Proceedings of the Standing Senate Committee on
National Finance
Issue No. 68 - Evidence - May 30, 2018
OTTAWA, Wednesday, May 30, 2018
The Standing Senate Committee on National Finance met this day at 6:45 p.m. to examine the Main Estimates for the fiscal year ending March 31, 2019; and in camera, for consideration of a draft agenda (future business).
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: My name is Percy Mockler, senator from New Brunswick and chair of the committee.
I wish to welcome all of those who are with us in the room and viewers across the country who may be watching on television or online.
[Translation]
As a reminder to those watching, the committee hearings are open to the public and are also available online at sen.canada.ca.
[English]
I will now ask the senators to introduce themselves.
[Translation]
Senator Pratte: André Pratte from Quebec.
Senator Moncion: Lucie Moncion from Ontario.
[English]
Senator Marshall: Elizabeth Marshall from Newfoundland and Labrador.
Senator Eaton: Nicole Eaton from Ontario.
Senator Neufeld: Richard Neufeld from British Columbia.
[Translation]
The Chair: I would also like to introduce the clerk of the committee, Ms. Gaëtane Lemay, and our two analysts from the Library of Parliament, Alex Smith and Shaowei Pu, all of whom support our committee’s work.
[English]
Colleagues and members of the viewing public, the mandate of this committee is to examine matters relating to federal estimates generally, as well as government finance for the Budget 2018-19.
Today, we continue our consideration of the expenditures set out in the Main Estimates for the fiscal year ending March 31, 2019.
For the first hour, we have invited National Defence and Armed Forces to present and discuss their request for funding for the current fiscal year.
[Translation]
We welcome this evening Mr. Claude Rochette, Assistant Deputy Minister, Finance, and Chief Financial Officer. Thank you for accepting our invitation.
[English]
We also have Patrick Finn, Assistant Deputy Minister, Materiel. Thank you for accepting our invitation.
[Translation]
We also welcome Ms. Elizabeth Van Allen, Assistant Deputy Minister (Infrastructure and Environment).
[English]
Thank you for coming here this evening and accepting our invitation. We also have Vice-Admiral Darren Hawco, Acting Vice Chief of the Defence Staff.
Welcome and thank you all for accepting our invitation to share your comments and visions and to inform the public through the Finance Committee of the Senate on your vision going forward for the best country in the world.
I have been informed that Mr. Rochette will make your presentation and then you will be followed by questions from the senators.
Before we do that, I would like to ask the three senators who have joined to introduce themselves.
Senator Coyle: Mary Coyle from Nova Scotia.
Senator Andreychuk: Senator Andreychuk from Saskatchewan.
Senator Jaffer: Senator Jaffer from British Columbia.
[Translation]
The Chair: Mr. Rochette, please go ahead.
[English]
Claude Rochette, Assistant Deputy Minister (Finance) and Chief Financial Officer, National Defence and the Canadian Armed Forces: Thank you for introducing the Defence team. I am sorry that I missed the appearance for consideration of Supplementary Estimates (C), but I can assure you that I am pleased to be back today to answer your questions regarding the Main Estimates for the 2018-19 fiscal year on behalf of the Department of National Defence.
My colleagues and I look forward to reviewing this important information before the committee.
[Translation]
As I have said on previous appearances before this committee, the magnitude, complexity and visibility of the Defence budget demand a cohesive, comprehensive and strategic approach to maximizing the efficacy of our expenditures and investments. The approved policy, Strong Secure Engaged, issued in June 2017, intensified our efforts to deliver strong fiscal responsibility and prudent stewardship of our resources.
[English]
Let me spend a few moments on Strong, Secure, Engaged and what the 20-year plan means for Defence.
The financial plan included in the policy means that Defence now has a clear picture of the funding committed to ensure that the men and women of the Armed Forces have the support they need at home and whenever or wherever they are deployed. That includes ensuring that they have the right equipment, at the right time, to do the job safely.
How clear is that picture? We have costed all initiatives and capital acquisitions and mapped these forecasted expenses on the 20-year plan based on our best delivery expectations at the time. This approach allowed us to determine funding required under the defence policy to ensure the plan would be affordable.
By way of an example, the funding impact of SSE when comparing planned 2026-27 with 2016-17 funding, Defence will receive a vote 1 operating fund increase of $4.8 billion in baseline costs related to salaries, infrastructure and training, as well as increases to the force structures, incremental operating and sustainment, and new initiatives. At the same time, capital funding through vote 5 is forecasted to increase by $10.4 billion.
[Translation]
While the plan extends forward for 20 years, each year Defence will return to the plan and consult other committees to provide information about the impact on the Main Estimates for the year.
This leads me to today’s topic of the Main Estimates for 2018-19. Turning to the Main Estimates before you, I would like to highlight key points for the committee on page II-117 in the English version, and on page II-166 in the French version.
[English]
The bottom line for National Defence is an increase of 9.2 per cent or, if you prefer, $1.7 billion from the Main Estimates figures approved for fiscal year 2017-18. This change reflects increases across the departmental vote structure, which I will summarize in four points.
First, operating expenditures will increase by $1 billion, attributable mostly to the annual escalating costs of operations, military and civilian pay raises, and new initiatives included in the defence policy such as the Total Health Strategy.
Second, the capital expenditures will increase by $658 million, due primarily to progress in delivering major capital equipment and infrastructure projects, and a decrease in funding related to the Federal Infrastructure Investments Program as those projects are delivered.
The increase in capital funding is related to in-year delivery of projects such as Fixed Wing Search and Rescue, Canadian Surface Combatant and the Light Armoured Vehicle Upgrade.
Third, grants and contributions would increase by $12 million to reflect the introduction of a new program under the defence policy entitled Innovation for Defence Excellence and Security or, if you prefer, IDEaS.
Fourth, the statutory allocation would increase by $9.2 million in light of an adjustment to employee benefit plan contributions.
The Main Estimates reflect a determined and comprehensive effort to direct and allocate defence dollars responsibly and appropriately across a broad spectrum of related activities in support of defined corporate priorities during the fiscal year.
The department continues to monitor and manage its fiscal requirements to ensure value for taxpayer dollars and support for government priorities.
At the same time, the department remains committed to having no residual funding. In fact, the department is expected to achieve that commitment for the second year in a row.
The Department of National Defence and the Canadian Armed Forces continue to deliver our essential national mandate while embracing fiscal responsibility and effective stewardship of resources.
[Translation]
As Chief Financial Officer, I am fully engaged in the governance of Defence resources, working in close collaboration with my military and civilian colleagues to deliver successful outcomes and value for taxpayer dollars. Defence continues to work closely with the Parliamentary Budget Officer as we continue to be transparent about the life cycle costing of projects and the details related to implementation of our new defence policy.
[English]
In closing, Mr. Chair, I hope that I have confirmed the department’s commitment to monitor and manage our fiscal requirements, to ensure value for taxpayer dollars, and to continue our effort to transparent and responsible spending.
My colleagues and I would be pleased to address any questions or comments you may have.
Senator Eaton: Thank you very much, Mr. Rochette. That is indeed good news. I would like to go back a bit before I get to my question, so that my question makes sense to the vice-admiral and Mr. Finn.
This is not a partisan issue. I think both the Conservative and Liberal governments have had difficult times doing defence procurement.
In 2006, there was an announcement that three new joint supply ships were to be launched in 2012. In 2007, six to eight Arctic and offshore patrol ships were to be launched in 2013. In 2008, a polar icebreaker was to be launched in 2017. In 2010, there was an announcement of the National Shipbuilding Procurement Strategy. In 2011, the procurement strategy was detailed: six to eight Arctic and offshore patrol ships, 15 Canadian surface combatants, two to three joint support ships for the navy, one polar icebreaker, one offshore oceanography vessel, three offshore fishery science vessels; and, in 2013, 10 Coast Guard vessels, five medium endurance multi-tasked vessels and five offshore patrol vessels, up to cost.
Are any of these floating? I don’t think so, are they? I don’t think any of them have been launched or floating.
Patrick Finn, Assistant Deputy Minister, Materiel, National Defence and the Canadian Armed Forces: In one case, one has been launched and is floating. There are many more to come in the coming year.
Senator Eaton: I am not interested in “many more to come” right now. One is done.
Mr. Finn: One offshore fishery science vessel has been launched. Within a few months we will be launching the first Arctic and offshore patrol ship in Halifax that will go into the water. We will start construction of the fourth Arctic and offshore patrol ship this September.
Senator Eaton: To continue, obviously the cost for all these things has escalated hugely as well. Mr. Rochette is probably only too aware of what the costs are now.
Why do we not issue fixed bid contracts? That is one question. Why do we also insist on industrial regional benefits? Wouldn’t that discourage bidders?
I hear that you have had three bids for the surface combatant ships. Out of 12 that were approved, only three came by.
Why aren’t people jumping at the idea of building these ships? Why the delays and the cost? Is it because of things like the regional industrial benefits? Are the costs escalating because, unlike Europe and the rest of our NATO friends, we don’t have fixed bid contracts?
Mr. Finn: I will try to take you through all that relatively smoothly without consuming too much time.
There is a lot of complexity to shipbuilding. There are a lot of issues, quite frankly, in the history of the boom and bust in Canada of how we build ships. A lot of the early phase you talk about is part of the reason we created this strategy and started to unroll it. We can’t continue to do one at a time.
We tried fixed price contracts. We tried that the first time out with the joint support ships. In fact, most of our allies do not do fixed price long-term builds.
Senator Eaton: Well, several people would disagree with you.
Mr. Finn: Perhaps, but as I sit with all of my colleagues internationally on shipbuilding quadrilateral, and I sit at NATO as our national armaments director
Senator Eaton: Can we just back up a bit? I am sorry, you are going to educate me here.
I get a price for a design and for the steel hull of the ship. When it comes down to radar and communications, all the technical parts of the ship, is that done by the shipbuilder or is that costed out? Is that given to another subcontractor?
Mr. Finn: Generally in the warships, it is done through a separate subcontractor.
Senator Eaton: Is that part of the main bid?
Mr. Finn: That would generally be part of the main bid where they pull it together and they propose a solution.
Senator Eaton: That goes into the main final bid.
Mr. Finn: It does, senator. There are different models. The models we used to modernize our Halifax-class ships were in fact because of knowledge of where we were. We did use fixed price for the entire combat system and had that brought together in that fashion. A lot of that does flow through. We have an open book approach to it.
A lot of what you are generally describing has been the journey and the path that we have been on, including early optimism by us around cost and schedule.
We have spent a lot of time with our international partners comparing best practices. We brought in Steve Brunton, as you know. We sit down with Australia, the U.K. and the U.S. several times a year to ensure we have similar approaches.
The first of the Arctic and offshore patrol ships will be in the water in September. We start building the fourth one. We are going to be into delivery and handing it off to the navy next year. We will soon start building the joint support ships and will be selecting the design for the surface combatants later this year.
We are, as you indicate, at the beginning of the delivery.
Senator Eaton: That design for the surface combatant ships has been pushed back several times, correct?
Mr. Finn: It has been the selection of the design. You indicated the 12. We started out with two groups of six, one of which we were looking, if you will, the hull form solution, and a separate approach to the combat systems, the radars, the sensors and things you described.
Based on feedback from industry, we took an approach that we wanted a single solution. The three bids represent at least six of the 12. When we say 12, it was two lists of six ships and there were some on both lists.
The majority of the companies that have indicated an interest from the outset continue to be involved. Many of them have come back to us through the process and asked for more time. It has been a back and forth, with international competition. All of the ship designs and the combat system integrators largely are from big international suppliers. They are bringing in the same practices they use around the world.
Senator Eaton: When you do sign a final contract after you have chosen the design or the bid, will you have a penalty clause in the contract?
Mr. Finn: For most of our contracts, we will have a number of things that we include in our normal practice. We will have things like liquidated damages. We will look at ability to terminate for cause or for convenience. These are built into pretty much all of our contracts.
Senator Eaton: Do you have a deadline or a timeline?
Mr. Finn: If that is in the best interest of the Crown to motivate, but it really depends as we negotiate our way through it. Also the Crown could be part of this.
The more we sort of penalize, the more we put penalty clauses in, the more their price will go up. That is normal practice.
Through the shipbuilding strategy, we have entitlement to complete open book access to all of the costs and everything the shipyards bring forward in their proposals. That gives us complete insight into how they are doing things. We will consider all of those things, but we will attempt to do what is best for the Crown to get this delivered.
Senator Eaton: Thank you. I will not take up any more time.
Senator Jaffer: I also have many questions. Thank you very much for being here, and thank you for all the work you do.
I want clarification on reservists, please. I understand that the program will compensate employers at approximately $425 per week during the period the reservists are away. The employers do not pay the reservists while they are working for us, right?
Mr. Rochette: No.
Senator Jaffer: What was the rationale for paying the employers? Is it so that when the reservists return they will have jobs? Obviously you did a lot of work on this. What was the rationale?
Mr. Rochette: I will start and I will ask Vice-Admiral Hawco to add to it, if he wants to.
This is a grant and contribution program. Based on the past experience we had especially in Afghanistan, for example, we were employing more and more reservists. They had the opportunity to be deployed in an operation without losing their jobs.
It is a bit unfair also for the employers when they have employees who may be leaving for six months, plus coming back and having rest and restoration for another month or on vacation. It is taking away a person for a long period of time for the employers.
The intent was to help a bit. It is not to compensate completely. It claims to help employers to allow employees to be part of the reserve first, to train, to be deployed when they wish to be deployed with the unit, and to be compensated. At least they can absorb a portion of the cost of paying for new employees while their employees are away.
Senator Jaffer: That is around $1,300 per month. That is quite a bit, right?
Mr. Rochette: When you consider the salary plus all the benefits, if they have a pension plan and other contributions that the employer has to pay, the calculation is not too much. It is based on an average.
Senator Jaffer: I did not think of pension plans. Thank you. I understand.
I have another question, which is longer. I know we are not yet transparent, so I can’t ask you for a gender-based analysis, but when you read the department plan and the minister’s message it is peppered everywhere that the gender-based analysis was done. What was the process of doing the gender-based analysis?
Mr. Rochette: I will touch on the part that I know and maybe, again, the vice-admiral can complete it.
As you said, we always look at gender-based analysis. Any time we ask for the funding, like we are now going through new funding in the supplementary estimates, we always have in our submissions a section where we do a full analysis.
Senator Jaffer: That goes to the Minister of Finance, right?
Mr. Rochette: It goes to the Treasury Board committee. Sometimes it is a submission for the minister. In all the submissions that we do now, it is part of our policy that we have a section on gender-based analysis to ensure that we look at all opportunities.
Senator Jaffer: Do you do GBA+ as well?
Vice-Admiral Darren Hawco, Acting Vice Chief of the Defence Staff, National Defence and the Canadian Armed Forces: I will offer two contextual points, one related to the development of the policy and one about how we do it in practice.
In the development of the policy as part of the consultation, we did a number of round tables, including round tables geographically.
The policy went through a consultation phase directly and specifically related to GBA+, and the policy was read, start to finish, with the GBA+ lens.
On the practical part, and I will use capability development as an example, when we are doing an integrated soldier system or any kind of new capability that is being developed, we have on our Defence Capabilities Board a GBA+ person there as part of the board that listens to, hears and has had an opportunity prior to a board rendering a decision to review the product and the capability from a gender-based analysis.
The plus is important because it is not just about gender. It could be about age. It could be about —
Senator Jaffer: Race?
Vice-Admiral Hawco: We do many capabilities that are employed by public servants as well as Defence, so there is a range of physical capacities considered. Different persons process information differently when you look at how information is displayed, visualized and the like.
These specific analyses are done.We normally would do them anyway. What we would do for an ejector seat is in a medium percentile for weight to weight. That covers a range of gender and size configurations.
We didn’t actually draw attention to it from a gender perspective. We’re doing that more concretely now.
Senator Marshall: My first question relates to our hearing in February. I had asked for some financial information on the new defence policy, and I haven’t received anything yet.
I would like to know why it wasn’t sent to me. There are two options. Is it that you don’t have it, or that you have it and you’re not sharing it?
Mr. Rochette: You know that I would never do that.
Senator Marshall: It might depend on your answer now.
Mr. Rochette: I will give you the answer. I will have to discuss with our colleagues on the policy side. The document was prepared and was sent, so I don’t know where it is exactly. I thought that you had it.
Senator Marshall: I don’t have it. Just as a reminder, the policy keeps referring to a total amount over 20 years. I want it broken down by year. I want it broken down between operating and capital, and any further breakdown that could be provided.
A total is provided in the document. It is a little information by year, but not sufficient for transparency and accountability.
Mr. Rochette: Yes, we have the information. I know that you were also asking specifically about using 10 years, like 2026-27.
Senator Marshall: The 20 years is great, but most of us won’t be here in 20 years. That’s really far out.
I would like to see the first five or 10 years broken down in detail. That would be very informative if you could get it for me.
I was trying to work with the information that I had available to me, and I noticed that in the Main Estimates it’s $20 billion. If I look at what is accessible to me in the defence policy, it should be $21.428 billion. If I look at the graph provided in the defence policy and was reproduced in the document released today, it looks like it should be closer to $22 billion.
I would like to have some good numbers instead of just trying to back into some numbers as to what you’re talking about. It would be appreciated if I could get those numbers.
Mr. Rochette: Do you want some information tonight?
Senator Marshall: Yes, it would be very great if I could get it tonight. It would be very good.
Mr. Rochette: It would be my pleasure.
Senator Marshall: There was an article today on CBC with a picture of the minister. It says:
National Defence fell $2.3 billion short in its plan to re-equip the military in the past year . . .
It also says that $6.2 billion in new capital was pledged. Can you give us some insight into that? Where is the $6.2 billion? When I look at the Main Estimates, I can only see $3 billion for capital.
Where is the $6.2 billion coming from? Where is the $2.3 billion that is short? Can you explain the article?
Mr. Rochette: I can do that. It’s a very good question. It needs a bit of explanation and all that.
The Chair: We’ll give you all the time you want.
Mr. Rochette: Thank you very much. I have nothing else to do tonight. You may regret that.
Regarding your first question about the funding for this year, as you mentioned, under the defence policy we talk about bringing in $21.428 billion. If you look at the mains, we have a total of $20.3 billion. There is a bit of a shortfall of $1 billion.
You have to keep in mind that if we look from last year’s mains to this year’s mains, we are bringing in $1.7 billion or $1.8 billion of new money already. You can see that we are progressing in our plan to bring the money.
If you look at last year, for example, where we had $18 billion for the mains, we brought in after that an additional $1.7 billion through supplementary estimates.
This is the same thing here. You have to keep in mind that it’s very important for me, as I mentioned in my speech, to make sure that we lapse as little as possible. If you look at three years ago, we had $2 billion of lapse. Last year, when I was before this committee, I mentioned that we were making great progress. We had reduced it to $1.5 billion for the previous year and then $850 million. This year we are closing last fiscal year and we are expecting it to be around $677 million, which is the maximum now, compared to $21 billion.
To be able to achieve that, we obtain the funding only when we need it. In the mains, we have what call the notional, the things where we need to maintain the base and things like that.
Then I work very closely with Mr. Finn looking at the capital project, because this is the most important part. We are saying, “Do you need that right now?” We cash manage. I use my supplementary estimates to bring the money that we need, but just enough so that I don’t do like what we were doing years ago.
I could have asked for $6 billion this year, right now, and lapsed $2 billion at the end, but what would be the purpose?
Senator Marshall: I understand what you’re doing with your budget. You’re bringing it in as you need it rather than lapsing.
Mr. Rochette: Exactly.
Senator Marshall: But where is the $6 billion coming from? I understand your explanation as to the mains or the Main Estimates. I understand how you do it in your budget.
However, when I look at the defence funding, the bit of financial information that I have in the new defence policy, there is no way I can determine from there that you have a problem being $2.3 billion short.
Where is that information coming from? The information must be out there because somebody has come up with this, but I do not see it and I haven’t been provided with this. Where is the data? Where is the financial information?
Mr. Rochette: On page 43 of the defence policy it provides only one amount. It’s combined, the operating and the capital. The breakdown is not part of it. We have only one amount.
Senator Marshall: Does operating decrease?
Mr. Rochette: No.
Senator Marshall: The operating is not decreasing.
Mr. Rochette: It keeps increasing and we spend it all. In fact, if I may, there are two points I would like to address. One is your point about the spending and the other is about the $2.3 billion.
The $2.3 billion is about last fiscal year. I will address that in the second part, and I will take a bit more time on this one.
For this year, as an example, we are bringing in $581 million of new money under the new defence policy. In that we have a $401 million operating budget and in the mains we currently have $293 million.
The difference is only $4.68 million, and it’s related to one of the initiatives called engagement. I do not have the funding in the mains because we still have to go to Treasury Board to get an approval to draw the funds.
Senator Marshall: They are not drawn down there.
Mr. Rochette: Exactly. I cannot draw the funds at this point.
Senator Marshall: Is that the new budget initiative?
Mr. Rochette: No, it’s not in the new budget initiative. The only items we have in the new budget initiative is $400,000 for gender-based violence.
On this one it is the same thing. We did not ask for it because we have to go with a submission to Treasury Board to get approval to draw the funding.
Senator Marshall: Because of the way you’re doing it, if somebody is looking for financial accountability information. You really need the breakdown for your long-term plan, right?
As you trying to move from your long-term plan into your more current plan, you really can’t follow the dollars. As I was saying the other night, I spend a lot of time on the government website looking at financial information. There is not a whole lot broken down there, so I would really appreciate the information you are to give me tonight.
I would find it very helpful because I can’t follow the dollars, and I would really like to be able to follow the dollars.
Mr. Rochette: That takes us to the interesting $2.3 billion story.
Senator Marshall: It is last year.
Mr. Rochette: Yes, last year, but you’re right. You have to know what was the breakdown on the operating and the capital sides.
Senator Marshall: In order to follow it, yes.
Mr. Rochette: You are correct on that. These articles are being written right now, based on the information they have. They were right about the capital. We brought in and expended an amount less than $2.3 billion. In fact, we did not lapse and we did not lose it.
Senator Marshall: You didn’t lapse because you never drew it in.
Mr. Rochette: Exactly.
Senator Marshall: You should have drawn it in.
Mr. Rochette: Keep in mind my point that at the end of the year I don’t want to bring money into the department if I am not going to spend it and it just lapses at the end of the year. It’s not good financial management to do that. I bring in only the money that I need.
If I may explain the $2.3 billion, everybody is saying that this is money we have not spent. It’s almost like saying, when we read something, that it’s lost.
First, the money is not lost. We never draw it. We have one capital investment fund for 20 years under the policy of $108 billion. From that money, we draw the money we need. If I don’t draw it, it stays in the account. If I have a project that I am saving money for, it stays in the account for new capabilities to invest.
If I have a project that is delayed, and now there is an inflation cost and I have to pay more for it, then I have to cash manage within my envelope.
This is the new financial framework we have under this policy. It works really well. We don’t lose that money.
When we look at the $2.3 billion perhaps I can use four boxes. We wanted to know exactly why we did not spend that money on these projects. When you look at the first box, it is really efficiency. We have projects that they have come in on time and under budget, or other projects that they came on budget but we did not have to pay for the contingency. We did not draw the contingency.
Senator Marshall: You can’t do many of them.
Mr. Rochette: There was a savings there. In fact, it’s $202 million of the $2.3 billion, or 10 per cent just there.
I will call my second box risk mitigation. Mr. Finn can expand more on this, so I will keep it simple. Sometimes we have some projects where we may pay for things like intellectual property.
We don’t know if we will pay it the first year, the second year or the third year. For me to make sure that we will not delay a project, I have to put money for intellectual property in the first year of the plan in case we have to pay it right away. It did not materialize.
This is $434 million, or 21 per cent of the $2.3 billion. This is where we are now.
Senator Marshall: That is the first two.
Mr. Rochette: The third box is a very interesting category: 42 per cent, or $855 million, is related to industry. These are projects that we are implementing. We have contracts for all kinds of reasons. I have a long list of all the capital projects and the reasons why.
For example, a company may bid on something and their third party went bankrupt. Now they have a dilly, or they had a dilly in production.
Under the management, we will not pay for goods or services that we asked for but did not receive.
We are holding that money and it is not lost, again. When Mr. Finn says yes, it’s as per the specs and we can pay and sign off, we will pay for that. It’s just money we are basically holding.
As Mr. Finn can explain, we are working to have even more relationships during the procurement process to make sure that we have good comprehension between the industry and ourselves, so that we all work together and we don’t have these dillies on some occasions.
Senator Marshall: I hear what you’re saying with the explanations, but some of that money must not have been drawn down because you were slow getting the projects under way.
It can’t all be intellectual property that you didn’t have to pay for.
Mr. Rochette: I have the fourth box. The last quarter, which is ours, is around 27 per cent and is really related to DND. It is very important to look at and understand that portion. Basically it is $556 million.
Unfortunately right now everybody is looking to DND for delivery of the policy based on our capital expenditures, but times have changed. You will understand, as an accountant, the option analysis under the new project management cycle that we use.
We use vote 1 operating, and we only start to use capital money at definition and implementation. What we have seen over the past year and a half is that we spend more and more time in the option analysis to do the work, and we use vote 1. We evaluate it on the capital but really we spend vote 1 money to advance the project and nobody sees that.
Senator Marshall: I can only conclude from what you have said that the bad press is at least partially of your own making because of the financial information you are providing.
I am an accountant. I am used to government documents, and I have trouble, so anybody else must have a lot of difficulty.
Mr. Rochette: I agree with you. In fact, we have talked about that. We have to find ways of communicating with people to make it transparent and clearer so that they understand these issues.
[Translation]
Senator Pratte: I have a short question and a longer one. In your presentation, Mr. Rochette, you said that you have determined the costs of all initiatives and of the identified capital expenditures, so all planned expenditures, as part of a 20-year plan. I am asking you this and I am confident that the answer is no: is that a public document that you could provide to us?
Mr. Rochette: I have the document. You can appreciate that the information in it pertains to our estimated costs for each capital project. As a result, we cannot disclose that information publicly, or else there would be no competition when we launch the bidding process to award contracts.
Senator Pratte: That is really unfortunate.
Mr. Rochette: On the other hand, I can assure that for all our plans, whether they pertain to the structure of the force or any increase to it, for all capital projects — we have 33 of them — and for all our projects, we have a cost estimate for each of them, based on the full cost, including acquisition, operating and maintenance costs. We have calculated everything. That is a first for a defence policy. Money is earmarked not only for the operating costs of the planned aircraft acquisitions— vote 1, operating expenditures —, but funding has been specifically allocated for equipment maintenance. We have heard a lot about buildings or equipment that become obsolete because we have not invested in their maintenance. Under the new policy, that funding has already been earmarked for projects, and everything is calculated.
Senator Pratte: Mr. Finn, it will not surprise you, if you have a good memory, that I am raising the issue of support ships. There are all kinds of information on the ship production schedule, especially for joint support ships. Can you provide an update on that schedule? I am especially interested in those ships, because I am interested in the Davie shipyard in particular. Can you give us a quick update?
Mr. Finn: Thank you for the question. We are actually negotiating the contract right now to begin construction soon. I am expecting the government will make an announcement very soon so work can begin later this year. The first ship should be delivered to the navy in fiscal year 2022-23, and the second the following year. Once again, these ships will be in service for more than 30 years.
Senator Pratte: Those are the planned delivery dates.
Mr. Finn: Correct, senator.
Senator Pratte: In the meantime, you still have the Asterix, and you have rented ships from Chile and Spain, is that correct?
Mr. Finn: That is something the navy has negotiated with all the other navies we work with. We did it for Chile and Spain, with the ships deployed, often through NATO, the United States, and so on. Just as the Asterix was recently used as a resupply ship for the U.S. Navy, we do the same thing with all those other navies.
Senator Pratte: You might not have the information at your fingertips, but it would be interesting if you could provide the committee with the operating or rental costs for the ships we are renting from foreign navies.
Finally, in November 2017, Senator Forest asked you the exact reasons for your decision not to build and rent the Obelix. No doubt you remember. We have not received a satisfactory answer. In February 2018, Senator Forest, who is unfortunately away for health reasons, asked the same question again. We finally got an answer from your minister this week. It was three fairly cryptic paragraphs, which, in other words, do not say much.
Honestly, it is very disappointing that it took three months to come up with three paragraphs. I am being honest. Senator Forest and I were expecting a much more complete answer. This is very important to people in the region and in the province. Could you please provide a more complete answer, ideally in less than three months? Thank you very much.
Vice-Admiral Hawco: You might find the answer short, but we tried to be succinct in preparing it.
[English]
What I would offer in trying to add value to understanding is the Canadian Armed Forces evaluation of the capability requirements for the navy. That is not the navy per se. I am talking about my organization in the chief of forces development.
We recognize there is an absolute requirement to have a warship that is able to support deployed operations in any region to which the government would deploy a task group.
In conducting its assessment from a maritime point of view, the RCN did an analysis based on a number of different models, such as the Tikey model, which essentially looks at probabalistic deployment requirements. It helps determine how many warships are needed.
That is part of the analysis which led to earlier understandings that 15 warships or 15 combatants was what was required for the surface fleet.
In considering what the replenishment requirements were, that led us to the form and shape of the joint support ship requirement. When recognizing at the time what the deployment requirements were as we began to understand when the joint support ship would likely be delivered, the RCN immediately started to look at smart scheduling, to which Mr. Finn alluded. He referred to specific arrangements with allies. You understand that from your own remarks, sir.
The navy also began to look at what the requirement would be from an interim point of view, and that is implied in the name, to ensure the navy was in a position to operate globally, recognizing that it had a deployability dimension to it.
I would like it emphasize the word “warship” because that confirms the vessel is able to operate in areas of potential conflict, in the vicinity of areas of potential conflicts, and where danger and concerns exist.
While we recognize the interim AOR has the ability to sustain and support force generation and other like activities, it lacks some of the critical deployability and certainty aspects the navy needs to be able to deliver Government of Canada missions.
In conclusion, in making that assessment, the navy’s assessment was that it needed an interim AOR, singular, in its determination. We see now, for example, the Asterix being prepared to reposition ultimately for operations in the Pacific theatre. While one has one interim AOR in conjunction with smart scheduling, arrangements with allies, routine operations and the ability of the interim AOR when necessary in a planned fashion to redeploy from one coast to the other, one interim AOR was the assessment of the requirement. It has been sustained in our subsequent analysis. We never really looked at the need for or validated the need for a second interim AOR.
Senator Pratte: First, what you have told me now is more than we have heard for the last six months. Second, the next time we ask you questions like that, don’t try to be succinct.
We are hardworking, intelligent legislators and parliamentarians. People are asking us questions. They want detailed answers. They want us to have the information, so give us all the information. We are ready to absorb it and we can understand it.
Senator Neufeld: I want to talk a bit about the department’s work in protecting Canadians against threats to and attacks on Canada.
I refer you to page 8 of our departmental plan for 2018-19. Departmental result 1.1 addresses the very issue of ensuring Canadians are protected against threats to and attacks on Canada.
One of your department’s three results indicator is the percentage of operations that meets stated objectives. Your target is 100 per cent. That is a good target to have in light of what we are dealing with here.
Actual results from the three consecutive fiscal years of 2014 to 2017 show your department has achieved a target of 100 per cent.
I have two questions. First, your department has a perfect track record, which I am pleased with. It will surely reassure Canadians.
How many operations were conducted during those three years that protected Canadians against threats to and attacks on Canada?
I am trying to get a sense of what 100 per cent really means. Are we talking about a few possible threats or attacks, a couple dozen or even more?
I understand some information may be classified and confidential, but can you give me some sense of 100 per cent: 100 per cent of what?
Second, can you give us an example of objectives that would fall within this type of result? How does the department determine if the stated objectives of an operation of such a nature were met?
Mr. Rochette: I will ask Vice-Admiral Hawco to address the operational requirements.
Vice-Admiral Hawco: When one thinks of the purpose behind having a military, one often begins to contextualize deployed operations, support of foreign policy, alliances and obligations.
There is no higher purpose or requirement for a military than defence of its own country, its own sovereignty and its own needs in the support of its people and the like.
I could refer to aspects like Operation ELEMENT, wherein the Canadian Armed Forces supported the Canada Border Services Agency in managing the migrant actions and requirements from the United States in most recent times.
I could talk as well about support from floods, fires and other natural disasters. That is not really the heart of your question, though. It is against foreign and existential threats.
Senator Neufeld: On the ground, yes.
Vice-Admiral Hawco: When we look at the protection of Canadian resources in terms of supporting Department of Fisheries and Oceans and at fishery patrols in support of the Davis Strait and things like that, I want to paint a slightly broader picture of someone who comes and takes your stuff. That is a threat to Canadian national interests.
Protecting our resources in our support to other government departments is an example of the type of operation we do on a regular basis.
In terms of military-specific threats, notwithstanding the tragic incidents on October 22, 2014, in regard to the acts of one individual which resulted in the attack on Parliament and the death of Mr. Cirillo at the National War Memorial, I also appreciate that our posture with NORAD.
More specifically, I could talk about existential threats, the types of responses we do to maintain our territorial integrity, which also resulted in our moving to expand our air defence identification zone in the North to ensure it mirrored and matched our territorial airspace. Those are examples of deployments that we would make our airspace to ensure we preserve territorial integrity.
I can’t go into greater detail than that. The binational NORAD responses for territorial integrity, actions taken to preserve our natural resources, and the readiness of our special joint task forces to support law enforcement activities on request under their specific mandates, are probably the right character of the types of operations we do. Perhaps in some other forum we can get into more detail about the specifics.
Senator Neufeld: Does that mean 100 a year, 200 a year, 50 a year or 20 a year? You are hitting 100 per cent, which is wonderful. It would be nice if we could build ships at 100 per cent.
Vice-Admiral Hawco: NORAD responds to a number of them. I am trying to figure out exactly how I can communicate in this forum. It is clearly not 500 in a given year. It is clearly not one.
We will need to find a way to communicate to you that there is a number in the middle. We would want to talk about how many responses NORAD conducts and how often we directly support the Canada Border Services Agency in the execution of its mandate, whether in the North, in northern waters or in support of the Department of Fisheries and Oceans and those sorts of incursions.
The Chair: Mr. Rochette or Vice-Admiral Hawco, could you provide information on that question? It hasn’t been answered.
Vice-Admiral Hawco: I will undertake to go through what are the security-specific aspects of that question because I believe the answer to that can be arranged.
Senator Neufeld: There must be something that drives 100 per cent every year.
Vice-Admiral Hawco: Yes, sir, absolutely. It would be a ready conclusion to say it is an absence of a catastrophe. That would be an unfair conclusion to draw, just to say it is 100 per cent because there has been no catastrophe.
The Chair: We are being very prudent here. That is fair. We respect that. Perhaps you could, through the clerk, provide the information. The clerk knows the process of due diligence also. On this question, I could also include comments made previously by Senator Pratte.
We are here and we have the same objective. It is all about transparency, accountability, predictability and reliability. Canadians have a right to know this. We appreciate the information that we are receiving from you tonight.
Senator Coyle: Thank you to Mr. Rochette and the whole panel for being here with us tonight. I am very pleased to see the level of support behind this whole budgetary discussion for the men and women of the Canadian Armed Forces.
I have a nephew who will be deployed next month to Iraq, so I am personally interested to hear about what you are doing.
My first question is on the operating side of things, and the second is on capital expenditure.
On the operating side, there is a very significant increase. Both elements are big increases over last year. You mentioned that the operating was largely due to the escalation in salaries, benefits, et cetera. That is a huge increase, by the way. I am curious about that.
You also mentioned new initiatives. How much is for new initiatives and how much is for the ongoing increases in salaries, benefits, et cetera?
Mr. Rochette: Basically, as you mentioned, we have a large increase in the operating fund. It is $1.35 billion, to be exact, compared to last year. It is quite substantial.
We were talking about the ongoing cost increases. We have roughly $14 billion in operating. As you can appreciate with inflation, even if you use 1.2 per cent for inflation, it increases rapidly. We have roughly $569 million related to inflation, ensuring that we maintain the costs and continuing to operate like we do from one year to another.
You will recall that we often referred in the past to the defence escalator, the 2 per cent increase that was given to us on a yearly basis. This is part of that.
The second part is the pay increase. As you know, many civilian collective agreements have been signed at a cost of $96 million.
The military pay comparison is based on the collective agreements to have parity, so there was also a pay increase for lieutenant-colonels and below, but not colonels and general officers above. These still have to come. They don’t have their pay increases. We talk about $201 million of the $1 billion.
You were talking about the new defence policy. On that, we have basically $293.5 million related to the new defence policy. You wanted to know about that portion also.
To give you a bit of a breakdown, we have four big initiatives under the defence policy. The first one is engagement. I mentioned earlier to Senator Marshall that it was one of the initiatives that we did not have funding for. It will be $4.68 million, but we have to wait to get an authority through a Treasury Board submission to draw the funding. You will hear about that in the supplementary estimates.
The second one is total health. We are asking for $15.63 million for that. This includes things like physical fitness. You heard the minister announce last year that we were giving $6.6 million to our family support centres. This is part of that.
We also have integrated conflict and complaint management. There is funding for that too.
We have Op HONOUR to ensure that all members of the forces and our civilian workforce are treated properly. There is some funding for that also.
The Return to Work programs, spiritual resilience and things like that are where we are putting the money. This is what we call total health. That is a new initiative. The total on that is $15.63 million.
After that there is the portion of the in-service support that I referred to before. When we have a capital asset, we ensure we will have funding to maintain the asset. We are bringing in money for that, $300.9 million.
Senator Pratte talked about the Asterisk. Some $123 million is the cost of our interim auxiliary oil ship. This is basically where we are spending our money.
We were supposed to bring a maximum $401 million in new money, and we have brought in in the mains $293 million. We are almost there. You will see the difference through the supplementary estimates.
Senator Coyle: My second question is on the capital side. I am from Nova Scotia. A lot of those ships are being built in Nova Scotia.
You mentioned, Mr. Finn, the prior situation of boom and bust in the industry. It is a concern still. We heard about the sequencing of the procurement of ships.
Is there a smooth procurement plan? I am particularly interested in the Irving shipyards in Halifax. Can you speak to that?
I know there have been issues ramping up your skilled workforce and then a gap, and then trying to ramp up again. The costs of that are quite extensive. Could you speak to that?
Mr. Finn: Yes, I can speak to it. I’ll speak specifically to Irving but the others are the same.
Part of the point of the strategy is in fact to try to load level the work, as we would call it. It is probably one of the biggest factors and the thing that has affected us.
In reference to Senator Eaton’s questions about ramping up and getting going, it is really understanding the impact of what is called green labour. As we talk to our allies and others in this area and bring in more experts from around the world, quite frankly, it is something that we underestimated. It is about a 30 per cent premium. You can take skilled labour, but if they have not built a ship as you bring them together it is what we go through.
We have seen that in both yards. We are now getting through that, which is why, for example, the efficiency of relative costs and hours of the first ship and the second ship is quite dramatic in the Arctic and offshore patrol ship. We are smoothing out the hours to ensure, to the best of our ability, that we get through the Arctic and offshore patrol ships and immediately start the surface combatants.
We have load levelled that as well. In our current estimate, there is a reduction. It doesn’t go to zero but there is a reduction.
We are looking at strategies. In fact, we met again this week with the shipyard to talk through that and to see what role they will play in it. There’s a view that we did not say we would fill their entire order book. They are engaged quite actively around the world to see other markets.
The big trade show is on today and tomorrow here at the Ernst & Young Centre. The shipyard is there talking to a number of foreign countries that are showing some interest in the product. We are looking at strategies to see how we could reduce or eliminate that gap, largely because we do not want to pay on surface combatants that green labour approach.
We are looking at the same things on the West Coast. Rather than looking at each of the projects almost as a stovepipe piece of work, we are looking across the work at the joint support ship and other things. Are there parts of it that we could advance to ensure that we are load levelling across all of the Coast Guard ships that the senator also mentioned?
For us, this is a big part of the strategy. Quite frankly, as we talk to our allies around the world in the U.S., the U.K. and Australia, all of them are active in managing shipyard production runs for this very reason.
Our colleague in the U.K. recently put in an order for some patrol vessels to explicitly fill a gap between the carriers and their next generation of global combat ships.
We are very active at it, selfishly for the purpose of ensuring that we deliver the ships on schedule, but also to make sure we reap the benefits of what we set out to do, which is to experience those learning curves over time.
If you drive down Barrington Street in Halifax and see what’s going on there, it is quite exciting as we start the fourth ship in September. We are rolling through this and reaping the benefits of what we have been trying to do for a number of years.
Senator Andreychuk: I am not going to say I understand the figures in the Main Estimates as some of my colleagues do, but I am concerned when I get a presentation that talks about these Main Estimates reflecting a determined and comprehensive effort to direct and allocate defence dollars responsibly and appropriately across a broad spectrum of related activities in support of defined corporate priorities during the fiscal year.
They are good statements of purpose, but what I am looking for is: What is the program? What are the dollars attached to it? What are the targets? Are you meeting them?
I looked at something that says you have 33 new indicators coming in your new national plan in 2018-19. I don’t know if there are past results on those indicators, or are they now framed in a way that I won’t be able to find the previous data? In this 20-year plan and your forward departmental plan, how are we to assess the performance indicators?
The people I deal with and certainly work closely with on NATO issues, to use one example, the program on the defence team has only one target, as I understand, to be achieved in 2018-19. Most of the targets aren’t even defined, and some of them will not be defined until March 31, 2020.
They are issues of great importance to us as parliamentarians. One of the indicators is the percentage of military personnel who are medically fit for occupation. It concerns me, when we send out people in harm’s way or in any defence, whether they are equipped physically, materially and mentally, and whether they are trained to take the job.
I need to know that objective and how it is progressing. If I am told in a document that it probably won’t be determined until March 2021 under this new plan, what are we doing until 2021? What assurance do I have?
My second question is on the percentage of military personnel who feel that the health and well-being of the defence team are well supported. How do I know what kind of support? Again, it will be determined in March.
I am asking for civilian oversight. I never want to know anything that I shouldn’t know. I know there is a barrier to those things, but there has to be a process that I can understand and targets that I can see to know if you have achieved them.
It shouldn’t be a puzzle. Rather than coming to a meeting and getting a little here, a little there and trying to put it together, it should be a continuum of achievements if we were to trust the process.
The Chair: I think there were three questions in there.
Senator Andreychuk: I think there were more than that.
I want civilian oversight in a reasonable way, and it shouldn’t depend on me. Whoever sits in these chairs or any other parliamentarian should have this oversight.
Mr. Rochette: I will try to be brief in answering your question.
The reason we are looking at 2020-21 is that a new policy on results was published by central agencies that we have to deal with.
Before we were talking about program activity indicators that we were using. We moved from that to a policy on results framework.
We now have a departmental plan that is based on the policy. We are looking at what we want to achieve going forward. At the end of the fiscal year, we will have a report on results that look at what we said we would be doing and at what we have done. Have we accomplished what we said? If not, why? That is the new policy.
As you see, it will take time because we developed the framework for the first time this year. We are putting in place all the financial systems to ensure we can gather that information. We have to dig down now from the results of what we wanted to achieve and have some subindicators that we can get more information.
It takes time, and it is part of the new policy now. It will take a couple of years to do it.
Senator Andreychuk: I have one quick supplementary question. I don’t have much time. I need to be sure that I am doing my job for accountability today. You are telling me the old ones are being revamped and the new ones are not yet in place, so are we in limbo for the next few years?
Mr. Rochette: We have the new one but it is only at the first level. We talk about the plan. You mentioned that it was very high level. Yes, because it is our first year. Next year you will see it at a deeper level with more subindicators.
Senator Andreychuk: In the meantime is the problem.
Mr. Rochette: Yes. We have that but we also have the new defence policy. We said we had specific targets and projects that we wanted to establish. We’ll have to be able to communicate that.
Senator Jaffer: The recruitment this year is an extra 3,500, right? How much is the recruitment for this year?
Vice-Admiral Hawco: The 3,500 number you’re referring to is the authorized increase to the size of the Canadian Armed Forces as part of the defence policy.
Strong, Secure, Engaged indicated the government intended to grow the Canadian Armed Forces regular force from 68,000 to 71,500. That will be conducted over a number of years between 2019 and 2024-25. It will grow by 350 and then by successive jumps up to get to 3,500.
Mr. Rochette: I can provide you the exact the breakdown by years.
Senator Jaffer: When I read the press release and I see the figures, it talks about what I was saying to you about the GBA. It was talking about how to include women and that women were highlighted.
From everything I am hearing, it’s not just the women. It’s the GBA+ as well. I see estimates for women, but I do not see them for the plus categories.
Maybe I am not reading it properly and it’s my fault. I see many places in the minister’s letter where he talks about diversity, but then I do not see it in the estimates. Maybe I am not seeing it correctly.
Vice-Admiral Hawco: From a Canadian Armed Forces point of view, we have a self-identification approach. It would be less appropriate to start counting by type and stripe.
Senator Jaffer: No, I am not asking for that.
Vice-Admiral Hawco: That provides a character to why we have certain types of data and richness and are perhaps not able to focus and explain. That’s part of the answer.
Senator Jaffer: You talk about GBA+, but I do not see GBA+ being translated into the plus categories like race, religion, age or geography; I only see it in the estimates for women.
Vice-Admiral Hawco: In one short burst, we have many specific recruiting areas like Women in Force and our Raven programs and like our recognition and engagement with specific communities and the elders in those communities. That is a very deep and active part of our recruiting program. It is looking and targeting to achieve an effect to make sure the Canadian Armed Forces represent Canada.
[Translation]
Senator Moncion: Do you have a plan for your inventory that indicates what you have purchased or future acquisitions? We have investment plans in dollars. I was looking at your plan and thinking it might be indicated somewhere, but I could not find it. Is it there?
Mr. Rochette: You mean as to future acquisitions?
Senator Moncion: Yes.
Mr. Rochette: As I said earlier, we have a plan. In developing the new defence policy, we identified 333 capital projects. We worked with our military colleagues as to the acquisitions. We developed a plan to determine the year in which we would need a new capacity, such as a replacement ship or a new piece of equipment, in order to verify whether we could purchase it in a timely manner. Once I get the information, we do a cost estimate for the year of purchase, including inflation for future years. Then we calculate what we intend to spend each year.
It is a 20-year plan. When I had my house custom built, there were hundreds of changes. So you can imagine that, over 20 years, although there is a plan, many adjustments will have to be made because many things will change.
Senator Moncion: You are still taking about dollars. I would like to have the list.
Mr. Finn: The minister announced our investment plan this morning. That database is now public and accessible. It sets out all future projects.
Senator Moncion: So the list is accessible.
Mr. Finn: Yes, the plan is now public and accessible.
Senator Moncion: I will try to find it before you leave.
The Chair: Can you send the information to the clerk, please?
Mr. Rochette: We can give you the web address.
The Chair: Thank you.
[English]
Senator Eaton: Just to finish with that, do they have when everything will be delivered? Are there finished dates on the plan?
Mr. Finn: There are for each of them. Our minister, at the trade show at CANSEC this morning at breakfast, announced it.
It is our investment plan. It shows the multiple phases going out. As our chief financial officer indicated, it shows budgets as a band again to make sure we can preserve a competitive environment.
Senator Eaton: My last question to you is on icebreakers. You can educate me again, Mr. Finn.
The CBC apparently reported in October that the federal government had warned that a failure to replace the icebreaker fleet could result in the ports of Montreal and Quebec City being partly cut off in the winter months.
I think they are now saying 15 to 18 years to bring it an icebreaker for the Arctic on track, so please disabuse me here.
Mr. Finn: I can’t, senator. These are vessels that belong to the Canadian Coast Guard. They are not an arm of the Department of National Defence. They are not projects that we work on or look at.
Senator Eaton: When the admiral talks about territorial integrity, isn’t an icebreaker in the Arctic, with the Chinese sending their research ships up there, part of our territorial integrity to have icebreakers up there in the winter?
Again, is it a Coast Guard issue?
Mr. Finn: It is a Coast Guard issue, senator.
Vice-Admiral Hawco: There are multiple ways of maintaining awareness of traffic in the Arctic and having the ability to physically go in at certain times of the year.
Senator Eaton: We don’t have to have a presence there, is what you’re saying.
Vice-Admiral Hawco: To know what is going on, there are space-based assets as an example.
Senator Eaton: But they don’t think we have to have a presence there.
Vice-Admiral Hawco: No, I didn’t say that.
Senator Eaton: You said you don’t have to have a presence there.
Vice-Admiral Hawco: No. I said to know what is going on.
Senator Eaton: To know what is going on, but shouldn’t you have a presence there?
Vice-Admiral Hawco: That is a different question. As Mr. Finn indicated —
Senator Eaton: That’s not your concern; it’s the Coast Guard’s.
Vice-Admiral Hawco: No.
Senator Eaton: Didn’t he just say that? Didn’t he just say that icebreakers are not our concern; they are the Coast Guard’s?
Mr. Finn: I said we don’t manage those projects. You’re asking me specific questions about the capabilities of the Coast Guard.
Senator Eaton: Wouldn’t you know about the capabilities of the icebreakers if you’re not in charge of their procurement?
Mr. Finn: I would not know. Nor would they know the capabilities of our war ships and patrol ships, et cetera.
Senator Eaton: Interesting.
The Chair: They are two different departments.
Senator Eaton: Maybe they should talk to each other.
The Chair: Honourable senators, I want to say thank you, on behalf of Finance Committee, to Mr. Rochette, Vice-Admiral Hawco, Mr. Finn and Ms. Van Allen.
We have had a lot more clarity this evening. It has been very instructive, educational and informative. The objective of it is basically the same objective that you have: transparency, accountability, predictability and reliability.
We want to say to our Armed Forces men and women, thank you for the well-done job that you do for Canadians.
(The committee continued in camera.)