Proceedings of the Standing Senate Committee on
Fisheries and Oceans
Issue No. 9 - Evidence - January 31, 2017
OTTAWA, Tuesday, January 31, 2017
The Standing Senate Committee on Fisheries and Oceans met this day at 5:27 p.m. to study Maritime Search and Rescue activities, including current challenges and opportunities.
Senator Elizabeth Hubley (Deputy Chair) in the chair.
[English]
The Deputy Chair: Good evening. My name is Elizabeth Hubley, a senator from Prince Edward Island, and I am pleased to chair this evening's meeting. Before I give the floor to the witnesses, I would like to invite the members of the committee to introduce themselves.
Senator Watt: Charlie Watt from Nunavik.
Senator Enverga: Tobias Enverga, senator from Ontario.
[Translation]
Senator Forest: Éric Forest, senator, Gulf region, Quebec.
[English]
Senator Gold: Marc Gold from Quebec.
Senator Sinclair: Senator Murray Sinclair, Manitoba.
Senator Christmas: Dan Christmas from Nova Scotia.
[Translation]
Senator Poirier: Rose-May Poirier, senator from New Brunswick.
[English]
Senator Raine: Nancy Greene Raine, senator from B.C.
Senator McInnis: Tom McInnis, senator for Nova Scotia.
The Deputy Chair: The committee is continuing its study on issues relating to the federal government's current and evolving policy framework for managing Canada's fisheries and oceans. We will be hearing from senior officials from CHC Helicopter regarding the marine search and rescue services they provide and their activities in several countries around the world.
We are pleased to welcome Sylvain Allard, President and CEO, CHC Helicopter Canada; Barry Parsons, Senior Vice-President, Global, CHC Helicopter; Michael Fry, Director Commercial — SAR/EMS, Global, CHC Helicopter; and Ian McLuskie, Senior Manager — SAR/EMS, Global, CHC Helicopter.
On behalf of members of the committee, I thank you for being with us here today. I understand you have opening remarks, following which the members of the committee will have questions for you. In the interest of allowing as much dialogue as possible, we would ask that you limit your opening statement to 10 minutes, please.
You may go ahead. The floor is yours.
Sylvain Allard, President and CEO, CHC Helicopter Canada: Thank you, Madam Chair. Good afternoon, honourable members of the committee. First I would like to thank the committee for giving CHC Helicopter this opportunity to share with you our experience in providing search and rescue services to governments around the world.
I sincerely hope that this presentation will help you in assessing the potential solutions for Canada's long-term strategy in regard to search and rescue.
As you pointed out, my name is Sylvain Allard and I am the president of CHC Helicopter Canada. I've been working with CHC for 35 years now, including 12 years as the CHC group CEO. CHC, through its founding company, started 70 years ago in Penticton, British Columbia. Over the years, thanks to the vision of a great Newfoundlander named Craig Dobbin, we have grown the company to become one of the largest helicopter companies in the world.
At CHC Group we have been providing helicopter services for search and rescue to several governments, namely the United Kingdom, Ireland, Norway and Australia, for nearly 30 years now. To share with you the experience we have had with the various countries, I have with me our executives Barry and Ian. Without further ado I will just ask Barry to share with you our capabilities, and then we will go right into the questions.
Barry Parsons, Senior Vice-President, Global, CHC Helicopter: Good evening committee members, and thanks again for the time to make a presentation to you. Sylvain mentioned our beginnings 70 years ago in Penticton, B.C., and marrying up with Sealand Helicopters in St. John's, Newfoundland, CHC has now become a global operating company with ongoing operations in 23 countries around the world. I have been with CHC for two years, an on-again, off-again passenger of CHC for 20 years, and I have had a 20-year career in the oil and gas industry offshore of Newfoundland, my home and Nova Scotia, and some onshore in Alberta and B.C.
Of those 23 countries where CHC has operated in recent years we have two principal business lines: oil and gas crew transport, my primary interface with CHC during my oil and gas days, and search and rescue services as Sylvain has mentioned already.
We currently provide several models of search and rescue services. One is providing search and rescue services directly to our oil and gas customers where national search and rescue services have gaps. Predominantly in developing countries and developing nations where they lack national search and rescue services, often the oil and gas companies will contract companies like CHC to provide that search and rescue coverage for the duration of their operations. Of more relevance to your committee today is the search and rescue services we provide to other national and state governments around the world.
Sylvain mentioned the Irish Coast Guard. We also provide similar services to the Norwegian ministry of justice, the Australian Royal Air Force, the U.K. government, and to some state governments in Australia on the east coast and west coast, New South Wales and in Western Australia.
Beyond the deep technical knowledge that I hope this indicates we maintain as an organization in the search and rescue space, both around the aircraft and the services we provide in searching and rescuing to injured persons, the many national models we have deployed in these half-dozen different countries will be relevant and will inform the discussion this evening about options and alternatives the Government of Canada might consider to address search and rescue needs in Canada.
I would point to two in particular: the Irish Coast Guard service we provide as well as the service we are currently mobilizing right now for the Norwegian ministry of justice. If you look across the multiple national and state governments that we provide search and rescue services to today, you will find the two things that I observe connect all of those contracts, those different models of providing a service. First is the flexibility of CHC to tailor the service to whatever is required in the national government. As you can imagine, different national and state governments have different stakeholder groups and different priorities, so we endeavour to tailor the service to meet the needs and requirements of that state or national government.
Second, the commonality that associates all of our national and state government search and rescue contracts is a standard expectation of a very transparent and robust system of operational and commercial governance so that the national or state government for themselves and for the public stakeholders can demonstrate that the service they are paying for is being provided and they are getting what it says on the tin when they get the service.
The two contracts which are most relevant and might inform our discussions are the Irish Coast Guard and the Norwegian ministry of justice. In the case of the Irish Coast Guard the interesting element of the way we provide that service in concert with the Irish government is that while aircraft personnel are being provided by CHC — so trained by CHC, employees of CHC, and assets owned by CHC — they are all badged in Irish Coast Guard livery, Irish Coast Guard coveralls. As far as the public is concerned this is clearly a service provided by the Irish Coast Guard as opposed to a service provided by a contracting company like CHC.
That is relevant because it implies not only flexibility in the business model between CHC and our governmental customers but also an ability for contractors like CHC to be able to tailor the offering and comply with governmental standards, as opposed to just complying with the standards which we develop ourselves as a professional helicopter operator.
In the case of the Irish Coast Guard we have been operating there since 2012. We cover the entire coastline of Ireland across four bases with five aircraft of a similar type that might be relevant for our discussion today. In the case of the Norwegian ministry of justice, a much more recent contract that we just secured last year is currently being mobilized. While the aircraft and personnel will be badged as CHC — that was a preference of the Norwegians in this particular case — of relevance to the consideration of the committee is that the Norwegian contract business model represents an opportunity for a contracting company to fill a gap in the national SAR service.
While the ministry of justice of the Norwegian government currently manages an existing search and rescue service that is part of the country, in the future they plan to maintain and provide their own national search and rescue service provided by the national government. In between they have a three to five-year gap where there's a particular issue with the aircraft that requires an interim coverage. That's where CHC comes in and provides an interim coverage. As I understand the context of some of the search and rescue solutions in Canada, that ability to define an interim gap solution might be relevant to the discussion for the committee.
With that I take your advice, Madam Chair, to try to keep our remarks brief and welcome any questions and discussion you might want to have.
Senator McInnis: Thank you very much for being here. I read about your company. I must say it was impressive. You modestly stated that your company's helicopters have unmatched services. I am wondering how you gauge this or calculate it.
Who are your serious competitors? You state that you enable people to go further, do more and be safer. Can you distinguish your services from that of the Royal Canadian Air Force and the fleet that operates under the Canadian Coast Guard as it relates to helicopters?
Mr. Parsons: I appreciate your observation of our modesty in our comment about unmatched services.
I have been with CHC for two years, but many more years as a passenger of CHC, so maybe I can give you my perspective as a passenger which might underpin that comment on our website.
If I can be equally modest, CHC invented the idea of a global helicopter company. Before Sylvain and Mr. Dobbin and their counterparts built CHC to the enterprise it is today globally, the global helicopter services industry was served by small regional players. There was a small player called Sealand in offshore Canada. There were a few small players in the Gulf of Mexico and two small players in the U.K. The market was all individual players, all meeting individual standards.
In an industry where safety is as critical a path as aviation, to have the presence of mind to have a global standard to which you manage the company was a surprisingly revolutionary idea, and one which CHC brought to the market. That really underpins that notion of unmatched. I would maybe illustrate it by one example.
The idea of managing an aviation business to a single global management system is a concept that CHC introduced to the industry. I would argue it is still largely unique in the industry today. It may be surprising for people outside the industry, but I think in that regard we are demonstrably unmatched among our competitors.
You asked who our major competitors are. That's a bit of a hard and long lengthy question to answer. Actually our competitors change dramatically. Depending on which part of the world we play in the market today is still dominated by small regional players. My competitors in Australia are completely different from my competitors in Mozambique and in Kazakhstan and so on. It is a bit difficult to answer the question comprehensively.
CHC is a founding member and occupies a significant leadership position with an organization called HeliOffshore, where we endeavour to exchange information related to safety among our competitors and try to set an expectation that while we may compete aggressively on a commercial and technical basis we don't compete on safety. There are five founding members of the HeliOffshsore organization. CHC is one; a company called PHI, which operates principally in the Gulf of Mexico, is another; Era, another Gulf of Mexico company, is a third; Bristow, a company from the U.K. and in the Gulf of Mexico is a fourth; and the fifth founding company escapes me now.
Mr. Allard: That would be a U.K.-based one.
Mr. Parsons: Babcock. Those would probably be the five largest players, CHC being one of those five although, to be fair, some are playing in some regions and not in others. CHC is one of a very short list of global players in this space.
Your comment about our services being unmatched in the context of the capabilities of the Royal Canadian Air Force or Coast Guard is I think a very important concept for the committee to consider and discuss. In our conversations with various stakeholders in government and various agencies our learning so far has been that the expectation or the need here is not to replace the capabilities of the Royal Canadian Air Force or the Coast Guard but rather to supplement the capabilities of the Royal Canadian Air Force or Coast Guard, depending on which agency takes the leadership position.
If I go back to the example from the Norwegian ministry of justice, in that case it wasn't a matter of whether the Norwegian ministry of justice could do a better job than CHC or not, but rather that they had a specific gap due to the particular technical nature of their equipment. We represented a quality and cost-effective solution. That worked out and they have contracted CHC to fill that gap. That model is very informative for the way we see the relationship with the Royal Canadian Air Force and Coast Guard, if this progresses to a contractual relationship.
Senator McInnis: For example, we have had the opportunity to visit the Department of Defence offices in Halifax and over in Dartmouth where they monitor all vessels offshore. You wouldn't have a plant, an infrastructure to deal with that. You are talking about flying helicopters.
Mr. Parsons: That is correct.
Senator McInnis: I understand from what you're saying, you are also talking about filling the gaps, not replacing?
Mr. Parsons: That is correct. There are certain examples in the world and the Irish Coast Guard would be one. We are the rotary wing division of the Irish Coast Guard, full stop. That is not regarded by the Irish as an interim solution. In the case of the Norwegians we are regarded as an interim solution. We are capable of tailoring the solution to the requirement of our national Coast Guard.
Senator McInnis: What do you do in Australia?
Mr. Parsons: In Australia we have several different models. Perhaps the most relevant is the service we provide to the New South Wales Government, where we provide a service that's a combination of air ambulance and search and rescue, mostly onshore in that particular context. It is a permanent solution where their choice is to contract out that service for a longer term.
Senator McInnis: I also read that your aircraft have new technology systems such as forward-looking infrared four-axis automatic flight controls with auto hover, rear cabin modification for winch recovery, medical treatment and customized rotary wing aviation. You will appreciate we're doing an investigative study. Would not the military and Coast Guard have that equipment?
Michael Fry, Director Commercial — SAR/EMS, Global, CHC Helicopter: Perhaps I could answer that, sir. Yes and no.
The equipment we have is developed in response to a stated requirement and a well-developed need. It is pretty much reviewed and updated on a very regular basis. Yes, there are elements of that equipment in some of the fleet. Perhaps where there is a shortfall in capability within the Canadian model is where things have been adapted over the years. I spent 24 years in the military and I know the plugging of the gap.
The example I would give you would be the Griffons operating on the Great Lakes. They have been adapted from battlefield use into the SAR role, which they fill very ably, but without some of that equipment it limits their applicability in the role and the ability to do some of the more complex tasks in that skill set.
Senator McInnis: Is it temporary that the Sikorskys have been put elsewhere?
Mr. Fry: The last information we have is that it was listed in the 2013 auditor's report as a temporary measure then. It seems to have maintained that position whereas the Cormorants are plugging basically the search and rescue coverage for the East and West Coasts.
Senator Poirier: My colleague was talking about your looking at your service more as closing or filling in the gap. How often are you called upon to fill or close that gap?
Mr. Parsons: Do you mean in terms of how many contracts we have of that nature?
Senator Poirier: How many times would they reach out to you that they need you, in Canada?
Mr. Parsons: In Canada we are not currently providing such a service. From memory, the only country today where we are representing an interim solution for the national government search and rescue service is in Norway, but in that particular example it is not a call-out basis. We are contracted for a number of years to fill an expected gap in their ability to provide the service with the assets that the government owns itself.
Senator Poirier: Did I understand that you don't have a contract right now with Canada?
Mr. Parsons: We do not provide search and rescue services in Canada today. No, we do not.
Senator Poirier: The Canadian Coast Guard has a maximum reaction time of 30 minutes and the Department of National Defence and Royal Canadian Air Force also have a reaction time of 30 minutes or less during busy hours and two hours during standard time upon receiving a call for search and rescue. What is your CHC Helicopter reaction time?
Ian McLuskie, Senior Manager — SAR/EMS, Global, CHC Helicopter: The standard reaction time that we work to for most of our contracts is 15 minutes by day and 45 minutes by night. That's from the call-out to get the aircraft airborne. We track and monitor this with our own in-house software solution that we have in place to manage our search and rescue services. Our contractor can view very clearly what our activities are and see to the minute what time we take off and when we land again after the event.
Senator Poirier: How do your SAR aircraft compare to those operated by the Royal Canadian Air Force?
Mr. McLuskie: The aircraft we're operating right now in this space is the Sikorsky S-92. It is a modern airplane with modern standards and all the modern equipment required to allow it to operate in icing conditions, at night and in all weather. To give you some idea of that capability, the aircraft is capable, correctly flown and correctly managed by the crew, of descending at night into an open area over the sea down to a 15-metre visibility. That's effectively putting a helicopter into this room on a dark, wet, miserable night anywhere on the ocean.
Senator Poirier: Can you describe to us how your pilots and engineers are trained for SAR incidents?
Mr. McLuskie: Most of our crew — that is particularly the pilots and the rear crew — come from the military. Eighty per cent of our people have come directly from the military on retirement and have come into the commercial world. We also have our own training and standards team within the organization. We train to similar if not the same or higher standards as the military. We use exactly the same standard operating procedures and the procedures that are derived from the international IAMSAR documents. We operate to the same systems, the same measures and the same level of competency.
Senator Poirier: Even though you do not have any contract with Canada at this point, are you in the process of trying to get a contract? Is that something you guys have tried to work on in the past?
Mr. Allard: There have been ongoing discussions for quite a while about procuring some search and rescue services in Canada. I am probably the guy going back the longest now. Discussions started in the mid-1980s. When you talked about gapped, it's gapped for a longer period. This is not a day-to-day gap. It's truly if you have a fleet replacement or maintenance. I see the government now coming up to some heavy maintenance on the Cormorant fleet, for example.
If you had a gap for a year or two or three years, this is where we would come in and help you with managing the requirements. That's what we mean by "gap.'' It is not to say we never get a call from search and rescue in Canada. It is just that the way the system is right now you wouldn't get a call.
Now the oil companies on the East Coast, and I have been on the East Coast for a while, had to supplement their own requirement. In other words, they had to contract their own aircraft to help in the search and rescue. I am thinking more of St. John's, going back to the Gander base in St. John's and so forth. That was a set contract by the oil companies that felt they wanted a quicker response time out of St. John's, but that is a different sort of gap that was identified by the oil companies.
When we talk about gap it's mostly on a longer-term basis. Certain countries decided to do it and certain countries decided to actually privatize. It started with an analysis of gap. They decided to look further into cost effectiveness, response times, equipment and capital expenditure. Then they decided that a very interesting way was to work alongside with us.
In Ireland, for example, the image is really the Irish Coast Guard. We are just the contractor behind making sure they deliver the service.
An interesting point is all these agencies and governments would love to talk to a representative of Canada to explain how that works. That is what we try to facilitate because sometimes it's hard to sell your own product. It's better to have a customer tell you how they can do this more efficiently. In more cases than others it's a cost issue and a CAPEX issue.
Mr. Parsons: Perhaps I could briefly add to further clarify the question. Despite the many years of Sylvain's engagement with different government agencies and parties over the years, today the invitation is for us to discuss our experience to help inform your own deliberations to form a recommendation of what a future solution might be.
As far as I know, no decision has been made to pursue any procurement activity. We have no contract to obtain. At the moment we are just trying to provide some information to help that process.
Mr. Fry: I am not a Canadian so I have no particular axe to grind in this direction, but I have been dealing with various government departments over the last year in Canada. Perhaps I could just state an observation. The issue of search and rescue coverage in Canada was becoming a bit polarized between full-state provision and all-commercial provision. I don't think either of those solutions is optimum.
What Canada would be best served in considering is some way where they extract the greatest benefits of commercial provision in support of either the DND or the Department of Fisheries and Oceans that do a fantastic job on a day-to-day basis in the ownership. No other country on earth provides search and rescue coverage for 18 million square kilometres.
The current situation you have is not failing. It is working. It is working well, but there needs to be some capability put into that to allow the DND, as they reassess their resources at the moment, to do the job effectively. I think that is the debate we are trying to inform with our presence.
Senator Enverga: From what I read in your written submission, it tells us that you are ranked as the world's safest. However, I also noted that on April 2016 an Airbus H225 owned and operated by CHC Helicopter crashed. Do you still consider yourself as the safest?
Mr. Parsons: There may be others who may be less familiar with the incident from April last year. Tragically, in late April 2016, there was a crash of an Airbus H225 helicopter in Norway. You are absolutely correct that the aircraft was owned and operated by CHC. We lost 13 lives that day. It was a tragic accident that the industry is still reeling from right now globally.
I can go into as much detail as you like, but let me summarize to say that the direct cause has been determined by the manufacturer of the aircraft to be a particular bearing component in the main gearbox. In layman's terms, it connects the rotor to the helicopter. As you can imagine it is a really important piece of equipment.
The manufacturer, Airbus, has basically identified a manufacturing design shortfall in that particular component, and so the global fleet of that aircraft is grounded. Still today, as far as I know, nobody is commercially flying that particular model of aircraft.
To answer your question, though, about the relationship between that tragic incident and the safety record of CHC as a global operator, it is a tragic accident whichever way you cut it. There is no desire to minimize that but the equipment is currently the focus of the investigation. There is currently no focus that I am aware of on any of the operating procedures or maintenance history or to any degree the sort of contribution of CHC personnel or systems to the incident.
In other words, it was a terrible misfortune for the 13 people who lost their lives and their families. CHC happened to be operating that aircraft on that day. The observation at the moment is that the manufacturing problem is a problem across the global fleet of those aircraft. This is a particular problem with a piece of equipment. There is no narrative currently that would associate any weakness or shortcoming in CHC that led to that tragic incident.
Senator Enverga: Basically faulty equipment is blamed for this accident, right?
Mr. Parsons: Can I add that it's important to note that the Accident Investigation Board in Norway owns the determination of root cause for that accident. They have not issued a final report on the root cause. I am sharing with you my own summary of the state of discussion in the industry with regard to the direct cause. Root cause is still unknown. It's for the Norwegians to investigate and then determine what the root cause of the accident was.
Senator Enverga: You declare you are the world's safest. How would you compare yourself to other private groups with the same services?
Mr. Parsons: That's a fair question. It can be a hard thing to measure.
We exist in a competitive marketplace. The majority of the revenue and business model of CHC is transport. Our customers exist in a competitive marketplace, so the transparency of data in that competitive marketplace is not always the easiest to come by.
What we do have, fortunately, is an International Association of Oil & Gas Producers that share statistics across the industry. Again, in some statistics of accident and incident rates we perform favourably versus any of our major competitors.
While it is probably true that there is a small helicopter company somewhere in the world that has never had an accident because they operate only one machine and fly infrequently, in terms of global or significant helicopter service companies in our space we can demonstrate from our accident frequency in compliance with our management systems that it is a fair claim.
Senator Enverga: What is the comparison between the Canadian Coast Guard, a government coast guard, a government SAR, search and rescue, and a private company like yours? Are they better or equal, or how would you compare your operations?
Mr. Fry: If I may, there are a number of efficiencies in a commercial model over a government model. If you look at the way the military or the government procures a helicopter, they have a number of criteria to fill that we are not burdened with. If we were to buy a helicopter for search and rescue, we buy a helicopter for search and rescue. We don't expect it to fit in the back of a C-17. We don't expect it to be able to be fitted with weapons or any of the other criteria that the military add on to their requirements list because that aircraft may be called away to do another role.
We buy a commercially off-the-shelf model which is less CAPEX intensive. The example I could probably give you is the U.K. government decided to make search and rescue a commercial provision a number of years ago. Prior to that, the provision was made by the Royal Navy, the Royal Air Force and the U.K. Coast Guard. Under that system there were 12 bases operating 44 aircraft. The new commercial model is 10 bases with 22 aircraft and maintains the same level of capability, if not more expanded, through the technology. That might sound counterintuitive, but the old fleet of helicopters that the military and the Coast Guard operated was nearing the end of their life.
They were Sikorsky Sea Kings. They were very old and slow. Keeping them going was starting to involve elastic bands and Blu Tack. Actually putting new technology in has boosted that at a huge saving. In many ways the commercial provision can provide a cost saving over the military.
Mr. McLuskie: If I could just add to that, we modernized the Irish Coast Guard provision in 2012-13. We took out the old S-61Ns and replaced them with new S-92s. When we changed that service over, the Coast Guard was doing 450 call-outs a year around the coast of Ireland. Since that time in 2013 the rate of call-out has gone over 1,100. You can see an expansion of the service because the aircraft are more capable. They can get to more locations and they are contributing more to the safety of the people in and around the waters of Ireland.
Senator Enverga: You mentioned the cost. Can you possibly quantify how much cheaper it will be? Are we going to be saving if we buy these?
Mr. Allard: I will share my numbers if you share yours.
Senator Enverga: Just a rough idea.
Mr. Parsons: I will let Mike take a stab if he wants to weigh in there and make a guess. To the core of your question on cost efficiency as opposed to capability, in the example, to use an illustration, we are maintaining a fleet of 100 to 200 aircraft globally depending on the demands of the day. Our purchasing power with the helicopter manufacturers is based on a pipeline of 100 to 200 helicopters in service at any one time and a pipeline of new helicopters coming.
We currently have two confirmed and as many as five all-weather search and rescue Sikorsky S-92s currently being manufactured to come into the CHC fleet for deployment to various customers around the world as we speak. That is probably a different frequency and magnitude of purchasing than any single national government or department within a national government would have in this case. It provides some insight into why we might have cost efficiency that a single government department in one national government might lack. In terms of magnitude, if you want to take a guess, feel free. I wouldn't guess.
Mr. Fry: I would point out that the dollar value is not the only benefit. If you look at lead times, our relationship with the OEMs and the fact that we buy off-the-shelf commercial models mean that we have a lead time for an aircraft of 18 months to two years of putting that order into the equipment manufacturer to putting it on the apron outside a search-and-rescue hangar.
Governments go about procurement in a different way but I would struggle to think of a government in the world that has a procurement system that lean and that agile.
Mr. McLuskie: Perhaps I could add some facts to the equation. I used to run the RAF search-and-rescue organization in the military before I left. I was in the air force for 30 years. We manned our service with the same competency and level of requirement for the crews but we had twice as many people. The manpower bill for delivering a military capability involved a lot more people and airplanes than an equivalent commercial operation.
The Deputy Chair: I would like to recognize Senator Munson who has joined us.
Senator Raine: This is very interesting. Is it fair to say that when it comes to procurement you are shopping around and you buy off the shelf what fits your needs, whereas a national government would have to go through a whole bunch of calls for proposals?
Mr. Allard: The request for specific equipment can go on a fairly long list, if you will, versus the requirements.
Mr. Fry: Just to align that statement a bit, I wouldn't say that a commercial model negates most of the procurement system. There has to be a competitive system under government procurements. I would say where it saves is on the requirements and thinned-down requirements.
If you have a scope for a helicopter that is this big because it might have to go to Afghanistan, the Far North, the Great Lakes or the East or West Coast, all the additional requirements that go into that tender document have a dollar value. By buying the tool you need for a specific task cuts down on a lot of that dollar value, a lot of the procurement cycle and a lot of the lead time for delivery.
Senator Raine: Because your fleet is 100 to 200, your fleet itself is flexible.
Mr. Fry: It is indeed.
Senator Raine: That is based on the fact that you know you will need a certain number of helicopters for this specific purpose, and you will be going out and looking for those specifically designed helicopters.
Mr. Allard: It comes out of framework agreements we have with suppliers or manufacturers. You have a base model and you establish a certain amount of aircraft. It is really volume driven. Once you have your specs you can adapt it to a specific contract, be it oil and gas or search and rescue, and basically be a bit quicker in responding.
Mr. Fry: In answer to your question, we can sit here and promise anything. Let me wrap an example around that which would probably be useful. Again, I will go back to the Irish Coast Guard.
They had aging S-61 aircraft and they decided they wanted new technology because of the nature of the search-and-rescue tasking they were doing. Under our service model they said, "Hey, provider, we want new technology,'' and that was up to us to field. Within two years they had gone from the S-61 to the S-92, completely different new aircraft, management of change program, crew retraining: everything done.
In terms of agility for a government that is a very complex task. We are unencumbered by some of the lengthy processes that the government has in a system like that. We have the flexibility to change technology on behalf of a customer in a very efficient manner. That is not to say that it is the panacea and every other system is wrong. It is just that we have that flexibility, which suits a lot of requirements in day-to-day usage.
Senator Raine: In using that approach, then, we are looking at gaps in our ability right now. You are not talking about the whole fleet. You are talking about this particular gap and the same procedures would be in place?
Mr. Fry: That is completely correct.
Mr. McLuskie: We already have agreed criteria for what the equipment would look like on the airplane. We are not going out and shopping. We already know what we want. We have already warned off the manufacturers that we want an airplane with this level of equipment and these lead times. It means everything is a lot slicker than it would be otherwise.
Mr. Fry: It is worth adding that we have a good oversight of these suppliers and equipment. Putting any element of SAR provision to a commercial solution or an alternative service to the remodel involves huge elements of trust between the government and the provider because at the end of the day you are trusting that provider with the safety of your citizens.
That is not something we take lightly. It is certainly something we put a lot of effort and thought into because on a dark and stormy night is exactly the time when things will fail and will go wrong. You have to have fail-safe equipment. You have to have the rigidity in your operating procedures and your equipment to deal with that because the worst time for that situation to happen is exactly the time it will.
Senator Sinclair: All of this is very interesting, gentlemen. I was curious about your comment earlier that you were not recommending one way or the other, although I found very helpful Mr. Fry's comment that it is not a private versus public issue but a combination of both.
I understand from the staff that you requested to make a presentation to us. My assumption is you have a message of some kind you want to leave with us, so tell me what that is.
Mr. Parsons: Let me try to address that one. I would make two key messages. First, as you consider the best solution for search and rescue in the marine environments in and around Canada, consider that there are established commercial models that are flexible enough to tailor to whatever the requirements are that you determine. We have illustrated a couple of extremes where the national government effectively privatizes, buys a commercial solution lock, stock and barrel, and at the other end where they define interim levels of cover sometimes badged with the logo and colours of the contractor, sometimes badged as the agency of the government that they are supporting. There is tremendous flexibility within that model. That might not be obvious for people outside the business, so I would suggest that is one key observation.
Another is that there is a contracted solution of relevance to the solution that you discuss and determine demanding a systemic level of transparency so that the contractor can demonstrate the details of the way the service is being provided. You can establish, for example, compliance with national regulations. You can track costs on a realistic basis and compare them to the expected costs of the model. That is a critical element of any successful solution.
We have developed a solution called IAMSAR that is now being used globally by all our competitors to provide that sort of transparency to our national governmental customers.
Those are the two key takeaway items we would like to communicate today.
Senator Sinclair: I don't want to put anything in your mouths but I gather from the work the committee has done so far and perhaps from your comments I gather you see Canada's operation as being primarily a public operation, a publicly owned service provider.
Mr. Allard: That is correct.
Mr. Parsons: Yes.
Mr. Allard: It is not unlike what used to be in the U.K. or Australia. These countries went through the same process.
Senator Sinclair: All of which have moved more toward a commercial model.
Mr. Allard: A commercial model, with Norway being most recent, and going to an interim solution.
Mr. Fry: Perhaps I could add two comments there. I have known other jurisdictions that have gone from government provision to commercial provision. I am not aware of any that have gone back to government provision afterward. I don't know how helpful that is.
Senator Sinclair: More than you think, perhaps.
Mr. Fry: The second point is that this is an information thing. When you come to decisions like this and with the ongoing policy reviews in Canada at the moment, it is a bit of a once in a generation decision point. We would just like to inform because it is a big decision.
Most of the countries that have gone for commercial SAR are G20 nations. There has been that move. There has been some fear of the unknown among the countries that have gone that way on what that will involve.
I have been on both sides of the fence. I have worked for the government for a number of years. There is a long-held suspicion of commercial companies, which is quite right, and there is the worry of public perception that you are taking something that is a fundamental service to a citizen of a country and giving it to a supplier. Both of those have operated where the service has been put into place.
In Ireland there is no deliberate aim of hiding the fact that it's a commercial provider. They just choose to have the livery and the uniform. I don't think most people in Ireland actually realize that there is a commercial provider providing search and rescue.
Mr. Parsons: I want to expand on the thought about the Irish Coast Guard because it is more than just the aircraft are painted in Irish Coast Guard colours rather than the contractor's colours, or that the rear crew wear the coveralls of the Irish Coast Guard and uniforms and so on. The choice the Irish Coast Guard has made represents a very important choice where now the contractor's personnel, be it the pilots, the rear crew or whatever, are flying the mission representing the Irish Coast Guard. We're not flying as CHC. We're flying representing the Irish Coast Guard. There are a host of standards and expectations, contractual and otherwise, behind it that require the crew to behave and operate not just to the CHC standard but to the Irish Coast Guard standard because we fly with the Irish Coast Guard badge literally on our chest. That's a very subtle but important change in the way we provide the service.
Other governments have devalued that particular choice but in the case of the Irish Coast Guard that was important. My impression from the discussions we have had up to know with agencies in Canada indicates that might have some resonance in Canada.
Senator Sinclair: In developing that line of thinking have you considered the amount of time that it takes governments to go through the tendering process for contracts like the kind you are talking about?
Mr. Fry: Yes.
Mr. Allard: We have.
Mr. Fry: During the course of this process we've had several meetings with the varied procurement agencies in Ottawa. In the education process we've actually had the release authorized of the requirements documents that the U.K. and Irish Coast Guard used to evaluate the model. We've provided those to various federal procurement departments here.
At the end of the day the bottom line is that we are a commercial company. I would encourage all of you on the committee to validate what we are telling you here. Speak to our customers, speak to the Irish Coast Guard, speak to the U.K. Coast Guard or the Ministry of Justice to get that independent, bipartisan view of what that model involves.
Mr. Parsons: If that's an opportunity the committee chooses to pursue it could have a lot of value. Our role in that would simply be to make connections and then for you and your national counterparts in Ireland or Norway or wherever to pursue a conversation as you like. We have reached out to our customers in Ireland and in Norway particularly with our presupposition that those models are relevant to you and both agencies indicated they would be happy to receive representation from Canada to have that discussion.
Senator Sinclair: The researchers for the committee informed us that in May of 2016 your parent company filed for bankruptcy proceedings in Texas.
Mr. Parsons: That's right.
Senator Sinclair: Maybe you could comment about what implications that has for your operations.
Mr. Parsons: The short answer is none at all.
Senator Sinclair: Isn't that the beauty of bankruptcy proceedings?
Mr. Parsons: It is incredible. This is not my core expertise. Nonetheless I have become more of an expert in this than ever.
CHC Canada was not a filing entity within that exercise. To answer your question for the global organization we will exit the restructuring process somewhere in the next two to three weeks. The process is all but concluded formally and hasn't had any impact whatsoever on our operations globally. We continue to operate the same aircraft the same way in the same place as we did when we entered the restructuring process in May of last year.
Senator Sinclair: Any information necessary for us to find out more about that is publicly available, is it?
Mr. Parsons: Absolutely, and as we exit the process more information will become publicly available as we go.
For the information of the rest of committee our principal customer base is oil and gas operators. We transport their crews to and from the rigs and platforms around the world. You might know that the oil and gas industry is under some stress right now. We as part of that supply chain are experiencing our fair share of that stress which led to the chapter 11 restructuring problems.
Senator Sinclair: Things are changing; we will see.
[Translation]
Senator Forest: Madam Chair, I want to thank Senator Sinclair for asking the three questions I wanted to ask, particularly about last May's filing. Thank you for being here, and for answering our questions with such transparency.
[English]
Senator Gold: I want to go to the basic question of what the needs are for Canadian search and rescue. It is a two-part question. What is your understanding of our needs and gaps, whether they be structural like we just don't have enough resources in the right places given the demand or punctual, as we say in French, like we need an additional icebreaker.
What is your understanding of the needs? I know this is information but you have been doing it for some decades now. What would your offer be to the Canadian system? How would you fill the gap or otherwise enhance our search and rescue capacity, if you could write the script?
Mr. Fry: We have done lots of analysis of the Canadian search and rescue over the last few years, probably going back even longer than that. I see the need in Canada in three areas.
The first area is the Cormorant aircraft are approaching a mid-life upgrade in the next few years which, I am guessing now, would involve a rolling program of those aircraft coming off frontline service and going into in-depth maintenance for a substantial time. This leaves a potential gap in frontline coverage on either the East or West Coast of Canada which could be fulfilled through commercial provision on a gap basis as we do through the Norwegian ministry of justice.
The second area of need I see in Canada is around the Great Lakes and a longer term provision for the Griffon aircraft. I have the 412 background myself from the U.K. military so I am a big fan of the aircraft, but it is a battlefield aircraft that has been put into a role without some of the required key facets. If you look longer term certainly there would be some requirement to either replace that or upgrade that capability at some point.
The third area of need is hardest to find at the moment and that would be the Far North of Canada with the increasing cruise ship activity in that part of the world and the need to have a visible presence on sovereign areas.
You might ask how that fits with search and rescue. I am not sure. As more activity goes on up there, the net of search and rescue will have to be cast further. Whether commercial provision is the right tool for that task I leave with you. The DND's box of toys will not magically get bigger and bigger. At some point there will need to be a husbanding of resources around that task. To expand presence into the Far North with the current resources and assets available to DND will involve some harsh decisions on where resource is allocated.
The last point on the Far North is less defined because I think that process and thinking is still in progress, but it feeds into the other two in that there are some potential capability gaps where a commercial provision could empower DND or any other federal department to achieve that task.
Senator Gold: We service the Far North from bases in Halifax and Trenton. Do you envisage a more permanent installation in the north, or is it simply using the newer technologies and aircraft to more efficiently service the North? How would that connect with the visible presence and sovereignties?
Mr. Parsons: That is a great question. Mick outlined three aspects where we would position our search and rescue needs potentially in the future. Let me start with the first and perhaps most pressing and tangible, namely, the maintenance requirements on the Cormorants fleet that currently service the East and West Coasts. There is a pending major maintenance event that will cause several of those aircraft to be out of service for a period of time. One scenario might be to set aside one operating base for a commercially provided supplement service that would fill that gap while those aircraft are out for service. Then the Cormorant maintenance program could roll around those commercially provided assets.
Regarding the upgrade to the 412 Griffon fleet in the Great Lakes and considering the potential need perhaps for projection to the Far North, perhaps there is a case to be made or discussion to be had around not a gap provision service but in a future state a longer term provision of service. If you could imagine partnering with commercial organizations to supplement the service on the Great Lakes or on the East and West Coasts, that might free up resources currently within DND and/or DFO and the Coast Guard to deploy those resources into the Far North. You end up with a situation where you have flexibility now to choose. Rather than being asset poor by leveraging the commercial operator, you become more asset rich and with the ability on the flexibility to deploy those assets in a different part of the nation.
Senator Munson: I am sorry for being late. I was looking on Google what CHC stood for. It took me a while. It is Canadian Holding Company. It is not as sexy as CHC in terms of marketing, I guess. There is no question that we will have to go to Ireland as a committee to check things out on our own and/or to Norway.
To follow up on Senator Gold's question, you talked about filling these gaps on the Great Lakes and the East and West Coasts. Can you fill these gaps at a decreased cost from what it costs the Canadian taxpayer with the assets in place? I don't know if you can but maybe you can do a cost analysis on that. Can you do it with better efficiency than what is being done now?
Mr. Parsons: Certainly our experience with other national governments indicates the short answer to your question is yes. We explored a couple of different avenues around that theme. One tangible example is the efficiency of scale when you are maintaining a global fleet of 100 or 200 aircraft and the purchasing power with the manufacturers of those aircraft. That is an important capital expenditure consideration to make.
You can extend that to the operating expenses of the aircraft. If you have a supply chain of parts that is supplying a global fleet of 100 to 200 aircraft, you have some more efficiencies of scale to deploy those parts rather than have more inventory than you need if you only have a fleet of 15 aircraft in this case.
In terms of better efficiency, as an example from our Irish SAR experience, leveraging that purchasing power to upgrade the fleet from Sikorsky 61-based service to a Sikorsky 92-based service was a significant leap forward in terms of capability. We were able to service the coast and handle almost three times as many search and rescue calls per year with no more assets.
In the case of the U.K. we were able to do the same with 20 per cent fewer bases and about half the aircraft, 44 down to 22 aircraft providing an expanded level of coverage. I am not sure if I am answering your question on efficiency, but certainly we can provide as much or more capability with less investment, less assets and less workforce requirements.
Mr. Allard: One of the key issues we are providing beyond accountability is a measurement of those KPIs, those key points you want to measure on a daily basis. This is what IAMSAR provides. You can go online to see the rescue of last night, the efficiency, the time it took to take off, and how many hours or minutes. It is all available online to our customers.
We are efficient and we can reduce costs. The reason a lot of governments never went back was because the service delivery was good enough for them to say that was the solution.
There is a great opportunity to have an experiment, if you will. Due to the maintenance event on the Cormorant fleet you will have a gap while these aircraft are on the ground getting serviced for a fairly long period. We saw an opportunity that there was a gap which is probably the first opportunity to see what this kind of operation can do.
From that point on you have the Great Lakes and the Far North, which could be a redeployment of existing assets of the government, if you have enough aircraft in those gaps.
Senator Munson: When you are filling in those gaps how does the government know how much it is paying? How do you work out a contract with the government to fill in those gaps so there is a budget there and you are working within that parameter?
Mr. Allard: Absolutely. It is a tender process.
Senator Munson: Has this been done at all in this country, in Canada? Search and rescue has been done, but I mean filling in these gaps in the private sector. Has there been a budget set out for that kind of thing?
Mr. McLuskie: Not in Canada but other jurisdictions have. The contracts in other countries have gone into the contract with a specific budget, a budget and expectation. Against that expectation there is a capability that has been very clearly articulated and shown from their research and from their past record.
Mr. Parsons: If I could briefly add, as a commercial provider our role here is to be transparent and demonstrate what the costs are on a real-time basis, a monthly basis or whatever the appropriate period is. That sort of question is actually better asked of peer agencies and departments in other national governments that have done the exercise and are on the other side of this equation. They have the experience: the Irish, the Norwegians, the Australians and the U.K. government. They have all experienced this transition. I am sure they would have run into the same challenge to demonstrate cost effectiveness to their constituents.
Senator Munson: I was just curious because of the amount of money. They are all professional pilots, both in the private and public sector. They are all well trained, but I would think they are better paid in the private sector. There would be an attraction to working in the private sector for a company like yours, even though there is an attraction to working for the government to have a steady stream of work and to be reasonably well paid. We have noticed in the past that those who leave the public sector to go to the private sector actually do well monetarily.
Mr. McLuskie: It is true to say that in the military model the tour length is usually between two and three years. They change people over much more rapidly than they do in the commercial world. We have search and rescue flights pilots who have been on the same base for 17 years. They haven't moved. They've remained in that location throughout. In a similar military environment the crews would change over every two or three years and you have to retrain the elements that are going in and out all the time. Purely on those grounds alone you have less turn over and less disruption to your service.
Mr. Fry: I have one thing that might help to answer that question. If you were to look back with hindsight on the transition from military or government provision to commercial provision in the countries that we have mentioned — Australia, Ireland, the U.K. and Norway — there has always been a trigger. There has always been a driver for that change. That takes many formats and numerous reasons depending on the priorities of the government.
In the U.K. example they had an aging fleet of Sea Kings that required replacement. For 45 aircraft the capital expenditure was absolutely huge. It made far more sense to actually structure that over a term as a service model.
It depends very much on what you're trying to achieve and the challenges in front of you. It might be that you want to improve a situation but you don't have this massive bucket of funding to throw at it at the time, or it might be that you want a more cost-efficient service, or it might be that you want new technology or a service improvement. It depends very much on what your priority is, but our experience is that the flexibility and agility that we can put forward have met those requirements. It is a very popular system with all of those that have migrated across.
Senator Munson: I have just one final question. Public perception is everything.
Mr. Allard: Yes, absolutely.
Senator Munson: You have come here on a marketing mission to sell the benefits of the private sector. You talked about the examples that worked in Ireland. When men and women in the public sector are working in search and rescue there is an incredible commitment. I would think the same commitment would be there. If something didn't work out well — you are in the North, a person hadn't been saved, and so on and so forth — the politicians and the government are held accountable that it just didn't work. There was a gap there. They didn't get there fast enough, and so on and so forth.
The same could happen in the private sector. If you didn't make it there the public perception could be, "Well, they were private; they were brought in to do these things,'' no matter what expertise you have. Do you concern yourselves with that kind of marketing process of selling the private perception of rescuing Canadian citizens who may be in a tough spot?
Mr. McLuskie: Certainly I would speak from experience here. I was actually running the U.K. search and rescue organization for the military when we embarked on the program to transfer to privatization. There was great concern that the military would lose the kudos and the flag-flying capabilities that search and rescue gave them. It was the accepted face of military flying.
It was also felt that the civilian counterparts couldn't train to the same standard. We have proven with our application of the same technology, the same techniques and the same training methodology that we can match whatever the military was doing previously and do better in some circumstances because we have longevity of experience in post.
Mr. Parsons: If I think about the service provision to the national and state governments in Australia, the national governments of Ireland, Norway and the U.K., and other countries where we have operated, inevitably in the nature of a service like search and rescue, by its definition, conditions aren't ideal when that service is operating. Something has gone terribly wrong when search and rescue is in the air. It doesn't always end well. Sometimes bad things happen and against everyone's best efforts.
Whether it's the Irish Coast Guard or the Norwegian ministry of justice, or there are other contacts we could provide from other national governments, from a governmental perspective of anticipating and managing the potential public perception risk is real, and they have experienced it.
Examples come to mind from offshore rescues in the North Atlantic in Ireland and onshore rescues in Australia where a bad result occurred. From my perception, at least, it seemed to be very well managed. Public perception didn't get ahead of everyone. The service was able to demonstrate a level of competency, consistency and compliance with the requirements as set by the government. That discussion was well managed.
I would advise that your counterparts from other jurisdictions are best placed to give you some advice on that point.
Mr. Fry: That question is the nub of the whole issue. We could talk about technology and we could talk about efficiency but the public perception is key to all of this. That really comes down to that contract of trust or that bond of trust between the contracted party and the government that is contracting them. That's not a job for amateurs. This is a very complex task. We take that exceptionally seriously.
The way in which that trust is built and the way in which this model is set up to succeed is through the requirements and "the ask'' of the contractor. We can give you a start on that based on other jurisdictions, but at the end of the day the Canadian government needs to ask the right question to get the right answer. The foundation block of the whole principle is that level of trust and the performance standards you mandate for the contractor to provide. We are very happy to live up to that.
If you take Ireland, for example, we have a system in real time where any stakeholder can log in and view the performance against those metrics. We logged in this afternoon to the Irish Coast Guard. As to performance so far this month for Irish SAR, availability is 99.4 per cent. That is one of the stated metrics that we have been asked to provide. The metric is 98 per cent and we are currently at 99.4 per cent.
If you ask the same question of the Canadian Air Force today, I doubt it would be 99.4 per cent. It would be high. They are a very capable organization, but 99.4 per cent is exceptional. The reason that is exceptional is because that's what the government asked for. That's what they asked us to deliver, and that's what we deliver day in, day out because people depend on that.
Mr. Parsons: Importantly, they have a service to demand accountability to that requirement. They can see on a daily basis whether or not we're meeting that requirement. That generates accountability at all levels through the system so that everything is working together to deliver the requirement.
Mr. Fry: There is no end of month quibble about whether we performed or not. It is very obvious whether we performed or not. We have complete transparency to the point where you could log in today, see which pilot flew the mission, when he was last in the simulator, what the mission was, how long they were out, and a satellite mapping system of where they flew on that search pattern.
Senator McInnis: Can you do it less costly? That is the question. To Senator Munson's point, it's not just the private sector. It's that the government went "cheaped it''. They went out and got something cheaper, less costly. There is where the nub is with respect to the controversy.
Mr. Fry: With respect, you're asking me a direct question so I will give you a direct answer. I believe we could but I will caveat that with one point. You have to compare apples with apples. When you look at the government provision today there is stuff that is in a general pool. You need to include that in your accounting but yes, I firmly believe that we could.
Senator Watt: I too feel that I understand what you're putting forward. I am from the High North, so I associate with the matters that you have brought forward. Over a number of years we have had a great deal of dissatisfaction in terms of the way the North is being serviced, especially with regard to the search and rescue matter.
As you know, when there is an ongoing crisis in the Arctic, whether it's in the Subarctic or up in the High Arctic or Labrador, the rescue originates from Halifax. It is quite a long distance, going all the way up to the High Arctic to try to find a person or rescue a person who has already been identified. It has never been satisfactory.
We have lost many people who have been swallowed by the ocean current. It could start off by identifying where the person disappeared or where the object or boat disappeared. It can go a long way in one day. If you don't have a clear understanding of the currents and how they work then you might look in the wrong area. That has happened a lot with search and rescue under the Coast Guard due to that factor, the distance. Also a lack of knowledge has taken many people's lives.
I see a potential for improvement from what I am hearing from you as the private sector moving in and filling the gap. Maybe you should consider not only filling the gap but to take over the whole search and rescue operation. Perhaps that could be agreed to until there is improvement.
When search and rescue moves into the North I would say most of the time they don't find what they are looking for. Then our private aircraft have to move in when they give up. We've always been able to manage locating the person and saving them with our own aircraft, which expense is not covered by the Government of Canada. We usually take care of that in our own way and cover the costs, whatever we need to do to save lives.
I would like to put a question to you. I know you have a volume of aircraft, helicopters. Instead of doing the same thing the Coast Guard has been doing, which is operating out of the Halifax, you're going to have to do a complete inventory and decide where you want to locate stations in isolated communities.
Mr. Allard: The biggest part of the review of the needs analysis is what distance you can cover from a specific base.
Senator Watt: Exactly.
Mr. Allard: You establish the coverage and the response time. It all goes hand-in-hand with analyzing the number of rescues that were performed. We keep talking about a gap, but in reality it is: How long did it take to rescue? God forbid anything major happens because then the response becomes even more important. The question everybody must ask themselves is: Are we properly covered up North?
The purpose of this presentation was not only to focus on this area. It was to focus initially on sort of a small gap in the maintenance requirements when you have to basically take out of service a Cormorant and also go to the Great Lakes and obviously the Far North. Everybody, certainly sitting where I am sitting, can say if anything happens up North the response time won't be the same as being off the coast of Halifax. That is for sure.
Mr. McLuskie: To put it into context, the oil and gas industry in Norway perceived a problem of responding to incidents that occur in the North Sea. What they did is that they positioned helicopters on the rigs. We moved the base out to the area of operation rather than leaving it on the beach. We put them on the rigs and we now operate offshore in Norway to provide oil and gas search and rescue to the industry.
Mr. Allard: And their base of search and rescue has moved, as far as Norway, quite a bit up north.
Senator Watt: You also have to take into consideration that from time to time you might need to modernize the helicopters to be able to deal with the climate change that is taking place.
Mr. Allard: Absolutely.
Senator Watt: When you land on the ice you might think that it is very thick and therefore it should be safe. We have evidence of helicopters going through the ice. At times helicopter pilots have to be saved by the person they are trying to save. Those factors have to be taken into consideration. The fact is that the texture of the ice is not the same as it was before. For that reason you might have to consider modifying the equipment on the helicopter.
Mr. Parsons: Certainly that level of expertise is always important.
Senator Watt: Those are the types of things I am talking about.
Mr. Parsons: We appreciate these are complex problems, that the solutions to these problems aren't free, and that you're tasked with finding solutions to complex problems within a fixed budget and resources.
We don't pretend to have all the answers to these complex problems today, but in short we would suggest that some sort of partnership with a commercial service provision is an option that provides some flexibility in the way you might allocate those resources. Whether that's a commercial service in the Far North or a service best provided natively by an agency of the Canadian federal government, either solution can work. We just suggest that either solution is available or mixtures of that solution are available for your consideration.
Senator Watt: My last question is more to do with the people that are in the business in the North. There are some Inuit people in the helicopter business and things of that nature. Would you be open to a possible joint venture if you do get the contract?
Mr. Allard: As we have seen in the past that is exactly our approach. You have to partner with local operators because it makes sense. They know the area.
Senator Watt: And they have the knowledge.
Mr. Allard: Exactly.
Mr. Parsons: The challenge can be that they value that partnership. For example, Sylvain pointed out local knowledge of the environment, something a local partner is uniquely positioned to provide. At the same time our global experience base in defining the standards of success for search and rescue service is perhaps some expertise that we bring to that. A successful partnership with a local partner would depend on both avenues of contribution being able to find something that works in the environment.
Mr. Fry: I've been with CHC for three years now. One of the things I've noticed with quite a source of pride is that to make operations in the oil and gas industry more sustainable in a lot of the remote places where we operate we have embarked on nationalization programs. That has resulted in a lot of upskilling in technical areas and has gone very well.
As well as the discussion we've just had, CHC has the experience of recruiting locally and putting technical upskilling in those areas such as training engineers and pilots in quite a meaningful way.
You see it in brochures sometimes and it's a bit of a throwaway aspect, but I've seen it done in action and it's very good. Those are exactly the kinds of upskilling and aspirational jobs that you want to put people in those communities into.
Senator Watt: Thank you for your presentation, your thoughtfulness, and your openness in terms of being willing to move forward into the High Arctic. I think it is the time to do it. Things will get busy down the road when the international economy gets better.
Senator Christmas: I would like to go back to Senator Munson's point and Mr. Fry's comments. The arguments you are presenting are persuasive. The work of the committee can verify a lot of those facts and a lot of that evidence. I like the idea of going to the users and finding out directly from them how they found the service.
The problem I have is that I think my head can be persuaded. There are enough benefits, even with the possibility of expanding service with new technology. I am persuaded that you will meet or exceed safety standards. The part I am having difficulty with — and I suspect there may be other Canadians in the same situation — is that it's hard convincing the heart that this is the right decision.
I'm not sure if the issue is privatization. There have been some experiments with privatization in Canada. Some haven't worked well. Maybe it's all about pride because search and rescue have such a prominent place. I'm from Nova Scotia. The military have a very prominent place in my province, and that's where the search and rescue base is located.
I come from a small community where one of our industries is commercial fishing. A few years ago we almost lost a crew of snow crab fishermen when their vessel unexpectedly took on water and the pump failed in the night during the worst storm. Search and rescue came and saved the lives of our crew. There's a lot of pride. There's a lot of connection with the military doing search and rescue. I have to come back to the point that it's really about public perception.
Mr. McLuskie: I think that's a two-way street, though. It would be both for the new provider and the government to convince the customer that we can provide that. The same ethos exists in commercial search and rescue as it does in military search and rescue. Those are great doubts or that same concern in the minds of some elements of the U.K. government that the commercial operator couldn't take that same ethos into the search and rescue community. That has proven not to be the case. It's quite the reverse. They embark on the culture in exactly the same way as if they were in the military.
Mr. Parsons: I identify with the question. You're from Nova Scotia; I'm from Newfoundland. I grew up with it being a great source of public discussion. Search and rescue services were provided out of Newfoundland; then they weren't and they were. This was an enormous challenge of public perception and to some degree the facts of the efficacy of the service, but principally a discussion of public perception.
I would suggest that other jurisdictions — the Irish, Australians, British and Norwegians — all face some variation of the same challenge as their constituents need to be convinced to move from one model to another. It's a management of change process on a grand scale. I think some advice and observation from those would be valuable.
To use an example from the Irish Coast Guard, as they went through an exercise to change their model and partner with commercial organizations, part of that unlocked an ability to upgrade a level of technology. The coverage envelope changed to the point where they were able to effect 1,100 rescues per year instead of 450 rescues per year.
For me as a constituent that goes a long way to address my heart on the issue. If I can rescue three times as many people with this solution then my heart is all for that solution. It's that demonstration of the service in the real world as opposed to some sort of academic discussion on the service. Go and speak to people who have experienced a change, who have had to defend and demonstrate that change to their constituents. If there's one takeaway from our discussion today, I think that's probably the biggest one. That's where you'll find, I suspect, solutions to these really complex human public perception issues.
Senator Christmas: I would suggest that at some point during our discussions we would have to look at that whole issue of public perception. How do we not only bring forward an option that may be better for Canadians, but how do we help Canadians appreciate and grasp that model? To me, that second point, the point of the heart, is probably more difficult than the first piece.
For instance, questions would come to people's minds. Would that mean that we would close bases or would that mean there would be a reduction of military personnel? Would it affect suppliers? There are other questions. Others may come forward and say, "If we do this option, this might be the consequence.''
Mr. Parsons: Of course.
Mr. Allard: What we're bringing to the table is expertise but also past experience of the same process that occurred in other countries that went through the same questions about what do we do with the people. Most of these people actually transitioned to commercial quite happily, I might add. It boils down to people. Somebody is going to go and pick you up at night. It depends on the guy sitting in that cockpit and the guy going down on that wire to pick you up. These people basically transition quite effectively.
That's one thing that Ian was mentioning with this transition. It was initially, I mean: How do you trust them? It's back to what Michael was saying about trust. It would be very important. I encourage any kind of communication that could occur between people that have done it and experienced the same problem, the same discussion.
Mr. Fry: I would like to come back to one of the points I made earlier. When we look at the world at the moment, I don't think either full militarization or full commercialization is the optimum, based on what I see at the moment. To use your phrase, you have to eat the elephant one spoonful at a time.
The public perception boils down to fear of the unknown because you are taking them from a comfort zone to a future state. That can be done in a phased and staged process. I think that is the key where it has been successful in the past. It is not a light switch going on or off and, voila, a new provider. They have phased in a solution, and lo and behold the sky has not fallen. People still get picked up when they need that and they still get the medical care that they need as part of that.
I would urge some caution against a huge rush to change the earth overnight and I would put it toward a more phased or staged and carefully managed process where information and transparency is key. The people near the waterfront reading their newspaper need to be informed. They need to see the vision. They need to see what the current problems are, what the solution is, how that's going to work, and how that will impact them. What happens if I fall off my boat tomorrow? Who is going to come and get me, and in what format is that going to come? Actually it's very similar to today.
Mr. McLuskie: The U.K. Coast Guard and the Irish Coast Guard very proactively launched TV programs called "Seaside Rescue,'' where they placed a camera in the aircraft and it went off on all the jobs. It became a best-selling TV show and kids used to watch it all the time. That did a massive amount to convince the public that the service being provided would be just as good as it had previously.
Mr. Parsons: One thing Mick just said that was really helpful is that we're moving toward a moment now that perhaps you can regard as an opportunity. The fleet of 15 Cormorants have a major maintenance milestone that we're steaming toward right now. Canada is going to have to do something with that.
That may be an opportunity to try to do this small thing in this one spot and decide if that solution works and is scalable or not. Then we will move on from there.
Mr. Fry: I agree with Barry. I think that is a good opportunity. I think you would be pleasantly surprised with the results, but I am bit biased in that regard.
Senator Raine: This has been most informative.
Looking at the list in the document you left with us on the commercial structure, what does RNLI stand for?
Mr. Fry: The Royal National Lifeboat Institute.
That is a good point. We spoke about local knowledge earlier. Helicopters invariably involve pilots. Pilots tend to have the world view that they know everything.
Senator Sinclair: They had better if they're flying.
Mr. Fry: Occasionally they don't know everything and that local knowledge is key, as we alluded to earlier.
Our crews, whether it be in Ireland, the U.K., Australia or Norway, exercise day in and day out with the other agencies, whether they be the police, the lifeboat institute or the medical professions so that they have that seamless service at the point of delivery.
Another element of that is the lifeboat organization is a volunteer organization. It's charity funded in the U.K. These guys live in that community. They run to the lifeboat when the klaxon sounds, and they launch that lifeboat. They know every rock and eddy on that coastline. They provide all of the organizations, including us, with the local knowledge and the picture that takes us from our world picture down to a local level. It is a key element of that relationship.
Senator Raine: In British Columbia we have the same relationship between the volunteers and the Coast Guard. It is good that you have had operational experience with that.
Mr. Allard: Yes.
Mr. Fry: We attended the national SAR conference in Edmonton last October. Apart from the sheer scale, there were a remarkable number of parallels. We felt quite at home and comfortable.
Mr. McLuskie: What is interesting as well is that the RNLI organization crosses boundaries. It is run for two governments — the Irish government and U.K. government — completely impartially and purely by volunteers. All of the funding is raised by boxes in people's shop windows and things like that. Governments don't pay a penny toward it, and it is a very efficient service.
Senator Munson: I think you partially answered this question regarding the financial restructuring and bankruptcy of the CHC Group. Has that had any impact at all on your various search and rescue operations?
Mr. Allard: No.
Senator Munson: None whatsoever?
Mr. Parsons: Let me go a step further. For obvious reasons our search and rescue service occupies a level of priority not every helicopter mission that we fly globally has. Chapter 11 restructuring of the CHC Group hasn't even affected our routine, day-to-day crew chain services from oil and gas platforms. There has been no operational impact at all.
In particular, to add to Sylvain's point, the CHC Helicopter Canada organization is not part of that proceeding. In any event it has had no impact.
The Deputy Chair: Prior to my thanking our witnesses, I would like to welcome and recognize three new members to our committee. I hope that you have enjoyed your first meeting. Unfortunately, Senator Forest had another meeting, but I would like to recognize Senator Gold and Senator Christmas. Welcome.
To our witnesses, it has been wonderful to have you here this evening. On behalf of the members of the Standing Senate Committee on Fisheries and Oceans, I would like to extend our appreciation and thanks. You have brought a great deal of information to us on CHC Helicopter, and you have also created a new perspective that we can consider as we go forward with our studies. Thank you very much.
As a result of a sessional motion regarding the membership of Senate committees, which was adopted by the Senate in early December, all committees were directed to add a fourth member to their Subcommittee on Agenda and Procedure who is not a member of a recognized party. Therefore, is it agreed:
That, pursuant to the order adopted by the Senate on December 7, 2016, the membership of the Subcommittee on Agenda and Procedure be increased by one non-voting member chosen from the senators who are not members of a recognized party, to be designated after the usual consultations?
Hon. Senators: Agreed.
The Deputy Chair: If there is nothing else, I remind senators to advise the clerk if they intend to travel with the committee to Newfoundland and Labrador from March 5 to 9 as soon as possible. Thank you.
Maxwell Hollins, Clerk of the Committee: And I will follow up with an email.
(The committee adjourned.)