[English]

We thank you for your attendance here today. We look forward to your testimony. We will now turn the time over to Mr. Berthelette.

We're honoured to have with us, from the Office of the Auditor General, Mr. Jerome Berthelette, assistant auditor general of Canada and Ms. Casey Thomas, principal. From the Department of National Defence, we're pleased to have the deputy minister, Ms. Jody Thomas, as well as Patrick Finn, assistant deputy minister, materiel, and Lieutenant-General A. D. Meinzinger, commander, Royal Canadian Air Force.

I would just remind the committee, and those in our audience today, that we are televised, so I would encourage all of you to put your phones on silent or vibrate, so there are fewer distractions.

This is meeting number 122 of the Standing Committee on Public Accounts for Monday, December 3, 2018. We're here today in consideration of report 3, “Canada's Fighter Force—National Defence”, of the 2018 fall reports of the Auditor General of Canada.

[Translation]

National Defence expects to spend almost $3 billion to extend the life of its current fleet and to buy, operate and maintain the interim aircraft. However, without a plan to deal with its biggest obstacles—a shortage of experienced pilots and the CF-18s declining combat capability—these spending decisions will not be enough to meet Canada's commitments. Until National Defence knows how and when it will solve pilot shortages and get better combat capability, more aircraft won't solve its problems.

Furthermore, we found that the combat capability of the CF-18 has not been kept up to date. This is in part due to the advancing technology of modern fighter aircraft and a lack of investment to upgrade the CF-18's combat systems. Without these improvements, the CF-18 will be increasingly less effective while deployed on NORAD and NATO operations. In our opinion, flying the CF-18 until 2032 without a plan to upgrade combat capability, will result in less important roles for the fighter force. It will also pose a risk to Canada's ability to contribute to NORAD and NATO operations.

The government is now planning to buy used fighter jets from Australia as an interim solution to bridge the gap to 2032, which is the current target date for completing transition to a replacement fleet. However, even if National Defence can address its personnel shortage, the Australian jets are the same age and have the same operational limitations as Canada's current fleet of CF-18s.

Even though National Defence's analysis showed that it needed additional technicians and pilots, the government focused on increasing the number of aircraft as the solution to meet the new requirement. It first planned to buy 18 new Super Hornets. However, because of a trade dispute, the government decided not to pursue this purchase.

While there was a plan to increase the number of technicians, we found that there was no plan to increase the number of CF-18 pilots. Pilots have been leaving the fighter force faster than new ones could be trained. As a result, given the shortage of pilots and the limits of its training system, National Defence will not be able to meet the new operational requirement for many years.

According to National Defence, as of April 2018, 22% of technician positions in CF-18 squadrons were vacant or were filled by technicians who were not yet fully qualified to do maintenance. Furthermore, National Defence identified that it had only 64% of the trained CF-18 pilots it needed to meet the government's new requirement.

In 2016, the Government of Canada directed National Defence to have enough fighter aircraft available every day to meet the highest NORAD alert level and Canada's NATO commitment at the same time. This meant that National Defence had to increase the number of fighter aircraft available for operations by 23%. This new requirement came at a time when the Royal Canadian Air Force faced a growing shortage of trained and experienced pilots and technicians. Even before the new operational requirement, the fighter force did not have enough experienced technicians and pilots.

Mr. Chair, thank you for this opportunity to present the results of our report on Canada's fighter force. Joining me at the table is Ms. Casey Thomas, the principal responsible for the audit.

This process is under way and progressing well, but it will take time. The next major milestone will be the release of a finalized request for proposals to qualified suppliers in the spring of 2019. While we continue to develop the future fighter fleet, we are acting on the Auditor General's recommendations to upgrade the CF-18s, and increase the number of skilled and experienced technicians and pilots in the federal force.

To close, I want to state one thing quite clearly. The only enduring solution that will allow us to simultaneously meet all of our commitments involves both the procurement of 88 advanced fighters, and having enough pilots and technicians to get them mission-ready.

These initiatives reflect our commitment to our people, and part of that commitment is making sure they have the tools and training to do the job we ask of them.

At their core, these retention initiatives are about improving life for air force personnel and their families at the squadron and unit levels. They are intended to address some of the main reasons why pilots and technicians are leaving the air force. As an example, the family sponsor program is helping families settle into new postings more easily. Sponsor families become an immediate support network for new arrivals to the squadron and help them connect to the larger community both on and off the base.

We must also retain our experienced personnel to fly and maintain the the CF-18 fleet between now and then. This has been a significant challenge in select areas in recent years. We're putting significant effort into improving our retention strategies.

The Canadian Armed Forces is always working to improve and refine its recruiting strategies. We are exploring a variety of innovative new methods to allow the Canadian Armed Forces to attract new personnel with the skills and aptitudes we need. We continue to recruit maintenance technicians and pilots. We are making sure that the training and experience they receive will prepare them to fly and maintain the advanced fighters in 2025.

We expect to start implementing these upgrades into the CF-18 fleet as early as 2020. As per the Auditor General's recommendation, the Royal Canadian Air Force is assessing additional options that will allow us to quickly enhance the combat capability of the CF-18s that will fly until 2032.

We have to simultaneously support the interim fleet now, and prepare for the advanced fleet of the future. We have plans in place to upgrade the CF-18s to continue to meet regulatory requirements, so that the Canadian Armed Forces can continue to operate seamlessly with our allies, both at home and abroad.

We are managing the life of the CF-18s with the purchase of 18 interim fighters from Australia to meet our retirement date of 2032. We are furthering recruitment, training and retention initiatives to make sure the RCAF has the right people with the right experience to fly and maintain the aircraft. Each of these activities is vital. It should be noted that they are happening concurrently.

This also means that while we will continue to fly the CF-18s until 2032, we will not be flying all of the CF-18s until 2032. We will only fly as many as we need to support the transition to the advanced fighter fleet. We recognize that there will be challenges as we prepare for this transition. We are working very hard to implement the Auditor General's recommendations, which will help us mitigate these challenges.

We are committed to keeping the procurement process for the advanced fighter fleet on time and on budget. By 2032, we will have the right quantity and quality of aircraft needed for the Royal Canadian Air Force to meet our NORAD and NATO obligations for years to come.

Before I speak to how we are addressing these challenges, I would like to clarify one point. The 2032 timeline is being reported quite extensively, but to be clear, the Royal Canadian Air Force will receive the new jets between 2025 and 2032. The first advanced fighter will arrive in 2025 and the number of mission-ready aircraft will increase quickly to address our NORAD and NATO commitments. In fact, we expect to achieve initial operating capability by 2026 with nine advanced fighters ready to fulfill the NORAD mission.

I will keep my remarks to the point so that we can answer as many of your questions as possible.

Mr. Berthelette, I would like to start by stating on the record that as far as I understood the report—maybe Ms. Thomas will be able to elaborate on this—the question of a capability gap, which has been subject to so much questioning, is not an invention of the Liberal government. It was a capability gap in terms of the obligations we have to NORAD and NATO, if we are to provide the maximum and the best of our capability to meet our obligations. Am I correct?

Correct. When the commitments changed in 2016, there was a new requirement to meet the highest level of NORAD and NATO commitments at the same time. That was the change that came into place.

The work we did demonstrated that we needed more technicians and pilots. That was the work that National Defence had prepared, and that's what we found.

What plans do you have to meet those requirements, because that is quite worrisome? You don't train a pilot in six months. We would like to hear a little more detail of what exactly your plans are to fulfill this very obvious and urgent requirement.

Madam Deputy Minister, it has been a constant through the audit that the department is facing this obvious shortage of pilots, technicians and mechanics capable of meeting these higher expectations from the force.

We are doing a number of things as a result of “Strong, Secure, Engaged” to improve life for families in order to make it easier to stay in the forces. We ask a lot of our families. We ask a lot of our military members. Our retention strategies include a number of things for families to make life on the base better, better incentives to move, better remuneration, and then, in addition, there are recruitment and retention strategies for the air force itself, which I will ask General Meinzinger to respond to.

Since 2016, when this demographic change really began to take effect, we have lost more pilots than normal. There is always a normal attrition to industry and to other things, but there has been a significant change in that attrition over the last two years.

I'm going to ask the commander of the air force to elaborate on specific plans. I would like to frame the answer by talking about the worldwide shortage of pilots. There is a demographic change going on, and there is a demand for pilots in the public sector, in armed forces and in the private sector around the world, and we are experiencing a shortage of pilots.

Additionally, we have a strong focus on the fighter force in terms of force generation—that is, the training we provide to our pilots on a yearly basis. Through 1 Canadian Air Division headquarters in Winnipeg, we've put a premium on force generation being priority one. What that means is that any given day, the fighter force flying around this country is making maximum benefit of every single hour they're flying. We're doing perhaps fewer air shows, fewer CF-18 demos, but we're really focused on that knowledge transfer that has to happen in that cockpit or between the two pilots, perhaps, who are in that formation.

I look at our family sponsorship program that the deputy mentioned, which we've just rolled out officially this year. Essentially what that means, for example, is that for a family moving from New Brunswick to Cold Lake, say, if that particular family has a child that might have a particular ailment, through the MFRCs, we're linking that family with perhaps a family in situ that might be helpful, might have a similar challenge, and can connect and support that family as they transition.

What are we doing about it? There's a number of prongs of attack. Certainly we're looking at the reserve force. Fighter pilots who have left, and who undoubtedly will continue to leave, are given a customized reserve service offer, meaning we will offer them the ability to continue to work with us on a window of two to five to 10 days per month, to encourage them to stay and continue to contribute to our mission. We will support that through temporary duty travel and the like.

As we look at the reasons why people leave the Canadian Armed Forces, it very much drives our thinking as to what we need to do. Certainly the feedback from those who are releasing is that it's a question of family, challenges for their family. There's a dimension of ops tempo, work-life balance, predictability of geographical location, and then typically fifth or sixth are comments about financial remuneration.

There are many angles. To answer your question, we are tackling this in multiple ways. I look at the great work that's under way under General Chuck Lamarre, the chief of military personnel. As the deputy minister has indicated, there's a whole host of personnel issues under “Strong, Secure, Engaged”. Seamless Canada is a bespoke initiative under way currently, which really gets at supporting our families. As we move families from province to province, often they have to be exposed to atypical and dissimilar transitions, where they may have to get their vehicles reinspected even though they had their vehicle inspected six months previously, or spousal occupations are not accredited in provinces. There's a huge effort to try to normalize the expectations and the transition requirements from province to province, so I have a lot of hope in that.

If I may, just to reinforce the comment with respect to the macroeconomic reality, before I get to some of our initiatives, the most recent labour force report out of Canada, in March, indicated the demand for additional pilots at 7,300, just in Canada alone. If we look at the global estimates, we see commercial travel doubling over the next two years. There's a fairly significant macroeconomic pressure at play, and we acknowledge that, and it puts more urgency behind some of the work we wish to do.

In the eighties we bought 138 aircraft, and that was to fulfill NORAD, NATO and defence of Canada missions. Now we have 76, and we're talking about buying 18 additional ones that are older than even the ones we own. We also have incredible knowledge and data about our maintenance capability. We're one of the best in the world in terms of our understanding of aircraft maintainability and reliability of the CF-18. We've seen from the Auditor General report and from our excellent data that the maintenance hours are rapidly increasing. You've presented to us that we're going to be able to maintain that capability because we're going to divide those flying hours over these increased significantly older aircraft, so the maintenance hours are going up rapidly, ensuring the aircraft are not available, yet we're going to deliver capability until the forecasted replacement in 2025. I'm wondering if you can tell us how exactly that will happen.

Thank you very much for a really important and critical report. I think you've highlighted quite clearly that we have to focus, first and foremost, on why we have an air force, why we have a fighter force, and that's to deliver fighter capability.

What our goal is in purchasing the additional fighters from Australia is to spread the number of hours out over more airframes, as you rightly point out. They do require more maintenance—there's absolutely no doubt—but we're also investing in their regulatory capability and we're finishing the analysis for their combat capability.

You point out that our aircraft are aging. There is absolutely no doubt, which is why our focus is on keeping the air force operational until the future fighter capability project is complete. It's a project where we've met every milestone. The draft RFP is on the market, so we are now working towards future fighter capability.

We have extended the estimated life expectancy of the F-18 for almost 25 years, this auditor's report says that it won't make it past 2025 yet we're going to take them to 2032. Why should the Canadian public have confidence in those numbers?

At this point, we don't have the evidence yet to show how the distribution over a greater number of airframes will allow us to achieve our NORAD and NATO operational commitments until the end of 2025, which is when we start to get the new fighters. We don't get all of them until 2032, yet the Auditor General's report clearly says that the estimated life expectancy, which was originally 2002, which was extended to 2008, which was extended to 2012, which was extended to....

I assure you that the money being put into those airframes will keep them safe and operable. We would not otherwise put the money in. We certainly are not in the business of putting our pilots at risk, but I will ask General—

Fair enough, but if I could, it's money that we need to ensure we deliver on a capability, so I think the real question here when we're looking at taxpayers' money is this one. Is this good money after bad, when we're looking at almost the equivalent of a horse and buggy in an era of cars, yet we're saying that we're going to attract pilots and we're going to continue to operate horses and buggies and deliver on a car mission?

The goal of the interim fighter capability project and the investment we're making not only in new aircraft—the Australian planes—but in our own fleet is to ensure they are operable and highly operable and functional until the future fighter program comes into effect. The future fighter program is moving as quickly as is possible. As I've said, we've met every milestone for it. Our focus is the future fighter.

If we could look at it, is it a reasonable expectation that it will take us another 10 or 15 years to procure aircraft? I know that other countries are able to procure replacement aircraft more quickly than that.

General Meinzinger and Pat Finn can speak to you about the current fleet, and certainly Pat can speak to you about the timeline for the project.

I will try to be brief. I wanted to get at a portion of your question with respect to maintenance. Unquestionably, hand over heart, we have the best maintenance personnel in the world. I think I would make that point to any particular crowd. One of the most important—

When we're 22% short and the maintenance hours are increasing exponentially because in many respects it is beyond its estimated life expectancy, we are asking something that may be more than we can actually achieve to maintain capability. I think that's the question I'm looking for, General.

The maintenance renewal plan approved in 2017 is going to be transformational in terms of our maintenance capacity within the fighter squadrons. Currently that particular contract has yielded almost 50 seasoned contractors, who are largely retired technicians who have dozens of years of experience. Those teams are now working in 3 Wing and 4 Wing—

Okay, so in that regard, are we not looking at furthering the demographic problem so that we don't actually have the maintenance capability over the long term to get us to 2032?

No. I think that in this program what we're seeing is about 2,200 hours of mentorship happening per month per squadron. On the feedback I've had, certainly in being in Romania quite recently and speaking to the technicians who are delivering on that NATO mission with our F-18s, the feedback was extremely positive. A lot of these individuals are able to discern the snag or the maintenance problem just by quickly assessing the challenge, whereas it perhaps would have taken a little longer with the current technicians we have.

: Thank you, Chair. Thank you, Chair.

Thank you all for being here again. Once more around the mulberry bush, eh, Deputy?

I want to open my remarks by going in a little different direction from what I normally do, to the extent that usually.... I would say that 95% of what we do deals with exactly what we deal with at every meeting, which is the administration of the policies the government sets. The politics of the issue get dealt with in the House of Commons, and we hold you, Deputy, and your staff accountable for the dollars you've been given to implement the policies that the political folks have said will be the priority policies.

I've been around here a long time. I was around before we had the legal basis for an accounting officer. We brought that in for a very good reason. It was to separate the responsibilities between the minister and the deputy, because it can sometimes be a blurry line. I'm prefacing all this, Deputy, by asking you to be very clear, if you would, in your answers, at least to me, in terms of what your responsibilities were, what your decisions were and where that line is.

In the past, it was expected that if you wanted to be a deputy, and stay a deputy, your first priority was to protect the minister. We now have legislation that says your first priority is to be accountable. If your responsibility of accountability ends, and it's a political one at that point, then you have to leave that there and not be defending the politics of the day. I'll be watching very closely on that, Deputy. Trust me, it's in your interest. If we start sliding into just blind loyalty and defending, I'm going to be very upset—really.

I have to say that for the first time in this Parliament—not some others, but only for a total of maybe three or four times that I can think of, in 15 years and five Parliaments—where we need to go speaks to the politics of the issue and the politics of the policies that were given, as opposed to what the department did and didn't do.

I say that this way. I've looked at this thing. I read this very carefully. I was the defence critic for a number of years. I understand this a little bit. I don't pretend that I'm any kind of expert. It's pretty clear that no matter how many edicts from on high the government may make, if there are not enough pilots and technicians, we're not going to keep the planes in the air that we need to meet the commitment. Pretty much, that's what this report is.

I want to point out, Chair, with your indulgence, that the audit objective.... You all know that often I like to start right at the beginning of what this is about.

The objective of this audit was to determine whether National Defence managed risks related to Canada’s fighter fleet to meet government commitments to NORAD and NATO until an operational replacement fleet is in place. The conclusion was “that National Defence has not done enough to manage risks related to Canada’s fighter aircraft fleet so that it can meet commitments”. Also, in paragraph 3.52, “National Defence has not done enough, in part because of factors outside its control.”

I have so much sympathy for that when I read this.

I get the politics. As I understand it, there was a shift from NORAD being the priority, to making sure that a high alert at NORAD and all of our NATO commitments could be made. I get the politics of that. With the President of the United States going on and on about NATO, and the responsibility of the minister to make sure Canada is seen to be a team player—I get all of that. That's to be dealt with in the House of Commons. To turn around then and buy these planes, leave the impression that this is going to solve our problem and pretty much hang out the department to dry, as I see it, is not acceptable.

There is a part of this in my second round where I'm going to hold the department to account on a bit of their estimates and some planning they did, where I have some questions. Overall, I have to say this is very serious.

I've been around. I know there are procurement problems. We've gone around that many times, Deputy. I've done that with other deputies, too. That's not the issue here. I look at this, and I am saying to myself that the politicians of the day—and I was a provincial minister, so again, I do understand that relationship—made a proclamation that we will now be able to do this with NATO, we'll do this with NORAD, we're going to buy these planes and, there you go, we've solved our national defence problem.

No. Because of the reason they've outlined in this audit. We don't have enough technicians and there are not enough pilots. If you don't answer those questions, it doesn't matter how many aircraft you have, we're still not going to be able to meet our commitment.

I look at this and I ask, how much of this can I put at the feet of the deputy and the department? I have a lot of sympathy for the fact that you were put in an impossible situation. To that degree, I don't really have a lot of questions for you. To me, a lot of this stuff is back in the House of Commons. Why is the minister announcing things that, when we look at it, aren't real, i.e., our ability to meet a NORAD high alert and all our commitments to NATO. The minister has left the impression that purchasing these planes is going to solve that. The fact is that it has not. I scoured this, trying to find where I can hold you to account on this, Deputy, but from what I can see you're working really hard and going against headwinds. I accept what you say, General. There is a problem out there.

Would more money solve the problem? It usually would, so there may be some solutions. However, the department doesn't decide, how much money they get. The government and then Parliament does.

This is one of those times, colleagues, when I really feel the actual crux of the issue is not so much that our senior bureaucrats and decision-makers have let us down. That's often the case when we're here. It's our job to hold them to account. I have to tell you in this case I don't see it. I read the analysts version of things. I've read this. I've talked to our critic. To me, it all boils down to the fact that we haven't had the replacements. The department's been jerked around by both parties who've been in government saying, “We're going buy all these planes, that's going to take care of everything.” Then you get the rug pulled out from under you, and then all of a sudden out of nowhere there's an edict from on high about all this defence we're going to do in the air with all our planes because we're buying somebody else's used problems, which is a different issue and we can talk about that.

Anyway, I don't have a direct question on this. I do later. I'm coming around on the second round—I'll give you warning, Deputy—but that's the way I see this. I'll just give you an opportunity, Deputy. I'd to hear your thoughts. Maybe in the second round the deputy could give us her thoughts on.... Maybe I'm wrong and it is her fault and she wants to confess and say so. I'll accept that, Chair.