Deputy Minister's Opening Statement

Public Accounts (PACP): Report 2, National Shipbuilding Strategy

Opening Statement by DM Jody Thomas, National Defence

25 May 2021

Introduction

Madame Chair,

I’m pleased to be here with my Deputy Head colleagues to discuss the Auditor General’s Report Number Two: National Shipbuilding Strategy (NSS).

First off, I’d like to thank the Auditor General and her team for their important work.

The NSS is a key element of our work at National Defence—and indeed, the entire Government of Canada—to ensure Canada can be strong at home, secure in North America and engaged in the world.

We Agree with the Report’s Findings

National Defence agrees with the report’s findings as they relate to our Defence Team and we accept its recommendation.

We agree: Complete, current, and reliable schedules are absolutely essential for decision making and management of the shipbuilding projects.

The review and insights highlighted in the AG report are timely and useful.

As with any massive and long-term capital procurement project, we knew we would need continuous review and likely hone our approach as the NSS progressed. That’s a very typical reality of major procurement.

As the report notes, DND was already in the process of implementing key improvements as the report was being produced.

Management Action Plan

Additionally, since the report was released, DND has coordinated with our colleagues at PSPC, and Fisheries and Oceans on our different Management Action Plans to ensure they achieve an integrated outcome. These action plans will outline how, with what milestones, and by when we will achieve the outcome of the recommendation.

At National Defence, we expect that Q2 of fiscal year 2021/2022 is when we will be in receipt of shipbuilding schedules that are complete and reliable.

Mitigating Delays and Contigency Planning

I would also like to address the fact noted at the end of the report, which was that we can not yet know the full impacts of COVID on shipbuilding timelines.

This is another difficult reality of COVID. Until we are over the pandemic, we will not have a complete and accurate picture of what the full impact has been, including the anticipated delays on major procurement.

However, I want to reassure the Committee and Canadians that we have firm contingency plans in place to ensure that the Canadian Armed Forces has the ongoing capability required to conduct operations, including in relation to the Navy’s work.

Work continues on the Canadian Surface Combatant project with the first ship of 15 ships expected to be delivered in the early 2030s, and the last ship to be delivered in the 2040s. While we develop these modern, capable ships, we will extend our current Halifax Class ships as long as required.

Until the arrival of our Joint Support Ships, we have engaged a third party to help provide these interim services, and we can extend that contract if required in order to keep that capability going.

For our Arctic Offshore Patrol Ships, this vessel offers a new capability. There are other means by which we can and do achieve the same outcome, including having vessels escorted by helicopter or icebreaker. And of course, the first AOPS, HMCS Harry DeWolf, is already conducting training and operations.

In addition to shoring up capabilities, we also have other means to ensure our operations are supported, up to and including working with our allies to resource share if an extenuating circumstance arises.

As with so much else in the federal government, cross-department collaboration, and timely information sharing is key, both for overall efficiency and, increasingly, to manage Canada’s evolving threat environment.

National Defence will continue to work with our colleagues in other government departments and in Canada’s shipyards, and our Industry partners to keep the strategy moving forward.

This concludes my opening statement, and I am happy to answer any questions from the Committee.

Thank you.