NDVA Committee Meeting

STANDING COMMITTEE ON NATIONAL DEFENCE AND VETERANS AFFAIRS

COMITÉ PERMANENT DE LA DÉFENSE NATIONALE ET DES ANCIENS COMBATTANTS

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, March 15, 2001

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[English]

The Chair (Mr. David Pratt (Nepean—Carleton, Lib.)): I'd like to call the meeting to order.

The principal item we have on the agenda is the procurement study passed last June by the committee. It was felt appropriate that we have a briefing, especially for the new members of the committee, so that they would have some idea of what is in the report and understand the thinking that went into some of the recommendations.

I believe I mentioned this, but for those of you who weren't here at the last meeting, under the Standing Orders the required notice period is 150 days, and that period expired when the election was called. So it's necessary for us to reintroduce the report and bring it formally to the attention of the government. I very much hope it won't take 150 days to get a response back, since they've had nine or ten months to examine the content of the report.

So what we're doing here is largely a pro forma exercise. But I think it's important, given the continuing importance of the issue of procurement to defence, that we have a little refresher on the subject. Our trusty researcher, Mr. Wolf Koerner, has been kind enough to prepare a small presentation on this. I think what we could do, as well, is respond to any questions people may have.

I want to emphasize, though—and I think this is important—that it's not up to us, as part of this new Parliament, I think, to rewrite this report in any respect. I think it's important for us to deal with the report, move it on to the House, and get the response we were looking for initially on the recommendations.

With that, I will turn the floor over to Mr. Koerner, and we'll entertain some questions afterwards.

Mr. Wilfert, you have...

Mr. Bryon Wilfert (Oak Ridges, Lib.): Could I ask you a question pertaining to the remarks you just made? At the heritage committee we had a similar situation, where 25 recommendations had gone to the department and then because of the election... Then we had an assistant deputy minister before us, who gave us what I would consider an unacceptable verbal presentation. I then requested, through the chair, that we get, as we did, an agreement from the department that they would provide in writing their response to 23 of the recommendations the department accepted, and for the two they did not they would provide the rationale.

I suggest to you that in order to speed it up, we could try a similar approach, by asking the department if in fact... Because, presumably, they have had this report for some time, as you quite rightly point out, they should be able to respond to us very expeditiously in writing as to which recommendations they've accepted and which ones, if any, they have not, giving the rationale. Then we won't have to wait too long. I presume they'll be able to respond fairly quickly.

The Chair: If it is the wish of the committee that the chair write that sort of a letter, I'll be happy to do that.

Mr. Bryon Wilfert: I put it out on the table, and if people are willing to do that, then... As I said, the Department of Heritage had no difficulty responding quite quickly after our meeting on Tuesday.

The Chair: Mr. Hanger.

Mr. Art Hanger (Calgary Northeast, CA): In reference to that comment, there may be further clarification to expedite the process. It is suggested that a letter be forwarded to the government for their response in writing. Is that what you're saying?

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Mr. Bryon Wilfert: I'm saying, yes—through you, Mr. Chairman—I would want a response to all of these recommendations in writing. And I presume that is not very difficult, since they have had these recommendations for quite a while.

Mr. Art Hanger: And then what did the committee do with the response?

Mr. Bryon Wilfert: That will be up to the will of the committee, but presumably, once we look at the recommendations, we'll see what the status of each of them is, what the government is prepared to do, and move along from there.

Mr. Art Hanger: At first blush, that might not be a bad idea, but I'm going to refer to one recommendation and some comments in the preamble to it, number 38. The comments in the preamble say:

It is the opinion of this committee that the failure to replace the Sea King helicopter epitomizes everything that is wrong with the procurement process.

The recommendation is

that the government finalize this procurement strategy and proceed immediately to tender the contract for the replacement of the Sea King helicopter.

I would have to suggest this is a burning issue. Undoubtedly, the government will say, this is great, we agree with it, we're going to accept that recommendation—and then nothing more happens with the recommendation or the fact that the government responded in a positive way, I suppose, to the recommendation. I think there's an obligation on this committee to find out exactly what happened in this procurement process, even—and I agree with the suggestion—to bring this kind of a comment about.

If the committee all of a sudden decides the government responded positively to all these concerns—what more is there to do, or what more should we do?—I have a problem with that. I would suggest that most in the opposition side would have. We should be delving into many of these recommendations one at a time, and not to rewrite them.

The Chair: The suggestion is not there that we rewrite—

Mr. Art Hanger: Absolutely not.

The Chair: —the committee recommendations.

Mr. Art Hanger: No, and I'm not saying that.

The Chair: But also—and I must say this—we cannot prejudge what sort of a response—

Mr. Art Hanger: Absolutely.

The Chair: —the government is going to come back with. I think it's our responsibility at this point, once again, in a formal way, to bring the matter to the attention of the government, which is what is proposed. The motion I have in front of me, in connection with dealing with this—and once we get through the briefing and members' questions on the content, then we can send it off—is:

That the Committee, having considered the Third Report of the Standing Committee on National Defence and Veterans Affairs entitled “Procurement Study” which was tabled in the House on June 14, 2000, and having concurred in its findings, in accordance with the provisions of Standing Order 109, requests that the Government provide a comprehensive response to this report; and, that the Chair be authorized to report this request to the House as the FIRST REPORT of the Committee.

It's a fairly routine motion, as you see, and I would say, in many respects, pro forma.

Mr. Art Hanger: Again, I want clarification, more than anything. If a comprehensive response means we end up with a written submission as to the government's response, and that's as far as it goes, I have a problem. There's a need here for examination too, and a definite response on some of these recommendations that would require officials to attend.

Am I missing something here?

The Chair: I'll hear from another few members of the committee, but we don't want to prolong this too much.

Mrs. Longfield.

Mrs. Judi Longfield (Whitby—Ajax, Lib.): I didn't want to prejudge what the response to the report would be. I want them to report on it, and once we have the report in our hand, then we can make those kinds of determinations about whether we want them to go back further or whether we want to get into a fuller discussion of their response.

But I think the first thing is to get this tabled, so that there is a response, and then deal with it. And I might suggest a cover letter to summarize some of the things Mr. Wilfert said: we understand that probably this is going to come a lot faster than it normally would, and we're looking for a very speedy response, and leave it at that. And then deal with the response when we get it.

The Chair: Okay. Mr. Price, and then Mrs. Wayne.

Mr. David Price (Compton—Stanstead, Lib.): I go along with exactly what Judi and Bryon have said. I think it's important. That's what we're here for today, to get this moving along, to get it back to us as soon as possible. Then it will be up to the committee to sit and look at it and say, okay, we don't agree with certain things, and then we'll decide what to do on it. But we can't prejudge it.

The Chair: Mrs. Wayne.

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Mrs. Elsie Wayne (Saint John, PC): We tabled this document in June 2000. I know the election was called in November, but we truly should have had a response before this. I have a major concern as well when it comes to the Sea King situation and what is happening there.

If we were to adopt this motion, how long do you think it would be before a response would be coming back to this committee? Approximately how long would it take?

The Chair: I certainly don't think it would take 150 days. I'm not in a position to guess at how long it would take the minister to respond. They've obviously had the report for some time now, nine or ten months, so I think we could expect something back quickly. As was indicated, if it's the desire of the committee that I write a letter asking for the earliest possible response, I'm happy to do that.

As well, by way of a point of information here, I think it's important to note in connection with the quality of life study that was done, we did get a comprehensive response back from the government. The quality of life report was obviously a big one. This is a significant report as well. Whether we would get the same level of response back, I don't know. I hope it would be comprehensive, but I know as well that the minister has taken the issue of procurement very seriously. He has set up an advisory committee with the Canadian Defence Industries Association. They're actively looking at how to streamline procurement. So I think a lot of the issues that are dealt with in this report have been issues of ongoing interest to the department over the last year.

Mrs. Elsie Wayne: The other issue was, if my memory serves me correctly, I thought we put in a recommendation that we should have an ongoing shipbuilding policy for our military.

Mr. Wolfgang Koerner (Committee Researcher): It's in there.

Mrs. Elsie Wayne: That's what I thought.

Mr. Wolfgang Koerner: There is a suggestion that we have a national shipbuilding policy strategy.

Mrs. Elsie Wayne: That's right.

Mr. Wolfgang Koerner: There's also a recommendation that we move to what they call a roll-on process of procurement so that we don't wait until the last moment. All those things are still in there.

Mrs. Elsie Wayne: The thing I'm worried about is this. As you know, the Minister of Industry is now looking at a national shipbuilding policy, and what I want to know is, on the recommendation we had in here for our military, is that separate from what he is bringing forth, or are they working on this thing together?

I got stopped just before I came here, about my shipyard, which Trudeau and Mulroney both built to build the ships in. I'm told already that the bloody shipyard is closing; it's going to be gone. I'm worried sick about that. If this is going to take three or four or five more months, there's no way we could allow that to happen.

Mr. Wolfgang Koerner: Realistically, I think we'll hear from the government before the shipbuilding strategy is put in place, given the way these things work. The way procurement works also, the Department of Industry will be consulting with the Department of National Defence. So I think there we're looking quite a way down the road. If this report is tabled quickly—maybe we should just move a motion—we'll get a response.

Mrs. Elsie Wayne: I'm concerned because when the committee came to Saint John, New Brunswick, and when I spoke to the committee and told them about this report, the committee didn't know anything about the National Defence and Veterans Affairs report saying there should be an ongoing shipbuilding policy for us to build our ships here in Canada. They said, we didn't even know this; we haven't heard it.

The Chair: Okay.

Mrs. Judi Longfield: It died.

Mrs. Elsie Wayne: What died?

Mrs. Judi Longfield: It's not there.

The Chair: I want to hear from Mr. Bachand. He has asked to be recognized.

[Translation]

Mr. Claude Bachand (Saint-Jean, BQ): Personally, I think the situation we are facing is the following. In the worst case scenario, we will have to wait 150 days before the government answers us. We are doing some parliamentary work to accelerate proceedings, but this is the parliamentary work that we must do as parliamentarians.

I think that as parliamentarians we also have political work to do. Out of the 38 recommendations I can at any given time choose the 17th recommendation, go before the House of Commons and put a question about it. I don't have to wait for the government's reaction. I can at any time do my political work. I have never waited for the 150-day period to pass, for the government's answer, to do my political work. I have seen reports before and I know how things go. Often, a report is put on the shelf and people forget about it.

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So, while waiting for the answer, I can go ahead and do some political work. I can raise questions in the House, hold press conferences, make public statements. This does not prevent me from doing my political work in any way. However, I agree entirely with my colleagues, and I would like to obtain answers quickly so as to have a little more ammunition to help me in my political work. But I am not paralyzed because the government has not replied to this report.

[English]

The Chair: Okay.

Mr. Wilfert, and then Mr. Provenzano.

Mr. Bryon Wilfert: I realize I'm new to the committee, but I hope we're not off to a bad start here.

The Chair: Not necessarily.

Mr. Bryon Wilfert: Let me repeat, for somebody who's trying to make this quick, we seem to be dragging it out. It's very simple, no hidden agendas. All I want is what I saw happen at Heritage. It was unacceptable that we did not have a response. Had there been no election, we would have had a response to this. As to whether we like the response, that is up to this committee to decide. I'm suggesting that you send a letter contacting the department, saying we want a response, pronto—

The Chair: That seems to be the consensus of the committee.

Mr. Bryon Wilfert: —and then we will evaluate. We don't have to wait 50 or 100 or 150 days; I am sure they will have it ready and they will be here. Then, if we like or don't like certain things, that will be up to us to decide.

The Chair: Yes.

Mr. Bryon Wilfert: But I'd just like to get it on the table and move on it.

The Chair: Okay.

Mr. Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): First of all, I thank the chair for providing a copy of the procurement study. It makes interesting reading.

I realize perhaps no one has the answer now, but on page 7 of the procurement policy, there's reference to defining operational requirements and day-to-day management of its procurements.

The Chair: Mr. Provenzano, if I could interrupt you right here, we haven't had the briefing yet from Mr. Koerner in terms of the content of the report. We're going to go to questions on the content, but we're dealing with some procedural issues right now surrounding—

Mr. Carmen Provenzano: Okay. There's something missing, which I'll be able to bring up at some point.

The Chair: Absolutely.

Mr. Price.

Mr. David Price: I think it's important to mention very briefly that the minister has mentioned a couple of times now that he is looking for this report because he wants to streamline. I think you mentioned that. So he's going to want to move it fast, too, and that means he's going to push his department.

The Chair: Yes, and if can I add also, again by way of a point of information, the issue we're going to be looking at, as it seems to be the general consensus of the committee, is the operational readiness of the Canadian Forces. Many of these procurement issues go right to the heart of some of the operational readiness issues as well. So it's not as though we're tabling this and sending it off to never-never land. This stuff is going to be with us constantly over the next year, two years, three years, possibly four years, or maybe even five years.

Mr. Hanger.

Mr. Art Hanger: I have to concur with Mr. Wilfert. I don't want to hold this up any longer either. All I want is some sort of assurance that once we have a response from the government, we're not going to lose the ability as a committee to be able to question at length any of these items. That's all I want. I don't want that motion to take care of the idea that we're getting a comprehensive response and they chose to do it in writing and there's no other avenue of discussion.

The Chair: Yes.

Mr. Wolfgang Koerner: No, it won't. The report has to be tabled to get a response. Even along with the letter, that can speed it up. But then we can do what we did with the quality of life study, and that is, once we have the responses, call the department in and they can speak to it.

So getting the response from the House in no way restricts any further questioning or study that you might want to undertake. It certainly doesn't prevent the committee from looking at the helicopter issue on its own.

The Chair: Okay.

Mr. O'Reilly.

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): I want to assure the committee that, as parliamentary secretary, I've talked to the minister and he indicated that he is waiting for the report. He wants to deal with it and he wants the department to deal with it. He can't deal with it unless we forward it to him from this committee. Then if we wish to call witnesses and examine some of the recommendations that come back to us, I think that's up to the committee, and there's no reason we shouldn't.

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The Chair: Okay. With that said, we'll get on to Mr. Koerner.

Mr. Wolfgang Koerner: Shall I continue with this?

The Chair: Do you want the motion to be dealt with?

Mrs. Judi Longfield: Yes.

The Chair: Do we have a mover?

Since Mr. Wilfert was asking all the questions, it has been moved by Mr. Wilfert and seconded by Mrs. Wayne.

(Motion agreed to)

Mr. Wolfgang Koerner: Should we just entertain questions, or do you want me to go through this?

Mr. John O'Reilly: You're not getting off that easily.

Mr. Wolfgang Koerner: Thank you. I was hoping to have my first beer of the evening here.

Some hon. members: Oh, oh!

Mr. Wolfgang Koerner: I was on the fringes of this study, so I thought I would go through it using fairly broad breaststrokes.

As you probably recall, the study was undertaken in part because of suggestions made by the Auditor General and some of the concerns he had with the procurement process. During the quality of life study, we also heard about problems with boots and with getting clothing, not having enough munitions for the troops, etc. These considerations were, I think, important for the committee. I don't think they were ignored over the period of time.

But when we sat down to look at the matter of procurement, the committee was careful to maintain a distinction between—I think this is important in reading the report and seeing where the report is going—procurement problems that largely stem from budget deficiencies—that is, structural problems, which we can't always solve—and the problem of procurement as process and administration. It's the problem of procurement as process and administration we largely dealt with. We didn't ignore the former, but we decided to concentrate largely on the latter.

The basic intent of the report—and I think it does this fairly well, having read it again—was to make recommendations with a view to simply ensuring that the procurement process is transparent, fair, and efficient. In this regard I think it would also be fair to say we didn't find huge problems but we did find significant irritants, and certainly significant irritants on the part of the defence community. That also needs to be qualified by the fact that I think the report addresses the helicopter issue straight on. We see that as having been a major problem of the procurement structure.

In terms of structural deficiencies, right at the outset the report notes that the department must have some form of stable and predictable budget in order to effectively plan future purchases. This is something the department hasn't had for a long time, and the committee hopes this is something the department is going to put in place.

The report also recognizes that we have to move beyond the current design to cost strategy. Funds need to be determined by capability requirements—we're very strong on that—and these are determined by what the Canadian Forces are required to do. That in turn is defined by government policy and for the time being still the white paper.

Another of the more important recommendations is that in recommendation 3 the report says that we hope the department will be able to increase the capital projects portion of its budget to 23% of the total budget. That's important and significant. Right now we're at about 18%. However, it's still fairly modest. Most analysts would say that about 30% to 35% is healthy. The Swedes have managed to bring their capital portion of the budget up to 50%, and the Europeans are working along those lines as well. To help in this regard, the report recommends that DND be able to keep some of the profits generated by the divestiture of its assets. We'll have to see whether or not the government will go along with that.

In terms of issues of process and transparency, we argue that in order to ensure better transparency, all major crown projects over $100 million should be referred to this committee not for approval but for scrutiny. Again, there is a good precedent. The German Bundestag committee has to approve all major crown projects. We're not all the way there, but I think we're at least moving in the right direction with that recommendation.

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Along with this we also recommend that the government look at increasing approval levels. Right now the minister can approve anything up to a value of $30 million; Treasury Board, $30 million to $100 million; and cabinet has to approve everything from $100 million and above. In terms of today's procurement process, $30 million isn't a lot of money. If that number were raised, I think it would help the department to just move things along.

We also talk about better interdepartmental coordination and ask that consideration be given to folding the contracting functions of Public Works directly into the Department of National Defence. Treasury Board won't like that. It means the Department of National Defence would become the prime purchaser for procurement. Again, that would be an efficiency advantage, and it would also help the department to focus exclusively on defence objectives.

There are two recommendations with regard to combat scenarios, recommendations 9 and 10. These are scenarios the government draws up in order to measure the kinds of equipment it will need in the future. We suggest that these be completed. According to testimony by Admiral Garnett the other day, that has been done, and apparently they are public.

Recommendation 12 calls for a review of defence and security policy and an update of the white paper to better match policy with operational requirements. I suspect that will be a big part of our next study on operational requirements, the match of policy and operational requirements and equipment, of course.

Recommendation 13 asks for a clear timeline from the department with regard to long-term equipment needs. Again, this is something that has been difficult to get. It's something that has been difficult for the department to do given the cutbacks in funding over the last number of years.

We also asked—I think it was at the suggestion of Mr. Price—that the department report on a regular basis to the committee.

Mrs. Elsie Wayne: He was smart.

Mr. Wolfgang Koerner: I'm almost done.

In recommendations 20 and 21 we simply want to ensure that managers in the procurement process are properly trained. One of the problems with staffers at DND is that they are like some of the people at Foreign Affairs: they have one job one day and another job six months later and are on a continuing learning curve. The department has already started working on this. It has a good system, and it's probably one of the best educators around. But we want to make sure the managers in place do have the proper credentials.

A minor recommendation also suggests that the department establish a senior review committee of sole-source contracts. This is something Treasury Board doesn't like to do. It has avoided it, but it has been a consistent recommendation on the part of the Auditor General for National Defence and other departments.

In terms of industry relations, we suggest that the department consider establishing a defence industry advisory board. The purpose of this would be to more formally connect industry to the department. Consultations go on now with regard to requests for proposals. Industry can comment on them, but there is no formal process. Britain, under its smart procurement policy, formalized this process, and it seems to be working extremely well. The Germans and the French now insist that industries sign formal agreements with the department and the government.

With regard to industrial regional benefits, we simply recommend that when these are taken into account, of course operational requirements always take precedence.

Finally, the major irritant on the part of industry was with regard to the statement of requirements and requests for proposals. What industry found was that these are often too long, too complex, too technical, and too specific, and it takes them an inordinate amount of time to respond to them. It also takes the department an inordinate amount of time to write these things up. Currently, the department is emphasizing performance specifications as opposed to technical specifications, and it is trying to streamline the process. But we recommend that they move along with this a little more quickly and that from now on their statements of requirements, especially their RFPs, be written in clear language and be manageable. Part of the industry concern also was that some of the companies, when they read the RFPs, thought they were almost being sidelined when the intent of the department in fact was not to do so.

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Finally, of course, the most important recommendation—number 30—is that we establish a procurement plan for Canadian ship construction and that those ships I think be built in New Brunswick... I'm not sure—

Some hon. members: Oh, oh!

Mr. Wolfgang Koerner: —Halifax, yes—

Mrs. Elsie Wayne: Saint John.

Mr. Wolfgang Koerner: —Saint John... sorry.

Part of that was also the idea that we move to a rolling procurement process. That's not only important for the ships; it's also important for the F-18s, which are in their mid-life upgrade. If we're going to move with the new joint strike fighter, then it's important that the process get in place as early as possible.

Those are the broad themes in the report. Reading it again, I think it's a good report. I think the Department of Industry will be interested in hearing it, and we'll certainly look forward to the government's response.

I think, given the discussion that went around the table, the relationship—just an editorial comment—between this committee and the department is such that the department will try to do a good job on this. I have worked for other committees and this department takes this committee seriously.

Thank you.

The Chair: Mr. Provenzano, a question.

Mr. Carmen Provenzano: Yes. On page 7—I think it's just an omission, but I'm not sure—the statement is made that the Department of National Defence as a sponsoring department is responsible for defining operational requirements and the day-to-day management of its procurements. Added to these is Industry Canada, which administers the government's industrial and regional benefits policy in concert with the regional agencies. Then it sets out those regional agencies: the Atlantic Canada Opportunities Agency, Western Economic Diversification, and Canada Economic Development Agency for the Regions of Quebec.

In actual fact, Mr. Chair, there is another agency—FedNor—for the northern Ontario region. As I said, I'm not sure of the significance of its being left out of that litany, but I would rather see FedNor included than excluded. Whatever the implication might be, it is a bona fide development agency of the federal government in northern Ontario.

The Chair: Yes.

Mr. Wolfgang Koerner: That's easy to do. For some of those concerns that are largely editorial, before we table the report, we can put an addendum in with a page of the addition rather than printing the whole report again.

Mr. Carmen Provenzano: Should I raise it again then?

The Chair: No. I think you've raised it and the point's been taken.

Mr. John O'Reilly: Mr. Chairman, I think FedNor was originally in there; it was discussed somewhere.

Mrs. Judi Longfield: We certainly talked about it.

Mr. Wolfgang Koerner: Maybe it was just an omission or it disappeared during the production process.

Mr. John O'Reilly: I'm pretty sure it was in there to start with... perhaps not in the report, but it was certainly discussed.

The Chair: Mrs. Wayne.

Mrs. Elsie Wayne: Mr. Chair, I'm wondering if we shouldn't move a motion in view of sections 14, 30, and 38 to send a copy of this to the industry minister, pointing out that the Department of National Defence committee should determine the value of adopting the ongoing rolling approach to major capital projects.

According to the minister—I spoke to him yesterday—he said it would probably be another month or a month and a half before he comes in with the shipbuilding policy. So I think this should be taken into consideration.

The Chair: Okay. Actually, from that standpoint, there might be some wisdom in sending a copy of the report to all of the ministers who are affected, including PWGSC, Foreign Affairs, etc.

Mrs. Elsie Wayne: That's what I'm asking, Mr. Chair.

The Chair: Is that the direction of this committee?

Mr. Wolfgang Koerner: I think we should do that. The other thing is when the responses to these reports are written, because other departments are involved, the response will be done through an interdepartmental committee. I suspect that's how the initial response will be.

The Chair: I think Mrs. Wayne's point is well taken in that it's important to bring the report to the attention of the particular ministers involved. The minister, if it's dealt with by an interdepartmental committee, may not see the—

Mrs. Elsie Wayne: That's right.

The Chair: Mr. Stoffer.

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Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP): Is it possible to go onto a different subject, to discuss a different page within this report?

The Chair: Yes. I think we've dealt with the FedNor issue.

Go ahead.

Mr. Peter Stoffer: My colleague, obviously, is no longer here. I haven't spoken to him yet.

As you know, I'm quite concerned about alternate service deliveries. I'm wondering if the chair or the researcher can advise. Was the discussion at all about, if alternate service delivery takes place, what will happen to the employees who become displaced?

The other day when the minister was here, they discussed what they were going to do in terms of training, maybe HRDC programs, or whatever. But we don't have that in this report.

Mrs. Judi Longfield: No. It wasn't part of the study.

Mr. Peter Stoffer: The thing is, if you're going to proceed, it's all the discussion of what is core. As you know, we debated the other day that I think civilian workers attached to military establishments should be defined as core.

Now we can debate that if it's not core. But if indeed civilian workers are going to lose their jobs to outsourcing or alternate service deliveries, we as a committee—I would assume, or I stand corrected—should be able to provide some sort of recommendation that states if the department indeed moves to alternate service delivery as it relates to the supply chain, those employees who were previously attached to that chain must be taken care of in some manner.

The Chair: Mr. Stoffer, we're dealing with the procurement report—

Mr. Peter Stoffer: I apologize, Mr. Chairman.

The Chair: —and I think it's important to keep that in mind—

Mr. Peter Stoffer: But it's in here.

The Chair: What we're talking about was largely related to the issue of procuring—

Mr. Peter Stoffer: That is understandable, but you have alternate service delivery in the book.

The Chair: Yes, I know it is in here.

Mr. John O'Reilly: Mr. Chairman, that's covered under our quality of life report. So if you read it, you'll find the answer you're looking for.

It is the intent and the policy of the department that anyone who's a civilian employee is offered the job first. Then anyone who's bidding on outsourcing has to offer the job to the people who are presently employed first. So they have first priority. In some of the outsourcing on the bases, the people who were actually doing the work, bid on it, and won the contract.

Mr. Peter Stoffer: I ask my following question—

Mr. John O'Reilly: You'll find that in the quality of life.

Mr. Peter Stoffer: I ask the following question in ignorance, obviously, because I wasn't here during the process.

Did the committee at all decide maybe to have something put in a preamble about that issue? You have it in one report. I'm just wondering why it wouldn't say a couple of lines in this report in that regard.

Mr. Art Hanger: It is in here on pages 16 and 17.

Mr. Peter Stoffer: But it doesn't specifically say what happens to the employees attached to it.

Mr. Art Hanger: No, but it talks about the process overall—which is the best way to proceed. There was another reference here too.

The Chair: What we were dealing with in terms of Mr. Provenzano's comments were editorial changes. I'm not sure we're in a position to change the report substantively. Well, I know we're not because we passed the motion already.

Mr. Peter Stoffer: Understandable.

The Chair: We can provide some addendums in terms of editorial changes.

Mr. Peter Stoffer: It's just a point of clarification actually more than anything else.

The Chair: Okay. Are there any other questions?

Mr. Goldring.

Mr. Peter Goldring (Edmonton Centre-East, CA): Yes, Mr. Chairman.

I have a question on point number 6, where it talks about projects valued at more than $100 million. One part of the question is this. We know there has been recently a number of armouries built across the country, and collectively, I would assume, they would be over the $100 million. But individually, because some of them have been leased... I think this should really be a lifetime value, or a lifetime cost, that would be the $100 million, because obviously a one-year lease on an armoury, or even collectively for a number of them, isn't going to be $100 million. But over the lifetime of the project, it certainly would be. Would that be...

Mr. Wolfgang Koerner: I think that's probably right. I'm not a bean counter, I'm sorry.

Mr. Peter Goldring: I think it's very important that if we are looking at these projects, we bring it before the committee. If it has a lifetime value of $100 million, it certainly is worth discussing.

Mr. Wolfgang Koerner: Sure. The other thing is if that's an issue, we can have them come before the committee to address that anyway.

But your point is well taken. I think the way it works is that the initial cost estimates are $100 million, then that goes to cabinet. It has to be approved by cabinet, the total budget. I'm not sure—

Mr. Peter Goldring: But if they lease them, the cost estimates aren't going to be...

Mr. Wolfgang Koerner: That's right. I wouldn't assume so. I'm not sure.

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Mr. Peter Goldring: It distorts the picture unless it's brought forward and we discuss why lease, why purchase—the lifetime of it.

Mr. Wolfgang Koerner: Yes. That's a good point.

The Chair: Actually, just on the basis of this discussion, obviously we're picking up some questions that I hope people will keep in mind when we do have the departmental officials in front of us again so that we can raise them.

Mr. O'Reilly.

Mr. John O'Reilly: I was just going to say that whether it's a lease or a purchase, the value is up front. So it doesn't matter whether you're paying $10 a year, if it's a $100,000 building, the value is $100,000 at the outset. That's the way it was described to me. The lease value is not the payment; it's the value of the property being acquired. They can't go out and lease something that's worth more than their limit. Their limit applies whether it's lease or purchase.

Mr. Peter Goldring: I know when I lease vehicles for my company—

Mr. John O'Reilly: You never want to look at the other end.

Mr. Peter Goldring: No, you don't. You look at the year-by-year cost because that's your running cost.

Mr. John O'Reilly: But you have to start with the purchase price or the lease price on which to value the payments.

The Chair: Are there any other questions? We've dealt with the motion, so the issue is deemed to have been dealt with.

Mr. John O'Reilly: Can we get an addendum added, Mr. Chairman.

The Chair: Yes, we've taken note of that, and the letter to the minister on this as well.

In terms of the housekeeping items I have, Diane will distribute the first report of the subcommittee on agenda and procedure. It's straightforward; it deals with the minister's appearance in front of the committee on the estimates and the study on the state of operational readiness and quality of life issues.

Has everyone had an opportunity to read the report? Could we have a motion to adopt the report? It's moved by Mrs. Longfield and seconded by Mr. Price.

(Motion agreed to)

The Chair: The next motion I have reads as follows: That the committee agree to accept the invitation of the Department of National Defence to visit their headquarters on Tuesday, March 20, 2001, and that the clerk be authorized to obtain ground transportation at the committee's expense using the operations budget.

It's moved by Mrs. Longfield and seconded by Mr. Wilfert.

(Motion agreed to)

The Chair: Just by way of information on that visit to the department, what's being proposed is a 3:15 p.m. departure from the west door of the Centre Block, members' entrance. Transportation will be provided by one of our trusty green buses, or taxis may be used as well. We'll be looking at meeting from 3:30 to 4:30 p.m., with respect to a briefing session on the department; from 4:30 p.m. to 5 p.m., a visit to the command centre; and from 5 p.m. to 6 p.m., a meeting with the minister and staff and a wine and cheese reception for those who are interested. Then there will be a 6 p.m.departure for the Centre Block. Transportation again will be provided.

We can send a memo out to you with this information. I think it's important to mention as well that the tour, briefing, and visit to the command centre is restricted to members and staff of the committee.

Mr. David Price: I have in my notes that Tuesday we have long votes starting at 5:30 p.m. possibly.

The Chair: Is that 5:30 p.m.?

Mr. David Price: Yes.

The Chair: I did notice that up on the board. We may have to roll with the punches.

Mr. John O'Reilly: Let's have the wine and cheese first.

The Chair: Mr. O'Reilly, St. Patrick's Day will be over by then.

Mr. John O'Reilly: I didn't hear any objections.

The Chair: Let's roll with the punches on that one and see what we come up with. We may be able to shorten things a little bit so that we do have an opportunity to have some refreshments at the minister's office.

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With respect to upcoming meetings, we have the visit to the department on Tuesday, March 20.

What's being proposed at this point for Thursday, March 22, is a briefing session on depleted uranium with Colonel Ken Scott. He was away on holidays this week, I understand, so he wasn't able to be here today. He is the director of medical policy for DND.

We may want to have a meeting of the steering committee, perhaps over the course of next week at some time, so that we can perhaps line up some witnesses for the coming meetings toward the end of March and early April. We do have the Minister of Veterans Affairs, as I indicated, on the estimates, on March 29.

There's one final point. A number of members have talked to me about this. If we can do something on this, fine. If we can't, then that's fine, too. But the issue has come up in terms of the meeting times and the fact that Thursday afternoons is not a great time to hold committee meetings and have attendance at what I think we would like to have it at, at a level where members are participating.

So the suggestion has come forward that we look at Monday afternoon meetings from 3 p.m. or 3:30 p.m. until 5:30 p.m., or 3 p.m. until 5 p.m., whatever. It doesn't seem to be flying.

Mr. John O'Reilly: What's the matter with Thursday mornings?

The Chair: For some reason or other we have lost that slot and we're now at Thursday afternoons.

Mr. John O'Reilly: Let's get it back.

The Chair: Again, by way of information here, that's the hand we've been dealt. I can certainly try to do what I can to have us moved to Thursday mornings. But this suggestion did come forward, because if we were to go with the Monday afternoon, we would also be able to go with a Wednesday afternoon meeting, which would have our meetings out of the way by the end of Wednesday, so that if members wanted to go back to their ridings, if they didn't have duty on Thursday or Friday, that option would be available to them.

Mrs. Judi Longfield: You mean meet Mondays and Wednesdays instead of Tuesdays and Thursdays?

The Chair: Yes. The other option would be to meet Mondays and Wednesdays, so you wouldn't have to deal with a committee meeting on Thursday.

Mr. Stoffer.

Mr. Peter Stoffer: On that note, Mr. Chairman, and this is for the Atlantic Canadian people, the 5:30 p.m. flight out of Ottawa will be cancelled back to eastern Canada. I'm meeting with Air Canada officials to see if we can't get that changed for later on. In other words, that's the last flight to eastern Canada after that.

The Chair: On Thursday at 5:30 p.m.?

Mr. Peter Stoffer: It won't go at 5:30 p.m.; I think it will be 4:45 p.m. That's what they plan to do, which is just nonsense for anyone, regardless of party, in Atlantic Canada. So we're trying to get that changed.

In the meantime, Elsie and I were just musing about whether it is possible to have a meeting on Thursdays at 11 a.m. I know it's through most people's lunch, but would that be a compromise?

Mrs. Judi Longfield: It's in conflict with a lot of other standing committees.

Mr. Peter Stoffer: It's just an idea.

The Chair: Mr. O'Reilly.

Mr. John O'Reilly: What happened to the war room in the East Block? Did we get cut out of that? That used to be where we had our meetings.

The Chair: Do we know?

Mr. John O'Reilly: Could we check into that? I think that room is vacant right now.

The Chair: That's something we can check into.

Mr. John O'Reilly: Don't forget the committee rooms in the East Block. There are a couple of good ones over there.

Mrs. Judi Longfield: Monday and Wednesday is good.

The Chair: Mr. Goldring.

Mr. Peter Goldring: Mr. Chairman, I believe, too, that Monday will be problematic for a lot of the people coming in from western Canada, every bit as much as from eastern Canada. So Thursday morning, Wednesdays, or Tuesdays would be the preferred times. Is there any available time through there?

The Chair: I will definitely see what I can do with the whip's office that way. I am getting some pretty clear direction. Coming from Ottawa, I'm here all the time. It doesn't make any difference to me whatsoever.

Mr. John O'Reilly: You can go home for lunch.

The Chair: I go home for a sleep.

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So we'll leave it at that then, and we'll try to make sure, to the greatest extent possible, that we concentrate our meetings as close to the centre of the week as we can. I take it that is the direction of the committee.

Is there any other business?

Mrs. Elsie Wayne: I move we adjourn.

The Chair: The meeting is adjourned.