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House Hansard - 75

44th Parl. 1st Sess.
May 19, 2022 10:00AM
Context: House Hansard - 75 - May/19/22
The Assistant Deputy Speaker (Mrs. Alexandra Mendès)
  • May/19/22 6:45:33 p.m.
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Pursuant to Standing Order 81(4), the motion to adjourn the House is now deemed to have been withdrawn. The House will now resolve itself into committee of the whole to study all votes under Department of Public Works and Government Services in the main estimates for the fiscal year ending March 31, 2023.
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The Assistant Deputy Chair
  • May/19/22 6:46:07 p.m.
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Today's debate is a general one on all votes under the Department of Public Works and Government Services. The first round will begin with the official opposition, followed by the government, the Bloc Québécois and the New Democratic Party. After that, we will follow the usual proportional rotation. Each member will be allocated 15 minutes at a time, which may be used both for debate and for posing questions. Members wishing to use this time to make a speech have a maximum of 10 minutes, leaving at least five minutes for questions to the minister. When a member is recognized, he or she should indicate to the Chair how the 15-minute period will be used, meaning how much time will be spent on the speech and how much time will be used for questions and comments. Also, pursuant to order made earlier today, members who wish to share their time with another member shall indicate this to the Chair. The Chair will receive no quorum calls, dilatory motions or requests for unanimous consent. When the time is to be used for questions and comments, the minister's response should reflect approximately the time taken to pose the question, since this time will be counted in the time originally allotted to the member. Pursuant to order made earlier today, the time provided for the debate tonight may be extended beyond four hours as needed to include a minimum of 16 periods of 15 minutes each. I also wish to indicate that in committee of the whole comments should be addressed to the Chair. I ask for everyone's co-operation in upholding all established standards of decorum, parliamentary language and behaviour. We will now begin tonight's session.
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Mr. Pierre Paul-Hus (Charlesbourg—Haute-Saint-Charles, CPC)
  • May/19/22 6:48:27 p.m.
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Madam Chair, I would like to salute and welcome the minister. Now, on to the first question. The Parliamentary Budget Officer said the following at the February 4 meeting of the Standing Committee on Government Operations and Estimates: “The pattern is that whenever we look at major procurement issues, for example, combat ships, supply ships, and now polar icebreakers, there is one constant: the costs are always higher when an independent office estimates them rather than the government.” Why is that?
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Hon. Filomena Tassi (Minister of Public Services and Procurement, Lib.)
  • May/19/22 6:48:58 p.m.
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Madam Chair, we always provide the estimates, and we do our best to maintain procurement that matches up with those estimates.
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Mr. Pierre Paul-Hus
  • May/19/22 6:49:08 p.m.
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Madam Chair, Andrew Kendrick, who testified on May 13 at the Standing Committee on Government Operations and Estimates, mentioned that the major shipyards always transferred the risk to the smaller suppliers, the contractors, and that the costs associated with the risks were assumed by them. If they needed to boost the price, they just had to increase the bill and the government paid. Why are the contracts written that way? Why is it always the taxpayers who pay for the cost overruns or the risks, which most often are passed on to the smaller players?
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Hon. Filomena Tassi
  • May/19/22 6:49:42 p.m.
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Madam Chair, we are really proud of our national shipbuilding strategy. The investments we make into that strategy pay off. The economic benefits pay off, and it is not just for the large shipyards. Small businesses benefit as well.
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Mr. Pierre Paul-Hus
  • May/19/22 6:49:58 p.m.
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Madam Chair, the cost of everything is skyrocketing right now. None of the contracts involve fixed costs. A number of witnesses told the committee that many businesses in many countries had fixed costs. The witnesses suggested signing fixed-cost contracts. Does the minister agree?
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Hon. Filomena Tassi
  • May/19/22 6:50:18 p.m.
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Madam Chair, what I would acknowledge is that COVID has had an impact around the world. With respect to the shipyards, there is no question that COVID has impacted costs of labour and supply chain issues. We always work in a way to maintain having costs match up to the quotes that are given, but COVID has presented a number of challenges, not only in shipyards but also all around the world in supply chains and labour.
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Mr. Pierre Paul-Hus
  • May/19/22 6:50:49 p.m.
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Madam Chair, was Canada the only country to experience COVID‑19 or did it happen in other countries as well?
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Hon. Filomena Tassi
  • May/19/22 6:50:56 p.m.
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Madam Chair, COVID has happened around the world.
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Mr. Pierre Paul-Hus
  • May/19/22 6:51:00 p.m.
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Madam Chair, I have another point that was raised by officials from Public Services and Procurement Canada. On April 7, these bureaucrats told the committee that we can expect further cost overruns and delays regarding the delivery of new ships for the navy and the Coast Guard, and that the multi-billion dollar shipbuilding program faces significant challenges. Will the minister admit that billions of dollars in cost overruns are already expected?
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Hon. Filomena Tassi
  • May/19/22 6:51:26 p.m.
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Madam Chair, I have had an opportunity to visit one of the shipyards, and the work that is going on there is second to none. To see the extent of what is taking place here in Canada, on Canadian soil, to produce these ships is absolutely fantastic. It is creating jobs and economic growth right here in Canada.
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Mr. Pierre Paul-Hus
  • May/19/22 6:51:58 p.m.
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Madam Chair, nobody is questioning the shipyard employees' work. What we are questioning is the excessive cost overruns taxpayers have to cover for projects that, to make matters worse, are often delayed. There are delays. Here is my question. Are these delays and cost overruns due to government management, or does the problem lie with the shipyards?
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Hon. Filomena Tassi
  • May/19/22 6:52:23 p.m.
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Madam Chair, just so that we are aware, I want to point out some of the benefits that the national shipbuilding strategy and the investments that we are making are having on Canadians. First, there is the creation of jobs, which includes the creation of over 18,000 jobs per year that are created or maintained. In terms of the economic benefit, it is $1.54 billion annually to the economy. With respect to overruns, I have already mentioned that COVID has had an impact and that does impact some of the overruns that have been faced.
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Mr. Pierre Paul-Hus
  • May/19/22 6:52:57 p.m.
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Madam Chair, Troy Crosby, the person responsible for National Defence procurement, told the committee that the ships are not being built fast enough and that they are costing more. I want to know if the minister has sent the shipyards an official letter, directive or document of some sort expressing the Government of Canada's concerns about the delays and cost overruns. If so, when did she send it? If not, why not?
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Hon. Filomena Tassi
  • May/19/22 6:53:25 p.m.
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Madam Chair, we are constantly monitoring the progress of the shipyards. We are working very closely with the shipyards. They are working very hard to keep their projects on budget and on time, but they have faced challenges, as I have already mentioned. We continuously monitor the situation and do whatever we can to assist to ensure that those ships are built as quickly as possible and with the amount that has been allotted.
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Mr. Pierre Paul-Hus
  • May/19/22 6:53:54 p.m.
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Madam Chair, about the construction timeline, the Parliamentary Budget Officer estimates that construction of the first polar icebreaker will begin in the 2023-24 fiscal year, and the second in the following year. The ships should be delivered in 2029-30 and 2030-31, respectively. How can they even have a timeline when the Davie shipyard is still not an approved partner in the national shipbuilding strategy?
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Hon. Filomena Tassi
  • May/19/22 6:54:25 p.m.
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Madam Chair, again, we are working with the shipyards. I would like to point out that we have actually had five large ships delivered already. Three of the offshore fisheries science vessels have been delivered, and two of the AOPS have been delivered. Other projects are under construction. We are going to continue to work with the shipyards, and we will ensure that we continue to monitor the situation and do what we can to support them. We know how important it is to keep these jobs here in Canada and have this production take place here in Canada.
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Mr. Pierre Paul-Hus
  • May/19/22 6:54:58 p.m.
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Madam Chair, let us talk about some of projects that are currently being delivered or have been delivered, particularly the Arctic and offshore patrol ships. A witness who appeared before the Standing Committee on Government Operations and Estimates last week, Mr. Kendrick, said he really could not understand why the cost of the seventh and eighth ships to be delivered to the Canadian Coast Guard will exceed $1.5 billion, while Norway is building three larger, more powerful ships for a total of $700 million. Can the minister explain that?
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Hon. Filomena Tassi
  • May/19/22 6:55:30 p.m.
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Madam Chair, I would point out that it depends on what the specs are with respect to the ships that are being built.
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