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Proceedings of the Standing Senate Committee on
Defence and Security

Issue 1 - Evidence, July 18, 2001 (morning session)

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OTTAWA, Wednesday, July 18, 2001

The Standing Senate Committee on Defence and Security met this day at 8:45 a.m. to conduct an introductory survey of the major security and defence issues facing Canada with a view to preparing a detailed work plan for future comprehensive studies.

Senator Colin Kenny (Chairman) in the Chair.

[English]

The Chairman: I call the first meeting of the Standing Senate Committee on Defence and Security to order. Whether you are watching us on television or following us on the Internet, welcome to the committee. My name is Colin Kenny. I am a Liberal senator from Ontario and I am chairing the meeting today. To my left is a distinguished senator from Nova Scotia, Michael Forrestall. Senator Forrestall is a Conservative and he is the deputy chair of this committee. On my extreme right is Senator Lucie Pépin from Quebec; sitting beside her is Senator Cordy from Nova Scotia; on my far left is Senator Atkins, a Conservative from Ontario; beside him is Senator Wiebe, a Liberal from Saskatchewan; and beside Senator Wiebe is Senator Banks, a Liberal from Alberta. We will have some other senators joining us shortly.

Our committee is the first permanent Senate committee with a mandate to examine subjects on security and defence. Today we begin our introductory survey of major security and defence matters facing Canada, with a view towards preparing a comprehensive work plan for future committee studies. We intend to spend the summer and the fall on this survey, and report back to the Senate in February.

We have a format today of some one-hour sessions, which will comprise a 15-minute presentation followed by 45 minutes of questions and answers, and sessions of an hour and a half, which will comprise a 30-minute presentation and 60 minutes of questions and answers.

Our first witness today is Mr. Daniel Bon, who joined the Department of National Defence in 1987 and has extensive experience in defence policy matters in both the public and private sectors. He has worked with the Washington-based Centre for Strategic and International Studies, the Conference Board of Canada and the Parliamentary Centre for Foreign Affairs and Foreign Trade. The policy planning division, of which he serves as Director General, has three directorates - Policy Development, Strategic Analysis, and Arms and Proliferation Control Policy. This morning, Mr. Bon will provide an overview of defence policy with a special emphasis on the 1994 defence white paper.

Welcome, Mr. Bon. Before you commence, there is a technical matter that I need to raise with you, and it has to do with the arrival of briefing papers. The committee clerk requested them on June 13 and asked for them in three weeks so that we could prepare and they would be distributed to the committee. We did not receive them until the week after that, which made it difficult for us to do our work. In future, if we could get the briefing material on time it would be very helpful.

Mr. Daniel Bon, Director General, Policy Planning, Assistant Deputy Minister, Policy, Department of National Defence: Mr. Chairman, I apologize for the delay in the papers being sent to you. I am sure that we will try to do better.

The Chairman: Thank you very much. Mr. Bon, the floor is yours.

Mr. Bon: Mr. Chairman, it is a bit overwhelming to be the first witness to this committee, but I shall attempt to do my best.

[English]

I am as pleased to be appearing before you today as I was honoured to work very closely with your predecessors on the Lafond committee, from 1983 to 1987. In many ways, that period remains one of the most satisfying I have experienced in my professional life.

I am here today to talk about the 1994 Defence white paper - in other words, the current policy. I will not go into detail, since the time set aside for my presentation does not allow that. At least four members of your committee took part in the work of the Joint Committee of the Senate and the House of Commons, which held wide consultations prior to the release of the white paper. You should all have received a summary of the 1994 Defence Policy about two weeks ago.

I am proud to have contributed to the work of the Lafond committee. I am equally proud of the 1994 white paper. First of all, I would remind you that the white paper came about as a result of the end of the Cold War and the deep federal deficit of the 1980s and 1990s.

It was released at a time when, because of the huge federal deficit, government budgets were being severely cut all across the board. As a result, some way had to be found to bring down military spending to the greatest extent possible while still preserving our fundamental defence capability. That meant staff reductions, a more rigorous analysis of capital equipment and materiel requirements and real pragmatism in seeking smarter and more effective ways of doing things.

For Canada, the end of the Cold War meant that it was no longer subject to any direct military threat. Unfortunately, all countries were not so lucky, and the world continued to be just as dangerous and unpredictable as before. Many countries and regions were still engaged in conflicts which sometimes seemed as though they would never be resolved. However, the risks of another world war or confrontation between major powers seemed extremely slight. That is still the case now. In fact, the likelihood of such a conflict arising in 2001 is probably even lower than it was in 1994.

It is in this context that the three primary roles of the Canadian Forces have been defined. First of all, the defence and protection of Canada, ranging from search and rescue to surveillance of Canada's territory and maritime approaches, including, as required, armed intervention. Second, defence of the North American continent in cooperation with the United States, at sea, on land and in the air. Thirdly, contributing to international security through our participation in UN and NATO peacekeeping operations or other coalitions with countries that share our values; through a broadening of our bilateral defence contexts with Asia and the Americas in particular; through verification of the enforcement of arms control agreements; through humanitarian assistance operations or through our Military Training Assistance Program.

[English]

One major departure from what had gone before was that the 1994 white paper drew the logical conclusion from the fact that the Cold War had ended. There was no longer a need for us to approach multilateral missions as if they consisted of two very distinct sets of missions.

On the one hand, NATO missions had a high level of intensity; on the other hand, UN and other peace support operations had a much lower level of intensity. Our forces, therefore, could be multipurpose, which is to say that the same forces could wear two or three hats and perform the whole range of missions called for by the new policy.

Two years earlier, the defence statement of 1992 had confirmed the withdrawal of our troops from Germany. The white paper of 1994 now went beyond that. In effect, it called for a reality check at NATO. With no Soviet Union left and no overwhelming threat to face, the future would be peace operations. The outer extreme of the range of conflicts that we were likely to face in the foreseeable future was something of the magnitude of the 1950s Korean War - that is to say, well short of the all-out global war that had threatened us throughout the Cold War but a high-intensity conflict nonetheless. So the white paper called for combat-capable sea, land and air forces, able to fight "alongside the best, against the best."

These forces would be structured so as to enable Canada to deploy contingency forces consisting of a vanguard that would be ready for deployment within three weeks, be sustainable indefinitely in a low-threat environment and number up to 4,000, all elements combined. In a serious crisis, this force would serve as the rapid reaction component of a larger commitment, which we called the main contingency force and which would be ready for deployment within three months, number up to 10,000, all elements combined, including the vanguard of 4,000 of which I have already spoken. Unlike the vanguard, however, this larger force would not be sustainable, at least not without some level of mobilization.

These contingency forces were described in the white paper section on UN operations. Our reading of the tea leaves led to the conclusion that although we might need to fight a limited war once in a while, the post-Cold War world being what it was, the bulk of our operations would be of a peace support variety. Critics of Canada's defence policy notwithstanding, none of this meant that we were turning our back on NATO, much less on Europe.

For one thing, as you will recall, we had not left Europe at all in 1994; in fact, we have not left to this day. Indeed, in 1994, we were deeply engaged in the Balkans. Beyond this, we continued, as we continue today, to maintain all of our peacetime commitments to NATO.

The white paper of 1994 also made clear that, in a crisis or war, Canada would make all of its contingency forces available to NATO; indeed, we would proceed with mobilization of further national resources if it proved necessary. Even so, the white paper did not call for anything beyond plans for such a mobilization because nothing in our own or in our allies' reading of the international environment allowed for the view that a major conflict requiring mobilization would happen without a rather lengthy warning period.

In terms of the 1994 white paper, the order of the day was frugality, affordability, savings and doing things smarter and more efficiently. Changes to our force structure were intended to maximize the return on the investment of the taxpayer, most notably by cutting the "tail," which is to say base administration and other support personnel, while adding to the "teeth," which is to say operational units, or the "sharp end."

Most notably, reductions in headquarters, restructuring of the three services and the reduction of the reserves called for by the 1994 white paper were specifically intended to allow for the addition of 3,000 troops to the army's field force.

Savings were also expected to result from other gains in efficiency. For example, headquarters personnel and resources were to be reduced by one third; infrastructure was to be reduced; better business practices would guide our procurements; whenever it made sense to do so, DND and the forces would partner with the private sector for alternative service delivery.

Beyond this, the capital program would be restructured. The forces would be appropriately equipped, but no more - they would not possess every component of military capability, but they would be able to make a genuine contribution across a wide spectrum of operations at home and abroad. New equipment would be required only for purposes considered essential to maintain the core capabilities of the forces. As well, new equipment would need to be suited to the widest gamut of defence roles. The life of the equipment would be extended whenever cost-effective and prudent.

The white paper identified only four major equipment programs to be undertaken. These were armoured personnel carriers, search and rescue helicopters, submarines - maybe - and ship-borne helicopters, as Senator Forrestall knows very well.

There have also been other procurements, but I will not bore you with the list.

Let me here anticipate one of your questions: Are the Canadian Forces more combat-capable? Well, I am not a military man, but I remember what we had available at the time of the Gulf War. Therefore, I have no difficulty at all subscribing to what General Baril and General Henault have said on the subject - that with some exceptions the Canadian Forces are much more combat-capable than they were as little as 10 years ago.

I said earlier that I was rather proud of the 1994 white paper. In part, that is because in the six and a half years since 1994 our defence policy has proved to be both resilient and flexible. Some of our circumstances have changed to be sure. For one, the government has increased the defence budget a good deal in each of the past three years. Budget 2000 provided some $2.3 billion in incremental funding over four years. In March 2001, the government supplemented that with another $624 million. Last year's total expenditures thus reached $11.8 billion. This year's budget started a full $2 billion above the initial budget for 1998-99, at about $11.4 billion, and with a bit of luck it will not end the year at that level.

Our defence policy has also evolved in some of its details. Perhaps the best example of this can be found in a document that the department produced two years ago for the purpose of connecting the dots between our defence policy and the defence program. I am talking about Strategy 2020, of which I am sure you will hear much more from my military colleagues.

Strategy 2020 took the white paper to logical conclusions. For example, it emphasized the revolution in military affairs and the requirement for interoperability with our allies, especially the United States. It built on what the white paper of 1994 had meant by fighting alongside the best against the best.

Strategy 2020 also underscored the need to enhance our sea- and air-lift capabilities. Likewise, our recent report to Parliament on plans and priorities highlighted a number of other new directions, in particular, the need to address asymmetric threats and the growing risks to the country and to our critical infrastructure.

Where do we stand today in respect of our defence policy? While a number of circumstances and details have changed, it seems to us that the basic framework of the 1994 defence policy remains sound. Its fundamental tenets remain valid. Indeed, recent policy statements issued by a number of our allies have helped to confirm this validity.

Beyond this, in the 79 months following 1994, the Canadian Forces roles have been validated repeatedly, and so has their structure. We need multipurpose combat-capable forces. While they are undoubtedly important, the changes that we have noted in the defence environment are of a lesser order of magnitude. They certainly shade the big picture, but they do not change it fundamentally.

Senator Forrestall: It is particularly rewarding for me to see the culmination of the work of a number of senators - not the least of which is our current chair - resulting in the establishment of this committee. We pledge and have yet to define in our own minds a useful interpretation of the mandate that we have been given; however, we will get there, and in large measure as a result of information received over the next few days and months. This is a committee that I trust will be around for a long time. I am rather proud to be a member of it.

Mr. Bon - and so that there is no misunderstanding, Mr. Bon and I go back a long time on other matters - would you table for us documents that would include the utterances upon which you base your assertion that the Canadian Armed Forces are "more combat-capable now than they were 10 years ago". It seems to me that 10 years ago, for openers, we had a brigade in Germany that, alas, no longer exists. Could you do that for us?

My first question is a little broader and more general. We were committed in the 1994 white paper to the maintenance of a combat-capable force - a structure that would be more capable of responding to Canada's perception of its own security needs and the wishes of external groups with whom we were involved. I think immediately of NATO and NORAD. Those two alone are sufficient to make the point. It was without any apparent debate - certainly no widespread debate in academic circles or in newspapers. There was a growing, visible concern among your defence associations, but there was no widespread public debate that could have lead to the change in policy from the position of the 1994 white paper.

We have now gone from that lofty goal, which I felt the forces and the government embraced. It was found to be a proper place for Canada to be, given what was happening in the world and Canada's involvement. We have now gone to what I always feared - a paramilitary police force. I believe the current word is "constabulary."

How is it that Canada, a nation wanting to play its role, has gone from the 1994 position to the position it has today? Be my guest, Mr. Bon. How did we reach this point?

Mr. Bon: I do not think there has been any change of policy since 1994. I do not think anyone at National Defence Headquarters nor anyone in NATO or NORAD would necessarily share the views that you have expressed. The past CDS and the current CDS are now both on record as saying that the forces are more capable today than they were 10 years ago.

By the way, I quoted a statement that was General Henault's. I think that our campaign in Kosovo, as well as the operations that we undertake with American aircraft carrier groups, for example, shows that we have a significant capability, which is recognized and modern and which enables us to fulfil the policy that was issued in 1994.

Senator Forrestall: Let me quote from a paper prepared for the Federation of Military and United Services Institutes of Canada. I will paraphrase some of the things that are still left undone from a white paper soon to be seven years of age. It is somewhat disquieting.

We have not had the TRUMP program. I vowed that I would not mention the Sea King, but we have not had its replacement yet. We have not seen anything - it is no longer a mid-life conversion for the Aurora program. We now see sequential updating whenever we can find time to put a few planes on the ground and do a little work. While there may be little bubbles of interest that peak our concern from time to time, there is no announcement regarding the multi-purpose support vehicles. The army received three light battalions but lost the airborne regiment, its only really rapid asset. It is about to lose up to a company per combat unit and mothball other capabilities. Canada's three brigade groups are so undermanned at approximately 4,500 soldiers as opposed to 6,000 personnel that each group borrows from others in order to maintain a proper rotation schedule. The list is long; I can go on. We have lost our in-air refuelling tankers. There is no mention of a replacement for the Leopard main battle tank; there was a project on the books for the ACV, but that is not quite the same thing, I suggest. In any event, it goes on against the growing awareness on the part of people like myself who follow with interest and concern these activities.

The only external connection we have now, apart from our peacekeepers, is our floating service, the navy. We have nothing left. There is nothing operational. There is nothing out there working to support the positions. The positions have not changed on paper; they are still there. The 1994 white paper has not changed a word. That is probably the problem. Benign neglect has caused an enormous cancer to grow in our capability. I find that very disturbing.

How can you say we do not have a diminished capability? Indeed, we have an improved capability when, just six short years ago, these were the things we undertook to do to ensure that Canada had that capability. Mr. Bon, something has happened. What has happened?

Mr. Bon: Senator, you have an interpretation of facts that is different from the one that we have, obviously. The document you referred to and some similar documents sometimes read into the white paper things that were not in the white paper.

For example, you mentioned the TRUMP. I think the TRUMP went through its mid-life refit, but I do not think you will find in the white paper any lines saying that the TRUMP will be replaced. Neither will you see any reference to what you referred to as a supply ship. All the white paper said was that there would be a replacement for the AORs that we still have on strength.

You will have to take up with some of my military colleagues - in particular, Commander McNeil - some of the details with regard, for example, to the Aurora program that you mentioned. The white paper did not talk about any replacement of the main battle tank. There was a reference to the armoured combat vehicle. Some of the studies to which you refer are certainly written by people who have the best intentions in terms of the forces, but they may approach things with a mindset that is still steeped in the Cold War and in the past.

One of the things we have seen happening in terms of, for example, main battle tanks is that if it is large, slow and lumbering, it is very vulnerable. Also, the sort of operations that we think we will have to perform in the future may not call for the same sort of equipment that was necessary in other circumstances.

Much of what you say echoes what has been said by former military officers. I think you will want to explore that with current serving military officers.

Senator Forrestall: Sir, you are the director of policy planning. I would have hoped that you could have given us some indication of how we are more militarily capable today than we were 6.5 years ago. I will not talk about repeating what others have to say.

I read widely in defence areas and I listen quietly. You and I do have a fundamental disagreement, not on where Canada should be but on how we got to where we are from where we intended to be just a few short years ago.

Frankly, Mr. Bon, it is not good enough, whether it is a question of government intervention or the lack of funds. These are all reasons; put them on the table. I am quite capable of listening to the arguments. However, do not stonewall me, because that is a waste of time.

The Chairman: Mr. Bon, do you have a comment you would like to make at this point?

Mr. Bon: No, Mr. Chairman.

[Translation]

Senator Pépin: What will be the consequences for Canada of agreeing or refusing to participate in the National Missile Defence System that is so dear to Mr. Bush's heart? What kind of cooperation would there be between the two countries?

Mr. Bon: The decision to take part or not in this project is far from being made. We have to look at the consequences in fairly broad terms - in other words, what a missile defence system could mean for the international security balance. It depends very much on the approach taken - for example, whether or not there is an agreement between the Russians and the Americans.

As far as Canada is concerned more specifically, the decision to participate or not would primarily impact the relationship between military personnel and the Department of National Defence.

Basing myself on what I observed during President Clinton's time in office, it would seem the Americans do not really need Canada - either its territory, or its capability. The Bush project is still very sketchy. My belief is that the Americans would be perfectly willing to accept the idea that Canada would not take part. However, if Canada made a lot of noise about not being in on it, that might be far less appreciated in Washington. That's really all I can say at this time about the potential consequences of a decision that is still a long way off.

Senator Pépin: You talked about the white paper, which talked about creating a Chair of defence management studies. Was that project ever implemented, and if so, what is its current status?

Mr. Bon: Yes, that project was implemented quite some time ago. A professor currently holds that chair at Queen's University in Kingston.

Senator Pépin: You said that the government had given you $2 billion to make improvements. Was part of that budget used to improve the quality of life of military personnel and their families?

Mr. Bon: Yes. The initiative that has garnered the most attention is the one that involved members' pay, which has been substantially improved. There were other initiatives as well, particularly dealing with health care and housing. I don't have all the details, but some of my colleagues may be able to provide more information.

Senator Pépin: I read in the newspapers that Armed Forces personnel were generally happy to receive a pay increase, but that they were experiencing high costs just about everywhere else, and particularly housing. Was it proportional?

Mr. Bon: I don't have all the details, because I am not responsible for that particular area. But what you have just described is something all Canadians are facing; sometimes pay raises are completely eaten up by increases in the cost of living.

In terms of military housing, the idea was to reflect some reality in the rents being charged. I don't know exactly what portion of the increase would have been eaten up by the higher rents. And I certainly would not disagree that part of that additional spending power was eroded by increased costs.

[English]

Senator Banks: If I recall the white paper correctly, it said that we would have three brigades, as follows: one that would be sort of central and able to get out and do something and two that would be able to mobilize in a short period of time. Do I recall that correctly?

Mr. Bon: I am not sure that the white paper specified that there would be three brigades, but in the context there would be three brigades and there are three brigades.

Senator Banks: A brigade is about 4,000 or 5,000 people?

Mr. Bon: Something in that order, yes.

Senator Banks: Depending on the application.

In terms of our preparedness, you have said that part of the purpose of the forces is to be able to fight alongside the best against the best. If we are to have an army, it must be able to fight. Would we be able to deploy, in good time, either within Canada or elsewhere, a brigade now?

Mr. Bon: We must situate your question in a context. A brigade has not had to be deployed by Canada since the Korean War. The likelihood, given the current international situation, of Canada having to deploy a brigade is almost nil. Indeed, the white paper said either as a brigade or as three battalion groups. Over the past 15 years or so, we have noticed that deployments take place on the scale of a battalion, not a brigade. If we posit a situation that required Canada to deploy a brigade, we would also posit a level of unpleasantness in the world that would create a crisis. As I said in my presentation, all the intelligence analyses - ours as well as those of our allies - indicate that if there were a crisis of those proportions there would be ample warning. I have no doubt whatsoever that in those circumstances Canada could deploy its brigade.

Senator Banks: Following up on Senator Pépin's question, even though it is clear that the Americans have not yet established exactly what they will do with missile defence I did hear that they did hit a bullet with a bullet the other day, so it now seems physically possible. As director of planning, you and your people must have done some thinking along those lines. You must have some ideas. What is your thinking in that respect, given all the codicils that you might wish to attach to it, including all the ifs, ands and buts?

If we were asked to participate in or permit the operation of such a system over Canadian territory or in conjunction with the Canadian Armed Forces, what would be your recommendation to the government?

Mr. Bon: Sometimes I wake up in the morning, turn on the radio, and think that I have had too many ideas on the subject.

I am not supposed to have personal views. I express my personal views within the confines of the department, but for the rest I have a corporate view.

In the case of the Bush plan, we have remarkably little information as to what they want to do. Just because they hit a bullet with a bullet last weekend does not mean that there will necessarily be a decision any time soon. When I worked for Senator Lafond in 1985, there was already a test where a bullet hit a bullet. A bullet shot from Vandenberg Air Force Base was hit by a bullet fired from Kwajalein Island, exactly the same locations that we are talking about. There was no decision at that time. SDI sort of disappeared.

It is hard to know what will come. At this point, my recommendation to my superiors with regard to BMD is that we sit and wait and get more information from the Americans.

They have said that they will consult with us. We are happy that they will consult with us. We have held one meeting with them. They did not have nearly all the answers to the questions that we had. We need to know more before we go any further. At this point, that is my recommendation.

Senator Banks: You do not know enough now to have formed an opinion in respect to what your recommendation would be if we were asked to participate?

Mr. Bon: Yes. At this point, there have been so many changes from the Clinton plan that we need a lot more information, a lot more thinking and a lot more clarification in terms of what the international fallout is.

Senator Wiebe: Mr. Bon, I am glad to have you here this morning. I have a comment that I should like to make before I ask my questions.

As you are aware, the Senate has not had a defence committee for a number of years. One reason this committee is in place is the tremendous concern within the Senate chamber that the armed services in our country is not what it used to. Regardless of whether budget cutbacks or management is to blame, we are certainly concerned that our country does not have an armed services with the reputation it formerly had. It is my hope that our committee will not be spending its time dwelling on mistakes or issues from the past but rather that it will look at where we are today to try to come up with the means to work in conjunction with the Department of National Defence to improve the situation and provide this country with a first-class armed services.

My first question involves the reservists. I noticed that you did not comment on our reservists whatsoever. What is the Department of National Defence's policy in regard to reservists and the need for such a service within our armed forces?

Mr. Bon: There was one reference to the reservists in my text, but it was not one that you necessarily wanted to hear. The white paper of 1994 recommended that we cut the number of reservists. In fact, that was changed a bit later. Minister Collenette at the time decided that, rather than the 23,000 figure contemplated in the white paper, we should aim for 30,000. For the rest, there was no mention in my presentation.

There is no Department of National Defence policy with regard to reservists. There is a Government of Canada policy. There are certainly views that just as the Canadian forces of today must reflect the reality of today rather than the reality of the past the reserves also must reflect the reality of today. There are a number of areas where the regular forces would like to be able to call upon the reserves to help them in their deployment and to help them alleviate some of the difficulties that they have sometimes to deploy.

There is an approach. General Fitch was just appointed to look after the issue. As a civilian, to tell you the truth, I do not know very much about the day-to-day reality of the reserves. That is something that you may want to discuss with the military. What I know is that we need them. They are in the policy as something that we must build up and that must be adapted to fit today's needs.

Senator Wiebe: Would it not be part of your department's role to provide suggestions to the Department of National Defence and also to the minister in charge of defence as to what the best policy would be for a perfect armed services group within this country? Would that not also include reservists?

I ask that question because it costs the same amount of dollars to train a reservist as it does to train a regular service personnel. The difference is that, with the regular army, you are paying salaries for 12 months of the year, whereas you pay reservists only while they are being trained or while they are on duty.

The way we fight a war today is changing dramatically. We can no longer raise a brigade within three weeks, where someone is handed a gun and taught how to march and take orders, and away he goes, as in the time of the Korean War.

Our army personnel today have to be highly educated and trained. We should be spending more time at universities and community colleges recruiting those personnel to be able to handle the kind of technology that the defence of this country will need in the years ahead. One of the best ways to find those people economically is through the reserve forces.

We have allowed our reserves to dwindle badly throughout this country. In terms of policy, I would like to see our department take a very strong look at what role reservists will have in the future defence of our country. I hope you will take this message back to whomever it should go to.

My second question relates to public relations. I say this not in a discriminatory manner, but I think that the public relations department within the Canadian army stinks. I say that because I have had the opportunity to spend a considerable amount of time with our reservists and regular army, in the air force, navy and army. Our armed forces personnel are doing a tremendous job. However, when I get back to Canada I hear nothing about it. The people of our country know nothing about what our armed service personnel are doing, regardless of where they are throughout the world.

Politicians will react to what the general public says in terms of spending money. If the general public has a strong feeling about the good that our armed forces are doing, they will be talking to their member of Parliament about the need to increase budgets. That is where I think policy planning should take another very hard look at the policy and do a little bit of bragging in our public relations department about what our armed service personnel are capable of doing.

Mr. Bon: Senator Wiebe, I will make sure that our director general of public affairs notes what you think about our public affairs effort. Personally, I believe they have done a good job over the past several years, certainly in relation to what was done before. However, I will make sure that he knows what you said.

Coming back to the question of the reserves, there is a clear policy that was articulated as part of the 1994 paper and remains today's policy that the primary role of the reserves will be augmentation, sustainment and support of deployed forces. The quality and overall ability of the reserves to provide the total force with trained personnel for unit augmentation will be significantly improved. That is the policy.

It becomes a matter of how the armed forces want to approach the structuring of the reserves. From that point of view, it is no longer a policy issue; it is an armed forces issue. I understand that there have been some difficulties, but there has been good discussion and good progress. I think that, at times, perhaps, some of the reserve people have expectations of what their role might be in the forces that do not quite fit the policy that we have given them. Again, that is something that is probably best discussed with the military.

Senator Wiebe: If that is the case, then, what happens if you, as policy planners, make a policy recommendation that is not accepted or that does not work? Do they then come back to you and say, "That idea did not work. How would you like to develop another policy idea for us?" Or do you sit back, after some experience, and say, "Maybe that was not the right direction to go. Maybe we should develop another policy"?

Do you have that capability within your department, or do you develop a directive or sit back and wait until there is another directive?

Mr. Bon: It is both, in the sense that we do not make policy. We make policy recommendations and the government approves or disagrees. The policy that is in the white paper is the policy that the Government of Canada issued for the guidance of all the armed forces, including the reserves. To the extent that there are changes that are proposed, that are suggested and so on, those changes are studied, examined and discussed.

At the end of the day, particularly in the case of the reserve, it is up to the military chain to make recommendations. If the government approves those changes, they are made. If it does not, then they are not made.

Senator Meighen: Ever since I had the pleasure of sitting on the joint defence committee with our chairman and others a few years ago, I have heard reference to the tooth-to-tail ratio. You yourself mentioned it, Mr. Bon, this morning. Is that a concept, or is that a mathematically calculable ratio? If it is the latter, can you tell me what the change has been in that ratio from 1994 to today?

Mr. Bon: It is certainly a concept, but it is also presumably a ratio. You may want to ask Cmdre. McNeil, who will follow me and who works in the force structuring area, to tell you exactly what that is.

Given the number of bases and installations that have been cut and various other achievements since the white paper was published, it is my impression that we have indeed increased the tooth-to-tail ratio. I stand to be corrected by Cmdre. McNeil.

Senator Meighen: You would agree, would you, that that is the implicit recommendation and thrust of the 1994 white paper?

Mr. Bon: It is.

Senator Meighen: I will ask those questions later because I noticed references to reduction of civilian employees and things like that. I am interested in knowing whether that has been carried out.

You referred to a general mobilization plan in the white paper.

Mr. Bon: We did and we did not make a reference to a general mobilization plan. We said that there should be plans for mobilization and that we would not go beyond the plans.

Senator Meighen: I understood that. Are there plans?

Mr. Bon: Yes, there are.

Senator Meighen: They have been compiled and completed and are in place? Is that right?

Mr. Bon: That is my understanding.

Senator Meighen: Who would be able to confirm that, Mr. Bon?

Mr. Bon: Cmdre. McNeil.

Senator Meighen: Finally, more by way of editorial comment and along the lines of Senator Wiebe's words, free advice is worth exactly what you pay for it so I will give you mine. I do not say that this is necessarily accurate, but I was told in the joint committee that when members of the armed forces - and this may no longer be the case - left the area where they were serving and returned to Canada in a civilian context, they were urged not to wear their uniforms because, with a risk of doing something that might be poorly received or poorly viewed, it would be better if they were in civilian clothes.

Second, my impression is - and I may be wrong - that the armed forces are disappearing, regulars and reservists, from Canadian cities. They are being hived off to Borden and Gagetown and other places that are less visible to the general population.

Travelling in any other country, I have the impression that people in uniform are much more visible than in Canada. That may be due to the ratio of serving personnel to civilians, but I tend to think that it may be due, in some way, to the removal of the presence of military forces from our cities.

I am also a little concerned with the stated policy of a combat-ready force and the need, which I think everyone acknowledges, for rapid deployment. What have we have done to enhance rapid deployment? Perhaps you could help me there. I know we have disbanded the Airborne regiment. We can usually turn to our American friends to get us to the theatres where we want to go, but what have we done to enhance our own capability to rapidly deploy forces in the numbers that we deem to be necessary?

Mr. Bon: In terms of enhancing our ability to deploy, we are working on it. However, I would like to situate this answer in another context, which is this: When have we not been able to get there?

Senator Meighen: Oh, we can get there.

Mr. Bon: In terms of rapid deployment, we must put the matter in perspective. No one has ever said the forces should be there the day after. There would be significant problems if we tried to do this. For example, following the Somalia inquiry, we decided that the deployed forces required more cultural-sensitivity training, which takes a bit of time. In the Timor operation, porcine encephalitis was of foremost concern, requiring a vaccination program prior to leaving. We cannot pre-vaccinate all our people against every conceivable disease that might be encountered overseas just to allow for deployment overnight.

Compared to what our allies are doing and to what the Brahimi report calls for in terms of rapid deployment, we are fully within the range. Our vanguard is supposed to be ready for deployment within three weeks, which is pretty good. The Europeans, as you know, as part of their Headline Goal, want to be able to deploy a certain number of people within 60 days.

We must keep the overall context in mind. We need to replace our aging Hercules fleet. We need to enhance our lift capability; there is no doubt about that.

On your first set of comments, the disappearance of forces from the cities is something that happened years ago. Perhaps it was a phenomenon of the 1960s and 1970s when we moved the forces to places that were rather far from cities.

As for not wearing uniforms, it is news to me that people would be told that currently.

Senator Meighen: I did not say "currently."

Mr. Bon: Okay. In the 1960s and 1070s, certainly, as a consequence of the feeling of people towards Vietnam in particular, no military uniform was seen as positive, and that had some consequence. It is my impression that things are changing from that point of view, both in terms of the perception of people and the wearing of uniforms. In Ottawa, we may be blessed from that point of view. There are quite a number of uniforms to be seen.

The Chairman: Thank you for attending here.

We now welcome Commander Daniel McNeil. Some of us have memories of the commander when he had only four stripes on his sleeve and worked for the special joint committee. He provided a great deal of assistance to us during that period.

Cmdre. McNeil has had a varied career with service on a number of Her Majesty's ships. He has been an instructor at the Naval Officers Training Centre and the Canadian Forces Command and Staff College. As well, he has held positions at Maritime Command Headquarters and National Defence Headquarters. He has specialization in communications, electronic warfare, classical maritime strategy and the historical development of Canadian defence policy.

In June 1998, he assumed command of the flagship of the Canadian Pacific Fleet, the H.M.C.S. Huron. After his command tour, he returned to headquarters as director of defence analysis in July 2000. He was promoted to his current rank and appointed to director of force planning and program coordination.

He will speak to us this morning about defence planning and resources with reference to the document entitled "Strategy 2020."

Joining him is Lieutenant-Colonel William J. Kelly, who has degrees in mechanical engineering and aeronautical engineering. He has served both in Canada and Germany. On leaving the Canadian Forces Command and Staff College in June 1998, he was posted to Moose Jaw, Saskatchewan. The following year he came to Ottawa as strategic planner at Department of National Defence headquarters.

[Translation]

Cmdre. Daniel McNeil, Director, Force Planning and Program Coordination, Vice Chief of the Defence Staff: It was a very good experience working with the Joint Committee in 1994. I am proud to have been part of it and to have this opportunity to address you today. I am the Director of Force Planning and Program Coordination. Force Planning refers to the Canadian Forces Mobilization Plan, and Program Coordination refers to the program and the budget as a whole. With me today is LCol. W.J. Kelly, who is responsible for the Defence Plan. He is more familiar with the figures than I am.

[English]

To set the context, when we look back to the white paper of 1994 and when we look at the support that we provided to the committee, it was a time of severe constraint. We had a real problem with coherence within the department in terms of identifying where the money was spent, how it was spent and what force structure cost. Members of that committee could speak to the frustration of trying to make changes without a full picture of where the resources were.

We are considerably better, now that it is seven years later. I will speak to why we are better and where the information is. It is important to point out that this is simply an introduction to defence and resource planning. We are certainly at the disposal of your researchers to provide whatever information is needed, because this is indeed a very complex business. It is very dangerous to try to simplify it.

To carry that theme further, the other difference is in our transparency. We were several years out of the Cold War in 1994. Our culture was one of secrecy as a result of many experiences in the 1990s. We have determined that modern management and resource control demands transparency. As an example, all the information in the defence plan that would answer the questions directed to Mr. Bon are posted on the Internet, available to any Canadian.

Senator Forrestall: Have you read it?

Cmdre. McNeil: I wrote some of it.

It would be dangerous for me to go through my presentation. I would run over the 15 minutes allotted. I will direct you to the pages that I will use. I will speak to the themes and leave the proper amount of time for questions.

First, Mr. Bon did cover well the policy dimension and fiscal reality of where we came from in 1994.

The Chairman: In order to follow you, should the committee be looking at the introduction to this paper?

Cmdre. McNeil: The committee should look at the second page of the presentation outline. I will mention that to which I will speak; I will then direct you to the correct pages.

I will speak to defence policy and budget and how they go together from a macro point of view. I will then talk about defence management and how we make defence in its various bits and pieces. I will then speak about current funding and priorities based on current funding.

I would direct you to page 7, which should provide the NATO defence expenditures as a percentage of GDP.

The Chairman: Cmdre. McNeil, I regret to inform you that our pages are not numbered, but we will work through if you give us the titles.

Cmdre. McNeil: It shows Canada in red down near the bottom. I point that out because the press likes to use this measure. NATO has been using this measure for the last several years. It is not flattering to us. It does not tell the entire story.

Every country's economy is different. Canada's economy is a bit precarious because of our debt. If you look at percentage of GDP as a percentage of debt, you would see that if the government made heavy commitments to funding and there were an economic downturn Canada would be in a poor position.

We like to use the next page as a measure when we speak to NATO colleagues. Canada, in terms of size of population and geopolitical reality, stands in the middle, where we belong. We argue that our contribution is greater than represented. Sometimes we win that argument.

We argue that we spend our money effectively. We do not spend it on large standing armies that are locked into a defence posture in Europe. We get much more bang for our buck than many other countries.

Some good benchmarking has been done. You could receive some of those benchmarking materials. It would provide information on the amount of budget on defence for the number of soldiers. The data is very good.

I would like to jump approximately five pages into a slide titled the "defence corporate management universe." It is a pyramid with the minister at the top, the deputy minister to the left, the Chief of Defence Staff to the right and what we call level ones beneath them. Level ones are those entities within the department and Canadian Forces that have budgets and are responsible for resources. Our management structure is based upon accountability for how resources are spent.

As I say, we have much more clarity and coherence in terms of those numbers: what we tell people to do; what resources we give them to do it; what expectations we have for results; and what measurement is required.

This diagram is useful in pointing out that the Department of National Defence is not just another government department. It is a totally integrated structure that encompasses the headquarters of the Canadian Forces. For that reason, a resource management is under the Vice Chief of Defence Staff. The Associate Deputy Minister, Finance, has very important roles for comptrollership, but in terms of resource management, because it is tied to force structure - the output of the department - it is the Vice Chief of Defence Staff, the Director General, Strategic Planning, and my staff.

My staff is like a mini treasury board within the department, in that we are the only department that actually has a capital program under our control, which amounts to approximately $2 billion per year. Thus, we must have an accountability structure within the department that approves programs and changes to programs.

We are also, of course, responsible to Treasury Board and government like any other government department, but we have much more discretion because military forces are very capital-intensive structures. The next slide will speak to how we perform this management.

Defence Policy - Government Direction: We have developed an institutional strategy called Strategy 2020. Copies of it were distributed to the committee. We determined as the 1990s were ending that the defence policy was good but that it did not provide sufficient direction within the department and the Canadian forces for the direction that we would take. That held particularly true in 1999 when we clarified the resource demands and the difficulties we would face in respect of modernization and the fact that we needed new resources identified in budget 2000. I will speak to that shortly. With an acknowledgement that more funding is required, you need greater clarity in the planning of how to apply that funding. That is Strategy 2020.

From that, we have a mature business planning process within the department. Some military personnel, myself included, find business planning as a concept in the military somewhat difficult. Perhaps we would like to plan to spend the taxpayer's money using the principles of war, but that would not be a good idea. However, we probably need to use good business management principles, which come from good business management schools, to spend the resources. We perform business management throughout the department through the use of the resource managers - the level ones. It is an annual process that is performed openly, and we post the business planning material on the Internet.

Strategy 2020: This is an institutional strategy. If we did not have a strategy, we would not have something for people to attack - there are many critics out there. Just to be clear, the strategy developed from the defence management committee - the deputy manager, the chief and the senior level ones in the department - with a process that took one year using business management principles for strategic planning from the Queen's School of Business, actually. It was not done behind closed doors, but rather it was done with the leadership of the Canadian forces and the department to look ahead to see what we needed to do to remain relevant and capable. It actually provided, for the first time, some solid direction, as you will note when I speak to the next slide.

Defence Planning Guidance: For many years in the 1990s we had a document, Defence Planning Guidance, that was not widely read. People who chose not to follow the guidance liked to identify it as a document that was simply entitled "Guidance." We have matured the process with Strategy 2020 to provide clearer direction for targets and goals to be met. As of this year, because of a program of modern management within defence - a government initiative - we have gone to a defence plan. That was distributed to the committee members and it contains many of answers that you seek. It is a document signed by the deputy minister and the CDS.

Business Planning: In response to the annual defence plan, about 22 senior managers within the department are required to produce their own annual business plans designed to issue direction to subordinate organizations and detailing the resources assigned and exactly what is expected from them.

Reporting to Government: As a result of the headquarters downsizing in the 1990s, we have clarified the reporting by placing it with the business planning. That is where we do the performance measurement. My staff is responsible for working with other agencies within defence in the Canadian forces to produce the report on plans and priorities for Parliament. We also, following that in the fall, produce the departmental performance report. As a result of recommendations to the government in 1990s, we also produce a totally military Chief of Defence Staff report. All of those reports have been sent to the committee.

Departmental Commitments for 2001-02: In the past, we have not been good at aligning what we tell Parliament with what we tell ourselves. This year, we have tied the RPP directly to the defence plan. In the RPP, we tell Canadians what we will do and what our priorities are for the fiscal year. In the defence plan, we tell the parts of defence in the Canadian forces what they must do to achieve what we told Canadians and Parliament we would do. The priorities in the RPP should be no surprise. The Strategy 2020 is not simply a document that sits there because the defence committee reviews it annually. We are required on my staff within the next two years to redo the whole strategy using the same process that created it.

As a result of the scan by the senior leadership last fall, we identified the one area that the strategy did not address with enough clarity - human resources. We identified that we need to do more for our people. Therefore, putting people first is quite clearly at the top of our list: optimizing force structure - getting the most bang for the buck; maximizing business management; fostering our defence relationships; and contributing to the Speech from the Throne - the government's national priorities.

Making Defence, in Theory: This could be a 45-minute lecture, but it will be a 30-second speech from me. It is simply to identify that you cannot turn this big ship 90 degrees in a couple of seconds. Defence is a large organization and Canadian forces have a force structure that exists today. Changes in the actual force structure can take as long as 15 years, particularly if they are tied to capital acquisitions such as new aircraft and ships.

The engineering of the requirements, the acquisition, the fielding of capability, the amendments to the doctrine, the training of the people and the amendments to educational instructions would encompass a 15-year process. Real changes probably cannot be made within the next year, but you could make some changes within the 5- to 10-year frame.

Defence in the Canadian forces comprises the expenditures of people, people costs, operations and maintenance, national procurement - sustaining the materiel in the department - and capital acquisitions. We have determined that to ensure relevance in the future we must target capitalization and modernization of the equipment and capability of the Canadian forces.

Moving on to something very important, the budget. The Auditor General continues to examine our books and activities and continues to say that he believes we are underfunded. There certainly could be some validity to that. However, we acknowledge, in regard to the numbers in the defence plan and this diagram, that we did receive a considerable increase in funding with budget 2000. I will show you, in notional planning terms, what we did with it and what we plan to do with the extra funding.

In addition, there are other opportunities. The minister has spoken over the last several months about investment opportunities. He has managed to get additional moneys, other than the baseline moneys for the department, because we live in good economic times and we had sufficient hurt and pressure identified so that moneys could be applied. The most significant figure, in the last period, is a couple hundred million that he managed to get from the Department of Finance to increase salaries. Canadian Forces members salaries are now equivalent to what the government promised they would be to the public sector.

The next slide shows how we allocated that delta of extra money. We always do a planning horizon in allocations for three years. When we received budget 2000, we had to change the planning allocations for everyone for the next three years. When we changed them, the kind of formula the defence management committee and the leadership decided to use is as follows: a third would be applied to capital, 15 per cent to NP, 20 per cent to relieve the operations and maintenance hurt, 15 per cent to infrastructure and 20 per cent to personnel.

Senator Meighen: Can you identify the other portions of the pie, such as "NP"?

Cmdre. McNeil: National procurement.

Senator Meighen: What does "O and M" stand for?

Cmdre. McNeil: Operations and maintenance.

The next slide is force development. When you examine our defence planning these days, you will find that we have moved to capability-based planning. Perhaps in the future you would ask for a brief on what is behind the capability-based planning, but it is based on defence science.

There are many approaches to defence planning. One of the worst is to simply look at the money and shave the ice cube. You disburse the money and let people figure out what they need to do with it. There is a science to force structure, there is also an art to force structure. There is literature out there and we would be happy to work with your researchers to show them the art and science of force development.

Part of the art and science is on the next slide. This slide shows the use of force planning scenarios. These are also on the Internet. Mr. Bon referred to these in terms of what activities we are planning. We are planning activities in the medium level of combat. The development of these force planning scenarios and the development of a more coherent scientific rationale for our capital acquisitions was as a result of the Auditor General in the early 1990s and as a result of our own analysis with budget reductions and how we had to do things better.

The next slide is very complex. It demonstrates the big picture. It depicts the challenges presented in recapitalizing equipment in DND. In the upper left quadrant is the number of very capable and relatively new systems that we have fielded in the last several years. For example, the new submarines, the Canadian patrol frigate and the LAV 3 armoured personnel carriers. Conversely, in the bottom right quadrant are a number of older systems considered less capable in a resource-constrained environment. Identifying these items in this way helps to set priorities. It is a good illustrative picture of where we focus our efforts. If you were to examine our capital equipment programs, some of which is identified in the defence plan, you would see that recapitalization does centre on those capabilities in the bottom right quadrant.

I will pass over specifics of the programs to the land, air and maritime forces that are responsible for actually making the programs work.

The Chairman: Cmdre. McNeil, could you work through this particular graph for us, please?

Cmdre. McNeil: Certainly. On the left are newer systems. As you move from left to right, you have numbers of years. Just as an example, I know many senators are interested in the Sea King replacement. As a result of modern government, we are actually identifying the capital assets in our new financial structure. We are identifying a capital residual cost.

About a month ago, this question was asked of the Maritime Commander: What are the Sea Kings worth today; what capital costs are we putting on them? Without remembering the exact number, I believe it was somewhere between $40 and $50 million, the entire Sea King fleet. It is like trying to sell a car that is older than 10 years that you have put new tires on. We have put many new tires on the Sea King; that is probably the worth of aircraft. The typical lifespan of an aircraft is 30 years; however, you can spend money to make aircraft and ships last longer and more relevant.

To help explain the diagram, from left to right, with the lifespan of equipment at the top right, you will see DDH-280 Iroquois-class ships. We invested considerable money in these ships at the end of the 1980s. All of the money was spent. I commanded a Huron, which was a TRUMP'ed 280. I was out there with the American forces with that ship. I can assure you that she is every bit as capable as the most modern American ship of the same type. However, one must acknowledge that the Huron is approaching 30 years. One must look at the investment and decide how much more money to invest in that capability when it will life out at some time.

Moving to the bottom right, we go to the CF-18 fighter, which is getting on in years. However, when we look at multi-purpose fighters and what would replace it, I would venture to say - although I certainly leave it to the air staff to speak more about this - that there is probably nothing out there that would replace a CF-18 right now. That is a good aircraft to invest money in, and we are.

One of the ways we have managed to achieve effectiveness in that program is that the Americans have also decided to upgrade the CF-18. A year ago, we brought a $1-billion program to Treasury Board, to partner with the Americans in that and thus realize cost-effective savings. That is a very wise investment to make.

There are other things in the rust-out. I have already talked about the Sea King. That program needs to come to fruition.

Senator Banks: What is the 100 per cent. Is that lifecycle, the left-to-right line?

Cmdre. McNeil: The left-to-right line is representative of the lifecycle of a platform.

Senator Banks: Is it a capability? In other words, are the M-113 APCs operating at 25 per cent of capability or is it that 25 per cent of their life is left?

Cmdre. McNeil: We are saying that, notionally, about 25 per cent of their life is left - unless you make a complete remodernization, in which case there may be more life.

Moving on to the next slide, I wanted to talk about capability planning. In my previous job I was the director of defence analysis. I had a group of defence scientists working for me. Also, under the director general of strategic planning there are operational research scientists. They have developed the capability analysis tools that are helping us to do more coherent capital planning and overall defence planning, linking ends to means and doing risk analysis.

Moving to defence spending composition, where we are in this fiscal year, with a budget of approximately $11.4 billion.

The biggest expense is total personnel costs, amounting to 38 per cent. We spend $4.3 billion on people. Operations and maintenance account for 32 per cent. Capital is currently at about $2.1 billion. In addition, there are other odds and ends, statutory grants and contributions.

To highlight once again, our short- and medium-term planning is to modernize and put a greater percentage of our budget into capital. The additional money put into capital must come from somewhere, so there must be an identification of the trade-offs, which is part of our day-to-day business and long-term planning.

Senator Pépin: You were speaking about statutory expenses and subventions and contributions. From whom do the subventions come and of what nature are the contributions?

Lieutenant-Colonel W.J. Kelly, Force Planning and Program Coordination, Vice Chief of the Defence Staff, Department of National: The majority of that amount represents 20 per cent of what the department must pay in contributions for payroll, so it is essentially part of the payroll. If you were to try to figure out the total cost of people in the department, you would actually add up the three bottom wedges and see that almost 50 per cent of the budget goes to military and civilian personnel and the statutories related to their pay.

Senator Meighen: I realize that different countries have different priorities at different times, but would you believe that the numbers of our allies would be comparable?

Cmdre. McNeil: This is part of the benchmarking data that ADM (Pol) has, but my feeling is that many European nations probably spend much more money on people because they have large standing reserves and they have conscription.

Senator Meighen: A higher percentage of the total?

Cmdre. McNeil: Probably, yes, although when you start looking at the books of other countries, even though there are NATO standards, it becomes very problematic.

The last slide is about sustaining and change activity. I wish to highlight that resource management is in fact management. It is not strictly a military leadership activity. We have adopted the principles of modern management. Once again, as I said at the start of this presentation, our emphasis is on coherence, clarity and transparency, and we will do whatever we can to make a difficult and complex subject understandable to you and your researchers.

The Chairman: Thank you very much, Commodore. When you mentioned ADM (Pol), it reminded me of the discussion the committee had earlier about how large the fine should be for acronyms. On the last special committee, the fine was 25 cents per acronym.

Cmdre. McNeil: I bet I owe about a buck and half by now.

The Chairman: The committee is considering not only how high the fines will be but who the beneficiary of them will be. It may be the Navy Benevolent Fund. We will see.

Senator Stollery: My question involves the changing terms of reference of NATO. The defence report, after all, was in 1994 and has been massively overtaken by events, in particular the terms of reference of NATO that I think have changed twice since then and I think we can anticipate will change again. I notice that the Prime Minister has talked about when Russia will become a member of NATO.

I do not know whether this is the correct witness to ask about the implications of the changing NATO vis-à-vis operations.

The Chairman: I have noticed that there has been a significant level of downloading or offloading so far this morning, but if this witness cares to answer, that is fine.

Cmdre. McNeil: The question belongs to the director of strategic planning. It is in our world from a resource coordination point of view. Each of the services can speak to commitments they have to NATO. I will give you a couple of acronyms, because you will hear them. DCI - Defence Capability Initiative - was part of the Washington conference of 1999. NATO has a new strategy. They do identify that defence of the countries in Europe is no longer their primary role because there is not really a threat there, that security writ large and out-of-area operations is probably where they need to go. In fact, in terms of our strategy, we work with NATO and DCI in ensuring that we provide relevant mobile forces. We argue that we are way ahead of them. We are doing DCI with the Canadian forces.

In addition, NATO is doing an FSR - Force Structure Review - right now. Those commitments that we identified in the white paper that we call vanguard forces and main contingency forces were still very much a holdover from the defence of NATO commitments. NATO itself is looking at what is required and we are working with them in terms of revamping what our forces look like and what they can do. We are looking at more rapid deployable light and lethal forces.

Another acronym that is very important to this analysis is ESDI - European security defence initiative - and where that is going. Within the European Union, they have identified a need for a force of 60,000, composed of only European nations, and there is a certain amount of tension and angst over a separate headquarters, a separate force development structure, and our relationship in terms of America, Canada and the bridge.

It is very au courant and very applicable to where we are going in the Canadian Armed Forces.

Senator Stollery: The core article of the NATO treaty was Article 5, and everyone is now talking about non-Article 5 interventions. Having listened to the previous witness, I know that, whether you agree or disagree with the operation, Canada was very effective in its air missions in Kosovo. I believe we were third in terms of effective fighter missions, which confirms our efficiency. Certainly we were very efficient in that area.

As this thing evolves, we have the European Strategic Defence Initiative. NATO has accepted a non-Article 5 organization and the Foreign Affairs Committee, of which I am a member, has been told that if it is not Article 5 it is not NATO. It is interesting to speculate on what effect this will have on Canadian forces planning. I suspect that is an issue that is ongoing. Would that be correct?

Cmdre. McNeil: That would be correct, senator. Sausage making is not pretty, nor is NATO defence planning. However, there is a really good side to the legacy of the Cold War. When we put coalition forces together, be it in the Pacific, Europe or Africa, we end up for the most part using NATO procedures because NATO is really the only western international military force that works.

What is produced with ESDI and non-Article 5 out-of-area commitments is very much in the political sphere. However, from a military operations point of view, we, with our planning, recognize the predominance of NATO and the great success of the doctrine and the common communications standards and common NATO standards for everything from communications to supply systems. The sausage making will continue. We will be there.

Senator Forrestall: Two questions concern me. One is based on Dr. John Treddenick's recent work entitled "Financing the RMA." He says that to fund a revolution in military affairs Canada would have to cut the regular forces substantially. Would you care to comment generally on his work? This route is very attractive if you want to get rid of certain costly programs or to reduce the numbers of people, but would you comment on whether or not we have decided yet or whether it is still in the sausage-making process?

Cmdre. McNeil: John "Call-Me-Jack" Treddenick has had a great impact on defence planning in Canada. He was a professor at RMC and he has now gone to the Marshall Center in Europe. He is internationally renowned for his work in defence economics. His work is historically based. I had occasion to chat with him in terms of force structure at an exercise in Toronto two months ago. It is not as simple as a straight people-capital trade off, but we have learned from his defence economics model. In fact, the slide that I printed is his work.

When I spoke with Mr. Treddenick a couple of months ago, he was absolutely surprised at the new reality of our budget. He had never heard of a thing called "investment opportunity money," which is what we call what the minister gets for us to fund salary increases from outside our A-base. He was shocked to learn about the amounts of money that had been added to the budget in the last two years that are not on the A-base - that is, it is not added and continues to be added. He is the guru of capitalization in setting a target of 23 per cent, which is based on historical analysis of the capital base of the Canadian forces from the 1950s through to today. What he has not acknowledged in his science to this point, however, is that when we get an agreement from Treasury Board - as we did two years ago - that all increases are added to our A-base, our target is that much harder to reach. What Jack Treddenick's work does not do these days - and we look forward to continuing the dialogue with him - is that it does not identify clearly what "capital" is. We have moved in the revolution in military affairs and in business affairs from a world that is industrially based to a world that is information based. It is easy to identify the transition from the agrarian to the industrial - that is, large warships, canons and tanks. Capital investments cost a lot of money. What about the transition from the industrial age to the information age? The capital investment might be wide bandwidth, or communications structures, or people sitting at computer stations. It might also be infrastructure at O and M. That might bring you more combat capabilities. The analysis deserves a greater look and we are doing that.

Senator Forrestall: That is interesting. While information technology has made it possible for people to work from home, you cannot run the military from home or from the summer cottage. I recognize what you are saying.

Cmdre. McNeil: You can win battles; you can win wars; you can win skirmishes and do effective peacekeeping by having the right piece of equipment in the right place at the right time doing the right thing with the right ammunition with the right people. That is information.

Senator Forrestall: One the proudest moments of my life was to watch the commander of the Iroquois take command and control of the USS America and that training fleet and those exercises and do everything from his little black box. I appreciate that that is a long time ago now.

There are implications here and I wonder if one of them is not now a decision to rewrite National Defence policy. As you look at the revolution in military affairs, is this an area that you consider?

Cmdre. McNeil: Rewriting policy? I think that Mr. Bon did a fine job in describing the policy and where it came from. We believe the fundamental principles are still solid. However, that does not mean that it could use rework around the edges. Contingency forces and vanguard forces were legacies in Article 5 in NATO. Maybe some revamping of those commitments in terms of experience gained over the last 10 years might be in order.

I wish to go back to the "people" issue. I do not want to mislead you. There are clear examples where we can do more with fewer people. The naval examples are the ones that come easily to mind for me. I commanded Protector, the replenishment ship on the West Coast, with a ship's company of 250 and an engineering department of approximately 90. Propulsion in that ship is a steam plant. These are the only steam plants left in the navy. It takes a lot of infrastructure on the dockyard to keep that high pressure steam system going and it involves a large engineering department. With a modern ship, you can reduce that 90 people down to 30 or 35. It is the same with all the other systems in older ships like that, which are manpower-intensive. It is the same with the experience of the army with the Coyote reconnaissance vehicle. With one reconnaissance vehicle with modern technology and equipment, they are able to do - and I will leave them to describe it - more with one vehicle and fewer people than they could once do with several vehicles. You gain a delta of capability by modernization and, with that, in terms of force structure. We deal with establishment positions. When you put in a new ship and you remove a ship's company from 250 to down to maybe 150, you reduce establishment and reduce the Canadian forces by 100 people. That does not directly translate into people, but by the time you do recruiting, training and instruction, over time it is a reduction.

Senator Forrestall: There is a lot to consider. I have no question about that. In Strategy 2020, there is one mention of the reserves. That is very disappointing, to be very frank with you. Does that imply that there is no room in the army for the reserves?

Cmdre. McNeil: There is most definitely a role for the reserves in the future with the revolution in military affairs. Let us be clear. We are talking about the militia and about the land force reserve. It is the responsibility of General Jeffrey, Chief of the Land Staff, to do something about the reserves. It is a clear goal in the defence plan. As a matter of fact, I highlighted it with the question asked previously because it is very significant. Under "Restructure the army," it states that "the Chief of the Land Staff shall implement a transition plan to achieve a sustainable intermediate army of tomorrow with a structure for the year 2005 emphasizing medium-weight mechanized forces with enhanced command support and ISTAR capability" - that is, intelligence, surveillance, target acquisition and reconnaissance - "which will lead to a more strategically useful army. This will lay the groundwork for a more fundamental army transformation. Being the future army, it will harmonize the approved land force reserve restructure strategic plan with the modernization of the regular component."

General Jeffrey and his staff will talk to you about land force reserves. It is a big program for them and it is a real priority. It is structured with where we are going in defence. Mr. Bon referred to asymmetric threats.

The Canadian forces are postured throughout the country to do things for Canadians. When you look at our scenario set - and it is on the Internet - I believe scenario 10 deals with the some of the asymmetric activities that could take place, such as terrorism in Canada. One would say there is a role for everyone in uniform, regular and reserve, with that.

I would commend you to the Chief of the Land Staff to tell you where he is going with his modernization plan. He does have a plan.

Senator Forrestall: I was concerned about your use of the word "intermediate." What do you mean by that?

Cmdre. McNeil: I think you should ask the army what it means, but I can speculate.

Senator Forrestall: You are the boss.

Cmdre. McNeil: I am not the boss.

So that everyone is aware, my staff and I are a secretariat. We have no decision-making ability ourselves. We do analysis; we do research; we make recommendations, some of which are followed. "Intermediate" means "not heavy." "Intermediate" goes with the concept of light and lethal. "Intermediate" goes with where the American army thinks it is going.

Senator Wiebe: I have a supplementary question. You seem to be emphasizing on the reserves that the whole problem lies within land base and that there will be much emphasis placed on that. What about the other two services of the military now, such as the navy, for example, with which you are familiar? Ninety-eight per cent of the coastal defence vessels are manned by reservists. They are doing a tremendous job. Will you be falling back on that or will you be emphasizing the training in regard to the other two services as well?

Cmdre. McNeil: I will let the Chief of Maritime Staff, who is here today, tell you about the future of the naval reserve. I believe, from a central coordination point of view, it will continue with the role it has been given and its very real mission. It has been a real success. The problem identified with modernization is directly related to the land force reserve structure.

Senator Wiebe: I know that you probably have a wish list. I am looking at the state of current capital stock. I would like to go back to that.

Somewhere along the line, I suppose you sat down and figured how much it would cost you if you had all the money you needed to put all our capital stock up into the world standard or fully functional category. Can you share that figure with us?

Cmdre. McNeil: We have an on-line system for long-range capital planning called the capabilities initiatives database. Once again, I commend it to you and your researchers. It is a demand-driven online structure that provides all the documentation necessary for capital planning. The plans actually belong to each of the services. We have now a director, joint force development. It is a bottom-driven demand document when you print it out. It contains billions of dollars more demand than we actually have money for.

For some reason, I ended up doing this job. I am responsible for capital planning. I am also part of the team. When I was Director of Maritime Force Development, I was told to go away and make submarines affordable. We did. My job with the long-term capital plan is to go away and make it affordable, and we can do it. The emphasis is less on replacement of actual platforms and more on what capabilities are required and the most cost-effective way to work with the rest of government and the associate deputy minister of materiel to make the best investment for the buck.

Senator Wiebe: You would make a good politician. You did not answer my question. What is the dollar figure?

Cmdre. McNeil: There are billions of dollars more of demand than there is supply, and it changes on a daily basis.

Senator Wiebe: How many billions today?

Cmdre. McNeil: In the real plan, which is a three-year plan tied to the defence plan, we are affordable. We cannot bring to fruition the full logistic support ship, the strategic airlift and many army programs all at the same time. It must be cash managed and made affordable.

If I am not answering your question, it is because there is not an answer. There is continuing analysis, and we bring forward, when we have enough analysis done, programs to be funded by government.

Senator Wiebe: Somewhere along the line, you are having coffee in the lounge and talking about how nice it would be to have our jeeps, for example, up to standard, and whether we could do that next year, or our Sea Kings. Somewhere along the line, someone within your department must have said, "To bring our jeeps up to world standard figures will cost so many dollars."

Cmdre. McNeil: Absolutely.

Senator Wiebe: "To do the Sea King will cost so many dollars." Somewhere along the line, someone must have added it up. I would like to know what the added figure is. Surely, it will not fall within the current budget. It will likely not fall within a five-year budget. It may take a 10-year budget. Give us an idea of that figure so that we have something to work with in order to say, "In order to bring everything up to world standard position, we need $200 million." Then we must figure out how to go about finding those funds.

Cmdre. McNeil: We can give you that number when we present to you what is in the capability initiative database. Once again, I would say that within the next three years, in terms of allocation, it is real money, real demands. After that, it is demand.

I will lay a marker on the table to give you an example. The navy owns a program they called the area air defence replacement, a replacement notionally for the Iroquois class already identified, which almost has 30 years now and must be replaced. On one given day, my staff came to me and said that the navy put in an $8 billion demand for that program when notionally before that it was something like $3 billion. They did it because they went shopping and they found out that an Aegis Cruiser was probably what was needed. If you cost that out, it is $8 billion. I sit before you and say that that is not real. Yes, we need the capability and it is probably a ship with some level of capability, but it is not Aegis Cruiser. As we progress down our research and analysis, we will identify for Canadians what it really is and then we can properly cost it.

The demand is not real. The demand is artificial until we do the proper analysis and present it to government.

The Chairman: Senator Wiebe is looking for a wish list with a price tag on it and the committee will come back to that.

Senator Cordy: I am from Nova Scotia. We have hundreds of miles of beautiful coastline, but they need protection. I have read in the newspaper, and I am not sure whether it is in practice at this time or not, about the idea of unmanned aircraft doing surveillance of coastlines around Nova Scotia. Is this the case now and is this something that the military will be looking at for the future?

Cmdre. McNeil: There are several kinds of unmanned vehicles in the market today, the operational, tactical and strategic level. One is called Predator; one is called Global Hawk. In terms of cost-effectiveness of the surveillance one gets for the dollar, they appear to be a real force multiplier. The Canadian forces will look at those systems.

I think the Chief of Air Staff, as reported in the paper, has recently talked about that.

Right now we depend on the Aurora aircraft to do the proper stewardship of our coastlines. This will continue with the investments in the Aurora upgrade until, once again, the right analysis is done and we see whether systems like Predator and Global Hawk can actually provide cost-effective solutions that work for us. It is in the realm of the possible and we are looking at it.

Senator Cordy: I was very pleased to see that one of the commitments and priorities for 2001 is putting people first. Certainly we have all read in the media and heard on television about the low morale in the Canadian forces. What would you envision as priorities to raise the morale in the Armed Forces? We would like to think that the morale of the people defending our country is very high.

Cmdre. McNeil: We like to joke at National Defence Headquarters in Ottawa that the morale is inversely proportional to the distance from 101 Colonel By Drive.

You will have the opportunity to go out and talk to the troops. I am familiar with Halifax and Victoria. I recently spent two weeks in Valcartier trying to improve my French. I love talking to the troops. I find that their morale is very high.

We have done a lot in terms of housing and salary, with help from the Senate standing committee, by the way. I do not think there is a problem with the morale of the troops. Sometimes I myself have a problem with morale, but I do not think there is a morale problem out there.

Senator Cordy: Perhaps it goes back to Senator Wiebe's earlier comment about ensuring good public relations.

Cmdre. McNeil: I know well the Director General of Public Affairs and I must say that he has done a bang-up job in the last couple of years. One must not shoot the messenger. I have seen time and again that, even though we can provide plenty of good news stories, if the press chooses not to repeat them we can do nothing. Yet one bad-news story or one soldier with terrible morale leads to a sense that we all have bad morale.

We can only do what we can. All of us in uniform have a role to play, perhaps a greater role than we played in the past.

Senator Cordy: Those of us in politics understand what you have said.

Senator Meighen: Mr. Bon was good enough to suggest that I ask you this question regarding the tooth-to-tail ratio. Can you tell me whether that ratio is quantifiable? What is it now and in what direction is it going?

LCol. Kelly: I can speak to that. I can give you the number, but, anecdotally, when we went through the era of cuts as the department sought to fight the deficit we tended to focus on the support side of the house. We made a conscious effort to preserve the sharp end or the operational part of the force.

Anecdotally, it would be my guess that in fact the tooth-to-tail ratio has been improved. There is more tooth and less tail. That said, I think we are realizing now that - as the world changes and as we are being called to deploy abroad and as we no longer have standing forces overseas, we do not have the tail to rely upon in Baden and in Lahr - we have to bring the tail with us. We have found that in many of our foreign deployments now the people who are burning out are the engineers and the communicators and those folks who come along who must go repeatedly on deployment.

There is an effort within the department to look seriously at the deployable capability and to add some emphasis back into that area.

Senator Meighen: That would not necessarily mean changing the ratio? That is making them more deployable?

LCol. Kelly: No, we are looking at enhancing the capability of the tail. We need deployable capability of that group now called the joint support group. This is a group of support folks who can be deployed. Some additional forces will be put into that capability, over and above what we have today.

The Chairman: Perhaps it is a question of the definition of teeth and tail.

Senator Banks: Cmdre. McNeil, you have read the criticisms that have been publicized. The press grabs on to things that are controversial by definition. You have heard criticisms about over-management and those kinds of things in the forces.

I am somewhat torn. I am glad to hear that you are applying good business principles to armed forces management because armies for centuries have been criticized for not having done that. You have said that the navy has asked for four new cruisers, but since that is not doable we must find other ways to do things.

If I can make a medical analysis, the doctor is saying the patient needs two pills to cure the illness, to achieve the desired end. Your job is to say the patient cannot have two but can only have one. What does that do to our capability? What if a fireman says he needs four hoses but you must say that he can only have two? Is the tail wagging the dog here sometimes?

Cmdre. McNeil: If the doctor recommended that the patient needs two pills but I was not confident about what was going on I would go to another doctor and do proper research and analysis until I determined exactly what would happen when I took those two pills.

Senator Banks: Who is the second doctor?

Cmdre. McNeil: We have second doctors. I happen to be wearing a navy uniform. I have analysts on my staff. As I said, we are a mini Treasury Board; we analyze the information we are given in terms of coordinating the program. We analyze what would be affordable, what would be best for the Canadian people, for the Canadian taxpayer, for the Canadian forces. What is best for the Navy may not be necessarily what is best for the Canadian forces and for the Canadian people.

Senator Banks: The thing that drives it is doing the job? Am I right?

Cmdre. McNeil: Absolutely.

Senator Banks: Are we doing our military planning by asking how much is in the envelope first and then doing the best with that amount? Or are we asking what we must do and then deciding how we can do that most efficiently? Those are two different models of planning.

Cmdre. McNeil: There will never be enough for what everyone wants. We are always asking for more resources, as does the medical system, as does the education system. We know we will only get, within planning parameters, a certain amount, so we forecast and we do the best with what we have.

The Chairman: Cmdre. McNeil, LCol. Kelly, I think your presentation has created new questions in the minds of committee members, and that is why we wanted you here. Thank you.

Our next witness is Capt. Laing. After graduating from College Militaire Royal de St. Jean, Capt. Laing held several appointments at sea and ashore. During a posting to Norfolk, Virginia, he directed multi-threat live-at-sea tests of U.S. navy combat systems.

Upon completion of Staff College, he was assigned to the Canadian task force group for operations in support of UN sanctions against Iraq in the Arabian Gulf. In June 1997, he assumed duties as the director of tactics and operational analysis at the Canadian Forces Maritime Warfare Centre. The following year, he assumed command of the Canadian Forces Naval Operations School.

In January 1999, he was promoted to his current rank and transferred to National Defence Headquarters as director of maritime readiness. He is now the director of maritime strategy.

Capt. Laing will provide an overview of the navy, its current capabilities and future challenges.

Captain (Navy) Kevin Laing, Director, Maritime Strategy, Chief of Maritime Staff: Mr. Chairman, as mentioned, I serve in National Defence Headquarters. It is my privilege to address you today on behalf of Vice-Admiral Ron Buck, Chief of the Maritime Staff, to provide you with some general background information on Canada's Maritime Forces - your navy - as an introduction to your deliberations on the major security and defence issues facing our nation.

So far this morning, you have heard presentations on the general thrust of policy, planning and resources. The navy, army and air force undertake the application of that policy. It is appropriate to take a look at the individual services, and I am pleased to be the first to present the naval perspective.

I want to stress that the joint nature of the Canadian forces is more than just a catchphrase. In the case of the Canadian forces, the whole is truly greater than the sum of the parts. Realizing the potential of the whole can only be accomplished with a true understanding of those individual parts. The focus of my brief is on one of them, the navy, and how it provides its unique capabilities.

[Translation]

My presentation will begin with a description of just what the navy is about in the broadest terms. This will include how our navy has evolved in relation to our geography, to our physical place in the world, as well as to our economic place and aspirations, and finally to our political engagement on the world's stage. From there, I will explain how we think the maritime dimension of that world will unfold, and the role of the Navy in addressing some future concerns. Finally, I will explain our structure, how we are organized and equipped at the present time, and how we plan to evolve over the next 20 years.

[English]

In this regard, the navy very recently has developed a strategy for the future development of a coherent Canadian force structure and its most effective employment. The timing of this committee's initial deliberations is certainly fortuitous.

The document we have produced is entitled "Leadmark." It has been developed in two formats. The complete version is a robust 150-plus pages. It has been widely distributed electronically. It has been well received in the academic, security and defence communities. It is, however, in the final stages of translation. I expect it to be ready for distribution by the end of August, at which time I shall have copies passed to you.

In the meantime, we have also produced a condensed version. Advance copies have been provided to the clerk. You also have in front of you a small handout of maps and figures. Certain of the figures provided were taken from "Leadmark."

I will conclude with a discussion of some of the more significant challenges that we will face in delivering this strategy. After you have heard from my colleagues in the army and the air force, you will no doubt realize that while the maritime environment is different the challenges that face the navy are not necessarily unique. They may manifest themselves in different ways but their underlying essence is common to all three services. As a result, solutions will be developed jointly.

Please note that I have made minor, primarily stylistic, changes from the text that was distributed to you. The only substantive change is the reworking of a concluding paragraph. I am more than happy to provide copies of the revised version.

Let me a launch with some simple truths. Navies exist as part of a state's maritime policy. Specifically, navies allow the state the use of the sea for its only advantage while attempting to prevent the use of it by others to its disadvantage.

As an active member of the global community, Canada has significant maritime interests. The sea remains an important part of our national identity, and it is our gateway to the world. Canada boasts the longest coastline of any nation. We border on three oceans - the Atlantic, Pacific and Arctic. Our exclusive economic zone, or EEZ, constitutes an offshore estate more than two thirds out of the landmass. It is blessed with an abundance and variety of mineral and biological resources.

If I can draw your attention to figure 1, you will see there two maps. The first shows the extent of our 200-mile exclusive economic zone. The second illustrates Canadian defence responsibilities to our allies.

These responsibilities are for both the common defence of North America with the United States and also as part of the North American Treaty Organization. Effectively, they extend Canada's reach even further than the EEZ. The reach is extended to the North Pole and halfway across each the Atlantic and Pacific Oceans.

From a different perspective, nearly three quarters of Canada's gross domestic product is derived from international trade, placing Canada among the major trading nations of the world.

The Chairman: Could you explain the acronyms on map 2, please?

Capt. Laing: MARPAC has responsibility for Maritime Forces Pacific. MARLANT is Maritime Atlantic.

The container ports of the Vancouver, Halifax and Montreal are linked to their overseas counterparts by the global highways of the oceanic trade routes. That world, the global village, has a significant maritime dimension. The sea covers over 70 per cent of the world's surface. Eighty per cent of countries have a coastline. Most of the world's population lives within 500 kilometres of a coast.

It is a fundamental tenet to maritime strategy that depending on who controls the sea water can be a highway or a barrier. At present, Canada enjoys it both ways. While the oceans open us to the world, they also serve in our defence. The navy is Canada's exclusive instrument of national security policy upon the high seas. In the extensive exclusive economic zone, responsibility for constabulary matters is shared with other government departments. The navy operates regularly with many of them, most frequently with the Department of Fisheries and Oceans, the Solicitor General and Citizenship and Immigration Canada. Whether operating alone or with others, the purpose of the navy is to ensure our freedom of movement in support of Canadian interests and to enforce the rule of law.

Every Defence white paper produced by a Canadian government has prescribed three basic pillars of Canadian security. The current 1994 policy statement is no exception in this regard. They are: to defend Canada, to assist in the defence of North America and to contribute to international peace and security.

The navy is a critical element in these Canadian national imperatives of sovereignty enforcement, continental defence and engaged internationalism. Over the course of the past century, Canada's navy has developed in tandem with the nation. Prime Minister Laurier established it in 1910 as the one of essential elements of the task of nation building, a visible expression of the devolution of powers from Great Britain.

Initially, the navy was intended to simply assert sovereignty in Canadian waters, but as Canada's interests broadened around the globe so too did the reach of the navy, in peace as well as in war. With the growing commitment to collective security, Canadian political influence was measured by the credibility of its specialized military contributions to allied needs through the defence of North American and Europe. The Canadian navy played a vital part in the fight for democracy in two world wars and the armed peace of the latter half of the 20th century. Now, an expanded post-Cold War security agenda, at once both global and more independent, means that the world is more complicated. We in Canada will continue to be engaged. Due to the essentially maritime nature of the world, the navy will continue to play an important role. As a globally deployable force of longstanding, that role is to provide the Canadian government with the independent means to become engaged on short notice anywhere on three quarters of earth's surface anytime, and at the moment and place of its choosing.

[Translation]

Of course, overseeing the sovereignty of the territory of Canada and its maritime approaches is the fundamental priority of the Canadian Forces. While it is impossible to discount asymmetric threats, the latest departmental Strategic Overview and Military Assessment projects that a direct conventional military threat to Canada in the foreseeable future is unlikely. However, as you are aware, there is growing concern over what are known as asymmetric threats. Tomorrow, you will receive a brief on the nature of these threats from the Office of Critical Infrastructure Protection and Emergency Preparedness. I will not steal their thunder, other than to note that the Navy has already played a significant role in countering these developing threats to the homeland.

You will be familiar with our role in arresting the flow of illegal migrants, specifically those that arrived off Vancouver Island from China two years ago, and our ongoing counter-drug operations off the Atlantic and Pacific coasts, but we have also been engaged in this work as far afield as the Caribbean basin. I shall come back to that issue later in my presentation.

[English]

The point is, of course, that the navy does not just operate close to home. Ours is essentially an island continent, and because Canada will be engaged in the world many of the operations undertaken by the Canadian forces will be conducted beyond our Maritime frontiers. Indeed, expeditionary operations have been at the core of the Canadian security tradition and are the logic of the evolving concept of employment for the Canadian forces.

A world view of engaged internationalism recognizes that resolving global problems at their source can reduce the potential for asymmetric assaults. The first step will be putting the necessary tools in place to influence the outcome. For this, a growing role for seaborne assets is projected. As the oceanic highways provide an accessible and effective means of travelling to many parts of the world's likely trouble spots, they have the potential to be an important element of any solution.

Unlike during the Cold War, when most naval activity was geared to maintaining the sealines of communication in the blue water of the open ocean, attention has now begun to shift to operations in the green water - land/sea interface of the littorals. In large part, this is in recognition of the fact that the United States and allied nations have achieved de facto command of the sea and are expected to retain it over the next two decades. This gives maritime powers such as Canada a great deal of flexibility in preventing regional instability from escalating into global destabilization.

Since such operations will undoubtedly require the presence of some level of military force on the ground, military strategic planners are placing an increasing emphasis on how best to support joint and allied forces in the littorals. Indeed, all of Canada's major allies now forecast an increasing use of overseas littoral environments to launch more complex and, if necessary, robust expeditionary crisis management operations.

What makes the navy such an indispensable enabler of joint and combined operations from the sea is its ability to exploit the oceans in their capacity as global highways. Freedom of the seas gives the navy the right to operate in all three dimensions - above, below and on the surface of the high seas. This enables it the mobility and capability to go anywhere in the world accessible by the sea - that is, as close as 12 nautical miles off any other nation's coast. There are no such corresponding rights over the territory of another state.

Clearly, this freedom of movement offers a degree of synergy that the navy can leverage to a maximum advantage. A navy cannot hold ground to the extent that an army can hold ground, but neither can it reach the far corners of the globe as quickly as an air force. However, the ability of a navy to stand off a foreign shore for an indefinite period with substantial combat capability cannot be matched.

Thus, although naval platforms and their crews may be primarily designed and trained for war fighting at sea and in the littorals, it is this freedom of movement that determines their suitability for a much wider and more flexible range of operational tasking.

In particular, there are certain strategic characteristics specific to naval forces. First, they are unique in their ability to deploy quickly and remain in an area for extended periods without the agreement of neighbouring states, and they do not need to rely on complex shore-based logistical support systems. Second, they have an inherent flexibility that allows them to change roles quickly without loss of efficiency and without having to return home for reconfiguration. Third, they can extricate themselves easily from threatening situations while retaining the capability to function in harm's way and protect themselves and those entrusted to their care. Fourth, warships have a symbolic value, in that they are legal extensions of the parent state. In this respect, the presence of a warship is a clear signal of the interest or concern of a state, or a group of states in the case of a multinational force, about a situation.

[Translation]

Those are some of the unique attributes with which a navy is endowed. In turning to the practical application of these characteristics, I invite you to turn to Figure 2, Canadian Naval Roles and Functions. This model was developed as part of Leadmark, to illustrate the complexity of naval operations at and from the sea. Simply stated, it conceives of a triangle within which use of the sea is the unity underlying a trinity of roles - military, diplomatic and policing - that interrelate across the spectrum of conflict. Overlapping circles demonstrate the reality that, in practice, navies rarely conduct their everyday functions strictly within one single domain, especially in peace time. The type of activities and the potential level of military force necessary to carry them out are reflected within each sphere on an escalating scale. Indeed, the controlled capacity for violence resident in a fleet ranges from presence and influence, through coercion to war-fighting, and, based on appropriate political direction, is entirely respondent to the circumstances.

[English]

Let us look for a moment at each of the three broad roles and how these dictate the form and work of the navy.

First, there is the military role. Appropriately, it forms the base of the trinity, for the essence of a navy is its military character. While a direct military threat to Canada is unlikely in the foreseeable future, it cannot be dismissed. Canada's navy is expected to use the sea to defend national and allied commitments. The navy is the homeland's outer line of defence against an armed aggressor. Beyond Canadian shores, collective security obligations in turn require the navy to ready itself for modern war fighting. The anticipated increase in expeditionary crisis management missions in the world's littorals will carry with it the risk of escalation in such contingencies. As well, Canada could be drawn into conflict by alliance or coalition connections, as happened in both Korea in the 1950s and the Persian Gulf and the Adriatic Sea in the 1990s.

Second, there is the diplomatic role of navies. This concerns the management of foreign policy short of the actual employment of force. Accepting that Canada will continue to seek to influence the global security agenda by remaining engaged internationally, Canada's navy is expected to use the sea to support Canadian foreign policy. In the evolving security environment of the 21st century, the lines between the traditional notion of naval diplomacy and the overarching concept of crisis management are becoming increasingly indistinct. Yet, all of these functions will continue to be important dimensions of the types of peacetime operations involving the Canadian forces.

When the government directs the navy to participate in such operations as humanitarian assistance, sanction enforcement and preventive deployments, experience suggests that these operations likely will be conducted as part of a coalition or in cooperation with the armed forces of allied and like-minded nations. As such, this introduces a further dimension to the issue - naval diplomacy is frequently deployed to influence not only potential adversaries, but also friends and partners.

Third, there is the constabulary role. It is presented last only because it is oriented internally as much as externally and it is rarely concerned with the armed forces of other states. At the level of national sovereignty, Canada's navy is expected to use our seaward approach to secure Canadian sovereignty independent of support from other nations. In the absence of any likely major conventional military threat to North America, the primary sovereignty-related function of Canada's navy is patrolling our vast maritime approaches. Most countries with a seacoast have established some sort of separate coast guard. Indeed, in Canada, the primary responsibility for the enforcement of Canadian law rests with other government departments. However, the vast size of our offshore state means that frequently the navy is called upon to lend assistance of varying sorts to these departments. Most commonly, we operate with the Department of Fisheries and Oceans, the Royal Canadian Mounted Police, and Citizenship and Immigration Canada. The type of support provided ranges from surveillance and monitoring to compliance and to the provision of sealift transportation, culminating, only when necessary and as a last resort, in the ability to apply deadly force.

That, ladies and gentlemen, completes somewhat of an esoteric overview of the utility of navies.

I will now describe how the Canadian navy is structured and equipped to undertake these various roles and their subsidiary functions. The navy has some 9,000 regular force sailors, 4,000 reservists and 4,000 civilian workers. In figure 3, you will see the national distribution of Maritime Command - MARCOM - headquarters and the three subordinate formations. The head of the navy and the maritime staff have been located in Ottawa since 1997. Maritime Forces Atlantic - MARLANT - is headquartered in Halifax, Nova Scotia; Maritime Forces Pacific - MARPAC - is headquartered in Esquimalt, British Columbia; and the Naval Reserve is headquartered in Quebec City.

The bulk of the naval reservists serve in one of 24 naval reserve divisions located across the country. With approximately 150 to 200 members each, the divisions provide a very important element of visibility to the nation of its navy. The operational total force fleet itself is balanced between the East and the West Coasts, but with somewhat more infrastructure and personnel in Halifax.

At the outset of the 21st century, Canada has in its service arguably the best balanced and most capable navy in its history. It speaks volumes to the inherent flexibility of naval forces that this essentially Cold War construct has proved remarkably adaptable to the new world order. The country has a modern fleet with a broad range of capabilities. It is instructive to examine how the constituent parts are being employed, and as we do so I invite you to refer to figure 4, "Canadian Fleet Units."

The four destroyers of the Iroquois class, which were built in the early 1970s, were upgraded in the first half of the 1990s to modern command-and-control and area defence standards, earning the redesignation as guided missile destroyer, DDG.

Ships of this class have served as the flagship of Canadian commodores in command of NATO's Standing Naval Force Atlantic, including during the Bosnian conflict of 1993-95 and the Kosovo campaign of 1999.

You will recall that I mentioned earlier the long-range participation of the Canadian navy in counter-drug operations. This occurred in 1999 when HMCS Iroquois, the lead ship of this class, led the Standing Naval Force Atlantic in support of U.S. Drug Enforcement Agency counter-narcotics operations in the Gulf of Mexico.

[Translation]

The integrated combat system of the Halifax class of patrol frigates stands as the envy of other navies. The twelve ships of this class have toured the world as showcases of Canadian technological know-how. Single ships (in rotation) from both the Pacific and Atlantic fleets frequently have been integrated seamlessly into USN carrier battle groups deployed to the Persian Gulf in continued enforcement of United Nation resolutions against Iraq. The ship assigned does not simply augment the American force, but rather replaces a similar USN ship. I cannot emphasize enough the fact that our current credibility to work as integrated units on this one-for-one basis allows Canada's voice to have greater effect on the direction of these operations.

[English]

Victoria class submarines are replacing the Oberon class submarines, thus ensuring that Canada maintains a modern submarine capability and balanced fleet structure into the future. In addition to their traditional operations and training roles, submarines also, quite literally, have brought a new dimension to such sovereignty activities as fisheries patrols and counter-drug operations, being able to approach violators unobserved. During the turbot crisis fisheries dispute in 1995, they were used effectively in this fashion.

The Protecteur class replenishment vessels, always critical to the operational sustainment of Canadian and allied fleets, have seen much of that traditional employment in operations in the Persian Gulf, off Haiti and in the Adriatic Sea. Apart from this, these supply ships have been two of the busiest in the Canadian fleet. They have ranged around the globe on missions as diverse as the initial afloat joint headquarters for the Canadian contingent to Somalia in 1993 and in providing humanitarian assistance to East Timor just over a year ago.

The 12 ships of the Kingston class maritime coastal defence vessels are designed to embark a variety of mission payloads, most of them for different aspects of mine countermeasures. These flexible ships have also been employed in the conduct of junior officer training and sovereignty patrol missions and can lend support to major units of the fleet in operations.

In the Swiss Air disaster recovery operations in 1998, for example, four Kingston class ships embarked underwater acoustics payloads to assist in the search for identification and recovery of aircraft debris. Operated predominantly by the naval reservists, they serve as an excellent example of the total force concept.

Maritime air platforms have witnessed a broadening of their employment away from the traditional tasks of anti-submarine warfare and ocean area surveillance. Long-range Aurora patrol aircraft and Sea King maritime helicopters also support national and coalition forces and other government departments. They do so through a wide range of operations, including the following: sanction enforcement; overland surveillance; tactical lift; land support, peace support and counter-drug operations; monitoring of illegal immigration; pollution and environmental control; and search and rescue. Of course, all military air services in Canada are provided through the air force. Accordingly, Col. Hines, in his presentation on the air force this afternoon, will give you more details on both fixed and rotary wing maritime capabilities.

That is the fleet as it exists today. In the last decade, this fleet, like the Canadian forces in general, has been more actively engaged in a greater variety of operations throughout the world than at any other period in its peace time history.

If you refer to figure 5, you can see the range of Canadian naval deployments between 1996 and 2000. Your warships have literally covered the face of the earth, performing the full range of naval functions short of war.

[Translation]

Indeed, a review of the Navy's post-Cold War employment confirms the value of a balanced approach to defining naval capability requirements. Equally important is the fact that these capabilities now are resident in sufficient numbers in various platforms to allow an equitable distribution between both the Pacific and the Atlantic coasts. For the first time in its history, the Canadian navy is able to maintain a viable task group on each coast, and in fact the task group concept remains the fundamental precept of the operational employment of the Canadian fleet.

[English]

The phrase "tactically self-sufficient units" is coming into use to describe the fundamental asset that the Canadian forces requires for international operations - and also a key contributor to domestic operations - capable of integrating into a combined force package as a task-tailored component. A naval task group is an excellent example of this, in which various ships, submarines and aircraft, each with unique capabilities, act in combination, depending upon the mission, to create a synergistic effect multiplying their individual effectiveness.

While deployments of individual ships, submarines and aircraft may be appropriate to certain situations, these must be undertaken on the premise that they must at least be able to look after themselves. Presuming they are to join a multinational force, they must also be able to add something to the collective operational capability. In order to qualify for a political role in the management of a crisis, the deployment of a more substantial force is likely required. As such, the Canadian navy must retain its competence in task group operations.

[Translation]

While you can have every confidence in the Navy I have just described to you, we face a number of significant challenges in maintaining that hard-earned competence, even in the near future. These challenges fall into three broad categories: capability replacement programs; readiness and sustainment; and recruiting and retention of personnel. Let me examine these in more detail, and describe the way ahead for each.

[English]

First is our need to quantify and develop capital programs that deliver those capabilities that are needed to execute the defence mission to defend Canada and Canadian interests and values while contributing to international peace and security.

In an earlier presentation to you, Cmdre. McNeil, representing the Vice Chief of Defence Staff, explained the general process by which this is accomplished. It is referred to as capability-based planning and represents a fundamental shift in how the Canadian forces goes about what we call force development. I will not cover this ground again, except to note that in the navy we have completely incorporated this planning methodology into our own development of capital programs.

If you turn to figure 6 in the handout, you will see how we have matched the Canadian forces capability areas against specific naval competencies.

Again, this relationship was established as part of "Leadmark," the navy's strategic development of the past year. I would refer you to that document, when it is available, for more specific information on how and why the competencies listed were selected.

The point that is important to this presentation is that capability-based planning is being utilized to good effect in a series of projects aimed to ensure that we deliver the right capability at the right time and for the right cost. By "right," I mean appropriate to the needs of defence as a whole - to the Canadian forces and not simply the navy.

To illustrate this point, I will talk quickly about one specific project, the afloat logistics and sealift capability, ALSC. The plan is to achieve two critical capabilities, that is, tactical sustainment and strategic mobility, as part of the replacement for the aging Protecteur class supply ships. This project is tasked primarily to ensure that continued at-sea logistics support will be available to naval ships and embarked helicopter detachments. To gain the maximum utility from this ship replacement opportunity, it is intended to include a strategic sealift capability, which will enhance the capacity of the entire Canadian forces to deliver the lead army and air force elements of a joint expeditionary force almost anywhere in the world accessible by sea. Other roles, including aviation support, humanitarian crisis response and a joint or combined force headquarters capability may be accommodated as well.

The implications for the conduct of Canadian foreign policy that possession of such a vessel could provide are significant. Besides the ALSC, other major capital projects include the command, control and air defence replacement, the frigate equipment life extension project and the submarine equipment life extension project. In combination, these projects will ensure the continued ability of the navy to deliver on its mandate well into the 21st century.

I am prepared to answer specific questions on any or all of these programs after this presentation.

The second challenge has been the development of a readiness and sustainment policy. Readiness in the naval context is an assessment of the preparedness of a naval platform and its crew to successfully conduct an assigned task. Given the multitude of potential missions to which naval units can be assigned, readiness is benchmarked against an ability to operate in a mid-level conflict, such as the Persian Gulf War. To maintain the entire fleet at this level is a very expensive proposition. However, in today's environment it is not necessary, nor even desired, that all units be maintained uniformly at the levels of readiness required for full combat operations. The challenge, of course, is in matching resources to operational commitments. To this end, a tiered approach to readiness is being adopted. HMCS Winnipeg, the frigate currently on station in the Persian Gulf, is an example of a high-readiness frigate available in a very short time frame for combat-type operations. Other ships are maintained at a somewhat lower level, called standard readiness. They are capable of performing the vast majority of domestic operations and for training. Indeed, both HMCS ships Athabasca and Montréal, which conducted the successful boarding of the GTS Katie off the coast of Newfoundland last August, were standard-readiness ships.

Ships in extended readiness range from those placed in long maintenance periods to those assigned to a care and custody status, of which we have one, HMCS Huron, on the West Coast. The resources that would otherwise be required to keep her at sea have been reallocated to better advantage.

As a ship progresses from extended to high readiness, she undergoes a progressively more demanding series of trials, evaluations, workups and weapons systems certifications to validate her preparedness in terms of both technical performance and crew competence for combat operations.

The final major challenge we are facing is that of recruiting and retention. The navy is not just about platforms and high-tech equipment; its very foundation is its people. The Canadian forces have identified the development of a human resources strategy as its critical issue in the near term. The navy is actively engaged in the development of a departmental plan and its implementation within a naval context. Quality of life and quality of work life must figure prominently in all capability planning regarding Canada's maritime forces. The navy must foster continuing education through distributed learning and education cost reimbursement and promote such measures as will generate a holistic approach to meeting the career, family and personal needs of its sailors. The character of the Canadian labour market is that of an ever-shrinking workforce pursued by increasingly competitive employers. Positioning the navy as an employer of choice will be absolutely critical to the ability to recruit and retain officers and sailors within the essential skills and competencies to handle the complexities of our new equipment and to function effectively in the more complex security environment of the future.

These challenges are substantial but not insurmountable. A way ahead has been described for each, but two factors are critical to realizing the solutions. First, they are contingent upon the support of the government in terms of both policy and resources. Second, they must be addressed not in competition but in concert with the similar challenges that face our colleagues in the army and the air force. As I am sure you will hear in the next presentation, these challenges are not unique to the navy. My colleagues in the army and the air force undoubtedly spend as much time with the problem as I do. However, with a common framework now in place to progress force development within the Canadian forces and the Department of National Defence, the mechanism exists to rationalize all our perspectives into a single joint approach. As I tried to show, that joint approach is best developed in full recognition of the unique attributes that each service can deliver.

In conclusion, the navy provides the Canadian government with a wide range of crisis-management options to respond to national emergencies and threats to sovereignty in home waters and to intervene overseas militarily at the time and place of its choosing. In scenarios as diverse as fisheries patrol, disaster relief, sanction enforcement and collective defence, these options span the entire spectrum of conflict, from presence and humanitarian assistance through peace support operations to active war fighting. The navy brings to future Canadian forces global operations a broad range of capabilities.

Canada is an active international participant with extensive global interests. The seas are the highways to those interests. Given the realities of geography, the navy will continue to be the vehicle to transit those highways as it conducts the traditional roles of securing Canadian sovereignty and our maritime resources, defending the seaward approaches to Canada and North America and supporting Canadian foreign policy through the maintenance of international peace and security.

I am now prepared to answer your questions.

The Chairman: Thank you, Captain Laing. That was a very comprehensive overview.

[Translation]

Senator Pépin: You studied at the Military College in Saint-Jean, which is my home own. I want you to know I was very sad when the Military College closed.

You say that the air and maritime platforms are getting away from traditional roles. The navy carries out non-military tasks, such as sovereignty patrols along Canada's coasts and fishery surveillance, as well as controlling the flow of illegal migrants and counter-drug operations. Are the costs of these operations born by the navy or by the different departments involved? As regards control of illegal migrants, for example, does the Department of Immigration pay the costs of these operations and how much do they cost? If the costs are absorbed by the navy, what percentage do you expect them to represent in the coming years? And what impact do such events have on training?

[English]

Capt. Laing: If I understand the question correctly, you want to know how much we spend for supporting other government departments.

Senator Pépin: Yes, and who pays for it. Is it the navy, or is it billed to the department? Since everything is being planned in the budget, then if it is the navy that is paying what is the percentage planned in the next budget for those operations?

Capt. Laing: I will answer from a budgetary perspective. I am not an expert by any stretch of the imagination. The currency we use is days at sea. That is what we use in support of other government departments. Presently, from the total number of fleet sea days, we have 155 days that we devote to the Department of Fisheries - that is, 120 on the East Coast and 35 on the West Coast. These are negotiated at the strategic level, in the national headquarters, and then it is passed out to the maritime forces, Atlantic and Pacific. We also provide a number of sea days to the Solicitor General to provide support there as well.

If we are conducting operations such as the operations in support of Immigration Canada, for example, regarding the situation on the West Coast last year or the year before, for some of those operations we were already at sea so we accepted those costs. Incremental costs, however - that is, those above what we would normally spend - are governed under agreements that the department has with the other departments. For example, with respect to the Deputy Chief Defence Staff, there are guidelines about how it is arranged for use of Canadian forces and support.

Senator Pépin: It is not all the marine who is paying for that?

Capt. Laing: No; we have a share. Before 1990, we had a much lower number of days that we would use in support of government departments. During 1990, there was a report about the potential integration of the maritime fleets. Clearly, this involved the Department of Transport, the Coast Guard and naval forces. There are many ships out there, yet in some cases we have unmet demand for ship services. Is there a better way to coordinate? The interdepartmental program coordination review committee was formed to make best use of the federal maritime assets. As a result of that committee, subcommittees were formed to coordinate communications and operational aspects. Since 1990, from an operational perspective, we have roughly doubled the amount of support that the navy provides to other government departments. More important, however, we are gaining a better appreciation of the information and activities that are ongoing in our ocean front yards.

I understand the committee will be heading to Halifax. You will have an opportunity at that time when you visit Maritime Forces Atlantic headquarters to see all the ship contacts that we have managed to pick up. That is information provided to us from a wide variety of sources, and some of it is provided through the other government departments. We, in turn, feed that information to the vessels of other government departments to have a better assessment of the activities that are ongoing in those areas.

We have ships that are deployed in support. We have information that is ongoing all the time. We have the search and rescue centres that are integrated within the headquarters, and so on. That is a broad overview of how we operate in conjunction with some of the other government departments.

[Translation]

Senator Pépin: In another connection, there has been a lot of discussion of budget cuts. Did budget cuts have an impact on training? To what extent are simulators being used rather than actual ammunition? Compared to the United States or Great Britain, how often is the Canadian Navy able to use actual ammunition while conducting training? In that regard, would you say that budget cuts have had a major impact?

[English]

Capt. Laing: There is no doubt, senator, that there are budgetary challenges. The budgetary challenges affect everything that everyone in the Department of National Defence does.

With regard to training, it has obviously had impacts. We needed to change, adopt and modify the way we conduct training. One of the things that we in the navy did was run probably one of the most expensive training systems before 1990. We had training destroyers and the mine sweepers, and we had many people and resources tied up in actually sending ships to sea. That ideally is good, but it is also expensive.

We have adapted to make greater use of simulators. We have some excellent capability in simulators, from small arms simulated trainers through to combat team trainers where you replicate an operations room of a ship and then you conduct simulated engagements.

Indeed, once again, when you go to the Canadian Naval Operations School, which I believe is on your schedule for the Halifax visit, you will see that. They are able to run two teams because there are two operations rooms. They also have bridge simulators that allow junior officers, when they are conducting their training, to practice an exercise developing their skills to manoeuvre warships in these simulators. It is much more cost-effective than to be continually sending ships to sea.

By virtue of the fact of having a single point of training, you can better standardize the training and make sure everyone is at the same level of training. This allows difficult manoeuvres to be repeated in order to make sure that they are done right and done well. In this regard, we have made increasing use of scenarios using simulators.

There is nothing like doing it for real, however, and we will be placing an increased emphasis on putting junior officers, particularly, back to sea in frigates to do phases of their training. That is an option that we will be following through on over the next year. I do not have all the details on precisely how we are doing that, but it is intended to put a phase of their training back into the frigates.

With regard to actual munitions, they are expensive. I would not hazard a guess on the actual cost of the various missiles, et cetera. Yes, we do fire missiles from time to time, for a number of good reasons and not just specifically for training, although there is always an element of training involved.

No doubt, honourable senators are probably aware that in the mid-1990s there were quite a number of reports about some of the missile difficulties that we were assessed to have had. I was charged with the responsibility of figuring out what was wrong and I wrote a report in that regard. The bottom line is that we were doing many of those missile shoots in the early 1990s, when we were accepting the Halifax class. They were engineer-oriented, which dealt with whether the systems that were put on ships worked. Many of the missile firings would go off and that would happen. It was also for training for the crew, et cetera.

In the mid-1990s, when the last ship was being accepted, we decided that we must maximize the combat capability of these particular systems, as well as the people who use them, by attempting more challenging activities, target scenarios and everything else. We found a few holes in the training so we went back. We had some less than perfect success and we wanted to get at the root problem. Some was technically oriented, some was operationally oriented, in training, for example, as well as the fact that we were asking the system to do things beyond its capabilities. We learned through firing missiles.

We also put into process a scientific data collection effort that we did not previously have. Therefore, all our missile firings are recorded and analyzed, both within the systems themselves and within the data flow and the missiles that are fired. They all feed information back as they are going out.

It is all very complex, but we have a good data package right now. We use it for training and to assess whether there were problems or to gauge the capability of the system. We use the data package to develop a better understanding of the system and a better understanding of where some of the challenges exist in the system. In that manner, we can make improvements to the capabilities.

[Translation]

Senator Pépin: So, overall, simulators are highly effective.

[English]

There is nothing better than the real thing.

Senator Wiebe: I wish to go back to the first question that Senator Pépin asked in relation to the non-military tasks, or the policing tasks that the navy performs. Is there a greater demand for this service than there are ships?

Capt. Laing: The first thing, senator, is that the navy does not have any domestic law enforcement jurisdiction. We provide support to other government departments, generally speaking, providing transport, et cetera, to either the RCMP or the Department of Fisheries. When we are conducting fisheries patrols, we have fisheries officers from the Department of Fisheries and Oceans with us and we are providing presence, support, et cetera.

Is there an excessive demand? I cannot answer whether there is more of that than not. I know that in the case of the Solicitor General we have budgeted 30 ship days to their support, and we have done that pretty consistently over the last five years. I do not believe we have used that allocation in support of the Solicitor General.

Generally speaking, we pretty well use the budgeted amount for the Department of Fisheries, but it is an agreement that we come through with the Department of Fisheries. There could well be other demands out there that we all must balance in the operational schedule, not only from a budgetary perspective but also from a people perspective. We want to ensure that our sailors have the opportunity for relaxation and time with their families, et cetera.

I am sure, like everyone, we would all like to have more in order to be able to do more, but I cannot tell you the extent of unsatisfied demand.

Senator Wiebe: There is quite a drive beginning for recruitment in regard to the armed services. What is happening within the navy? Are your numbers up, are they down? Do we have enough regular forces and reservists to man our ships? What is the situation within the navy?

Capt. Laing: The situation within the navy is that we are currently about 400 folks short on the regular force side, which is in large part within some of the more technical trades. This is a challenge because they obviously get a little extra technical training. As well, those are precisely the kind of folks that industry is interested in using as well. We have a large amount of competition in attracting and retaining those folks. Roughly half of a technician's career can be spent in technical training. That is a bit of a challenge.

We are also short junior officers. I believe we are down 80 to 100 at the lieutenant level. These are the folks that are on the plates out there doing the job. There are definitely challenges in that regard.

The navy, in cooperation with the other services, is certainly supporting the increased emphasis on recruiting. Personnel are not exactly my bailiwick. I do not have the exact numbers we are pressing for. I understand that interest is up and that the number of applications to the recruiting centres is up, the extent to which I cannot answer.

Senator Wiebe: That sounds encouraging. I see from one of your handouts here that, for example, on the maritime forces, or Pacific, you have 281 reserves. These are reservists who do have civilian jobs, but have taken a year's absence. Are they actually on staff full-time, being paid full-time?

Capt. Laing: Yes, sir. Quite possibly that is so. I would assess that that is what it means, that they are on a longer period of service. It is interesting that, as you are probably aware, the navy is slightly different in the way that it has organized itself with regard to the naval reserves.

You heard earlier that the army uses the reserves as an augmentation perspective for each of the units they deploy, whereas the navy sets aside specific roles, tasks and missions for the naval reserves and, indeed, has provided them the equipment to do that, such as the maritime coastal defence vessels. Those have a crew of 35, of which only two would be regular force and the rest would be the reserves. These reserves would come from all across the country to form the vessel's crew. If we have six vessels on either coast, five of which would be operational, and one in a maintenance period, we will have roughly 180 naval reservists being employed in that particular regard. So there would be other opportunities for reservists to work as well.

The reserves, by the way, are down about 400 as well. We are about 400 below what our allowed establishment is.

Senator Wiebe: When you look at all three services, I find that the navy has done an outstanding job in regard to its reservists. I get the feeling from the experiences that I have had that the regular navy personnel are not quite as uptight about reservists using their toys, if that is the proper term to use - I should maybe say "equipment" - whereas that may be the case more in the other two services. How you have gone about accomplishing that, I do not know, but I certainly want to congratulate you on that. The navy has done an outstanding job in being able to get the reservists to work hand in hand and side by side with the regular personnel.

Is that part of the reason that applications are higher, because of the increased involvement with the regular navy than what may be the case in the other services?

Capt. Laing: I could not venture to answer the specific question of why applications would be higher. Indeed, as I mentioned several times in my presentation, each of the services faces unique challenges, but we also have common challenges as well. I cannot really comment on the situation with reserves in the other two services. Certainly, I know our folks, both reserves and regular, are, as in the other services, dedicated and very talented. With the training we give our people, and their dedication and discipline, it is difficult for us to retain them if the private sector wants them.

Thank you for your comments with regard to reserves.

Senator Wiebe: For example, if someone were in the regular navy and decided that private industry, because of salary and other things, were more attractive, would that individual, after leaving regular service, continue on in the reserve system in the area that he moves to, providing there is a reserve unit there? Do you find that they have had their stint with the navy and that is it?

Capt. Laing: Once again, that is pretty much a personnel issue. That is not one of my areas of expertise.

However, I do know that in practice it is entirely up to those who retire from the navy as to whether they wish to join the primary reserve or to be part of the supplementary reserve or one of the other associations, or to have no association. It is entirely a personal choice. Within the navy itself, what we hope to accomplish, I think more in a corporate sense, is to find a means or a way to improve the mobility of people between the regular force and the reserves. If we can arrive at a methodology to accommodate people's career aspirations, that may also help with our retaining and enhancing the value of the career for the Department of National Defence or for the Canadian forces to become and remain the employer of choice.

Senator Meighen: Senator Wiebe has not for the first time explored areas that are of interest to me. I must say I share his assessment, particularly with respect to the use of reserves by the navy.

You have answered his question, but I would like to put a slightly different slant to you. There seem to be two systems of dealing with the reserves. One is the augmentation approach, which the army seems to have used - let us leave the air force out for a minute - and the other is the carving out of a specific task for reservists, the system the navy has adopted.

Did you adopt your approach in the navy because on paper it seemed better, or did you adopt it because the navy lends itself to that approach? Why did you come up with the task-orientation approach as opposed to the augmentation approach?

Capt. Laing: That is a discussion that will require a little bit of history, of which I am unfamiliar. I can relate to you, certainly, that in the 1980s and previously the reserves were very much naval reserves, very much in an augmentation perspective. We would send naval reservists off on our steam-driven destroyers and frigates. They would go off and do that pretty much from the augmentation perspective. Their active employment from a mission role perspective was confined to what we call the old port boats and some of the very old harbour auxiliary craft, for example.

An assessment was made that the increasing technological challenges of operations at sea require perhaps a little more specialization - I cannot speak for those who made the decisions because, as I said, those decisions were made at least a decade ago - that the better way to proceed was to give them a defined role and mission and then equip them to do that particular job and mission. That was put into play. We have the maritime coastal defence vessel, as I mentioned previously. They do much of the coastal sovereignty operations; they are doing mine warfare and those activities.

Our assessment was that it was better for them to specialize. Also, perhaps, the maritime environment lends itself to that, and we were looking at that.

Senator Meighen: Perhaps that is so, but as Senator Wiebe said it seems at least anecdotally to be working much better than the other approach. We can explore that with someone from the army in due course.

To over-generalize a bit, you gave me the impression that, through a combination of good luck and good management, the navy has come through its Cold War phase and out into a more modern phase in pretty good shape in terms of capital equipment, after some modernizations and purchases. You have now, in a satisfactory way, covered the spectrum and are able to do your job.

For better or for worse, it seems that the constabulary role gets you the brownie points with the public. The other role of having a frigate in Bosnia, the public knows nothing about. However, they do know when you intercept a smuggler or stop a drug trafficker or catch an illegal fisher. You do very well there. Again, some free advice: I would concentrate on that. Is there, on your wish list, any capital equipment that you need in order to further pursue that role? I do not think that role will diminish soon and I would not want it to, if I were in your shoes.

Capt. Laing: Meeting the expectations of Canadians for their military is certainly a key element to be considered. Canadians are expending billions of dollars on defence and they want some return on that. As you have mentioned, constabulary roles or assistance with pollution threats, sometimes in concert with our Maritime air folks, all these provide an important relevance to Canadians. They can see that their navy is out there doing something.

The ships that are conducting operations in the Persian Gulf have been seen on television, along with the ships' COs and other folks. Various commercials for private companies have been supported by the navy there and in other locations. Perhaps that work is not so relevant to Canadians in their day-to-day business, but it is important to their government in the conduct of Canadian foreign policy.

Over the history of Canadian foreign policy, global navy activities have been tied in as support mechanisms. As Canada has matured and grown through the ages, we essentially went from a colony, a young dominion with no requirement for a navy, to a growing nation in the early 1900s under Prime Minister Laurier who said that we should have a navy. We got one, but it was used only for local activities. We also had no foreign policy then; we were part and parcel of the Empire.

As we broke the bonds of the Empire and went out into the world, especially during World War II, we greatly expanded to become the world's the third biggest navy. In foreign policy, we expanded our diplomatic perspective. Then, in the Cold War, we carried on with foreign policy opportunities, but the navy did not keep pace with that developing foreign policy.

Our 1995 foreign policy statement "Canada in the World" stated absolutely that Canadians want to be involved internationally. We want to export our values and goals because this is a wonderful country in which to live. We should be able to go out and help others and introduce them to some of our values and activities.

The navy is part and parcel of that introduction and I think that is the future direction for ensuring the relevance of our work to Canadians. One of the future programs will include float logistics and sea-lift capability. There is a tremendous capital investment opportunity to replace the replenishment ships that are 30 years old or more. These ships are critical elements to maintaining the capability of the Canadian navy to deploy individually and, even more so, as a group of ships working to support Canadian foreign policy and Canadian government interests offshore in various parts of the world. We need to take these "gas stations" with us. The replenishment ships transfer fuel, food, ammunition and other supplies while at sea.

We can capitalize on the requirement to replace the replenishment ships with float logistics and sea-lift capability and by taking elements of the Canadian forces vanguard, or lead elements, that are supporting peacekeeping operations. If we also use those vessels to provide humanitarian support to areas of disaster, the vessels will be in the headlines and will have great relevance to Canadians. If we provide that vessel to give support to the United Nations as it transports humanitarian aid or to transport other nation's contingents to areas of conflict because our forces are otherwise engaged, that work will certainly have relevance to the Canadian public.

I hear you, senator. The constabulary role is important to Canadians because it is close to their hearts. I look forward to the future, assuming that Canada will maintain an international foreign policy that is supported by the navy.

Senator Forrestall: With the absolute forward deployment of Korean military forces, including their navy, into the south, a conflict seems to be developing. Anyone who follows the area closely is alarmed from time to time; it is somewhat of a roller coaster. How long would it take our current intelligence capability to know of a crisis there? I am thinking of deploying vessels and not of engaging in any war. How much lead time would we have before conflict breaks out in that part of the world?

You know what is going on in North Korea better than I do, but what I do know is very disturbing, as is the situation in China. I asked earlier how a Chinese submarine could come into our water and leave again undetected. I guess it is because we were not looking for it.

Capt. Laing: As I mentioned to you earlier, senator, I have no knowledge of that particular situation.

Senator Forrestall: How good is our intelligence if something is happening? Should we be uncomfortable about our lack of knowledge? Is it important?

Capt. Laing: Obviously, our intelligence community is tied in with the intelligence communities of all our allies, the United States and the United Kingdom. There is a large international organization to which we contribute information and from which we receive information.

How long would it take for us to know about something? That is virtually impossible to answer. It depends upon the case in point. If ships or capital assets or military materiel is moved, it is entirely possible that we would find out within hours or days. With regard to intentions, one can never know. The intelligence community continues to watch for various signals. For a major war, we are talking about many years, because we do not foresee one within a decade.

As I mentioned earlier, sir, the asymmetric threats, the terrorist threats, are much more of a challenge. We continue to work with our allies in responding to that challenge.

Senator Forrestall: On the support and supply program, have we yet arrived at a definition? Are we ready to call for tenders in a contracting process, or will we contract directly, given the urgency of replacing this equipment? What can you tell us about this program?

Capt. Laing: The flow logistics sea-lift capability is but one of the programs that the navy is considering to maintain its capabilities at sea as required to fulfil its mandate. We are still in the process of developing a statement of requirements. We are hoping to move that forward over the next year or so. It would then go through the normal process, however the government wishes to provide the capability. I would not expect it to be at sea before 2006 or 2007.

Senator Forrestall: Is this going to be straightforward, in that we need a piece of equipment and we are developing a statement of requirements that will go out for comment, tendering and the whole bit? I hope, sir, that the process will be much better than the one we are going through to try to get a helicopter.

What can you tell us about the helicopter? Are we going to get it? What do we do if these three companies pull out? What do we do if Sikorsky, EH Industries and Eurocopter pull out? What do we do then?

Capt. Laing: Sir, that would be a wonderful case of speculation, which I am not about to embark upon. I would be happy to have you ask that of my air force colleague when he comes here later.

Senator Forrestall: You are the one who has to lug the vehicle around; its your border. It is your logistic responsibility. I do not think that you will need to worry about it at the rate we are going. What about it? Are we getting any closer? How does the navy feel?

We have ships that are operating without their eyes. We are talking about logistic support vessels. The major component of their role still seems to be housing and transport of the Sea Kings or whatever the vehicle may happen to be at the time. Do you have confidence that the air force will have a helicopter to fly off your ships.

Capt. Laing: The actual status of the program itself belongs with the air force. I am not about to speculate on when delivery would be. The reports are saying late 2005, as I understand.

From a navy perspective, of course, we would like to have that capability on board at sea as soon as possible. Indeed, both maritime platforms, the maritime patrol aircraft and the helicopter itself, are critical elements not only to the ships individually but also to the entire combat capability of the ships in the fleet at sea. Clearly, we would like to have that enhanced capability that would be offered through the particular program. We would like to get that at sea as quickly as possible.

Senator Banks: Captain, I think that I heard you say that the Huron is in effect tied up. Is that correct?

Capt. Laing: Yes, sir.

Senator Banks: Is it tied up because we do not have enough money or enough people to run it? I am assuming it is a good ship, and navies do not like to have their ships tied up.

Capt. Laing: One must take several things into consideration. First of all, the current strategic environment does not demand that we have all four of our DDH-280s fully operational. That is the current situation. The 280s are also some of the least fuel-efficient ships that we have. They are more expensive to run. Also, the cost of fuel has gone up about 60 per cent over the last three or four years, and that is a significant consideration. The personnel shortages that I mentioned earlier is also a consideration.

Indeed, as I mentioned in my presentation, we did an assessment of the capabilities of the Huron with a view to the various resource challenges, including personnel, money and materiel. One of the best ways that we saw to ensure that we were delivering on our mandate was to reallocate the resources that we assigned previously to Huron. These ships run at greater expense, with more people aboard, than one of the frigates. We had shortages, indeed on both coasts but on the West Coast more acutely. We decided to reallocate those resources.

Senator Banks: In a crunch or a crisis, would they be able to be up and running if you could get the people in fairly short order? The Huron is not mothballed, is it? How far is it from getting underway?

Capt. Laing: Theoretically, it would take 180 days. There are obviously a number of challenges to that. You mentioned getting the crew together. There would also be challenges in making sure that we got the maintainers and the dockyards to bring some of those systems up to gear. That is also another challenge.

If there were a crisis, and if the resources were allocated to do that, then I presume we would act in a fashion similar to what we did when we went to the Persian Gulf. The dockyard operated virtually 24-7 for two weeks to prepare the ships. If the magnitude of the crisis demanded that, I would expect those resources to be allocated. It is quite possible that the ships would be available within the 180 days.

Senator Banks: Is that the only ship out of the current complement of ships that is in that state?

Capt. Laing: In that particular state, yes, sir. There are other ships that are undergoing maintenance, out for refits.

Senator Banks: They could be ready faster than 180 days.

Capt. Laing: It depends on the type of refit, but the money is being invested in them.

Senator Banks: You do not have people go out and run ships for two weeks at a time in the summer time. You want them for a while longer than that. If I worked for the gas company and were in the naval reserve, is my job protected? What does my employer say when I tell him or her I am going off to sail on a ship for a year? Is it a year?

Capt. Laing: There are different things. When a person is a member of the crew, we like to have folks as long as possible. That is part and parcel of the naval reserve headquarters in Quebec City. They look at trying to ensure that they have people for all the different ships. Indeed, fleet commanders do the same thing as far as the management is concerned.

There are still opportunities for naval reservists to go out for two weeks to conduct phase training and to gain some experience. Indeed, throughout the year, there are opportunities; some reservists spend a weekend.

Senator Banks: There are some - Senator Wiebe referred to this earlier - who are on full-time service, for all intents and purposes.

Capt. Laing: Full-time service, virtually; yes, sir.

Senator Banks: Is there some protection for their job?

Capt. Laing: That is a question I am not capable of answering. It is a personnel policy matter. That is part and parcel of restructuring the reserves.

I mentioned earlier that it would be wonderful to have a better transition between the regular force and the reserve folks to cater to various career aspirations and things like that. That is all part and parcel of how the reserves interact with the civilian workforce.

[Translation]

Senator Pépin: In March of 2001, as a result of the Navy acquiring a Victoria class submarine, it was announced that women could now work on submarines. I have always been in favour of equality of the sexes, but I must admit that when I heard that announcement, I had my doubts. I know that military personnel are used to working together in risky situations, but I felt that this could be just too risky.

Since that announcement, has the number of women applying to the Canadian Forces gone up? Have you received any feedback regarding the ability of men and women to work together on a daily basis in the submarine environment?

[English]

The announcement concerning women in submarines was made by the Chief of the Maritime Staff and Vice Admiral Madison earlier this spring. We have had women on all of our other ships over the last 20 years, since we instituted general integration. This is just another step. I am not aware that any women have applied to be in the submarine service.

Senator Pépin: There is a big difference between a large ship and a submarine.

Capt. Laing: Yes, senator.

Senator Pépin: I know that military personnel are accustomed to working in a risky situation, but that one caused a bit more concern. Do you have additional information?

Capt. Laing: No, senator, I do not have any information concerning the number of women that have applied to operate in submarines. Indeed, by and large, we have progressed beyond many of those issues. Yes, the space is confined, but the personnel are professionals. At least 10 per cent of the crew of, I believe, the HMCS Winnipeg, which served in the Persian Gulf, were women. They are on the frontline performing those various roles and missions. Frankly, from my perspective, I do not care. I want talented people that can do the job. We have talented people that can do the job. That is the kind of people that I want as members of my crew.

The Chairman: Thank you, captain, for the instructive overview. We appreciate your presentation.

For those people who are following the work of the committee on television or elsewhere, our Web site at www.parl.gc.ca/defence.asp contains witness testimony as well as the confirmed hearing schedules. As well, our clerk, Ms Barbara Reynolds, may be contacted at 1-800-267-7362 for further information and assistance in contacting members of the committee.

The committee adjourned.

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