. O'Brien for giving us such a well-rounded presentation. He has covered the points extremely well and highlighted what others have said. That is useful. At the end of the day we will have a record, an analysis that we have not had before. I know Mr. O'Brien would join me in thanking the senators who have spent the day here, because this is a local issue, although it has national implications. It is our own territory. It is not every day that you see other people give up that amount of their time to focus on other people's concerns.
In regard to Senator Forrestall's point about the carrot and the stick, there is a connection with the British in Goose Bay because part of the deal with the submariness was a financial consideration regarding training at Goose Bay. I do not know how that plays into the $20 million, but we should find out.
Senator Banks: They will come and find a leak at Goose Bay.
Senator Rompkey: With regard to getting the Goose Bay Office to Goose Bay, I know that has been tried. I know Mr. O'Brien has tried manfully to achieve its relocation. It is something that should be done. It is an issue that we should keep on at because it is a good idea, and it should be done.
The Chairman: Thank you, Mr. O'Brien. You have been deeply involved in this matter for quite a few years now. We appreciate your first-hand perspective.
Mr. O'Brien: Thank you very much.
The Chairman: Honourable senators, I wish to convene this committee in camera to discuss process for a few minutes. Therefore, I will need only the clerk and our researcher, along with simultaneous translation.
The committee continued in camera.