Defence Review After NATO Meeting

By: Murray Brewster, CBC NEws 

Canada's long-awaited defence policy review will not be made public before Prime Minister Justin Trudeau faces allies at the NATO Summit in Brussels later this month, CBC News has learned.

It's a significant decision that could make the gathering of alliance leaders uncomfortable for the prime minister, especially in light of the demands and expectations of U.S. President Donald Trump, who has insisted allies boost spending on their militaries.

A senior government official tells CBC News the plan had been to release the policy before the meeting, but officials believe it is important that Canada's defence policy align with a broader set of foreign policy goals.

Foreign Affairs Minister Chrystia Freeland will deliver a major speech shortly after the gathering of NATO leaders that will more clearly define the Liberal government's vision, said an official with direct knowledge of the plan.

That will be followed closely by Defence Minister Harjit Sajjan's policy review, which has been more than a year in the making and will set the future direction for the military, in terms of expectations, spending and equipment.

Related
Canada needs to 'stand-up to our responsibilities' on defence spending
Military grappling with years of underfunding, Sajjan acknowledges
Dawson considers revisiting probe into Sajjan over detainee abuse

Many critical decisions, including the replacement of aircraft, ships and vehicles, have been in a holding pattern because of the review.

The latest federal budget removes over $8 billion from the immediate equipment purchasing plans of National Defence and promises to sprinkle the cash into programs in future years.

NATO leaders agreed at the 2014 summit in Wales that, with a resurgent Russia on the world stage, member countries should have a plan to increase their defence budgets and bring spending up to two per cent of their gross domestic products.

That would require Canada to double the size of its defence appropriation to just over $40 billion from the current $18.7 billion.
Cash vs. action

Both Trudeau's Liberal government and former prime minister Stephen Harper's Conservative government have balked at the notion, arguing that the GDP measurement is arbitrary and that the true measurement is participation in NATO missions.

But the Trump administration, which has consistently hammered allies to pay more towards collective security, is likely to be unimpressed that Trudeau is showing up empty-handed, said one defence analyst.

"I think the Americans are going to be disappointed and our European allies will be dumbfounded," said Dave Perry, of the Canadian Global Affairs Institute. "Our recent budget changes have all been negative. We've pushed several billions of dollars of purchasing off into the future and our share of defence spending continues to decline."

According to NATO estimates, Canada is spending just under one per cent of its GDP on defence, but a recent Senate committee report, using Library of Parliament data, pegs that figure at .88 per cent.

"So, to go into the meeting empty-handed, without even the defence review; it will put our government in a very uncomfortable position," said Perry.
Ending defence cuts

The senior government official, who spoke on background because of the sensitivity of the file, said they are expecting that defence spending "will be brought up, as it always has been" at the NATO meeting, but argued "the defence policy is not for our allies. It is for Canadians."

The Americans were given a sneak peek at the new policy and were pleased, said a pair of defence sources, who were not authorized to speak to the media.

The expectation that Canada will deliver something of substance when leaders meet on May 25 extends beyond the U.S.

NATO Secretary General Jens Stoltenberg said the 28 member nations pledged to stop cutting defence and find a way to to get to two per cent GDP.

Related
Canada ranks 23 out of 28 NATO countries on defence spending
U.S. defence secretary tells NATO countries to increase military spending

"I expect all allies to be able to meet the commitment we made in 2014," Stoltenberg said Thursday following a meeting with German Chancellor Angela Merkel.

It will be a major topic in the coming days, and he said everyone is expected to be on onboard.

"What we're going to address is how to implement the pledge and I am encouraged by what I see across Europe and Canada."

Canada Must Make Tough Decisions on Defence Spending: Former NATO Envoy

By Monique Scotti, National Online Journalist, Politics Global News

Canada’s former ambassador to NATO says Ottawa has “to make some decisions” on defence spending given the global security situation and a recent budget that pledged almost no new money for the military.

Speaking with The West Block‘s Vassy Kapelos this weekend, Yves Brodeuremphasized that Canada is hardly the biggest laggard in the 28-member alliance, contributing to international missions like the one in Latvia.

Screen Grap of Global News "The West Block" 

But he also acknowledged that the recent federal budget is unlikely to impress Canada’s allies, many of whom are actively working toward NATO’s established benchmark of spending 2 per cent of their GDP on defence.

“I’m sure that the NATO leadership … would very much wish to see our numbers go up,” Brodeur said.

“In terms of Canada specifically, I think that we’re gong to be under pressure from our friends down south (in the United States) to try and do better.”

U.S. President Donald Trump has repeatedly stated that he will expect to see more money flowing in from America’s NATO allies, and has even threatened to pull out of the alliance. Canada currently spends just under 1% of GDP on defence, the fifth smallest proportion among NATO members.

NATO estimates that Canada set aside $20.3 billion for defence in 2016. The 2017 budget offered no additional money to move the needle, however, drawing loud criticism from the Opposition benches in the House of Commons.

“I think that we have to make some decisions, just looking at what’s happening in the world right now,” Brodeur said.

READ MORE: Lack of defence spending in the federal budget draws fire

He added that there are “several ways” of looking at the numbers. For instance, Canada currently ranks 9th out of all NATO nations when it comes to defence spending per capita.

“So not necessarily the top five, but not the bottom. So it’s not actually that bad.”

Still, money for new equipment and training will be critical in the coming years, said the veteran diplomat.

“That is really key for us, especially as we commit to do more military operations. I think we owe it to our military forces to have the best equipment they can count on if we’re going to put them in harm’s way.”

Canada reviewing how NATO members calculate defence spending

By: Lee Berthiaume, The Canadian Press 

OTTAWA – Defence Minister Harjit Sajjan says he has ordered officials to look at how Canada calculates military spending compared to other NATO members, to ensure all allies are comparing “apples to apples.”

“We have to be cognizant that different nations use a different formula,” Sajjan told the House of Commons defence committee on Thursday.

“So right now the deputy minister is working with our closest partners to look at exactly the formula that they were using so we can have a good comparison.”

The comments come as Canada and other NATO allies are facing pressure from the Trump administration in Washington to increase the amount they spend on their militaries.

While all NATO members agreed in 2014 to work towards spending two per cent of their gross domestic product, or GDP, on defence, only five have reached that goal.

Canada is not one of them, and is actually near the back of the pack. It currently spends less than one per cent of GDP on defence, which ranks it 23rd among 28 NATO members.

Sajjan would not say whether the government will actually roll in the spending on the coast guard or veterans programs like the U.S. and Britain, which would inch Canada closer to two per cent.

“But at the same time, we do need to look at what our closest allies are actually using so that we can then compare apples to apples in terms of that commitment,” he told The Canadian Press after the meeting.

Prime Minister Justin Trudeau appeared to all but dismiss the two per cent target during a visit to Germany last month, saying: “There are many ways of evaluating one’s contribution to NATO.”

That is the message the government has repeatedly delivered to Washington, emphasizing Canada’s military contributions to Latvia, Ukraine and Iraq in lieu of large spending increases.

Sajjan repeated it during and after his committee appearance, adding that the government would invest in what it believes the military needs to do its job rather than to meet a specific target.

“We are going to invest in defence and what we need for outputs,” he said. “That’s how we conduct a defence policy review. That’s what makes it credible.”

Defence analyst David Perry of the Canadian Global Affairs Institute said there is validity to the government’s argument that spending alone isn’t a good measure of a country’s contributions to NATO.

But the fact the government is reviewing the formula indicates it is at least a little concerned about how Canada compares to other NATO members, particularly given the messages coming out of Washington.

It is also another indication that the government is not planning to include any big injections of money into the military in the upcoming budget or its new defence policy, which is expected in the coming weeks.

“If they were about to unleash a big increase to the budget,” Perry said, “you’d kind of wonder whether or not they’d be going through the exercise of figuring out what to count.”

What President Trump Might Mean for Canadian Defence Policy

By Vincent J. Curtis, Espris de Corps Magazine (Vol. 23, No. 11) 

With the election of Donald Trump as the next president of the United States, the world can expect a large recapitalization of the U.S. military over the next four to eight years. We can also expect the Trump administration to pressure NATO allies to increase their defence expenditures to two per cent of their GDP (gross domestic product).

Trump famously campaigned on the theme that the United States was not going to carry a heavier share of the defence burden of the western world than was justified by economics. If NATO allies expected the assistance of the United States, then they needed to do their part. Some of that pressure will undoubtedly be applied to Canada, for Canada is one of those not spending up to the agreed level of two per cent of our GDP.

What does this mean for Canadian defence?

In the first place, it would mean that the Canadian defence budget would have to increase to be in the range of CDN $48-billion. The budget track released by the Trudeau government in its maiden budget forecast revealed a decrease in defence expenditures — the amount projected for 2016 was $29.4-billion with a decrease to $14.4-billion by 2020–2021. In the eyes of Trump, we are moving in the wrong direction.

Yes, defence is one of many competing priorities for federal tax expenditures, but national defence and maintaining good relations with allies is among the most fundamental of priorities of any national government. Those priorities have a higher call for money than new spending to make life more comfortable for a minority of Canadians. The needs of all take priority over the needs of the few.

What use could be made of additional defence expenditures?

There is no question that the Canadian Armed Forces are in need of recapitalization. The Royal Canadian Navy needs to be completely rebuilt, and soon. The fighting capacity of the Royal Canadian Air Force is aging rapidly, and the replacement for the CF-18 fleet is late and nowhere in sight. The Canadian Army could also use a new store of capital equipment for general-purpose combat operations.

The government is dithering over whether it should acquire 10 or 12 frigates to refight the Battle of the Atlantic, should it ever come back. The naval brass is still in the grip of the old-school small ship navy mentality that has dominated Canadian naval thinking since the days of the Niobe and the Rainbow. The RCN brass need to have in their top drawer a plan for a real battle fleet — a fleet consisting not just of frigates but of one or more battlecruisers as well. And if battlecruisers seem to be too war-like for political tastes, then missile-cruisers in the 10,000-ton range can be had off-the-shelf from the United States at $2-billion apiece, less than the cost of a 5,000-ton custom-built frigate. Anyhow, a capitalization project for the Navy in the range of $40-billion should be ready to go.

The RCAF is caught between the failure of Lockheed Martin to deliver a viable F-35 Joint Strike Fighter in a timely and cost-efficient manner, and a new government that wants to start the bidding process for a CF-18 replacement aircraft from scratch. The solutions are easy: buy off-the-shelf F-16s, or the updated F/A-18E/F Super Hornet off the shelf, both of which are also still in production. These are Gen 4.5 fighters, not Gen 5 fighters, but they can be had soon; they are still current and viable for modern combat air operations, and should be seen as an interim purchase until the Gen 5 fighters are finally available.

The Army could also use a store of useful equipment, in particular modern artillery. The M-777 proved spectacular in Afghanistan, and no army has been able to succeed in modern combat operations in the absence of dominant artillery since the 17th century’s Thirty Years’ War.

The problem of joint operations between air and surface has and will continue to bedevil CAF combat operations. If it flies, it is said to belong to the RCAF. But what about rotary aviation? What about a naval aircraft carrier? The United Timbuktu, Gao and Kidal regions ranged from 77 to 92 per cent.

Although PRTs were once described as the militarization of aid, some of these areas are just too dangerous for aid workers. In South Sudan, peacekeepers ignored the rape and assault of aid workers in the country. The adoption of a UN PRT model would allow aid workers to operate more freely in the country. It would also allow more positive interaction between the indigenous population and UN peacekeepers. The interaction with aid organizations and the local population will foster trust and, in turn, hopefully, generate useful, operational intelligence.

PRTs involved a level of Civil-Military Co-Operation (CIMIC) and that level and overall approach can vary depending on the model. There are four generic PRT models: American, German, British(-Nordic) and Turkish. These four generic models can be then divided into many sub categories that vary depending on which nation implemented the model in Afghanistan. A PRT model can be adapted to suit the requirements of a UN peacekeeping mission. Moreover, a UN PRT model in Mali may not work for South Sudan or Somalia and therefore a PRT model will need to be drafted to meet the requirements of each individual theatre.

The Trudeau government is weighing its options and conducting fact-finding missions to pinpoint the one mission that has the least of political consequences. The last thing the Trudeau government and the Canadian Armed Forces need is another Somalia incident. Since our withdrawal, UN peacekeeping missions have been blighted with accusations of rape and the solicitation of sexual relations with prostitutes and even trading weapons for gold.

Canada’s re-engagement with peacekeeping will offer its own unique challenges. Peacekeepers are regularly fired upon and that alone will create a political fervor in Canada. Our re-engagement will take political fortitude, but if the Trudeau government really desires for Canada to take international leadership, we must drive the evolution of UN peacekeeping.

Tory candidate Erin O’Toole vows to double defence spending

By: ANTHONY FUREY, POSTMEDIA NETWORK

Canada’s defence spending will double if Erin O’Toole becomes prime minister. The Conservative leadership candidate and Ontario MP has crafted a substantial defence policy paper that includes a commitment to increasing defence spending to 2% of GDP.

O’Toole, a former veterans affairs minister, says in a statement: “This plan will achieve that as quickly as possible through a responsible increase in expenditures to modernize the equipment needs of the Canadian Forces to ensure the capabilities required for Canada to contribute to domestic, continental and allied defence needs.”

Two per cent of GDP is the amount NATO members technically pledge to spend on defence. However only a handful of the 28 member countries actually fulfill their commitment. Canada currently spends around 1% of GDP on defence.

The policy paper is clearly designed to show O’Toole is serious about not only national defence but also key foreign affairs issues. “The security of Canada, its sovereignty and the safety of its citizens must be recognized as the first and most important responsibility of Government - and is even more so today than it has been for over a generation,” the statement notes. “Every day, we see the war against terrorism, Russian aggressiveness and Chinese geopolitical posturing in the news.”

O’Toole served in the Canadian Armed Forces for more than a decade before becoming a lawyer, entering the House of Commons in 2011.

Other measures O’Toole proposes in the paper include creating a Defence Procurement Agency with the aim of depoliticizing major equipment purchases; strengthening Arctic security measures; implementing new co-operation agreements with Israel and Ukraine; and creating a cyber warfare division within the Canadian Forces.

Tory candidates will square off once again on Tuesday at a French language debate, the third of four official debates, in Quebec City. The leadership vote will be held on May 27.

Auditor General paints dismal picture of the Canadian Army Reserves

By: David Pugliese, Defence Watch

Auditor General Michael Ferguson appeared before the Senate’s defence committee on Tuesday. His presentation, based on an audit of the Army reserves, as well as his answers to questions from senators painted a less than encouraging picture about the situation the Army’s reserve units find themselves in. Here is some of what Ferguson had to say:

-Training of the Army reserve was not fully integrated with that of the regular Army units. Although the Army reserve was given clear guidance on preparing for domestic missions, units did not receive the same level of guidance or how to train troops soldiers for international missions. The Army Reserve doesn’t always have access to the equipment it needed for training and deployments, Ferguson noted.

– Army reserve units are responsible for training their own soldiers. But the AG found that many reserve units didn’t have the number of soldiers they needed. Twelve of the 123 Army reserve units were smaller than half of their ideal size, Ferguson said.

– The Canadian Army provided funding for 21,000 reserve soldiers but only about 14,000 were active and trained. When Army reserve units met in 2105 for their annual, large‑scale collective training events across Canada, only about 3,600 Army Reserve soldiers attended, Ferguson said.

– DND knows that the current reserve recruiting system doesn’t work and that it needs to take steps to boost retention. It has set a goal to increase the Army reserve by 950 soldiers by 2019. But Ferguson said this goal will be difficult to achieve as the number of Army reserve soldiers declined by about 1,000 soldiers a year for the three years his office conducted the audit. Ferguson pointed to the latest numbers provided by DND; as of May 15, 2016, the number of active and trained Army reserve soldiers dropped by a further 1,000 soldiers, to 13,181.

-Ferguson’s audit found that although individual skills training was designed to train the Army reserve and regular army soldiers to the same standard, reserve courses were designed to teach significantly fewer skills than were taught in regular army courses. This skill gap was not always addressed during the pre‑deployment training of Army reserve soldiers, Ferguson pointed out. One example he used was that when Canadian Army soldiers began to deploy as part of NATO’s mission in Eastern Europe, a gap remained in weapons training between Army reserve and regular force soldiers.

-A number of reserve soldiers weren’t receiving the number of days of training that was predicted for them.

-Even if the reserves had all the personnel needed and all of the equipment required, and were doing all of the training, the result would be a severe strain on the existing funds the force has.

-Twenty‑seven per cent of the Army reserve’s existing budget is being spent on full‑time reservists, even though reserves are supposed to be mostly part-time.

-$166 million out of $706 million of their total budget is being allocated back to National Defence to pay for infrastructure.

“What I’m saying is based on everything that we’ve looked at, it is hard for me to sit here and see how they would be able to fund everything they’re supposed to do within the budget that they currently have,” Ferguson told senators. “But certainly it looks to me like it would be a significant challenge for them.”

Canada ranks 23 out of 28 NATO countries on defence spending

By: Murray Brewster, CBC News 

The Trudeau government won praise Monday along with some European allies who have chosen to put more into their militaries, despite only promising to increase defence spending by a whisker in the current budget year.

New figures released by NATO ahead of this weekend's leaders' summit show Canada inhabits the lower third of NATO membership in terms of defence spending, with the government planning to spend an additional .01 per cent of the country's gross domestic product on defence.

The increase, which is only anticipated because the 2016 budget year is just getting underway, will see Canada's defence spending rise to .99 per cent of GDP from .98 per cent.

To put that in perspective, the North Atlantic military alliance has established two per cent of GDP as its annual investment benchmark. Canada is ranked 23rd out of 28 member countries, wedged between Hungary and Slovenia.

It has been a source of frustration for the Americans, something that manifested itself last week in U.S. President Barack Obama's speech to Parliament, where he pointedly called on the Trudeau government to meet the NATO measure because "the world needs more Canada."

The irritation was also felt in Brussels, where NATO Secretary General Jens Stoltenberg has struggled to convince hesitant allies to pry loose cash in the face of a resurgent Russia.

"Last year, after a long period of decline, we saw a small increase in overall defence spending by NATO's European Allies and Canada," the secretary general said Monday.
'A very long way to go'

Stoltenberg, who has regularly but diplomatically rebuked nations for failing to meet the two per cent standard, chose to focus his praise on what's known as "real" defence spending — the total dollars each ministry pours into its budget without accounting for the corrosive effect of inflation.

He said NATO is pleased to see an expected increase of three per cent in defence spending by European Allies and Canada in 2016. That amounts to about $8 billion US, and 22 of the allies are planning bigger budgets.

"So, we are both spending more and we are spending better," he said. "But we have a very long way to go and we must keep up the momentum."

According to NATO figures, Canada will set aside $20.3 billion for defence in 2016, an increase from $19.4 billion last year.

Stoltenberg's praise raised a few eyebrows among defence experts, who point out it comes just a few days after the Liberal government committed to send troops and headquarters formation to a NATO high-readiness brigade, which is slated to deploy to eastern Europe.

Troops from the U.S. Army's 173rd Infantry Brigade Combat Team parachute from a Boeing C-17 Globemaster III during a NATO-led exercise held together with Canada's 3rd Battalion and Princess Patricia's Light Infantry, and Poland's 6th Airborne Brigade in southern Poland in May 2014. (Kacper Pempel/Reuters)

"If we were not going to take a leadership position on one of NATO's key priorities, I imagine that we would be having a very different conversation right now," said Dave Perry, an analyst with the Canadian Global Affairs Institute. "We have been getting a free pass on our actual budget commitments because we are heavy lifters when it comes to operations."

Perry noted the country's No. 23 ranking at NATO and said there's little in the Liberal government's plans or public statements that will change that.
Risk of a 'hollow force'

During the 2015 election campaign, Justin Trudeau promised not to cut defence expenditures and to live up to Conservative pledges of an additional two per cent annual increase, starting in 2017.

The government is in the midst of a strategic defence review, which could be completed in time for the next budget, but Perry said the Liberals seem to have other priorities.

"Our allies will remain disappointed with the actual amount of money we put on the table, and I suspect we can fob off the criticism by showing up for operations," he said.

But Perry warned that strategy runs the risk of further wearing down equipment and personnel, creating a "hollow force."

A spokeswoman for National Defence responded that government agreed at the 2014 NATO summit in Wales that bigger budgets were in order, but that committing to a "fixed target" was not something Canada was prepared to do.

Dominique Tessier said the NATO two per cent benchmark is "a statement of aspirations" and the prodding by allies was meant "to reverse the trend of falling spending on defence among allies and to optimize the use of available funds."

CADSI extends support to Canada’s Defence Review

Published by: Frontline Defence News 

Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries (CADSI), has issued the following statement pledging CADSI's support and expertise to the advisory panel to Canada’s Defence Review:

The Canadian Association of Defence and Security Industries (CADSI) welcomes the launch of Canada’s Defence Review and looks forward to being consulted by the Minister of Defence’s advisory panel. Our 1,000 member companies are an important part of the solution with global expertise to contribute.

The ability of the Government and the Canadian Armed Forces (CAF) to effectively implement Canada’s new defence policy is dependent on procuring the equipment and services the CAF needs to carry out its missions. Improving the process of defence procurement is therefore an essential part of developing an effective defence policy.

Canada’s defence industry has unsurpassed knowledge and expertise in procurement. We work with the system in Canada and across the world every day and at every level. We can speak to practical improvements to procurement to ensure the efficacy of a new defence policy developed through the Defence Review.

Our industry plays an essential role in our nation’s security and sovereignty by ensuring ongoing readiness of existing and building new capabilities with world class, innovative technologies made across Canada and sought the world over. The Canadian defence industry and Canada’s defence policy are interdependent and need to be considered as such in the Defence Review.

Audit says DND waste in the Millions

Written by David Pugliese, published in The Ottawa Citizen, March 30, 2016

Is the Department of National Defence wasting millions on parts for equipment that could be obsolete or that it plans to dispose of?

That’s the suggestion put forward in a newly released audit.

The 2015 document contends that DND doesn’t know how many private contractors it’s paying to repair its equipment. The situation, critics allege, was cultivated by deep cuts to full-time federal staff by the previous Conservative government.

While contesting some of the suggestions in the report — especially the notion of spending millions on obsolete parts — DND says it’s trying to improve, based on the recommendations. The Defence Department doesn’t know how many private contractors it is paying to repair vehicles and other army equipment, while at the same time it spends millions of dollars buying parts for equipment that could be obsolete or it plans to dispose of, according to a newly released audit.

The June 2015 evaluation by the Department of National Defence’s auditors suggested overall productivity for the organization that repairs and maintains land equipment and systems has been significantly reduced. But it is unclear why.

The auditors noted that private contractors are playing a significant role in maintenance management activities, jobs once held by military personnel and DND civilian workers.

“The number of contractors is not tracked,” the evaluation concluded. “The lack of availability of actual worker numbers is problematic,” it added. “Accessing the productivity of employees without this key data is not possible.”

The organization has 952 DND employees, 273 military personnel and an unknown number of contractors. It is responsible for maintaining and repairing thousands of pieces of equipment.

The DND says it is following up on the evaluation’s recommendations and will try to determine the number of contractors it has as well as establish management performance indicators by early next year.

But in its response to the auditors, DND officials dismissed concerns that parts are being purchased for equipment that could be obsolete. They countered that a majority of the purchases were legitimate. In some cases, large numbers of parts had to be bought to cover the life of specific equipment.

Defence union president John MacLennan said he wasn’t surprised by the warnings about private contractors. The Conservative government tried to save money by cutting full-time federal staff, he noted.

“What happened was that public servants were forced to leave and management brought in the contractors,” said MacLennan, president of the Union of National Defence Employees. “But it got out of control and you have the situation they find themselves in today.

“They cut vehicle mechanics, they cut maintenance people,” he said. “It was mismanagement, for sure.”

Since there are numerous contracts and subcontracts, it is difficult to figure out exactly how many private contractors are on the payroll, he added.

The government has promised to reduce spending on consultants and contractors. It wants to cut around $170 million annually.

Earlier this year, Postmedia News obtained a report prepared for DND that outlined plans to have private companies play more of a role in the maintenance of military equipment. But the report, produced by consulting firm KPMG, pointed out that there was a lack of accountability governing the plan. In addition, federal public servants were resistant.

The DND has already started a number of pilot projects on what it is calling its “Sustainment Initiative” and hopes to launch the program in June. Initially, most of the work is aimed at maintenance of ships but public service unions are worried the program will be expanded to include other equipment.

“Risks and issues are not well understood or clearly reported,” the KPMG report noted. “No consensus exists on progress to date and chances of success.

“The Sustainment Initiative has not utilized a number of fundamental program management components necessary for the success of such a large and complex initiative,” the KPMG report added.

On the positive side, the KPMG report points out that the initiative has strong support from DND leadership and industry.

But those involved in the initiative have also raised concerns there is a lack of a formal schedule or a detailed plan.

“There is a lack of a clear understanding of how decisions are made, or on what timeline results are expected,” the KPMG report added.

Budget 2016: Defence Takes a Hit

Written by JDM - CAFDispatch Author
Quotes from Dave Perry supplied by the Huffington Post
Published March 23, 2016

While I will boldly admit, I tend to lean fiscally conservative on a number of issues; I have no issue with running deficits. Especially in times of economic uncertainty, to help our economy, and to create jobs. So the infrastructure spending, first nations, or old age security spending does not bother me. However, it is the indefinite delay in close to $4 billion in defence procurement that does.

During the 2015 Election, the Liberals promised to re-outfit the Canadian Forces; while ensuring "More Bite, less Tail" for its command and operation structure...well not it seems that will not be the case.

In the 2016 Budget announced yesterday on Parliament Hill, the Finance Minister Morneau announced that the re-equipping of the Canadian Armed Forces will be delayed until after the next election. (For those who don't know the Canadian System - that is not until at least 2020 or later)

This delay is post-poining $3.7 Billion in already planned purchases - New Ships for the Navy, New Aircraft for the RCAF, and new vehicles for the entire CAF. However, Minister Morneau insists it’s not a cut to military funding, which the Liberals promised to maintain during the last election. Which in part is true; as they have pledged to maintain the 3% increase annually to keep up with inflation...so really it means no extra money.

The Liberals are not the first government to do this. The Conservatives did the same thing in two previous budgets; defence analyst Dave Perry of the Canadian Gobal Affairs Institute says the cumulative total of postponed defence purchases has now reached $10.4 billion! For the previous government, the postponement had a lot to do with the balancing the budget, Perry indicated.

What is the reasoning behind these dalays? The Liberal promise of a new Canadian Defence Review; or White Paper as they have been called. Morneau said the Liberals need a year to figure out Canada's defence priorities. "In order to make sure we have the funds available at the time when they need those funds, we've reprofiled some in the fiscal framework," he told a news conference prior to tabling the budget in the House of Commons."So, when we need the money, the money will be in the fiscal framework. So, we believe that is the appropriate action to take to ensure our military has the appropriate equipment, the planes and the ships they need."

The political significance of this delay, according to Perry, is that National Defence will be expecting its money at time when the Liberals will likely have to get serious about cutting the deficit, which is projected this year at $29.4 billion, and a plan to have it falling to $14.4 billion by 2020-21.

"They're literally going to have an issue five years from now because that's when the bill arrives," said Perry, who indicated that the military is at the point where it needs concrete guarantees that the money will be spent.

The CAF is facing a huge "rusting-out" issue. The RCN is already without AOR Vessels, and its fleet is aging and is not expected to be replaced before the mid-2020s. The RCAF CF-18's have already had their life expanded twice; and will need to be retired by 2025, unless billions more is spent retrofitting them a third time. The Army is looking for new troop transports as it retires it fleet of LAVs and just finished retrofitting its fleet of Leopart-2 Tanks for the war in Afghanistan.

"I think if I was National Defence, I would hope you'd already have the money in the bank, instead of having to rely on a promise of some year, some time in the future they'll be able to acquire this stuff," concluded Perry. 

All this at a time when the Government plans to redeploy the CAF on UN Peacekeeping missions around the world; where equipment will take on more damage, and require replacements even sooner. 

Canadian Navy's New Fleet to Cost an Estimated $104 Billion over 30 years

Written by Murray Brewster, CTVNews

OTTAWA -- The federal cabinet will soon be asked to make an initial down payment on the navy's $104-billion frigate replacement program with an approval that will lay the groundwork for the new fleet, The Canadian Press has learned.

It will be asked not only to approve requirements for the new warships and cost tradeoffs, but also first-stage funding, which will allow defence planners to get the ball rolling.

But getting a revised cost estimate before the Liberal government has proven to be a painful exercise and budget planners at National Defence and the Finance Department engaged in a tug-of-war over projections ahead of Tuesday's federal budget, say several defence and government sources.

But defence officials have been reluctant to be pegged down because of the complex variables and that means they're only able to project numbers into the future with "about 80 per cent certainty," said one source with knowledge of the discussions.The sources, who cannot be named because of the sensitivity of the discussions, say Finance Minister Bill Morneau's office has been anxious for military planners to produce numbers on the Canadian Surface Combatant program for the last couple of months.

Since the political fiasco over cost estimates for the F-35 jet fighters a few years ago, there's a desire to get the numbers as close to 100 per cent as possible, said the source.

The former Conservative government was hammered by the auditor general and the parliamentary budget officer for not including the full cost of buying and operating a fleet of 65 stealth fighters.

Internal documents and presentations leaked to The Canadian Press show that the federal cabinet was to receive an update this month on the frigate project, "including high-level requirements and cost-capability tradeoffs and the plan forward."

The November 2015 presentation said "funding decisions for the budget 2016" would be made, followed by a request to approve initial funding.

The estimated construction cost for 15 warships was originally pegged at $26 billion, but officials have long indicated privately -- and sometimes publicly -- that the price tag is outdated and will go higher.

One defence source said it could be "north of $40 billion" and the leaked documents warned cabinet soon after the Liberals were sworn in that "potential additional funding" for the navy's frigate replacements would have to be considered over the next few months.

Those figures do not include the lifetime maintenance and operating costs.

A separate presentation to defence contractors, on Feb. 23-24, 2015, said there is an "early projected estimate of $64 billion for the personnel, operations and maintenance costs over 30 years."

The eye-watering $104 billion total figure is an estimate that strictly depends on decisions the Trudeau government makes over the next six months, most importantly on the number of ships to be constructed.

What defence officials are hoping will come out of the internal debate over the next few months is "a solid commitment on how many ships the navy will get."

The Liberals have already taken preliminary steps to mitigate the enormous cost by proposing that the navy accept an existing warship design, rather than start from scratch. They are also proposing that the procurement of the warships be handled in one process, rather than through two tenders.

Retired colonel George Petrolekas, of the Conference of Defence Associations Institute, said taken together both measures will save an enormous amount of money and time.

But he says it will be up to the navy to exercise restraint in the kinds of high-tech equipment it wants to see on the ships.

"There's going to be sticker shock no matter what you do, but I think the navy is going to have to demonstrate a certain amount of financial prudence," Petrolekas said.

The practical example he uses is crew size, which on Canadian frigates runs over 200 per vessel. Many other nations, including the U.S., are reducing the number of sailors on each warship through heavier use of automation. Petrolekas says smaller crews mean less long-term costs.

Some defence analysts have said the navy cannot afford to get bogged down in an F-35-style debate over cost because unlike fighter jets, it takes a decade -- or more -- to get warships into the water and operating.

Defence spending expected to drop $400M — despite Liberal pledge to keep up with Tories: sources

By: Murray Brewster, National Post 

OTTAWA — The upcoming federal budget is not expected to commit to a broad increase in military spending, say several defence sources.

In fact, newly tabled fiscal planning documents suggest overall spending on the military could shrink by almost $400 million in the coming year.

During the election campaign, Prime Minister Justin Trudeau promised to maintain the former Conservative government’s defence spending levels and increase funding in 2017, as laid out in last year’s federal budget.

His government has been under pressure from allies to hike what it spends on defence, with both the United States and Britain asking Canada to aim for the NATO spending benchmark of two per cent of GDP.

Rick Bowmer / Associated Press An F-35 jet sits on the tarmac at an operational base

The demands have become particularly strident in the aftermath of the Paris terrorist attacks last November, which killed 130 people.

Preliminary budget estimates for the coming year show the military is expected to end the year with a budget of just over $19 billion, but planned spending for fiscal 2016-17 amounts to $18.64 billion.

National Defence does routinely goes back and top up its budget later in the year, but the amounts vary depending on what is going in the world.

Defence Minister Harjit Sajjan has denied there are spending cuts in the works, citing a Liberal promise to stick with planned annual increases through a budgetary mechanism known as the defence escalator.

The Conservatives used to use a similar line, insisting the military was getting its annual operating increase, only to cut spending elsewhere.

Related
John Ivison: Liberals’ vision for Canadian Forces unlikely to be swayed by public consultations
Canadian military losing soldiers at increasing rate as headcount drops to level not seen in years
Director of support unit for wounded soldiers steps down amid DND’s sweeping overhaul of system

Documents obtained by The Canadian Press under the Access to Information Act show those annual two per cent increases don’t keep up with inflation and have been more than offset by the previous Harper government’s earlier deficit spending cuts.

Under the previous government, the operating budget would increase by roughly $300 million per year, but all told some $2.1 billion ended up coming back into government coffers.

The escalator was introduced by the Conservatives as a way to provide stable and predictable funding to the military, but analysis has shown that inflation in the defence industry runs higher than in the broader economy.

A lot of that is driven by so-called “technological inflation” on high-tech military hardware, which the U.S.-based think-tank Rand Corporation estimates to range from two to five per cent annually.

National Defence is also forced to buy from a limited number of suppliers, which charge a premium.

Sean Kilpatrick / Canadian PressPrime Minister Justin Trudeau, Defence Harjit Sajjan, and Minister of International Development and La Francophonie Marie-Claude Bibeau during a press conference on Monday, Feb. 8, 2016

“The two per cent defence escalator appears to be more or less adequate to compensate for strict economic inflation factors; however, it is not adequate to compensate for other non-economic driven cost inflation factors,” said a memo written for the deputy defence minister on Nov. 12, 2014.

“The two per cent defence escalator does not provide the funding stability that will allow for the successful implementation of the (Canada First Defence Strategy) without access to the accrual envelope for additional funds to offset on-going non-economic cost pressures on the DND budget.”

Conservative defence critic James Bezan says at a minimum, the Liberals should honour the promise to maintain the planned escalator increases.

With all of the deficit spending going on in other departments, Bezan admits he’s getting nervous.

“Now that we’re talking a $30-billion deficit, there’s going to be increased pressure on National Defence is pare back their own funding requirements and that is something I’m going to be watching very closely.”

Change Needed in Canadian Defence Policy - Should we be looking at Australia?

Published in today's National Post, Matthew Fisher has written an interesting article explaining how Australia decides its matters of national security and overall defence policy. The intent of his article is to perhaps convince Canadians that we would be better off if Canada changed how it dealt with national security issues, military spending, and procurement; and took a lead from the non-partisan way Australia has been working for years.

Fisher's main arguement is that Australia has adapted a non-partisan forum for deciding issues of national security and its overall defence policy because it is geographically isolated from its allies, and therefore must make swift defence decisions. Australia cannot afford to take decades to decide on procurement; like Canada has been doing now on its FWSAR, CF-18 replacement, and the replacement fleet for the Royal Canadian Navy.

You can read his article below and decide for yourself.

Published by Matthew Fisher, National Post, Thursday February 18, 2016 Edition 

Australians figured out decades ago that national defence was too important to be left to the whims of competing political parties and their leaders.

While Canada has long dithered about what fighter jets to buy, Australia has acquired F-35s and F-18 Super Hornets with little political fuss or public outcry, Matthew Fisher writes, due to an all-party consensus that a common and consistent vision on national security is top priority.

What has evolved Down Under is an all-party consensus that robustly defending Australia is a top-level national interest. Decisions on strategic policy, defence budgets and procurement policies reflect that. A common vision on security supersedes everything.

There is a strong public expectation political parties and their leaders will set aside their differences and work together.

No matter which party is in power in Canberra, major defence policies have remained the same. There was been little parliamentary squabbling or controversy over such issues as the deployment of Royal Australian Air Force F-18 Hornets and Super Hornets to bomb the Islamic State of Iraq and the Levant, while training more Iraqi security forces than Canada has done or is proposing to do.

Nor do opposition parties seek election in Australia by campaigning to undo many of the outgoing government’s defence policies. Continuity in security strategy and philosophy are considered far too important. Even the media and defence analysts tend to be agreed on this. So debates on national defence often end up being about different shades of grey.

Australia provides the best straight-up comparison with Canada because both are large, thinly populated countries and share the Westminster political system and traditions. But while Canada has dithered for years about what fighter jets and warships to buy next, with little political fuss or public outcry Australia has acquired F-35s and F-18 Super Hornets. Its navy has commissioned a huge new assault ship, with another on the way, and is committed to spending more than $15 billion on a fleet of submarines to be built in Japan, Germany or France.

Such purchases often become political footballs in Canada because some politicians demand the money be spent in their jurisdictions. Australia can avoid such expensive partisan nonsense because the public has little patience for politicians trying to gain advantage from important decisions about the country’s security.

The usual explanation for Australia’s striking unity on security issues is that it is far from friends in a distant corner of the world while Canada expects the U.S. to pay most of its defence bills.

This is at least partly true, but consensus on national security has also been obvious for decades in Britain and France, and even in small Nordic countries with liberal traditions such as Norway, Sweden and Finland. In the U.S., there is still fairly broad political backing whenever a president commits troops overseas.

Canada has not had a broad public or political consensus on major military matters for some years. The most notable exception to this drift, which set in after the Korean War, was the Independent Panel on Canada’s Future Role in Afghanistan. John Manley’s report, whose recommendations were accepted by Parliament in 2008, called for combat troops in Kandahar to be provided with helicopter and unmanned aerial vehicle support, and combat help from a U.S. army infantry battalion.

Lt.-Gen. Michel Gauthier, who was responsible for the prosecution of Canada’s combat mission in southern Afghanistan during its most difficult years, points out it was not only incoming Liberal governments that tried to reverse the security policies of those they were replacing. For the first time in more than half a century the Paul Martin government decided to send ground troops to fight overseas in 2005. Within a few months, it was out of power.

“Canadians had instead elected the Harper government and its main military plank was to do more in the Arctic, not Afghanistan” he said. “The Conservatives had to immediately adjust to NATO and working in coalitions.”

Stephen Harper was no fan of peacekeeping or the United Nations. Justin Trudeau champions peacekeeping and internationalism. So does the New Democratic Party, which has a strong pacifist bent and would like the military to be defanged.

Without taking a position on these opposing views, Gauthier said, “You can’t turn around national security policy on a dime. Procurement takes 20 years and development of military capacities takes 15 to 20 years. There has to be some kind of consistency in a country’s national security vision. Defence and foreign policy derive from agreed interests and values.”

Armed forces in a democracy must abide by the decisions made by those whom the public elects. There is no question about that.

But it would be mighty helpful if Canada’s political parties understood, as Australians do, why there is a compelling need for continuity in defence policy and could forge a consensus about what the country’s strategic interests and values are. There is no chance that will happen as long as they do not regard national defence as a priority.

Soloman: CAF Risks Returning to a Decade of Darkness

Evan Solomon, Macleans Magazine on National Defence’s looming funding crisis

February 3, 2016 

Who would have guessed that, at the time of his most critical decision, Defence Minister Harjit Sajjan would be doing a military sample of the 1976 Genesis prog-rock song, Ripples?

“If we want to understand the ripples we are creating, we have to understand the environment we are creating them in,” Sajjan said last week. He was being asked—as he is on an almost daily basis—when he will reveal details about the long promised Liberal plan to pull out CF-18 jets from the mission in Iraq and Syria. Apparently this “ripple effect” theory is the “genesis” of the long delay. “We may not be able to control all the ripples that are out there, but we can control the ripples that we create,” Sajjan said, adding something or other about “negative ripples.”

As there is no formal military theory about “ripple effects,” it’s hard to tell exactly what the minister is talking about. But we get the gist: The decisions he makes now will have an impact on the future. The problem is, the future is already here. The Conservative mandate for the mission is up by the end of March. If the Liberals were not ready with an alternative plan—and clearly they weren’t—why didn’t they just say they would complete the original mandate and then end it? Pulling out now, after more than 100 days of post-election bombing, looks disorganized at best—at worst, it smacks of cheap politics.

Related: Why Trudeau’s crass stance on Syria is lose-lose

But as politically charged as the bombing mission is, it is really nothing compared to the deeper funding crisis facing the military. “There is simply not enough money to buy the military hardware that we need,” says Dave Perry, senior analyst at the Canadian Global Affairs Institute. Perry is to military procurement what Nate Silver is to polling, so when he crunches the numbers on the military budget you tend to listen. “There’s three times more demand for procurement dollars than there is budgeted fiscally, which means the Canada First Defence Strategy—the plan to maintain Canada’s military capabilities to protect our interests—is now, essentially dead.”

That’s a big problem. It would cost the government another $2 billion a year for 20 years, on top of what we’re already spending, just to maintain the Air Force, the Army, the Navy—and upgrade our technology for the North American Aerospace Defense Command (the NORAD commander comes to Canada later in February to demand those upgrades). Meanwhile, NATO is asking Canada to fulfill its commitment to contribute two per cent of our GDP to military spending. That would mean another $20 billion this year alone. Not happening, NATO. Because it’s 2016. And we’re still broke.

Fulfilling the military promises Trudeau made in the campaign looks equally unlikely. “The biggest one from the campaign in terms of the budget is the idea of savings tens of billions on the acquisition of new aircraft to devote to ships,” Perry says. “The $9-billion fighter budget was set when the Canadian dollar was worth 100 cents American—and now it’s 70 cents.” We’ve lost close to 30 per cent of our purchasing power. There’s no way to save on planes and still have a viable air force.

Defence Minister Harjit Sajjan speaks during a conference on foreign affairs in Ottawa on Friday, Jan. 29, 2016. (Sean Kilpatrick/CP)

The Navy’s needs are even greater. The government has budgeted $26.2 billion over the next 12 years or so to build 15 surface combat ships, destroyers and frigates. Any savings on jets—at best a few billion—won’t make a dent in this.

Related: The sinking of the Canadian Navy

The status quo alone is fatal. “We’re spending an inadequate share of the defence budget on capital equipment—between 10 to 12 per cent over the last three years,” Perry says. The bare minimum is supposed to be 20 per cent. “That’s the lowest share of the budget devoted to procuring new kit since 1977.”

That leaves Sajjan with three choices, Perry argues. “Invest the $2 billion a year, cut our military capabilities, or cut the size of the military.” That could mean giving up on a blue-water Navy or an expeditionary air force. And the chances of new money coming? “No government of any stripe has ever invested more in the military in a time of fiscal restraint,” Perry says. Given the other Santa Claus-like promises Trudeau has made on infrastructure and health care, more money to defence is about as likely as Stephen Harper asking women to wear a niqab. Cuts, cancellations or constriction.

This is not all the Liberals’ fault. Since 2007, the Conservatives lapsed over $10 billion in military spending. They turned military procurement into a game of freeze tag: whatever they touched stopped moving altogether—from military jets to joint support ships, maritime helicopters to the tactical armoured patrol vehicles. But if the Conservatives—and the Martin Liberals—didn’t spend, at least they did what NATO insiders call “swimming.” They took on tough missions in Afghanistan and Libya. That got Canada to the table, even with a light wallet. Trudeau says he’s out of that game, which is why Perry is not surprised Canada was not invited by our allies to the recent meeting on Syria and Iraq. If we don’t spend and we don’t swim, we get shut out.

Trudeau likes to say Canada is back, but unless he has a big budget surprise for the military, we may be back to the decade of darkness that once defined the military under Jean Chrétien. These aren’t ripples. These are full-size waves.

Defence Review to be completed in 2016

Written by: Marie-Danielle Smith

Published: Wednesday, 01/13/2016 12:00 am EST

Defence Minister Harjit Sajjan says he plans to complete a thorough defence policy review by the end of 2016—and the public will be asked to participate.

In an interview with Embassy Jan. 12, Mr. Sajjan confirmed that Department of National Defence officials are already identifying how the review, or Defence White Paper, will be conducted.

Public consultation will be involved and foreign allies will be consulted, he said. The review is expected to set a road map for the next 10 to 20 years.

“I want to make sure that we get the 'How' part. It’s so important,” he said. “If we don’t get that right then the quality’s not going to be there at the end.”

Arctic sovereignty, NORAD prioritized

As the raison d’être for the Canadian Armed Forces is debated once again, Mr. Sajjan said there are elements of Canadian defence policy that he assumes will be prioritized. The safety of Canadians will always be the “number one priority,” he said, while continental defence, Arctic sovereignty and Canada’s responsibilities within the North American Aerospace Defense Command and the North Atlantic Treaty Organization will stay constant.

Even so, he said defence policy needs to be placed “in a wider context that suits the needs of the vision that our government is setting." The Liberal government, in its early days, has talked up a return to multilateralism and a greater focus on diplomacy.

Working with foreign allies is “critical,” Mr. Sajjan said. The minister has connected with his counterparts from the United States, the United Kingdom, Australia, New Zealand and France, as well as other NATO allies.

British, Australian lessons

“The British just did a defence review," he said, referring to the Strategic Defence and Security Review 2015 released by the Cameron government on Nov. 23. "Australia is about to release theirs, and especially it’s important for us to be able to learn from those lessons."

He said he recently spoke with UK Defence Secretary Michael Fallon in London. “It is helping me to shape how Canada can look at doing [the defence review],” he said, noting the UK had used an interactive website to get public input.

“I’ve got some really key ideas that Fallon provided, and I’m looking forward to reading the Australian review when it comes out as well,” Mr. Sajjan said.

The minister said the credibility and relevancy of the review was important. “We can do a white paper of everything on the wishlist, but if you don’t have the budget to support it it really doesn’t matter.”

Defence officials declared the previous Harper government's military wishlist, the Canada First Defence Strategy, unaffordable in 2011, but no updated document was ever released.

'Very focused' on procurement

Sitting in his office at National Defence headquarters—where staffers said reporters hadn't been seen in the past few years under the previous government—Mr. Sajjan told Embassy that procurement is being looked at in “extreme detail."

“Does it have the right number of people, the right type of expertise to be able to make it more efficient,” he posited.

A recent report from the Canadian Global Affairs Institute’s David Perry had warned that cutbacks to DND’s materiel department were causing major slowdowns to the process.

“To have an agile force we need to support it as well. Certain areas we do need to increase,” Mr. Sajjan said. Procurement is "definitely one of them."

Though hesitant to look back at the previous government’s record, he acknowledged a belaboured procurement process.

He is “dismayed” at the capability gap in the Canadian Navy, he said, “because we didn’t get the procurement process right.” So he is “very focused” on making sure that procurement becomes more efficient.

“We’re going through a process that’s going to be more transparent, so that it’s done in a manner that gives confidence to the Canadian public,” Mr. Sajjan said.

He would not confirm, however, whether the Statement of Requirements for new defence procurements would be released publicly. In 2013, DND quietly decided to no longer post these key technical documents on its website, which allowed the public to see the military’s requirements for crucial new planes, ships, and vehicles.

With the ubiquitous F-35 fighter jet program, shafted by the Liberals to replace the CF-18s in favour of an open competition, Mr. Sajjan said “the last thing I want to see with our fighters is what we have with our Navy right now: the gap in our capabilities.”

When it comes to figuring out how Canada's National Shipbuilding Procurement Strategy should move forward—including narrowing down exactly which ships are needed and how many—the defence policy review will help to provide “a lot more clarity.”

'Consistent and predictable' funding

Asked about the transformation recommendations of fellow MP and retired general Andrew Leslie, whose controversial report recommended ways to improve the department’s efficiency, Mr. Sajjan noted there could be redundancies in some areas within the department. The defence review will identify these, he said.

Another thing the review will determine, he said, is the future for Canada’s reserve force. The previous government had committed to an accelerated expansion from 24,000 to 30,000 members.

“With the defence review it will allow us to look at what the capability and the role of the reserves will be for the future,” Mr. Sajjan said. “In some areas, as much as we want to grow, the population can’t support that growth.”

Ultimately, funding will play a big role in how the department will evolve. The Liberals committed to maintaining the current defence budget escalator—a three per cent increase to the budget annually, as of the 2015 federal budget.

The minister wouldn’t specify whether the government is thinking of increasing funding any more than that, but he said it’s his goal to make sure funding is “consistent and predictable” to better plan for the future.

“And as the economy improves, we can look at adjusting things as well,” he added.