Proceedings of the Standing Senate Committee on
National Security and Defence
Issue 23 - Evidence, June 6, 2005
OTTAWA, Monday, June 6, 2005
The Standing Senate Committee on National Security and Defence met this day at 9:39 a.m. to examine and report on the national security policy for Canada.
Senator Colin Kenny (Chairman) in the chair.
[English]
The Chairman: Good morning. Welcome to the Standing Senate Committee on National Security and Defence. My name is Colin Kenny. I chair the committee. Today, we are holding hearings in relation to a review of Canada's defence policy.
On my immediate right is Senator Michael Meighen. Senator Meighen is a lawyer and a member of the bars of Ontario and Quebec. He is chancellor of the University of King's College and past chair of the Stratford Festival. He has honorary doctorates in civil law from Mount Allison University and the University of New Brunswick. Currently, he is the chair of the Subcommittee on Veterans Affairs; he is also a member of the Standing Senate Committees on Banking, Trade and Commerce and Fisheries and Oceans.
On his right is Senator Norman Atkins from Ontario. Senator Atkins came to the Senate with 27 years' experience in the field of communications. He has served as a senior advisor to former federal Conservative leader, Robert Stanfield, to Premier Williams David of Ontario and to Prime Minister Brian Mulroney. He is also a member of the Subcommittee on Veterans Affairs.
[Translation]
To his right, we have Senator Pierre Claude Nolin from Quebec. Mr. Nolin is a lawyer, and was appointed to the Senate in 1993. He chaired the Special Senate Committee on Illegal Drugs, and is currently the Vice-Chair of the Standing Senate Committee on Internal Economy, Budget and Administration.
Senator Nolin is also active on the international stage: he has been one of the Parliament of Canada's delegates to the NATO Parliamentary Assembly since 1994, and is currently serving as both the organization's vice-chairman and the Science and Technology committee's general rapporteur.
[English]
On my left is Senator Tommy Banks from Alberta. Senator Banks chairs the Standing Senate Committee on Energy, the Environment and Natural Resources, which recently released a report entitled The One-Tonne Challenge: Let's Get On With It. He is well known to Canadians as a versatile musician and entertainer. He has provided musical direction for the ceremonies at the 1988 Olympic Games. He is an Officer of the Order of Canada, and he has received a Juno Award.
Beside him, at the far end of the table, is Senator Jim Munson from Ontario. Senator Munson was a trusted journalist and former director of communications for Prime Minister Chrétien before he was called to the Senate in 2003. Senator Munson has been twice nominated for Gemini awards in recognition of excellence in journalism.
Honourable senators, this committee has been mandated to examine security and defence and the need for a national security policy. We have produced the following reports since 2002: Canadian Security and Military Preparedness; Defence of North America: A Canadian Responsibility; Update on Canada's Military Crisis: A View from the Bottom Up; The Myth of Security at Canada's Airports; Canada's Coastlines: The Longest Under-Defended Borders in the World; National Emergencies: Canada's Fragile Front Lines, and, most recently, the Canadian Security Guide Book, 2005 edition.
We are in the midst of a detailed review of Canadian defence policy and have been holding hearings in every province and engaging with Canadians to determine their national interest, what they see as Canada's principle threats, and how they would like the government to respond to those threats. Canadians have been very forthright in expressing their views on national security in Canada. We will continue working on this review throughout the summer in order to forge a consensus on the type of military Canadians envision in the future.
Today, the first panel is on capabilities, missions, tasks, and problems facing the reserves in the Canadian Forces.
Honourable senators, we have before us as our first witness Major-General H.M. Petras, Chief, Reserves and Cadets for the Canadian Forces. He began his military career at the age of 16 and has served in command and staff positions within the Land Force Central Area, culminating in his appointment as Area Deputy Commander. Recently, he has served in the land staff in Ottawa as Director General, Land Reserves, and as Director General, Land Combat Development in Kingston, Ontario. He assumed his current position in December 2004.
General, welcome to the committee. Please proceed.
Major-General H.M. Petras, Chief, Reserves and Cadets, National Defence: Honourable senators, I am a reserve officer and, as such, I have had to balance my civilian and military career over the past 35 years. In my civilian career, I was principal of a Catholic secondary school in Sudbury, Ontario, as well as a school board administrator. As a reservist, I have served in a wide variety of command and staff positions. Particularly significant was the last 18 months prior to my appointment as Chief of Reserves, where I served on full-time service as Director General of Combat Development for the army.
I appreciate the opportunity to speak to you this morning on the state of the reserve component of the Canadian Forces, with particular focus on the primary reserve. I will briefly describe the four subcomponents of the reserves, and then I will focus on the role and the future of the primary reserve. I will conclude with where we fit into the Canadian Forces mission.
The reserve is composed of four different subcomponents — the primary reserve, the Canadian Rangers, the cadet instructor cadre, and the supplementary reserve. The primary reserve is 25,000 strong. Its mission is to augment, sustain and support the regular force. It is divided into six elements — and I have rounded off the numbers here just to provide you some scope. The naval reserve, with approximately 3,900 members; the army reserve or militia, in excess of 16,000; the air reserve, around 2,000; the communication reserve, less than 2,000; the health services reserve, just over 1,500; and finally, the legal reserve, with 62 officers. The primary reserve is the component most closely aligned with the regular force. They provide depth and breadth to Canadian Forces capabilities.
In addition, there are 4,200 Canadian Rangers. Almost 75 per cent are Aboriginal and Innu people. They are located in 164 communities spread over northern and isolated coastal regions of the country. The role of the Canadian Rangers is to provide a military presence and support CF operations in those areas when required.
The cadet instructor cadre has 6,500 members. It consists of officers whose raison d'être is the supervision, administration and training of Canadians between the ages of 12 and 18 who take part in our youth programs.
The supplementary reserve is comprised of 45,000 former officers and non-commissioned officers of the regular forces and the reserve force who are not required to undertake any military duty or training but could be called upon to augment the Canadian Forces in times of national emergency or mobilization.
Collectively, these subcomponents of the reserve force in Canada represent roughly 80,000 citizens found in virtually every city and town in Canada.
On behalf of the Vice Chief of Defence Staff, I also oversee the department's youth programs: The cadet program, with its 55,000 sea, army, and air cadets; and the 3,000 junior Canadian Rangers.
As Chief of Reserves and Cadets, I am the senior advisor to the Chief of Defence Staff on reserve matters. Let me be clear. I do not command any reserve force components. In my role as senior advisor on the reserves, I am a full member of the Armed Forces Council and provide the reserve perspective to the senior decision-making body of the Canadian Forces. I am also a member of the NATO national reserve forces committee represented by senior officers from every NATO country. Canada will assume the chair of this committee next year for a two-year term. I also chair the Chief of Reserves Council, an advisory group that consists of the senior reservists in the primary reserve. That council meets on a quarterly basis.
In the 1990s, we often spoke about ``total force.'' While the term was well intentioned, it did not reflect reality. The term did not acknowledge the unique difference between regulars and reserves, who each contribute to the CF mission. Today, though we no longer use the term ``total force,'' the integration of the reserve and regular forces has become a reality. A mutual respect has been developed from working together on domestic and international operations. Reservists have always stepped up to the plate when required — for example, the Red River flood in 1997, the ice storm of January 1998, the aftermath of the Swissair Flight 111 disaster in September of 1998, Y2K, and the B.C. forest fires in 2003, to cite a few major examples.
In addition, reservists have served on virtually every international mission the Canadian Forces have been engaged in over the last 10 years. Reservists are Canadian citizens who willingly give up their evenings, weekends and vacation time to learn and practise their military skills. Many devote an important part of their lives to go where they are needed, at times risking their lives in the service of their country.
As I stated, in the last 10 years, reservists have been employed in support of international operations, either as individuals or as formed subunits. Their capabilities complemented and supplemented those of the regular force. As of this month, we have 1,552 personnel deployed on international operations, and of that number, approximately 199, or 13 per cent, are reservists. At times in the past, we have had over 20 per cent participation on some operations.
The defence policy statement and the CDS's vision for the forces have created both challenges and opportunities for the reserves. Consideration will be given for more specific roles, missions and tasks. Some of these are directly applicable to national or domestic security because of the location of reserve units across the country and their close connection with civilian society. They are often seen as the military footprint in the community.
There is no intention to reduce the present role of the primary reserve, rather to expand their contribution within the military. While the support provided by the reserve force to operations has been impressive to date, I believe that with properly managed expectations, the reserves can do more in responding to the demands of the new security environment, both on the national and international scene.
Senator Meighen: Welcome, Major-General Petras. I want to ask you about your last paragraph: ``There is no intention to reduce the present role of the primary role, rather to expand their contribution within the military.'' You believe that ``with properly managed expectations, the reserves can do more in responding to the demands of the new security environment.''
Just to put the cat among the pigeons, I would venture to say that most of us on this committee are interested in and very sympathetic to the reserves. I will also stick my neck out by saying that most of us have questions both as to the efficacy of the reserves, their ability to perform the roles as you allude to here, and the willingness of the government and the military higher-ups to promote that.
For example, in the new defence policy, there is not an overwhelming mention of reserves. In fact, I scanned it, and I could only find three. The first is that reserves remain an essential part of our national military force structure, which is kind of a motherhood statement. The second is a reference to increase the reserves by 3,000 people — which is encouraging to those of us who support the reserves. However, when we are told it will take five years to get the 5,000 regulars into the main force, one wonders how many years it will take to get the 3,000 reserves. The third reference is building on the mix of military and non-military skills resident in the reserves. That also sounds good, as far as it goes.
There is always a high profile given to the reserves in discussions of the force, but are they part of the transformation of the CF? If so, what evidence is there of it? Most of us are clear that the CDS is pushing a transformation of the regular force. I am less convinced, because I have heard less about it, that the same applies to the reserve force.
While I am on that, there have been any number of studies, commissions, investigations and reports about revamping and rebuilding the reserves. I think of the Fraser reports and whatnot. Subject to contradiction, I do not see them having much traction. We continue to hear reports about the difficulty of transferring from the reserves to the regular and back and forth, not being able to train with the same equipment and the length of time it takes to enrol in the reserves. I have a particular example of somebody who took one year to get into the reserves.
Where is the meat? Where is the change?
MGen. Petras: There are several points to that question. If I can focus on your comment about the various reports that have been done with respect to bringing about changes in the reserve, by answering that question, I can bring it into the context of where we are today and where we are going.
The Fraser report, the Special Commission on Reserve Restructure, was launched in the mid-1990s. The environment it was done in at that time coincided with the subjection of the Canadian Forces and forces worldwide to a series of budget cuts. The Special Commission on Reserve Restructure had a huge number of suggestions that were excellent. If you do an analysis of where that has gone between then and now, the majority of those recommendations were implemented. The majority that were recommended in the initial Fraser report were implemented in a serious way.
The problem is that, between 1995 and 2000, in the middle of budget cuts, as soon as you talk about budgets and its impacts on the reserves and regulars, the cracks tend to show where you are reducing budgets and where you are going to assign particular budgets. It was not a healthy atmosphere during the latter part of the 1990s.
In 2000, when General Jeffrey came on, he was asked to take on land force reserve restructure, and he managed to get all of the constituents on side. Our view during what they called phase one of restructure affecting the land reserve over that three-year period is that there was a serious rebuilding of trust because, to a large extent, the people that were involved were open and transparent about where they thought the reserves could go.
Senator Meighen: Do you mean a rebuilding of trust between the regular force and the reservists?
MGen. Petras: Yes. General Jeffrey said that trust is like a marriage — that is, that you have to work at it everyday. That is absolutely the attitude that was projected at the time.
In phase two of the land reserve restructure, we were serious about ensuring that the right amount of money was allocated to projected growth figures.
To go back to your question, and to get away from where the army is and to where we are with the CF, the reserves as a whole were well positioned when the new defence policy statement came out and when the Chief of Defence Staff's vision came out to take part in that. I should like to make a couple of points.
First, as I mentioned in my opening remarks, as Chief of Reserves, I am a full member on the Armed Forces Council, which directs where the Canadian forces will go. As Chief of Reserves, I have direct access to the CDS as well. The people who advise me on reserve matters are the Chief of Reserves Council. These are the senior generals in the reserves in the country, in addition to some other people. I make sure that the advice I provide to the Armed Forces Council is done in a credible manner, based on the fact that we do have a connection with all constituents within the reserve.
The CDS has launched the transformation process using four transformation teams. We were careful at that point to include, at the request of the CDS, full-time reservists on a full-time service to participate on those transformation teams. At the request of the CDS, I have been fully engaged in that process since its inception. The intention is to continue to do that as CF transformation goes along.
You talk about the meat. Where is the meat? What have reserves done?
Senator Meighen: Where is the money?
MGen. Petras: I do not have the exact figures, because they are projected mostly to the army at this point. They are tied up in the budget at this stage, but we have been assured that the requirement for the expansion of the 3,000 will be fully resourced.
You mentioned that the defence policy statement and the reserves are not mentioned frequently. I believe that was deliberate. It is a reflection of how integrated we have become. The reserves continue to be an essential part of the Canadian Forces. When the CDS speaks publicly about the 5,000 and 3,000, he talks about 8,000 people coming into the Canadian Forces. We have made a strong commitment to integration, and we are fully involved the process of further transformation in the future.
Senator Meighen: Could you comment briefly on the allusion I made to the anecdotal evidence we have had about the difficulty of transferring back and forth, not to mention getting into the reserves?
MGen. Petras: One of the problems with anecdotal evidence is that it is simply one side of the story. However, if you hear enough anecdotal evidence, you know there is some substance to it. The policies we have in place were situated for the environment of the Cold War. It was based on a certain degree of risk.
We are aware of the two issues you have raised. In particular, you asked about transferring into the regular forces. It is just as complicated to transfer into the reserve force. It really has to do with the administrative processes that are in place and the level of risk the CF is willing to take.
Admiral Jarvis, Assistant Deputy Minister (Human Resources—Military), is in the process of working with us to develop a more streamlined process for transfer. Out of the 5,000 soldiers that will enter the regular force, we expect that a significant number will come from the reserves. We do not know how many. We have a significant number that go each year, and we definitely want to make it easier.
As to your anecdotal comment, I do have to say that there are usually finger problems on both sides. I hope I have answered your question.
Senator Meighen: Yes, you have. More than one person has told me about the length of time it takes to hear back. People begin to wonder if their application has been lost under a desk somewhere. Perhaps there has been some improvement.
Senator Nolin: I have a supplementary. I will quote the sentence you just used, because it puzzled me. You were referring to Mr. Jarvis, and you said he was ``in the process of working with us.''
What do you mean by that? Are you referring to the future, to something that has not started yet? What is the real meaning of what you just said?
MGen. Petras: I did not articulate that well. When the CDS said 8,000 people coming into the Canadian Forces, at that particular point, we had been trying for quite some time to improve recruiting and the way we do component transfer. The aim is to have a policy out in July, and the reserve component side of the CF has been fully engaged. In other words, as they generate that policy, it is run by us and the senior reserve leadership to provide the litmus test, to ensure that it will actually work for the reserves.
Senator Meighen: One has to take care to not overgeneralize. I understand there are different problems, depending on whether we are talking about the militia or the air force or the navy.
However, what is being done to deal with some of the general problems? What can be done to deal with the difficulty of having a number of people in the reserves who are well trained but under no legal obligation to serve when requested to do so? From your end of the spectrum, you need to hope that enough will show up and be able to get the time off. It might be easier to get time off in some professions than others.
The reserve program seems to be oriented towards university students, in that the training requirements are largely focused in the summer. If you are not a university student, it can be quite challenging to find seven weeks to go for the training you need. I am told that if you argue and struggle long and hard enough, they will adjust things so that if you have a regular job you can carve up your training requirements, but that option is not volunteered. You have to really work to get that permission. Perhaps you can comment on that.
Finally, what about the question of reserves and their relationship to the community? There is a vast difference, it seems to me, between the role of the reserves in Brockville than in downtown Vancouver. Surely, one of the roles of the reserves is to provide that interface of the Canadian Forces with the community. I will not even go into the business of not wearing a uniform and all the stuff that upsets us when we hear these stories, but maybe that is changing.
MGen. Petras: In response to your first question, dealing with the availability of reservists, we just finished an international conference on employer support this past week. The traditional allies — Britain, Australia, New Zealand, United States and ourselves — have come quite a long way in terms of the employer support process. Every country has some form of legislation that allows reservists reinstatement if they are called out on operations.
In Canada, at this particular point, the legislation that is being considered through Bill C-7 will allow reinstatement, but only during times of extreme emergency. We have really, in a sense, been the victim of our own success, because in operations over the last 10 years we have had no problems getting more reservists than we need volunteer to apply to go overseas. In the operations we ran in Bosnia, in Afghanistan and in the Gulf, there were more volunteers than required.
This does not mean we do not have to do prudent planning should the situation become worse, but that is the situation right now. We are getting volunteers, and we are getting them largely as a result of the fine work that the Canadian Forces Liaison Council is doing, led by John Eaton. Distinguished Canadians all across the country are involved in these provincial committees that connect with employers to ensure there are reserve-friendly human resource policies in their contracts. For now, that seems to be working for us.
Absolutely, the smaller the community, the easier it is to connect and to be a big part of the community. In Vancouver or Toronto, it is a little more difficult. Nevertheless, each of the reserve commanding officers and the reserve leadership are mandated to connect to Canadians. Being part of the community is a big part of what we do. A significant number of community events take place each year in various units. It is high on the radar screen. The biggest concern with reserve service of any kind is the time available. If you are a part-timer, you have a finite amount of time. Your mission is to ensure that your troops are trained and your operation is focused. At the same time, your mission is to connect to your community. How much time you can actually commit to that really is up to the individual commanding officer in that particular area.
Senator Meighen: I was intrigued by your reference to legislation in other countries to protect the job of reservists. What is the legislation in Canada?
MGen. Petras: Bill C-7, the way I understand it.
Senator Meighen: We do not have it yet.
MGen. Petras: No, we do not have it yet. It is being considered, and what is being considered there is the definition of an emergency as determined by the government. Some of the other countries have definitions of emergency that are a bit broader than what is being considered for ours. We are currently looking at it to see whether it will meet our requirements. Ultimately, it is a political decision to call out the reserves, as you know.
Senator Meighen: We have had the debate amongst members of this committee and with witnesses about the advantages, or not, of a statute protecting the ability of a reservist to go and serve while protecting his or her job — which I believe is the American situation, as well as many other countries; in our situation, heretofore there is no such statute. The argument goes that if you put in the statute and I am an employer who is concerned about these things, I will ask a prospective employee if he or she is involved in the reserves or intends to get into the reserves — which might colour my willingness to hire. Do you have a view on which way to go?
MGen. Petras: Absolutely, I do. You have probably heard from others that employment legislation is a two-edged sword. Our allies are beginning to find, particularly those who are involved in extensive operations, that in our situation reservists have to volunteer and employers have to be on side with what we are doing. In a democracy, all employers are not necessarily always on side in the kind of operations that are conducted. The biggest problem is not the big companies.
As an example, the employer support awards were help on Saturday night, and Home Depot was the national winner. A company the size of Home Depot has no problem with respect to allowing reservists time off. There are small operations, for example, where a chief petty officer who is a foreman in a tiny shop might be called out on a regular basis, on which that has a huge impact. For now, we think we should continue down the road with perhaps a modest type of legislation for real emergencies and allow us to function with the liaison council and volunteers as we are.
Senator Meighen: You mentioned Home Depot, and indeed having been a number of times to Juno Beach, certainly Home Depot was very prominent in their support of operations there. One wonders why some other corporations were not.
What about the federal government? How supportive is the government of an employee? One would think the government would be right up there among the award winners.
MGen. Petras: Initially, we discovered that the government really did not have policies to support reserves. Two years ago, the government committed to support reserves and encouraged all of the government departments to get involved. My organization is in the process, through the liaison council, of getting each government department to sign a measure of support. We are well on our way to being there.
The Chairman: We are curious, Major-General Petras. Out of the total number of departments, how many have you signed?
MGen. Petras: I do not have the figure with me. My guesstimate from the last time we were briefed is about a third.
The Chairman: Do you see the same in terms of organizations, Crown corporations, or organizations like the RCMP?
MGen. Petras: Yes. As a matter of fact, the Commissioner of the RCMP and the CDS were discussing that just recently. Part of my responsibility, through the liaison council, is to push that as hard as we can. Therefore we have a specific campaign to address Crown corporations and other government departments as well.
The Chairman: General, you have described a paradigm that has our reservists going over to relatively benign environments. We are looking at a situation in the United States with the reserves and with the National Guard where they are really not in a benign environment. There are folks there who are far less inclined to come forward. They are coming forward because the legislation requires them to, but once suspects that absent legislation they would not be coming forward and the Americans would be severely handicapped in achieving the goals that that country has chosen to pursue. Do you have a comment on that?
MGen. Petras: It is a fact that we tend to use reservists more in benign environments. The view now is that as we embark down the road of Canadian Forces transformation, and as we have experienced the last two or three years in operation, there will be certain capabilities within the reserve that, because of the skill set they have, they can maintain at a higher level of readiness in the reserve. That will require a commitment on the part of individuals. I will cite civil- military cooperation as an example.
The civil-military cooperation group would go into a theatre such as Afghanistan with the first crew that are there. All reservists will not necessarily not go with rotation zero, the first incursion into the country. However, there is no doubt that if the risk is high, and even though reservists are fully trained when they go out the door to be safe and to make a contribution — there is no doubt that you have to make sure that the forces you send, after you do a risk assessment, can handle the initial security problems that you are dealing with once you get into a country.
The Chairman: I am thinking of the shift from Kabul to Kandahar on the next rotation, and that will be a different environment. We may well see casualties there. In a circumstance like that, do you think the current policies would still function?
MGen. Petras: Yes, I think they would. As a matter of fact, we will assess what reservists should be part of that Kandahar operation; it is in the planning end of things. When I am asked to recommend, certain reservists are more than capable of being able to operate within that environment.
The Chairman: I was not talking about their capability; I was talking about the general availability of reservists. If you find that the casualties are high, are you going to find that availabilities are less?
MGen. Petras: We have not run into that.
The Chairman: That is my point.
MGen. Petras: Exactly. I suppose it is one of those bridges we will have to cross. I will give you an example with the Medak Pocket in 1994. Over half the unit were reservists when the shooting started. That certainly did not affect our recruitment after that event was over.
The Chairman: Fair point. Good answer.
Senator Meighen: No one knew about the Medak Pocket at the time — but that is another story.
Do you think it is possible to make the argument that one good reason for encouraging the reserve force is that a reservist costs the Canadian taxpayer less than a regular force member? Is that true? Can it be demonstrated in your view?
MGen. Petras: Certainly not if you are going to go to a Canadian Forces made up totally of reserves, if that is what you are asking.
Senator Meighen: No.
MGen. Petras: I understand what you are saying. It is cheaper to have a reservist deploy and to function than it is for a regular.
Senator Meighen: Yes.
MGen. Petras: In my opening remarks, I talked about total force. I said that, in the 1990s, the people at the time tried to make reserves like regulars — and that is not the case. The reserves, to use a baseball analogy, are like the triple A farm team to the professionals. The major difference between regulars and reserves, as I said, is the time they can commit. Even if I spend a year preparing to go off on an operation, I will be pretty good at the end of that year, but not as good as someone who works at it every day.
In a sense, to answer your question, we think that reserves really provide two functions. They act as a strategic reserve for the country. All of those folks who are part-timers out there — and about two thirds of them should be the strategic reserve. It is similar to how much insurance you buy to protect your house.
In the 1990s, we discovered that the reserves can also provide support on the operational end of things. As well, we have now discovered that there are certain capabilities better in the reserves. The bottom line is that some things are going to cost more time and a greater commitment on the part of those reservists can be resident there. Sure, they are cheaper in the long run, if you can leave them bubbling along at a little lower level of readiness and then take a few months to bring them up to speed when you need them for operations.
Senator Meighen: Are reservists by definition therefore restricted from some occupations within the military because it is just too complicated and it takes too long for training? Do they tend to be given the grunt work, which requires little or no sophisticated and long-term training?
MGen. Petras: I am not sure if I would agree on the grunt work end of things, although that is an infantry expression and a complimentary one there. However, I understand what you are saying, senator. Time is a big factor. There are times when people can commit during their careers to longer periods of time. When they commit longer periods of time, they can get involved in the more complex jobs. Your question describes one of the problems in the past, what the default was. That default does not exist today. There are highly complex jobs that reservists can be involved in, often because of the skills they bring from civilian life to be able to function in that environment.
As a reservist, you make a choice to join. I would not want particularly to fly a CF-18 if I were a private pilot who could not stay up to speed. If I were an intimately involved Air Canada pilot, I could potentially do that, should we want to commit the resources in time.
Senator Meighen: Just to correct the record, I mentioned Juno Beach. There was a great presence by Home Depot. I should also have said Wal-Mart, but obviously both corporations have been very supportive of our Armed Forces and I salute them.
Senator Munson: I have a question dealing with the foreign bodies of reservists in a larger way. I sometimes feel that reservists are like Rodney Dangerfield — that is, they do not get enough respect. We see them fighting forest fires and putting sandbags out in ice storms and that sort of thing, but at the end of the day, they disappear into another framework.
Moving towards the future in transformation, do you see any successful efforts to deploy foreign bodies or reservists on overseas operations?
MGen. Petras: Yes. Would we have stayed in Bosnia longer? The intent was there, and I was personally involved in the planning of that. There was no doubt that, in the 1990s, reservists were used as individual augmentees, to complement and supplement the regular force.
If you look at the navy reserve, they have their own mission. They operate the coastal defence vessels. That is a formed group, in a sense. The whole ship is made up of navy reservists.
Looking overseas, when the theatre started to mature a little bit in Bosnia, they started to send infantry rifle companies of 130 people who were all reservists and commanded by reservists, with the injection of the odd regular, if required. If we had stayed in Bosnia longer, by 2008 we would have been at the stage where we would have had a reserve heavy battle group in Bosnia — and made it a reserve-related operation. The spirit or the intent was there; the senior leaders were willing to take a risk. It is certainly something that, when the risk assessment is done and we look at the capabilities reserves can contribute to, we intend to do in the future.
Senator Munson: You feel leadership will continue to take that risk in the future?
MGen. Petras: Absolutely.
Senator Munson: Do you see the air force reserve getting larger and moving towards formed units?
MGen. Petras: In the current construct, in terms of the strategy they have put out, it is going to be reshaped under Canadian Forces transformation. There is no indication to do that. In terms of reforming units, I certainly have not heard that. However, that does not preclude it from happening in the future.
Senator Munson: I have not been around the military environment very often, although I have learned a lot in this committee. What is the attraction of cadet programs? How do you attract young men and women to join the reservists? Are you spending enough money in promoting the program? My guess is that a lot of kids would say that the last place they would go is into the reserves.
MGen. Petras: The answer is in the results being produced. We have to work hard at advertising, yes. We have to work hard at indicating that reserve service is challenging and interesting and an opportunity for Canadians to serve their country. The focus on patriotism is not lost on people. There seems to be a willingness to do something to serve your country. If you can do it in a challenging and interesting way, that is great.
We have had very little difficulty in reaching our recruiting numbers. When the money has been provided and the campaign is there, the recruits come forward with no difficulty.
Senator Munson: What about the idea of wearing the uniform? The uniform is overseas and on all of these missions. On the streets of Ottawa, we see the uniform from time to time. What do you think has happened in the last 10 years, where Canadians are proud of the reservists, whether on the home front or on another front, yet we sometimes want to look the other way when we see a person in uniform walking down the street? Should there be an active campaign to encourage wearing the uniform? It does not necessarily mean we are a war-mongering nation. Having pride in that uniform and visibility of it would be a good thing. After all, we are wearing our suits, our uniforms, this morning.
MGen. Petras: I do not disagree with you, senator. I wear my uniform wherever I can and where appropriate. To some extent, the policies in place now were part of the security concerns that came out after September 11. If you asked somebody in the military whether they would like to wear their uniform all the time and wear it proudly, absolutely. The trick is to look at that policy and see if there are other implications of not wearing the uniform every day in public. Nothing precludes us. You see it in cities and towns everywhere. People go to work in the morning wearing their uniform. Here the buses are full of people wearing their uniforms.
The Chairman: Before 9/11, there was a policy for a time at DND where on certain days of the week the uniform was worn. This goes back a while.
MGen. Petras: Understood. I am not zeroing in on that. I use that as an example as one of the factors that may be a reason why this does not happen.
Senator Munson: You talked about triple-A baseball. The Ottawa Lynx are a pretty good team. Why be satisfied with just triple-A? When I was talking about deploying formed units overseas, that would be major baseball and major military. Why the appeal just towards triple-A? Why can we not have them at that major league level, to use the analogy?
MGen. Petras: I did not get to finish my analogy. As in baseball, triple-A folks wind up with the professionals. Some of them go there and stay there forever. Others go there for a period of time, when they are called up to do things.
The main problem with the reserves has to do with the time available to produce expertise in a certain area. Even if we have some reservists operating at a higher level of capability, and civil-military cooperation is a good example, during the time these folks are in that particular work, at that time in their life when they are able to commit, they will head off with the pros and be pros, just like the rest.
Senator Munson: How much do reservists get paid? Is their pay based on rank?
MGen. Petras: Yes. At this point, if you are on part-time service, it is 85 per cent of what a regular makes.
Senator Munson: It is a lot better than minimum wage?
MGen. Petras: Absolutely. They are paid very well.
Senator Banks: The 85 per cent you were talking about a moment ago is related to a reserve member serving permanently or full-time, correct? On the other end of the stick, how much does a private soldier reservist in the militia get paid when he goes out on a Wednesday night to report?
MGen. Petras: He receives 85 per cent of what a regular gets, senator. The part-timers and the reservists in full-time service but not overseas in operations or operating the coastal defence vessels not in operations make 85 per cent.
Senator Banks: How would you break that down? If I were a private soldier in the Princess Patricia's Canadian Light Infantry, do you do a calculation based solely on the arithmetic and say, ``Well, 365 into my new salary is what a member of the Seaforth Highlanders gets 85 per cent of,'' and then do I break that down into 8 hours, 12 hours, 24 hours?
MGen. Petras: It is based on a daily rate and it is divided that way.
Senator Banks: Is it simply a matter of straight arithmetic?
MGen. Petras: Yes, it is.
The job I had prior to going on full-time service over the past 18 months was what is called a class-A position. In that job, I was making 85 per cent of what a regular general officer would make. When I went on full-time service, we simply took 365 and multiplied that by the daily rate. The result is my annual salary.
Senator Banks: That makes it easy to follow.
I will pursue the triple-A analogy, which I know is not a perfect analogy. However, since you brought it up, I will use it.
I wish to ask you about the future, the plan as you see it and the transformation. There is a vast difference between the way the air force reserve operates and the way the land forces reserve operates. You used the word ``integrated'' when you were talking to us.
Is it the case that the militia will move more closely to the air force model? Or will it be the other way around, whereby you will deal with formed units being sent? As you said, some infantry companies went to perform foreign service.
The pride factor is important. I know the reserve infantry company that went to serve in Bosnia will be able to eat off that pride for a long time. That is so because their unit went there, they had their badges on and their regiment did the job. That is very important in military tradition.
In the transformation that you are talking about, in which direction will the army be going?
MGen. Petras: Within the army, ultimately, it will be the Chief of the Land Staff and the constituents who will make that decision. However, having just come from there, I know there is no real intent to move to the air force model. Each environment has done things in their own unique way that meets the requirements that are set out for them.
Many of those who serve in a highly technical organization like the air force are former regulars who have transferred to the air reserve. They will train three or four days a week to provide support in the former trade they held. I am not saying that the army is not highly technical. I am talking about an organization that is predominantly technical and platform-centric, if you will.
As well, where the technical demands are not quite as large, there are a number of people who hold traditional class- A positions.
On the other hand, the army is much larger in terms of the reserves. There is no intent to change what they did with the foreign bodies going overseas, as I mentioned to Senator Munson earlier.
When we are talking about a transformation of the Canadian Forces, we are talking about two things. We are talking about command and control in terms of integration. The CDS has said that one of his principles for command and control is that the reserves will be involved from the top to the bottom within the Canadian Forces.
The second thing has to do with capabilities. The Canadian Forces will generate a certain number of capabilities. They will come either from the regulars or from the reserves, depending upon from where they can best be sourced. That is what we are looking at right now.
Do we see a change in what you saw in Bosnia with the formed units? Potentially, but not likely, in terms of the pride of badges, et cetera.
Senator Banks: To move to that model, you now receive $1.1 billion to cover all of the above. Is that enough to bring all five of the reserve forces to the point where they will be able to do that integration and where they will be interoperable to the extent that you can plug them in? Do you have enough money?
MGen. Petras: Right now, we do have enough money.
I should point out that the $1.1 billion is not my money. It is money that is counted against the reserve.
Currently, based on the number of people and the missions they have been asked to perform, there is sufficient money to function.
As the CDS said when asked a similar question concerning the budget at large, there is no doubt that, as we go through the transformation process and the implementation of the defence policy statement, if we are to ask more of the reserves and if we think more capabilities should be generated through the reserves, then the resources will have to come with those demands.
Senator Banks: In terms of their function, should reserve forces, then, be merely a triple-A mirror of the regular forces? The reason I am asking that question is this: If you are to train as part of a mechanized infantry brigade, you have to have the mechanized part. If you do not have that part, then you are not really part of the mechanized infantry brigade. That will cost some money because you have to have vehicles to do that. It is not a matter of having some vehicles in some place that you can go to for seven weeks in the summer. As you have pointed out, you have to have the time to spend to get to the point that you can be integrated. Is that being contemplated in the transformation?
MGen. Petras: At this point in time, everything is open for examination. As I have mentioned in the past, the caveat is that if we are to ask reservists to get involved in a mechanized infantry, if you want to use that as an example, then they have to have the time to commit, to ensure that they stay current. At times, even regulars have to work hard as full-time professionals to ensure that they have optimized the use of these mechanized vehicles.
Senator Banks: It is a two-way street. One of the things that would attract someone to that would be for the regiment to be able to say, ``We want to teach you how to work on a striker gun system, or to operate a forward LAV, but we do not have one.'' That will not attract someone to that unit, will it? Do you not have to have the machinery?
MGen. Petras: Absolutely. If you are given a mission, then you should have the equipment to perform it. That is essentially it. You do not want to raise false expectations for people. To call yourself one thing, and then do something else, certainly does not work.
Senator Banks: I wish to go back to one thing that Senator Meighen raised. It is also something that our former colleague, Senator Wiebe, raised constantly. It has been frustrating us for years. It must frustrate you to a greater degree. I am talking about the movement between the forces.
I will go back to your triple-A analogy. If a pitcher is sent down from the big leagues to a triple-A team to get his arm in shape, he leaves the big leagues on Wednesday and is pitching on Thursday in Ottawa. We have known for a long time the time difficulty of moving from the big leagues to the triple-A team in the Canadian Forces. Apparently, it is not so hard the other way around, but perhaps it is hard both ways.
The frustration we have is that, for three years now, we have been hearing people, including the general who is directly in charge of that, saying, ``We are working on it.'' It has been three years that we have been asking that question, and it still has not been fixed. Does this not drive you to distraction?
MGen. Petras: I have been involved in analyzing that fairly extensively, yes.
Senator Banks: What is the problem?
MGen. Petras: It is more complicated than trying to come up with a policy. Perhaps I can use a simple example. Your triple-A analogy, if we want to push that —
Senator Banks: It was yours.
MGen. Petras: Right.
If we want to push that a little bit, triple-A pitchers are trained to the exact same standards as the professionals. The only difference is this: Do they have the ability to be able to function in the big leagues, to use your term?
Years ago, reservists were not necessarily trained to the same standard as the regular forces; they were trained to a similar standard. It was not until about five years ago — longer in the navy and air force — that the land reserve started to focus on absolutely the same standard. However, because time was always a critical factor, they trained to what they called an essential level of capability.
With the technology we have nowadays, you can track the delta or the difference in terms of scope of training that a reservist might have and that a professional might have. It is easy these days to train towards that delta or that difference.
If I want to become a regular full time, they have to assess the job they have, they have to look at the training and background that I have, and they need to make sure that I am a match. It is not a case of going into the regulars and all of a sudden training up to that particular standard. You have to be the right fit. That is where the problem has been.
Senator Banks: That does not satisfy me, I have to say. That is saying to a member of the reserves that they do not want you in the forces until the reserves have trained you to that level. That does not seem right to me. I do not want to be argumentative. I will give you a specific anecdotal example, and we have heard several.
A pilot is in the forces and leaves to go into the reserves because he now flying for an airline or whatever. He then decides, for whatever reason, perhaps he lost his pilot's job with a private company, that he wants to go back into the forces in a matter of months. The impediment to him getting back into the forces cannot be a training question. He is still trying to get back into the forces after a year or 18 months. The forces are saying that they need pilots.
It seems to me, and we have heard from some folks, that this is simply a case of — no disrespect intended — the Indian civil service in which things are being written out in pencil, and it has not been automated and is an old- fashioned system. Is that part of it?
MGen. Petras: Absolutely. I want to be clear in what I said earlier. There is never a case of a regular saying we do not want you until you are trained up to a particular level. They just did not know what they were getting years ago. Now they are at the stage where they have a better idea what they are getting.
Your comment about the pilot is right on. It has been recognized that there are policies in place that do not meet the requirements. If we want to transfer people faster and better, some of those policies will have to be put to one side, and the intent is that it will be. Admiral Jarvis tells me that the aim is to have it in place for July. We have been working through this policy to make sure it works from our end. You can change a policy, but if you do not change the way you implement it, it will not be effective. The proof will be in the pudding, to see if it works.
Senator Banks: We will be watching that closely because we have been frustrated for three years.
MGen. Petras: There is a serious intent to try to improve this at this point as we move to the 8,000 in the CF.
Senator Banks: Major-General Petras, there have been several articles in the past few days about the United States services lowering some bars because of the stretch that is being placed upon them, the difficulty of retaining folks and the problems of rotation and maintaining the forces they have. They have, therefore, started to turn their eyes and not see things that would previously have caused members to have been discharged.
Our forces, as we are well aware, have been stretched past their limit. Are we beginning to lower the bar in order to retain and attract members?
MGen. Petras: Again, that is in Admiral Jarvis's world, but there is no evidence of that. We have had very little difficulty meeting our recruiting targets. We are not going to lower the standards. We are getting better at attracting and retaining people and at making sure it is interesting and challenging. All of the work that has been done on quality of life has made the forces pretty good, despite the stresses and strains of the operational tempo.
The Chairman: Major-General Petras, one of Senator Meighen's questions that you did not cover was the question of university students. We see a very high reliance in some reserve units, particularly in the militia, on university students. We see them in for four years, and then we are told they go through the usual changes, where they graduate, get a job, get married, and then the reserves do not fit them well. It strikes some of us on the committee that we are investing a lot and then losing those capabilities.
What plans have you to see that we keep people who join the reserves in university longer or have a program to attract people to the reserves who have left university and have settled down in their lives?
MGen. Petras: I apologize for not picking up on that because that was a good question that you asked earlier, senator.
A lot of what we hear is anecdotal evidence, some of it backed up by reality. In my hometown, university students graduate and often go off to other areas, although many are staying. We forget that what happens is that these folks graduate from university and head off to other centres, where they join the reserves and stay with the reserves. Many times a local commanding officer sees people leaving his unit.
That is reality. At certain points in their lives, people have other things they have to think about and may put reserve service to one side. We do not see what we call throughput or these folks we are losing to the CF capabilities in one sense as a bad thing. In a democracy, I believe that every citizen should take an interest in defence and security. If somebody has had that kind of training and goes off and becomes an active citizen, we have accomplished something. That is not the real raison d'être, however. We want to keep them, there is no doubt about it.
In order to bring these people back, the senator alluded to it very well. You talk about people having to fight to get these shortened blocks of training. In the army and other services, all training is going to be modularized. If you had seven weeks available in the summer, you spend the seven weeks. If you have two or four weeks, you spend the two or four weeks because they are being broken up into these chunks.
It certainly is a good possibility that people will be able to do these courses in the wintertime as well. As an example, a corporal in Newfoundland who was driving me works for the local Wal-Mart. He wanted to become a sergeant but never had the time to take that long block of time. The land reserve implemented modularization, where he could take things through distance learning and through little chunks at a time, and he is going to meet his aim of becoming a sergeant.
It is focused on the universities, yes, but that is just part of the reality of the way the forces are here.
The Chairman: Can you support your earlier statement that university students who leave the reserves upon graduation go out to another community and join reserve units? Can you give us figures, please?
MGen. Petras: No.
The Chairman: Not off the top of your head.
MGen. Petras: Right. In terms of interest, it is not something I have tracked. Just as you hear anecdotal evidence that everyone leaves, I hear the same anecdotal evidence that people join as they move from place to place.
The Chairman: I am asking you to provide that information to us, please.
MGen. Petras: Certainly, I can.
[Translation]
Senator Nolin: I should state from the outset that I find myself in a situation of conflict of interest today. As a Montrealer, I am an honorary member of the Régiment de Maisonneuve and therefore, as I am sure you will understand, have something of a soft spot for the reserve; or to be more specific, the well-being of the reserve forces and the Régiment de Maisonneuve is an issue that is close to my heart.
Let us turn our attention back to the 3,000 new members of the reserve. I would like to know the details of this expansion. What is your timeframe? To what sections of the reserve will these 3,000 new members be assigned?
[English]
MGen. Petras: Your question is about the 3,000 and how they are being distributed. As you know in other testimony, the 3,000 are primarily going to the army. They are also going to the Communication Reserve and to the Health Services Reserve.
The intent is that of the 3,000, a chunk of them will go to units to build up what we perceived as a bit hollow at times. For example, if in a regiment you have an infantry company that should have 130 people but only has 60, 70 or 80, we want to make sure that sufficient people are assigned, and it is the army's responsibility to bolster those.
At the same time, there will be a number of positions that will go to new capabilities within the reserve. We feel there are certain capabilities that could be generated in the reserve that are potentially not better than regulars, if they spent at it full time, but could be left at a lower level of readiness, brought to a higher level of readiness or be used because of the particular skills that they have.
I used civil-military cooperation as an example, but there are many others, in psychological operations, human intelligence and so forth. It goes throughout the whole forces, not just the land reserve.
[Translation]
Senator Nolin: Your comments serve to confirm what several witnesses have now told us: the objective is to increase the number of reservists to around 18,500. I must ask, however, whether it is realistic to expect this to happen by the end of the current fiscal year? Is that really the intended objective?
[English]
MGen. Petras: I have not heard from the army as to whether they will be able to meet the target in the short term. I must say that all 18,500 that are projected to go into the land reserve include the Health Services Reserve. There has been a serious effort by the land reserve to ensure they have met their targets and are well over 16,000 and on their way to meeting their final target. I do not have the end state. It was originally published as 2006. As long as the money and the resources are there — I am told they will be — while they may not meet the target in 2006, they will meet it shortly thereafter. It is certainly not as a result of a lack of effort in doing that.
The one caveat is that the only thing that could potentially interfere with it, as we start to bring the 5,000 in, is losing more people from the reserve component as they move to the regular. As soon as that happens, more will be required to be brought into the reserve.
[Translation]
Senator Nolin: Several of my colleagues have concerns as to problems being experienced with the transfer of reservists to the regular force. Over the course of a year, how many reservists make the change? What proportion of reservists decide to move from part-time military service to full time service? Could you please give me your answer as a percentage?
[English]
MGen. Petras: While I do not have the exact annual figures with me, it is an area of interest. We have gone from 300 to 700 or 800 per year, depending on what is going on at that time. Sometimes the way the economy is going has a bit of an impact. That has been about the average.
[Translation]
Senator Nolin: The department has restructured the way in which members of the armed forces are paid. Is this likely to result in our current reservists being tempted to leave the reserve? The department has publicly stated its intention to recruit 5,000 new members for the regular armed forces. Do you think that, in order to meet this target of 5,000 new members, there will be an increase in the number of reservists transferring to the regular force? Are you and your colleagues reflecting upon this issue while drawing up your future plans?
[English]
The fact they have restructured the pay will make it interesting for some reservists to move into the regular forces because there are 5,000 openings now. Is that part of your thinking?
MGen. Petras: If I want to go back to my baseball analogy, it is a good thing that reservists transfer into the regular forces. We are aware of the fact that a number will. However, we are not sure at this particular point. We went through the same thing during a time when they were bringing 7,000 people into the forces around the same time as the land reserve restructure thing was going on. It has an impact, but not a huge one. We are prepared to watch and see. If a significantly larger number goes in, then the resources directed at bringing 3,000 into the reserves will have to be channelled there as well.
We do not have a figure articulated at this point. It is hard to guess. The CDS has said two to five years to bring the 5,000 in over a period of time. I do not think it will have a huge impact in the large scheme of things.
[Translation]
Senator Nolin: Several members of the forces deployed in theatres of operations have expressed their frustration at the fact that it is very difficult for a member of the reserve to be transferred to the regular army. This allegation is not simply hearsay, it is based in fact. You can check for yourself, as you have access to the same information that we do.
Is it easier for a civilian to join the regular army than it is for a reservist? Of the two, who would find it easier to join the regular forces?
[English]
MGen. Petras: We used to make jokes to my regular friends when they tried to transfer to the reserves and we were asking why it took so long.
Senator Nolin: From the regular to the reserve?
MGen. Petras: Yes.
Senator Nolin: What about the other way around?
MGen. Petras: I used to joke with them about having standards within the reserve. That only wears so far and it is purely intended in jest.
As I said before, to transfer into the regulars is hugely complex, and we have managed to capture the main reason it was so complex, other than some of the policies that were more aligned toward where we were arranged in the Cold War-type of thinking, the focus on being able to clearly identify what you are getting when a reservist comes to a position in the regular force.
[Translation]
Senator Nolin: You mention the Cold War, yet the situation is not what it was 15 years ago. What is causing the problem today? Is it a question of national security, or information which could put the country in jeopardy?
[English]
MGen. Petras: It is all of those things and more. I can reiterate what I said before, namely, the intention is to come out with a policy that will make it easier at this particular stage. We recognize that.
Senator Atkins: Major-General Petras, I am surprised that you are saying you are having no difficulty with recruitment.
As you know, this committee is across the country, and we have met with many reserve unit commanders. It is true that some of them tell us that they are doing pretty well, but others say they are not.
I am making the assumption that when you say you are not doing badly, it is a global consideration and not a specific one.
MGen. Petras: Absolutely.
Senator Atkins: When you talk about 3,000, what is your average attrition factor in a year? You have to add that to the 3,000 over the next five years.
MGen. Petras: Yes, you do, senator. You are right. When I talk about no problems with recruiting in terms of attracting numbers, it is meeting national targets. Some are hugely successful in some areas and others are absolutely struggling to stay afloat.
The attrition figures are always interesting in terms of trying to calculate. We were trying to get a rough estimate. For years, there was discussion that we had 30 per cent attrition in the reserves. In terms of trying to track who is in the organization and who has left, our technology is improving. Our attrition used to include transfers to the regular force. We do not count that anymore. We are in the same organization. Once recruited, you are in.
It varies from environment to environment, but we are running at 15 to 18 per cent at this point. Those are the best figures that I have been given.
Senator Atkins: I assume, in view of the conflicts the country has been involved in, that those transfers are part of the attrition factor?
MGen. Petras: Absolutely. They are calculated in the attrition. The target under the land force reserve restructure is 18,500, and the annual attrition is factored into that. The allocated resources compensate for that.
Senator Atkins: The other thing we have heard when on our travels to different parts of the country is that a lot of these commanders are happy when they do not get a full turnout on a regular basis, because they do not have the budgets to address a full turnout. If they get two thirds, they feel that meets their budget on an annual basis.
If you were given more money, where would you put the money in the reserves?
MGen. Petras: If I return to your comment about commanding officers being happy that fewer people turn out —
Senator Atkins: I am not saying they are happy.
MGen. Petras: I understand what you are saying. It comes down to managing expectations. We have sufficient funds at this point to do what we need to do for the missions and tasks assigned. It comes down to managing expectations for the local commanding officer. They want to do all kinds of great things. As a commanding officer, you are given your base mission that you must accomplish, and you want to go a bit beyond. If you have fewer people show up and you have a little bit more money, you can broaden the scope of the training and the exercises that you do. It is human nature to want to do that.
At this point, I cannot assess where I would allocate the money if additional funding were granted. We are well positioned with the Canadian Forces transformation, and we want to see where it is going. We will determine through that transformation which capabilities are best generated within the reserves. If we think there is a greater requirement to do certain things in certain areas, we will need the money to go along with that.
They are allocating the resources for the 3,000 in the right way. They have committed to bringing up the units to greater strength and towards new capabilities.
Senator Atkins: In your statement, you said you believe that with ``properly managed expectations, the reserves can do more in responding to the demands of the new security environment.''
Do you wish to expand on that?
MGen. Petras: We have learned lessons from what we tried to do in the 1990s. In the 1980s, we were purely a strategic reserve. In the 1990s, we became a strategic and operationally focussed reserve, and most of the focus was on operations. We tried to make reserves into regulars, which we were not. At this point, we are striving for a balance between maintaining a strategic and operational reserve that is focused to best support what we do in the Canadian Forces.
The policy statement suggested that reserves be more involved in the domestic side of the house. We absolutely agree. Because of their presence around the country, the reserves can make a contribution. When I say ``properly managed expectations,'' we must be realistic in terms of assessing what reservists can bring to the table in that dimension.
The reservists are part of the CF capability mix that is going to support first responders in domestic operations.
Senator Atkins: Are there any formal programs being conducted to more closely integrate local forces with municipal first responders in populated areas? What is the official and lawful mechanism for the authorities in relation to the commanders of those units?
MGen. Petras: For a local commanding officer, there is always a tendency to want to be there and jump in and help wherever an emergency happens. When there is a local flood or fire, the first thing you want to do is help.
Senator Atkins: What is the mechanism?
MGen. Petras: If the locals want to call on Canadian Forces support, the request must go up through the solicitor general, through the Department of National Defence, and back to whoever owns the Canadian Forces resources in that area, and they then can authorize the request.
Senator Atkins: Through the solicitor general provincially?
MGen. Petras: It goes up through a provincial chain up to the federal chain and then back down to grant approval. In an emergency, that can be done fairly quickly.
You asked what we are doing to connect closer. As part of the work we are doing in making the reserves a more valuable asset for domestic operations, the land force reserve restructure project has planned to have community contingency planning officers assigned. Each of the centres in the town will have an officer assigned to work with the local emergency planning organization to give them a better sense of what potential capabilities the CF might bring if needed. That will form the basis for other things that we may potentially be able to do. Again, it is tied up with where we are going with Canadian Forces transformation at this point.
Senator Atkins: In some of the units we have talked to, there was a tremendous liaison. In others, there was not so much.
MGen. Petras: The program is not formally in place yet. There are places that have it, but it has not been completely followed through at this point. It was a concept that came out of the land force reserve restructure project, and it is starting to be implemented. In some cases, local commanding officers leaned forward and took the initiative and are already involved in sitting in. We want to formalize that process
Senator Atkins: There has been no directive that says, ``Do it''?
MGen. Petras: Not yet, but there will be soon. Part of the problem is that it was a pre-defence policy statement initiative. We are well set up to support it, but we need to analyze in terms of how the reserves are going to plug into this whole process.
Senator Atkins: We have talked a lot about university students. You have been in the military long enough to remember the Canadian Officer Training Corps — COTC. Is there not an opportunity to integrate the reservists with university campuses? Are we not missing something? Is there an opportunity there?
MGen. Petras: You are right. It has not been taken advantage of as much as we could. The COTC program in its time and the environment that we lived in was a terrific thing.
The effort they are trying to make at this particular point, which goes back again to the land force reserve restructure initiative, is an initiative called connecting with universities. They are running a number of pilots throughout the country. They have allocated a certain portion of the growth numbers to recruit specifically out of the university.
The Université Laval is an excellent example. There have been serious efforts to connect with that university. At one point, there was a recruiting office located right on campus. Pilot projects are being run to see whether there is interest from universities around the country. There is room to do a lot more there.
Senator Banks: Using the answer you gave to Senator Atkins about attrition, my arithmetic says you need to recruit about 13,000 new people over the next five years. Is that about right? Can you do that?
MGen. Petras: I am not sure. I have not done the math.
Senator Banks: If your attrition rate is about 15 per cent, and you have about 15,000 people now — so that is 2,250 people a year over five years, 10,000 and change, in other words, plus the 3,000, is 15,000, but that is modest. Is that doable?
MGen. Petras: I would expect that that would be correct, senator. As I said, we have had little difficulty in terms of replacing attrition. That is already built into the way we do business. The additional 3,000 is a confirmation of the commitment by the government to go to 18,500. We have already had 1,500 of those allocated, and 750 others have already been identified as to where they are going in the units. The additional 750 is what they are working on.
This is in the land reserve. If you are talking even 3,000 people spread out over 10 brigades, that is 300 people per brigade. Ultimately, it is not a lot of people.
Senator Banks: My final question, and it concerns the naval reserve. We have heard from naval reserve folks on maritime coastal defence vehicles, MCDVs, that there is an impediment to their forward, upward motion in terms of rank. As you said, those vessels are dedicated to them and they run them. They cannot go to go courses and they cannot move up the chain. Is that a factor that is being taken into account some place?
MGen. Petras: I certainly have not heard that.
Senator Banks: We have heard it a lot.
MGen. Petras: I absolutely believe that that may be the case with some individuals. However, it comes down to being a personal choice. As a philosophy, someone who is involved in operations should get the appropriate credit and recognition for it, in terms of advancement in career. If an individual has spent full-time service and has made that commitment, he or she should get the appropriate recognition. If an individual person cannot get time to take all his courses, manning an MCVD is a personal choice on the individual's part.
As I said in my opening remarks, I have balanced my civilian and military career to get where I am. I made a conscious choice to go on 18-month full-time service. It did not impede, it was a requirement of balance, and that is what is required as well.
The Chairman: General, what is the timing of the recruitment of the additional 3,000 reserves? What years do you expect them to come in and in what proportion each year?
MGen. Petras: That is within the realm of the land force restructure project. I alluded to it when I made my comments earlier that it is not a new 3,000. They have been in the mill for a while at this stage. The 3,000 in the policy statement, the way I understand, is a confirmation by the government to fully fund to 18,500. The land reserve has people who have been in the mill for a while. Some have been recruited and the rest are going to go.
This is more in the Chief of the Land Staff's lane and responsibility, but I have been told that the original aim was to have it finished by 2006, and we are going to see whether they get to that target at that particular point. We are certainly making a serious effort to try to get there.
The Chairman: Let me put it a different way. We have been given the impression that the recruiting and the training system are going to be stressed — which is one of the reasons the 5,000 are back-ended. Do you have reason to believe that your 3,000 will be in the latter two years or the latter three years rather than in years one and two?
MGen. Petras: As I have said, I think a number of them have already been in. I will give you an example. The army has been recruiting people for a little while now. Phase two restructure has been going on for a while, since 2003. Phase one ended in 2003. Phase two, which was a commitment to the next 3,000, started at that particular point. It is only now that the full funding is going to follow the 3,000. I do not estimate that there is going to be a great deal of difficulty in actually meeting those targets in the time indicated. Whether it is 2006, that is something we will have to find out from the army.
The Chairman: I was not asking whether there was going to be difficulty; I was asking when there will be capacity.
MGen. Petras: There is capacity now.
The Chairman: Is that to recruit and train?
MGen. Petras: Yes, within limitations. The example I used, as we were doing in my previous job, as director general army reserve, which is where I speak from because I was involved in implementing phase one of land reserve restructure, we were able to grow to 15,500 soldiers during a time when the regulars were recruiting 7,000. It was stretched. We had to do all kinds of things. I am not suggesting there is no problem there. There is a serious effort being made, and we think the targets are going to be met in the time required.
The Chairman: In terms of keeping track of each of the reserve units across the country, how good are your measurements? How well are you able to evaluate whether you are getting value from each unit? Obviously, you know you are spending a certain amount on each unit. Do you have indices that will tell you whether you are getting value for money?
MGen. Petras: That is not something I do on my end of things. I rely on what happens in each of the environments. Each of the environments is given a mission, each of the environments has performance measurement indicators within the units to determine whether they are meeting their targets. If you are required to train in an army unit to a particular level throughout a year, there are mechanisms in place to track that. It is the same with the other environments.
Are we at the stage where we are sophisticated enough to be able to drill way down and get a minute feedback on what is happening? We are not there.
The Chairman: I do not think it is drilling way down. I bluntly put that if you have a militia regiment operating in a community and they are not succeeding in terms of attracting people, or they are not succeeding in terms of training their people, surely the management and the system ought to know that and ought to be able to measure it and say no. Here is our bottom 10 per cent, and if they do not do something about it, we are going to find ways to remove them from the reserves and have the regiment cease.
MGen. Petras: Ultimately, that is part of the long-term mission of what the land force reserve restructure is intended to do.
The Chairman: Do you not see that as your job?
MGen. Petras: It is not my job. Where I operate at the CF strategic level, I am responsible for overseeing all of the reserve environments, but I do not get involved in the nuts and bolts of that kind of thing. It does not mean that I cannot advise when I am asked based on my experience.
The Chairman: Who develops policies that will encourage the good units and improve the bad units?
MGen. Petras: That is a really good question because it comes down to what land force reserve restructure is doing within its project is mandated by government policy. The project will eventually run out and will be integrated into the way the army operates normally. We are in the process of talking about a transition plan from land force reserve restructuring to Canadian Forces transformation and how we are going to deal with that in 2006 when the project is supposed to end.
The Chairman: Perhaps we can wrap up this session with you talking about one of your most important responsibilities, and that is cadets. Would you tell the committee how much we spend on cadets, how many we have and why the cadet program is important to Canada?
MGen. Petras: Absolutely. As a matter of fact, I was at a Kiwanis Club luncheon here in Ottawa last Friday and I was able to articulate that exactly because it was Cadet Appreciation Day. It is one part of my responsibilities that is highly interesting because of the enthusiasm of more than 55,000 young people involved. Junior Canadian Rangers are administered by the cadets, but they are kids of the same age. There is the same kind of enthusiasm in our towns and in our isolated communities up North. I was appointed chief of reserves at Christmas and had a good idea of what cadets were all about. However, until you get right into it, you really have no idea the number of people who are involved. In addition to the 55,000 cadets, there are other 6,500 officers in uniform, who are the CIC officers as we call them.
The Chairman: What is CIC?
MGen. Petras: Cadet instructor cadre officers. There are also thousands of volunteers. It is a huge program in the country.
In terms of what it is they do, the aims of the program are simple. They promote leadership, citizenship, physical fitness and an awareness of the Canadian Forces.
I went to the national biathlon championships in Mount Washington in the spring. Biathlon is cross-country skiing and shooting. The kids train locally and regionally to the point where some of them are at a pre-Olympic level. There was serious competition to get to this national competition. Three days before the national competition there was a huge melt and there was no snow. It was too late to go to plan B, which was to go back to Valcartier where there was snow.
When I arrived on Friday, I saw people running on muddy trails and firing, with the morale sky-high. They had accepted the challenge; they improvised, adapted and overcame. The event was a huge success, even though there was no skiing. What great qualities those kids have and will have. As they become citizens, are those qualities not what we want?
The program is hugely successful. We spend about $180 million a year from the Canadian Forces' budget to support the program. That is baseline funding. The Kiwanis sponsors two cadet corps in Ottawa. They generate a great deal of money to give the kids the extra things they need. It is truly an indication of where you have the Canadian Forces and the communities in a real partnership, putting together one of the best youth programs in the country.
The Chairman: How much did you say it cost, baseline?
MGen. Petras: It is approximately $180 million.
The Chairman: It is $180 million for 55,000 youth. How many hours do they put in over the course of a month?
MGen. Petras: They usually parade one evening a week, and they occasionally have a weekend a month as well. In the summertime, there are huge programs for cadets in all of the camps spread around the country.
The Chairman: How many cadets would go to a camp like Farnham or elsewhere? How many weeks would they go?
MGen. Petras: It varies. For example, I was at Camp Borden last summer, which had 1,500 kids. The kids do not necessarily go for the whole summer. The young people go there for two-week courses, three-week courses or month- long courses. It is a tremendous thing, and it is hugely sought after by the kids during the year.
The Chairman: Can you provide us with statistics on how many people attend those courses?
MGen. Petras: Yes. I do not have them with me, but I can get them for you.
The Chairman: On behalf of the committee, I would like to thank you for appearing before us. We found it a useful morning. We will have a number of other questions. If our staff can follow up with you on them, I would be grateful. As you can see, there is a high level of interest in reserves in this committee. We are grateful to you for assisting us in understanding them better.
For members of the public who are viewing the program, if you have any questions or comments, please visit our website by going to www.sen-sec.ca. We post witness testimony as well as confirmed hearing schedules. Otherwise, you may contact the clerk of the committee by calling 1-800-267-7362 for further information or assistance in contacting members of the committee.
The committee continued in camera.
The committee resumed in public.
The Chairman: Honourable senators, our witness this afternoon is Karen Ellis. Ms. Ellis was appointed Assistant Deputy Minister of Infrastructure and Environment with the Department of National Defence in February 2004. In addition to her responsibilities in the department's infrastructure and environment portfolio, Ms. Ellis is the Level 1 Champion for DND Managers' Network and the Nuclear and Ionizing Radiation Safety Committee.
Prior to this position, Ms. Ellis was director general of the Multiculturalism and Aboriginal Peoples' Programs Branch at Canadian Heritage.
Ms. Ellis, welcome to the committee. We understand you have a short statement. Please proceed.
Ms. Karen Ellis, Assistant Deputy Minister (Infrastructure and Environment), National Defence: Honourable senators, I am grateful to have the chance to meet with you today. There is an elephant in the room today; its name is infrastructure. I am its caretaker and I consider myself to be the conscience of the department on these matters.
Safe, secure, suitable and sustainable infrastructure is fundamental to the delivery of the defence mission.
[Translation]
I would like to describe the size, complexity and diversity of the DND/CF infrastructure and to highlight the unique way in which this portfolio is managed.
[English]
There are ongoing tradeoffs between investment in CF operations, on the one side, and sustainment and support activities, including infrastructure, on the other. We work continually to get the best results we can with the money available each year, but the demands always exceed supply. The result is that we have underinvested in infrastructure over a number of years.
Should new money come to DND through budget 2005, we should be able to make some significant improvements in our infrastructure over time. For now, we remain focussed on ensuring that available funds are well invested, because how and where we spend on infrastructure is as important as how much we spend.
The management of infrastructure within DND is largely decentralized. By that, I mean that the operational, maintenance and management responsibilities lie with my colleagues. For example, the Chief of the Land Staff manages 41 per cent of the infrastructure in the department; the Chief of the Air Staff, 32 per cent; and the Chief of the Maritime Staff, 13 per cent. They are the custodians of their own infrastructure.
As Assistant Deputy Minister of Infrastructure and Environment, I provide functional leadership, policy advice and oversight on matters relating to infrastructure for the entire department. The Canadian Forces Housing Agency, CFHA, also reports to me. My group also plays a major role in implementing the large infrastructure and environmental projects for the department across the country.
This management model allows my colleagues the flexibility they need to make choices between what they spend on operational requirements and what they spend on infrastructure and other issues. They determine their priorities on an annual basis.
The infrastructure portfolio in the department is huge. It is valuable, and it is functionally and geographically diverse. I know this committee has been travelling and has seen much. Within the federal government, DND is the biggest custodian of buildings by quantity. We hold over 44 per cent of the federal inventory. We have over 20,000 buildings, including 137 reserve installations and in excess of 14,600 housing units. The total replacement value for this set of assets is $19.6 billion.
[Translation]
All levels of government are facing major public infrastructure funding pressures stemming from aging assets and demographic growth. National Defence is no exception. The average age of our infrastructure is 40 years old. Approximately 57 per cent of DND's buildings are now more than 50 years old, which means, based on a typical life cycle of 50 years, more than half of our realty assets are theoretically beyond their useful life.
[English]
That is not to say that every building over 50 years of age should be replaced. It is simply a stark indicator of the need for investment in this area.
Since December 2002, when I actually started in the job, having been appointed later, I have travelled to all but two bases and wings in Canada. I have been just about everywhere. I have observed a great diversity in the condition, age and suitability of the infrastructure. I have seen a number of buildings and works that are in poor repair, no doubt, but I have also presided over the opening of a number of state of the art and absolutely fine facilities. It is a very mixed bag across the country.
DND invests $1.2 billion a year in infrastructure and environment activities. That is a significant portion of the total budget, getting close to 10 per cent of the DND budget for 2005-06.
With a realty replacement cost of $19.6 billion, we should be investing around $780 million a year in our infrastructure, split evenly between two categories. The first category is maintenance and repair. This involves work that helps us maintain service potential of a given asset, and it could range from repairing leaking roofs to restoring a road. The second category we should be investing in is called recapitalization. This refers to replacing or renovating facilities to make them better suited for operational needs.
We have set targets of 2 per cent of our realty replacement cost for maintenance and repair, and another 2 per cent of our realty replacement cost for recapitalization. That is a total of $780 million that we ought to be investing each year.
How are we doing? Investment in both areas has been quite low for a number of years, resulting in a fairly consistent shortfall of around $200 million. The biggest shortfall is for maintenance and repair. For 2005-06, we are forecasting an average investment of 1.8 per cent out of 2 per cent for recapitalization, but only 1 per cent out of 2 per cent for maintenance and repair.
Why is that important? It is important because it is similar to a car. If you put money into preventive maintenance and take care of your car throughout its life cycle, you will save money and keep the car in working order for a longer period of time. If you do not do that, you get into breakdowns and more complex problems, all of which results in you paying much more later to replace parts or ultimately to replace the vehicle.
[Translation]
The department and the Canadian Forces continually strive to find the best possible mix of investment in operations and sustainment. Senior leadership in the department are very much aware of and concerned about the issue surrounding infrastructure. Their choices are difficult ones.
[English]
In 2005-06, the department plans to spend about $360 million on capital construction projects. The main planning vehicle that we use is called our long-term capital plan for construction. This is a five-year rolling plan, updated annually. It captures all of the projects valued at over $1 million that my colleagues have set their priorities on and it puts the entire package together.
While that plan really helps us to reach close to that 2 per cent on recapitalization, and that is a good thing, I do wish to underscore the relationship between maintenance and repair. When you defer the ongoing maintenance, you end up putting pressure to recapitalize later. There is a direct relationship there as to why we end up doing more on the recap later.
Finally, additional funding would enable us to get closer to achieving the full 2 per cent and 2 per cent, and would help us to maintain, condition and improve suitability of our infrastructure.
[Translation]
Our goal is to optimize defence infrastructure holdings to support the evolving Canadian Forces structure and capabilities as articulated in the defence policy statement.
[English]
We also ensure that with respect to our renovations and new buildings, the importance of other government policies and priorities in the early planning stages is taken into consideration. We take into account things like environmental considerations, green building types of design, heritage, barrier-free access for disabled persons and energy efficiency and conservation.
In conclusion, honourable senators, I wish to emphasize that this is a very big business line for the department. Infrastructure issues are complex and they are long term in nature. We work on a daily basis with the need to do trade- offs and compromise, depending on competing priorities, across the department. We have good plans and tools in place to manage what we do have and to guide the investments, and we are ready to spend more money, should it come through with the budget, which should take us closer to meeting the 2 and 2 per cent targets over a number of years. We will wait and see if that comes through.
Senator Atkins: Having heard your presentation and read about your responsibilities, I think next to the Prime Minister you are the most important person in government.
Ms. Ellis: There is certainly plenty to do.
Senator Atkins: It sounds like it.
I will start off with the 2005-06 Department of National Defence Report on Plans and Priorities, and I quote:
...underinvestment in infrastructure, which affects the condition of realty assets, increases the risk of non- compliance with a wide range of municipal, provincial and federal legislation and regulations....Left unchecked, these factors can have significant impact on quality of life, health, safety and workforce productivity.
What are you doing about all this?
Ms. Ellis: Basically, this is an opportunity to talk about why some of our investments have to be directed certain ways in a given year. Obviously, when we are dealing with health and safety regulations and legislation, whether that is federal, provincial or municipal, and I would count in that also environmental legislation, we have to issue guidance every year. It comes out from me to my colleagues. It is called our functional planning guidance.
Based on what we have observed in the previous year, if we have seen chronic areas where we see problems emerging, we would highlight this and say to my colleagues, ``In this coming year, you will please put some effort and emphasis into correcting some of these deficiencies we have found,'' that relate to a particular law or regulation.'' It does not necessarily mean that every base or wing will have the same problem, but it means that sometimes we do have a chance to observe trends when we meet with bases and wings on a regular basis. We also meet with the engineering staff.
We would point out where there are some problem areas and provide advice and guidance on how to address that. Again, my colleagues, all the way down through the chain of command, to the base commander at the end of the day, are going to be responsible for ensuring they become compliant. The policy guidance and direction provided coming from my group is what can help people meet those types of issues on compliance.
If I think of health and safety, a good example is the housing agency. When they inherited the portfolio of houses in 1996, they were given a full-time focus on how to first deal with the first tranche of needs. That was bringing things up to health and safety standards. They invested $400 million over the first five or six years of their existence to address those issues.
There are times when you can put some targeted money into that. The housing agency I work with closely, but my colleagues in the army, navy and air force would have to say, ``We are making it a priority; we got the message and will do some work on that.''
Quality of life issues, everything we can do to improve infrastructure, the way a new facility is set up, bringing more natural daylight into it — I have toured many facilities where the mood has instantly lifted when there has been a design that has allowed a lot of natural daylight into a building. When you have the opportunity and are doing recapitalization or replacement, the kinds of things you can think about in the early stages to actually try to improve that working environment for people is incredible.
I have talked to base engineers who tell me that a fresh coat of paint has brightened people's moods. Sometimes it takes a whole new building to replace something that was perhaps very poor, and other times there are smaller, low- cost things we can do to help the quality of work life.
Senator Atkins: You are spending about $780 million a year on maintenance and infrastructure. It is broken down basically into four regions. How do you prioritize the distribution of the monies?
Ms. Ellis: Perhaps I can clarify; perhaps I did not set it out clearly. You are right about the $780 million, but that is what we should be investing. We fall about $200 million short every year on that.
Ideally, our target for maintenance and repair would be $390 million, half of the $780 million every year, and the other half would be recapitalization of $390 million.
How are the decisions made to spend that money is what I understand you are asking.
Senator Atkins: How it is distributed, yes.
Ms. Ellis: I am an Assistant Deputy Minister, but the generals who run the army and navy are my counterparts and colleagues. At the beginning of every fiscal year, each of them gets what we call an A-base budget, their overall budget for running the army or navy for the year. That budget includes their money for infrastructure.
I will choose the army as an example. A whole process happens, starting from base level, where all the ideas and proposals for what should happen on infrastructure get fed up to the commander of the army. The processes and review are fairly rigorous processes through his chain of command, and are ultimately presented to him once a year, whereupon he will make the final decisions on where the money will go in 2005-06 or 2006-07.
Senator Atkins: In that particular area.
Ms. Ellis: In that area, yes.
Senator Atkins: Who makes the final decision at the top? Are you the one who decides that?
Ms. Ellis: No. The decisions made by the head of the army will stand. It is the same with the navy. They decide where the money will be spent, and they are accountable for how they spend the money.
At the end of the year, I provide an overall assessment to the senior leadership of the department and let them know how much the army and navy spent. I make it visible. I expose to the department what was spent compared to those targets. My role is providing the guidance on how you should spend and telling everybody how you did perform. I do not do that in a critical or negative way. I know they are dealing with realities. It is my job to show what is happening with infrastructure. It is their decision. They choose and they spend.
The Chairman: As a supplementary question, why is your job needed? Could the heads of each environment simply report themselves, and where is the value added in your position?
Ms. Ellis: My job has many dimensions. As with some of the other ADMs you have probably talked to, we all play what we call a functional role, meaning that we provide the targets, direction, policy and guidance of what the rest of the department should be doing within our particular domain. For example, my colleague responsible for civilian personnel would do exactly the same thing. All of our colleagues will make their own decisions about hiring, but she has to provide that overall direction, the objectives for the department, targets and benchmarking, so that we can then report on performance for the department, which is the other part of our role. That goes for the department's own benefit and knowledge, but also to Treasury Board and for the public through our departmental performance report.
I also mentioned to you that my group manages a huge number of major construction and environment projects across the country. We actually do project management for the army, navy and some for the air force. They have a few of their own project managers as well, but we have a large staff out there managing big construction projects over a number of years for the department.
I also have all of the responsibilities for the strategic planning on realty assets. Basically, as the new defence policy unfolds and we start to see what that might mean for the changing force structure, new buildings, new configurations, we have to work with colleagues in the department to help them do the planning for these projects. This usually involves a minimum of one year to do the planning and another two or three years sometimes to do full implementation of construction. A lot of long-term, complex work goes on out of my group to support construction, environmental cleanups and unexploded ordnance cleanup. These are major undertakings.
The other thing I manage is the strategic disposals of property for the department. When it comes to disposing of surplus property, there are routine disposals that involve small, low-value properties that a base or wing commander or head of the army can decide he will dispose of. No one is particularly interested in it. It leaves the inventory. However, vis-à-vis something fairly large, such as the base closures that were announced in 1994 and 1995, because they are large pieces of property that could have high commercial value or interest to a nearby community, we call that a ``strategic disposal.'' My group manages the entire lengthy and complex process on strategic disposals.
I have the group that regulates anything with ionizing radiation in the department. National Defence has the largest inventory of equipment, from diving watches to dials on planes, that emits ionizing radiation. Admittedly, much of this is low-risk type of material, but my group has regulatory authority for the whole department.
The housing agency is another of my responsibilities. We manage the entire portfolio of 14,600 houses for the department. That is a true operational day-to-day service and renewing the portfolio kind of experience.
We have a wide range of responsibilities. It is a fairly profound set of responsibilities that requires fairly large staff. I have about 230 people in the infrastructure environment group per se, and another 150 to 200 are in the housing agency across the country. Everybody is fairly busy.
Senator Atkins: How would you deal with Shearwater?
Ms. Ellis: One of the major tools we have for helping individual bases and wings plan what they want to do with their ``footprint,'' namely, their infrastructure and property, is the master realty asset development plan. We are currently helping bases and wings across the country. We will do five a year. My group has a small fund of $20 million to advance specific initiatives for planning. We will give $1 million to each of five bases to update and renew their master realty asset development plan. That gives them a chance to think holistically about the base, including housing, what they will be doing there, what changes are coming, how they can consolidate, change and adapt. It is an important tool. My team will work with the navy and the air force, in this case, to develop and help deliver the realty asset development plan for Shearwater.
There are other decisions that are not in my area, but that is a hot potato. However, as soon as decisions are made about what types of things will be built or needed, based on that plan, my team then kicks in. It could be managing construction projects or helping plan what needs to happen. There are property issues there. My team would work with Canada Lands Company as required to work on property issues.
If there are negotiations to be held with First Nations — because, as you know, often with property and disposals, there can be an interest on the part of the First Nations in the area — my team will advise and work with the base commanders.
We kick in when it is time to start implementing the plans for the realty assets and the property. We help advise as the plans develop, but we do have a practical role of delivering the things.
Senator Atkins: If you are running on a shortfall of $200 million a year, where is the catch-up?
Ms. Ellis: The shortfall has largely been in the area of maintenance and repair, and the catch-up has ended up being a lot more recapitalization, the bigger projects that I mentioned earlier later on.
With some buildings, it is possible to keep going for a long time, before thing gets to a state where we cannot use it anymore. At that point, the commander of the army, as an example, will say to his team that specific buildings are at a certain point where they have to come down or something new has to be built or a major investment must be made in making it serviceable for the future.
The catch-up is often more expensive than having looked after the building to the degree we should have along the way. Those are trade-offs, as I said, that have to be made on an annual basis, depending on the other priorities the commander has across the whole world. Infrastructure tends to be the part that people feel they can let go longer, but the catch-up comes from doing a bigger job later.
Senator Atkins: It is generally agreed that the infrastructure on bases in many cases is critical. When they are putting out bids for construction, who manages that process?
Ms. Ellis: A project worth less than $1 million would be handled at the base or wing level. The base commander has the authority to manage any projects under $1 million when it comes to infrastructure. If the project is in excess of $1 million, my team will get involved.
You may have heard of Defence Construction Canada, which is a Crown corporation that reports to the Minister of Public Works, but we are their sole client. We have had a very good working relationship with them for over 50 years.
We work up the project, and then I have a project manager assigned from my staff who works with Defence Construction Canada to get the statement of requirements from the army or whoever wants to do the project. We sit down and ask, ``What is it you need? What do you need the building to do?'' Then we bring in all those other things, such as the environmental and barrier-free aspects.
Once we have figured out what is required, we set up a process to get the tenders out and the bids in. We then have the construction and the implementation follow after that. It is generally a minimum of three years for a basic construction project for that whole process to happen. My team gets involved at the beginning with the army or whoever the client is. We say that we will take over and help manage that process for them. My project managers travel and keep an eye on the projects throughout the period.
Senator Atkins: Does Public Works or the Crown corporation put out the contract?
Ms. Ellis: Defence Construction Canada does that for us when we work with it.
[Translation]
Senator Nolin: I understand that you are preparing a realty asset management framework.
Ms. Ellis: Yes.
Senator Nolin: Are you doing that in conjunction with Public Works Canada, with their assistance? Do they have a role to play with you?
Ms. Ellis: Our plan, which I mentioned in my remarks, is really a framework to manage all our realty assets. We are doing this ourselves.
Senator Nolin: In other words, Public Works Canada has nothing to do with it?
Ms. Ellis: Non, nothing.
Senator Nolin: I apologize for being a bit direct, but why is your organization so special? All other government of Canada departments deal with Public Works when it comes to their realty management framework, so why do you have an operating structure that is separate from Public Works? I understand that some buildings are used for special purposes, That said, baracks are baracks.
Ms. Ellis: Perhaps I can clarify that. I am responsible for monitoring and managing all realty assets located outside Ottawa. I am not responsible for the Ottawa region. All buildings in Ottawa come under the responsibility of my colleague, the ADM for Corporate Services, who works with the officials at Public Works Canada. There is a link, but not with me.
The second part of your question touches on two points. First, we have Defence Construction Canada, which was established 50 years ago and provides day-to-day support to us in this area.
Senator Nolin: You are familiar with that.
Ms. Ellis: Yes. Second, we do have a lot of special military facilities and requirements. My colleagues have long believed that we have a very good approach to managing our own construction projects with the help of DCC.
Senator Nolin: You mentioned what happens when you decide to stop using a building. Your organization manages the whole process of dealing with assets that the department no longer needs. Normally, departments operate with Public Works Canada and Canada Lands Company. They are responsible for realty assets that have been declared surplus. They do a very good job.
Ms. Ellis: Where disposition is concerned, other departments are involved. I thought you were talking about construction projects.
Senator Nolin: I was talking about construction projects earlier. Now I am talking about disposition of assets.
Ms. Ellis: You are right, there are two types of dispositions. There is routine disposition, which is managed by Public Works, and we do the same thing. Publics Works Canada has expertise to help us market assets and manage the disposition process. When it comes to strategic dispositions, they are involved, but it depends on the case. We have a process. When we have a surplus property, our minister has to write to each of his colleagues who might be interested. If there is someone interested, we undertake the transfer process. Sometimes, Publics Works helps us do that. Approval must be sought through a submission to the Treasury Board Secretariat.
It is true that we work with Public Works Canada; I do not want to give you the impression that we never work with them or with Defence Construction Canada. It depends on the region. It is sometimes appropriate to have a short-term partnership with them, but most of the time it is with Defence Construction Canada.
Senator Nolin: All of my questions center on expertise. I understand that you have special-purpose assets and buildings.
That said, Public Works has developed expertise in real property management over the years, and that has not always been easy. You may argue that it is expensive and that many departments claim that Public Works charges much more than what the departments would have to pay to get the same result. That could be debated; it is not within the scope of our study.
However, there is a service entity called Public Works Canada that offers this panoply of services. But you also offer those services, sometimes with assistance from Public Works and sometimes on your own. I am trying to understand why. That is all.
Ms. Ellis: Most of the time, we do it on our own.
Senator Nolin: Imagine if all the departments did that. There was a time when it worked that way.
Ms. Ellis: It is because we believe strongly that we are different.
Senator Nolin: All departments are different.
Ms. Ellis: Perhaps it is because we have a long tradition of specific needs for military operations, training and instruction. We have been doing this only for the past 50 years. We used to work more closely with Public Works, and we are always prepared to talk with them about the possibility of a partnership.
But for construction in general, we usually work with DCC. Many of the experts and engineers working in my group have excellent knowledge and long experience in managing construction projects for our department. It works well for us.
Senator Nolin: When you used the analogy of a car, you clearly pointed out that it makes sense to change the oil for preventive reasons because it costs more to fix a breakdown due to lack of maintenance. Not everyone has understood that. Obviously, some managers in your department have not understood. They invest much more, but not in prevention, so that the useful life of realty assets declines until the building finally has to be replaced.
You let users decide whether public money should be used to manage realty assets more efficiently, which is the term often used. We find it curious that you leave it up to your managers, your commanders, people responsible for managing bases to decide if you are going to do the work that is most urgent or if you are going to invest for the long term. We have problems with that. I would like your comments.
Ms. Ellis: The situation you describe is a difficult one. I often talk to my colleagues who are responsible for the decisions that you have just mentioned, and they have concerns every year about infrastructure. It is not something that they want to do. They have to make some very difficult choices among priorities and requirements of all kinds, from the operational, training and environmental side. Every year, each of my colleagues identifies the infrastructure problems in their business plan.
It is something that is invisible or ignored, but they always talk about the difficult choices that they have to make.
It is a hard reality. I hope that it will change and that we will get more funding to bridge the maintenance gap. That will help a lot, but we need to wait for the budget legislation.
We have plans for what to do if we get the money. People are well aware of the problems and they make difficult choices year after year. I want to encourage them to optimize our realty assets and think more creatively about what they can do to consolidate buildings or part of a base in order to save money.
We have kind of a creative environmental approach. If we have a good idea, like the demonstration pilot project on energy conservation, we can get funding from Natural Resources Canada to help us.
We are doing things, but it is a series of small steps. We take advantage of other programs and opportunities with our colleagues responsible for environmental management.
There are small signs of hope and we need to take advantage of our contacts and networks, but we still have infrastructure needs.
Senator Nolin: You estimate those needs to be $200 million a year.
Ms. Ellis: That is right.
Senator Nolin: Your more detailed documentation shows that you have quite a specific list of needs.
Ms. Ellis: I show them to the department every year and our impact statement helps people understand the situation. Yes, I am in favour of this and it is my role, but that does not mean that I consider other priorities to be less important. I am the conscience where infrastructure is concerned and I take that role seriously within the department.
Senator Nolin: Thank you. I will give my colleagues a chance to speak.
[English]
Senator Meighen: Ms. Ellis, my first question may appear negative, but I do not mean it in any way to be a negative or critical question. Given the responsibilities that I have no doubt you discharge extremely well, why would not somebody with a military or engineering background find it easier to slot into the responsibilities that you discharge so ably?
Ms. Ellis: I appreciate your question. When I first joined National Defence, I was worried about whether people would be concerned that I was a civilian or would be concerned about the gender issue. The only question I was asked in the first four months was whether I am an engineer. No, I am not. I have a master's degree in medieval history. I have 21 years of experience in the public service, having worked in a number of policy and program areas.
Basically, because I have such an extraordinarily gifted staff, with a large percentage of military engineers, what I found — and what I presume my deputy minister who hired me felt — was that my skills, in terms of administration, setting strategic direction, being able to look at how the rest of government works and how we would work with them on our issues, were the kind that would be complementary to the technical skills of the military engineering staff. It has worked out very well. The questions stopped after about five or six months, and we seemed to have worked out an effective way of working together.
The job was held by a military member for a number of years. I am the second civilian, and I am the only non- engineer to date.
Senator Meighen: I always believe you can hire expertise.
The Chairman: Being a specialist in medieval history would fit in with some of the bases we have seen.
Ms. Ellis: Absolutely. The heritage considerations are serious.
Senator Meighen: Who is responsible for the boiling oil?
Ms. Ellis: Oil tanks, but not boiling oil.
Senator Meighen: Along the lines of what I think Senator Nolin was getting at, the military is the only one to benefit from having a dedicated service such as your department provides. Is that correct? He was wondering why Public Works does not do some of the things that you do for the military right off. Your budget would be about $350 million?
Ms. Ellis: The budget for my own group would be about $29 million just for operating the group, salaries and that kind of thing. We would manage in the range of about $200 million for the capital construction program that we run for the department. These are not the projects that I described for the construction plan, but these are legacy projects, large projects left over from the early 1990s that are still going on. There are few things that we still manage the money for.
Before this decentralized model took place, everybody was centralized in my group. The person who held my job managed all the money and made a lot of the decisions. It has changed since that model of decentralization was set up.
Yes, it is probably in the range of about $250 million to $300 million. I could get back to you with the precise number. The housing agency has its own funds that it brings in through rent. It is on a separate budget, what it gets in rent and invests back in the houses.
My budget is not huge, but it is commensurate with my role in terms of functional leadership and some actual service delivery and management of projects.
Senator Banks: I am confused.
Senator Meighen: I am, too.
Senator Banks: It sounds to me like your budget is over a billion, is not it?
Ms. Ellis: Yes. The department needs to spend $780 million a year.
Senator Banks: Which department?
Ms. Ellis: I am talking about the Department of National Defence. In other words, the army, navy, air force and smaller custodians combined should be spending a total, divided up between them, based on how much they hold, of $780 million a year. I personally manage out of my group about 20 per cent of the total budget of the department, the numbers I have described to you. I do not have a large portion of the money.
I said that $1.2 billion is what we spend on infrastructure and environment. Hence, about 80 percent of the money is actually held by my colleagues. They get that budget at the beginning of the year, every year. It is divided between them. They actually have that money. They decide how they are going to spend that money, and they spend it. I have about 20 per cent of the overall budget, to help on specific smaller initiatives and on managing some of the leftover construction projects.
Senator Meighen: Going back to the thrust of Senator Nolin's questions, for the privilege, not meaning anything sarcastic, of having your group do things as opposed, for example, to Public Works, it is an expense that equates to about 20 per cent of the budget of the Department of National Defence.
Ms. Ellis: No. The actual overhead for having my group is about $30 million. All that other money is money designated for construction. It is not to keep me going.
Senator Meighen: About $30 million keeps you going?
Ms. Ellis: Yes.
Senator Meighen: Do we need your group? Are we getting value for $30 million? Is the Department of National Defence getting value for $30 million?
Ms. Ellis: I believe they are, and I believe my colleagues would endorse that without any hesitation. The role we are playing is one that could no longer be handled elsewhere in the organization. The group that I run used to be part of the ADM materiel group a number of years ago. It was a smaller unit under the group that does procurement. It was determined in the mid-1990s, probably 1994 or 1995, that the amount of work involved in the infrastructure environment portfolios was sufficiently heavy and complex and needed a lot of attention and management such that it should be set up as a separate, stand-alone group. That is what happened, and the decision was made. While it is not large, it is significant, and I think it provides good value to the department in all areas that it is responsible for.
Senator Meighen: Is there any way your contention can be validated? I hope it can be. I, for one, and maybe some of my colleagues, am a little concerned, because this is the same department, National Defence, where, for whatever reason, it takes an average of 13 years to bring a procurement idea to fruition out in the field. We cannot believe it would take that long.
Now we have a group such as yours which, as I understand it, is there to try to make the process work better, that is, to expedite the process. It is very important, if that is part of your stated role and responsibility. I am not talking about procurement per se.
Ms. Ellis: I just wanted to be sure.
Senator Meighen: No. This is the Department of National Defence that seems, prime facie, to be a little top heavy, and decisions seem to take an inordinate length of time. There seems to be lots of money spent on administration as opposed to buying military equipment, for example — to oversimplify. I am just probing to see whether we can come to the conclusion that, with your assistance, things are running more effectively efficiently.
For example, you said that base commanders or wing commanders with respect to projects under $1 million would have the authority to proceed with projects or disposals or whatever. How long has that $1 million been in effect? Is it a recent figure, or is it a holdover for 10 or 12 or 15 years?
Ms. Ellis: The $1 million has been in effect for quite a long time, more than 10 years.
Senator Meighen: That is what I was afraid of. Whose responsibility is it to say, ``Gosh, in 15 years, there has been a lot of inflation, but there has not been a change in the $1 million.'' Whose responsibility would it be to say, ``Don't you think we should adjust that figure?''
Ms. Ellis: Basically, that sort of issue, and anything to do with other levels of approvals, is something that my shop would identify with that annual functional assessment. That is where we would bring out any issues that we think the department ought to look at or that we think the department ought to raise with Treasury Board. We would definitely have a role in asking how that is working.
The system is quite clearly set out. For construction and infrastructure, the under-$1 million is at the base level. For a project of between $1 million and $5 million, I can sign off. On any project between $5 million and $60 million, the minister signs off, and anything higher than $60 million has to go to Treasury Board. There is a hierarchy for spending authorization and there is a rigorous process at each level. We have a very sophisticated and rigorous project management system for construction.
You talked about approvals. One of our challenges is the time approvals take, even in the department. As you can appreciate, with all the emphasis in the last couple of years on comptrollership and rigor, ensuring that all the numbers are right and that we have double-checked figures before we sign off has added some steps. Everyone in the department is aware of it, but we are working with the Vice Chief of Defence Staff and the ADM of Finance to streamline some of the processes without losing the ability to double-check and the care of managing the finances well. The construction season is very short and we need to get things moving.
Your question about whether I should be able to approve revised projects in order to speed things up for the minister is something I have raised in past years with Treasury Board. Perhaps it is something we should reconsider to see whether we can be more flexible. My group would lead that work in consultation with all our colleagues.
Senator Meighen: I can only encourage you to pursue that. To have the same limit for more than 10 years while we are faced with a snail-like decision-making process raises questions in my mind.
When a surplus property at a base is disposed of, where does the money from the sale go?
Ms. Ellis: The minister must first canvass whether there are other federal departments, provinces or municipalities interested in acquiring the property. We start at the federal level.
Senator Meighen: You said that you have to write to them all. Why would you not just publish a notice? That is the way the rest of us humans find out.
Ms. Ellis: For a routine disposal, we do just publish a notice through Public Works. A routine disposal is a property that does not have a particularly high commercial value and is of no political or regional interest. It is a simple notice and Public Works helps us manage that transaction.
Senator Meighen: So anything political — whatever that means — regional or of a certain value you have to write a letter?
Ms. Ellis: When something is determined to be a strategic disposal — in other words, it would bring in a fair amount of money and is in an area where there would be have a lot of interest —
Senator Meighen: Is Downsview an example?
Ms. Ellis: That is on our list of strategic disposals, yes. It is when it is strategic that the minister would take the extra step of writing to seven, eight or nine colleagues who might have other operations in the area and might be interested in looking at the property before we would move to a transfer to Canada Lands Company.
In the case of Nanaimo, B.C., for example, Indian and Northern Affairs Canada expressed an interest in that property. If another department indicated an interested, we would transfer that through a submission to the Treasury Board, but at market value. The other department pays us market value, likely as appraised by Public Works, and we would transfer the property in that way.
If no other department indicates an interest in that property, we would move to the next level of discussions. I would prepare a submission to Treasury Board recommending transfer of the property to Canada Lands Company. However, before we get to the final stage of asking for the transfer, we have to deal with First Nations issues and environmental cleanup. We have to consider whether there is any unexploded ordnance on the property or any heritage considerations, for example. We have to work through many other issues before it is actually ready to transfer. Again, we have to get a valuation of the property.
Once all the steps have been completed and the ministers eventually say that we can transfer the property, Canada Lands Company has to make a business case for that property. They get an evaluation of the property and issue a promissory note. Once the property is transferred to them and they are able to work out all the other interests, be they local or municipal, and they start to develop it and make money, we are allowed to apply for the proceeds through the Consolidated Revenue Fund. We can apply for up to 100 per cent of the revenues that come back through Canada Lands Company from what they make on the property.
The statutory regulations say that if the department gets money back, it must be reinvested in infrastructure. Our practice in National Defence is that when the money comes back, the Vice-Chief of the Defence Staff normally returns it. If it were a base initiative, the money would go back to the base. If it were at command level, they might put in the command level in the army, but the money is supposed to go back to the people who came up with the initiative to dispose, and they have to put the money back into infrastructure.
Senator Meighen: If the property were sold for $1 million, you have to deduct from that the expenses of Canada Lands Company for advertising, selling, negotiating, and whatever else. What else do you have to deduct from the $1 million, and is it only the profit or is it the total sale price?
Ms. Ellis: I will start with the first part, and I might have to get back to you with some of the detail.
If we had a piece of property on which there were significant environmental contamination as a result of National Defence having been on that property, we would assess and value what is known to us and Canada Lands Company would not have to give back the amount that it will cost to clean it up. In some cases, we might clean it up. Then it is a moot point and they get the full price.
If something else comes to light in terms of contamination that we had not identified at first, and it could be found to be caused by DND, we are liable for six years after the property is transferred to cover the cost of the cleanup. DND is always liable for unexploded ordnance. Regardless of to whom we have transferred the property, we always have to take care of that cleanup eventually.
Senator Nolin: What does the six years refer to?
Ms. Ellis: When we are going to dispose of a property, before it can be transferred to Canada Lands Company we have to find out whether there is any environmental contamination. We would do the investigation and evaluate the cost of cleanup. As part of the business transaction, we deduct the cost from what we would get from Canada Lands Company. If they are going to clean up the property, we would adjust the price accordingly. We might take the decision to clean it up before transferring it to them.
Senator Nolin: You are responsible for six years?
Ms. Ellis: We do our best to ensure that environmental contamination has been cleaned up. If we transfer it and within six years, as a result of erosion, a DND oil tank surfaces that no one knew was there, we would be liable to pay for the clean up, not Canada Lands Company. The general rule is that we are liable for six years after the transfer.
Senator Nolin: Who is responsible after six years?
Ms. Ellis: As far as I know, whoever took the land would be responsible. I will confirm that, but that is my understanding for environmental contamination.
Unexploded ordnance is a different category. Sometimes things can come up through years of erosion and freezing in winter. No matter who we transferred the property to at whatever time, DND would always be responsible for cleaning up any unexploded ordnance. There is no time limit on that liability.
Senator Atkins: Do you have examples of that situation?
Ms. Ellis: I do not have any offhand. I am not aware of any in terms of our strategic disposals since 1994-95. I would have to confirm that, but nothing comes to mind. I am quite familiar with the list.
Senator Meighen: With the vast basket of real estate ownership that DND has of undeveloped land, buildings and everything else, is there an ongoing program of investigation as to surplus needs — in other words, a program to dispose of surplus assets? If so, who does that?
Second, given what you were just telling us about the responsibilities and the various things for which the department is liable immediately or over a long period of time, how often do you get 100 per cent, or close to 100 per cent, back on your dispositions?
Ms. Ellis: Perhaps I can start with the question of surplus needs. If we go back to the major strategic disposals with which I am familiar, which are the ones that came out of base closure decisions by the Government of Canada in 1994 and 1995, obviously it was a major initiative of the government of the time to make cuts at DND. The department at that time probably would have been asked to provide an assessment of what they thought could be surplus. The government would have considered the advice they received from the department and, I am sure, consultation with other departments, and the government would have made a decision on what bases were surplus. That is a bigger question around base closure. That would be a government policy process.
In terms of ongoing, it depends on what I would call a site-by-site analysis. For example, thinking of Winnipeg, we recently had an announcement about the strategic disposal for Kapyong Barracks.
However, there is another piece at Winnipeg, which is the housing. I mentioned the master realty asset development plan in housing, which looks at what the needs of the base and the future might hold in terms of doing a strategic disposal for part of it. If the head of the army in that case came forward and claimed to have a potential candidate for a strategic disposal, my team would then help them take it through to the Treasury Board and the government system to get approval to do a strategic disposal.
I sit on a committee that looks at strategic disposals across the Government of Canada. All the big departments that own properties sit at that table, and we have a regular meeting where we consider properties that could be candidates. If there is an agreement that a certain property is strategic and we should put it forward to Treasury Board, then we give support for that to go forward.
There is definitely a process, but it is government-wide. Everybody is in the business of trying to optimize what they hold and get rid of that which they do not need.
Senator Meighen: If I were a base commander and I had a piece of real estate belonging to the base worth $900,000, can I take the initiative and seek to dispose of that piece of real estate at the best possible price? Let us suppose I am successful, and I get $900,000. What restrictions are on me with respect to the use of that $900,000? Do I have to put it back into something that can be substantiated as being base real estate, or could I put it into general revenues of the base or purchase of equipment for the training of my troops?
Ms. Ellis: I will give you the best answer I can right now, but I may have to get back to you with more information on some of this.
The first thing is to make that distinction. If it were a fairly small, routine disposal, then presumably the base commander would follow the chain of command, up to his area commander and then the head of the army, and let —
Senator Meighen: He or she cannot do it himself?
Ms. Ellis: He would let them know that he intended to do it. For a small, routine disposal, he can proceed on his own through Public Works Canada. If it is routine, it is not likely to generate huge amounts of money. The revenue would go back to the base. He could not use it for anything besides infrastructure. He would have to put the money from the routine disposal that he did with Public Works back into infrastructure.
Senator Meighen: Infrastructure?
Ms. Ellis: Realty assets, buildings, maintenance and repair.
Senator Meighen: Whether he needs it or not?
Then I suppose if he put it back into maintenance and repair, that $900,000 would then be deducted from his budget next year?
Ms. Ellis: I cannot confirm that.
Senator Meighen: Is there any incentive to optimize your assets? You locate a piece of property and identify that it is not needed, you dispose of it at a profit, and you are now required to put it back into an area that is not particularly in need of funds. Why do it?
Ms. Ellis: I should like to make a few comments on that. Number one, there are definitely incentives to reduce and optimize infrastructure depending on the particular situation on a base or wing.
Around the year 2000, the department initiated what it called the 10 per cent reduction initiative. Every command across the board was asked to reduce their footprint by 10 per cent. Bases and wings were all engaged in that particular set of assessments. Our data, though it is not perfect, is reasonable, and it tells us that, at this stage, most of department has met that reduction. Now, in terms of an incentive, that might be more of a stick than a carrot.
Senator Meighen: It is an order. It is not an incentive.
Ms. Ellis: Sometimes that is how you have to do things.
Second, the big positive is savings in what we call operation and maintenance money every year. For example, if you have a couple of buildings and you find they are so far beyond saving that it is probably better to take them down and do a disposal with that small parcel of land or consolidate something else and build new on it, I would hope that, in the business case he put forward, the base commander would be showing why the decision to build new or to put a major investment in there is actually going to save him ongoing maintenance money over time. Perhaps he will save on energy costs by putting better windows in it. There is a lot to think about in putting forward a proposal to do a project like that.
As well, there can sometimes be an incentive for shared use of a facility. For example, in Windsor, Ontario, we are very proud of a project we did there with the Windsor police. The Windsor Armoury is now a shared facility. An incentive existed to find a way to share the costs of operating the building. DND did not need to use it all the time, but they still needed it. We are saving money by sharing it, because the Windsor police are covering some of the operating costs.
We are trying to do more creative things, but there has also been a push in the past to get people to reduce. When we start to see what the new policy will mean for the force structure over time, there may be other opportunities for people to reconfigure, consolidate and to think of ideas for how to optimize the assets. We will be there to help them when they are ready to talk.
Senator Meighen: We saw the Windsor Armoury when we were there, and it is an excellent idea. It should be emulated across the country, where appropriate.
Some of these projects, like the Queen Mary II, once they get launched, it is almost impossible to turn them around or stop them. For example, with the decreasing use of Goose Bay, one wonders why we have just finished repaving the air strip. Is it difficult to pull the plug on something once it has gone through the approval process? What explanation could there be for doing that?
Ms. Ellis: The government made a decision to invest in the airstrip and now it is helping with the management of the project.
Senator Meighen: That is what I was afraid you said.
The Chairman: You are saying that you were told to do it as opposed to generating this yourself.
Ms. Ellis: I would not be in a position to generate a suggestion on an airstrip.
The Chairman: Where did the decision come from?
Ms. Ellis: I do not know. I know only that the government has made the decision.
The Chairman: Someone must have signed a memo on this.
Ms. Ellis: Well, I did not see a memo.
The Chairman: Would you please look into it? We would like a reply in writing as soon as possible indicating where this proposal originated.
Senator Meighen: Where and when it originated.
The Chairman: Where, when and who signed it, and we would like the documentation chain, start to finish.
Ms. Ellis: I can take your question under advisement but that is not my area of responsibility. I will have to refer it back to our parliamentary affairs and tell them that you would like this information. I am happy to do that.
Senator Banks: I am delighted to note that you were a teacher, the most noble of all occupations, and you are teaching us today. I am pleased to note as well that you have a degree in medieval studies, which will come in handy in helping us to understand the military record system, among other things.
We have heard from many people in both in the military and in the department over the past several years. We asked questions about initiatives of one kind or another that the committee might want to look at. If a base commander could sell a $999,999 piece of property, he could also spend $999,999 to erect the building on it. That was said more than 10 years ago. Should it not be $2 million now, and should your purview not be $10 million instead of $5 million?
What does ``we could look at that'' mean?
Ms. Ellis: We will try to take a look at mine, at least, between the $1 million and $5 million — and I see no problem in asking the same questions around the $1 million. It is important to remember that it is not National Defence alone that can make that decision. This has to be reviewed with the Treasury Board of Canada and be compliant with the Financial Administration Act.
Senator Banks: We understand that. My question is this: When you say that that is something have looked at, how long will that take? When was the issue first raised and where is it now in the chain of zero to finished?
Ms. Ellis: Certainly, I raised this question in January and February of this year, when I did my functional assessment of the state of the infrastructure and issues that I like to surface so that people will think about them.
Senator Banks: That was six months ago. What has happened to it since?
Ms. Ellis: We have not reached an advanced stage with it yet. However, I believe we will be talking to Treasury Board in the fall about this.
First of all, we have to work on it within the department. We have to come up with the implications of making the changes and how it fits with our knowledge of the Financial Administration Act. At that point, we would approach Treasury Board and tell them about this idea that would help us to obtain approvals more quickly, although it would still contain the necessary rigor. All of this comes down to who is accountable for what amounts of money and who is signing off for what kinds of projects.
Senator Banks I am aware of the ongoing and the new requirements that everything be checked, double-checked and double-signed off on. The pendulum in that kind of situation swings one way or the other way. I have never been one to suggest that anybody except I should be fully accountable for everything.
The frustration of committee members is that these things take years and years and years. Elsewhere, that does not happen. I know that public money is involved, so there must be greater and more glaring scrutiny. However, has the pendulum not swung too far the other way? Senator Meighen mentioned that it takes 13 years to buy something new. By the time we go through that process, it is no longer new. We know of a couple of pieces of extremely expensive equipment that were bought and ended up being costly boat anchors because they were no longer functional. We are worried about the length of time that these processes take. Cannot they be sped up? Are you not sometimes frustrated by this?
Ms. Ellis: I would say that when it comes to trying to get approvals, we do find it challenging at times because it does take a long time to get these things through the system.
Senator Banks: Who can fix that?
Ms. Ellis: We are trying a couple of things to streamline revised approvals that we might need on construction projects by being able to grease the wheels ahead with different offices at NDHQ who are required to sign off on projects.
Senator Banks: I understand that it takes more than one person. Our frustration is that the responses we receive when we ask the questions are just what you are saying.
Ms. Ellis: I do not want to do that.
Senator Banks: I know. You are saying that many people have to be asked. Someone must be able to say, ``We will cut through this bowl of spaghetti,'' while ensuring that the scrutiny is glaring and the greatest care is being taken. Someone must be able to ensure that the paper does not sit on a desk for six months. We know that that happens. Is there not someone that you know of who could fix this? I am trying to ask to whom the committee speak on this. We hear from more and more senior people who say that they cannot do that.
Ms. Ellis: In my case, I can only speak to approvals for construction on major environment and construction projects. The good thing is that we have, as I mentioned, the major construction plan that we roll up and get to the minister. Once it has gone through approvals of the department, we sit down and talk to the minister, and once he signs we can get rolling on the project. That always takes longer than we think it will take but that comes down to finding the time to do the briefing and move it through.
Senator Banks: What is more important than that? Why does it take so long to get it moving?
Ms. Ellis: In some cases, it is a matter of arranging the schedule to do the brief on the plan — however, that process works reasonably well. Some challenges occur when we have to revise a project. Some construction markets become very hot and the costs increase for legitimate reasons, and we have to run that to ground through the system. That can take a number of days.
Senator Banks: At times, you might receive a change order.
Ms. Ellis: If I know that we have something coming that has to move, I will generally call the three or four colleagues at my level, or more senior, who will have to be ready to look at it. At times, if it is urgent, we will have someone walk it to them to try to move it through faster. Things can be done faster in an urgent situation but much of it is competing with other things that are equally urgent from another perspective. It boils down to managing the workload and the number of things that can go on one person's desk at the same time along the chain.
We are working on it and trying to come up with ways to improve it. There can be some flexibility, but we know we have to be rigorous. As people become more familiar with our business line, it will improve because the wheel will not have to be reinvented each time. Some of it is a matter of internal education for the people reviewing these things. Some efforts on a practical basis can help a bit but it will not become a super fast system. That is not the way it will go.
Senator Banks: I know that my colleagues would join me in hoping that you will address alacrity, without giving up any clearing scrutiny, when and how, and as soon as you can.
With respect to real estate, I have an interest because I have the honour of being a member of another committee, one that has an environmental interest. When you build or refit a building, you can save enormous amounts of operating money by changing the windows or the light bulbs or putting in ground-source heat pumps when you are building a big building in the first place. Is your department paying attention to those things?
Ms. Ellis: We have started in earnest to take a look at what we call green building design. I would not say that today it has taken hold with every building. Just to go back to what I said earlier, it still costs money to do things on a given project and do some of the green pieces, which end up paying off later. However, again, the army or whoever is the client has to make the decision that they want to go that far on the green side.
Senator Banks: When you are buying new light bulbs, that is not a difficult decision.
Ms. Ellis: I agree; I am talking about when you are designing a brand new building. We have had two good examples recently. I am not sure if you went to the Chief and Petty Officers' Mess in Halifax, the new building there, but that one is very good in terms of incorporating green design principles. There are a couple of kinds of certification you can get. One is called ``leading in energy and environment design.'' The other one is a British one, the ``building research establishment environmental method.'' These are checklists where you can say, how much did I think about environmental issues when I built the building? That is a wonderful example.
Senator Banks: Does every new building or refit of an old building go through that process?
Ms. Ellis: No, not every one at this stage.
Senator Banks: How soon will that happen?
Ms. Ellis: All of my program managers have been trained in these things, so when they get involved with a client trying to design a project, they will raise that issue. They will say, ``These are things you can do.'' Will every building go to the gold standard? Not necessarily; it depends on the price. We are trying to encourage people to think about doing the minimum each time we start a new project. It is up to them in the end to decide how much they want to do. We are raising awareness on the environmental side.
Senator Banks: Let me suggest that it should not be up to them to decide what to do because the Government of Canada has undertaken to be a lead in this and has said that it is going to set good examples. You are the biggest landlord in the country, with the most property of any government department in the country. If we cannot set a good example in that, how can we ask other Canadians to do that?
Ms. Ellis: I believe we are beginning to set a good example. A lot of these design principles have started to become easier to use. We have just recently started to get these two tools I have described that allow us to go through a discussion with our clients.
The thing is to understand that when you are getting the statement of requirements from whomever wants to build a building, environment is one angle they look at; there are others, like barrier-free access. There are a number of pieces that have a price tag attached to them that the client has to weigh — how much do they want to do with each thing? My job and the job of my team is to continually raise what can be done, what is the possible green design for a building. I believe we are going to be getting more and more into making that. There are some minimum requirements on that and that is part of what I can push.
Senator Banks: Another committee will be issuing a report very soon, which will be urging that that become a lens through which every project should be seen.
You mentioned a big shortfall in repair and maintenance, and the analogy you used is perfect. You can pay me now or pay me later. We all remember that commercial.
You get a special allocation of $20 million a year to do stuff with, and in the last allotment of that money in 2005-06, the impact statement said it was all allocated to various planning activities, some construction and infrastructure reduction, but there was not anything that had anything to do with maintenance and repair. Did we miss something?
Ms. Ellis: You did not miss something. That is a good question.
Basically, 2004-05 is when I first had the $20 million fund. It was assigned to me for that fiscal year for the first time. What we did there was we made a decision in the department related to barrier-free access. The department was audited by the Canadian Human Rights Commission a few years ago, which said a number of our buildings were not compliant in terms of access. Again, because it is expensive to put in elevators and that kind of thing, some colleagues were having trouble making acceptable progress in meeting the compliance — remember going back to regulations on health and safety and compliance issues.
I did a brief to the department, and it was accepted, that I would use a chunk of that money out of the $20 million fund to help them do a matching arrangement so my colleagues could get the goods done for the accessibility issues over a two-year period. That was 2004-05 and 2005-06. If you want, it is a kind of maintenance and repair. That was the choice we made.
We allocated a bit of funding to colleagues for work on maintenance and repair. However, that was our big push for that year and we are continuing that work.
The planning is important. I would not want it to be seen as just money — $5 million on planning, what does that do? It does a lot because it ties into what I talked about in terms of how you optimize your holdings. How do you give a base commander the chance to do the things we talked about? How do you get him to think about what that footprint should look like, what he could do with it, what he might propose? By giving him that money, because he has short resources in terms of people as well, that gives him a chance to hire some expertise and sit down and think it through with his engineer, and then he can give us ideas to help us achieve the longer-term objectives of having the ideal-sized footprint.
It is all connected and planning is very fundamental.
Senator Banks: It is. I thank you for those answers. I urge you to put the ecological and environmental effects of refits and new buildings as high as you can move them on that list to which you refer.
Ms. Ellis: I will be enthusiastic in that, senator. This is Environment Week as well, and I am raising awareness in the department very seriously this week.
The Chairman: Ms. Ellis, did you say that last year the department managed to reduce its footprint by 10 per cent?
Ms. Ellis: Not just in one year — since the 10 per cent reduction initiative, which was initiated in 2000. Our data is not perfect, but it is reasonable, and we feel confident — and have reported to the senior leadership — that we have come close to reducing the footprint over the last three or four years. That would mean buildings taken down or consolidated; there are a variety of different ways in which that would have been met.
The Chairman: Were there criteria for this reduction?
Ms. Ellis: I was not in the department when that initiative was launched, but I am not sure that there were a lot of detailed criteria. I could not speak to that with any certainty today.
The Chairman: It was an arbitrary 10 per cent?
Ms. Ellis: Basically, people were asked to look at what they could do and take steps to reduce to the extent possible. Was there much in terms of criteria? There was not too much; it was a square metre direction.
Senator Banks: For the record, that is dumb.
The Chairman: I think Senator Banks is objecting to an across-the-board 10 per cent in terms of metres? Am I correct, Senator Banks?
Senator Banks: Yes.
The Chairman: I interpret for him a lot. What are the plans now, if any, to reduce the footprint of the CF?
Ms. Ellis: If you are talking about smaller types of things that might happen at a base or wing level, if it would make sense to perhaps do a consolidation, a small disposal, I could not document those for you right now. There may be ideas.
The Chairman: We are thinking of a 25 or 30 per cent reduction.
Ms. Ellis: There are no plans of that kind right now in the department. As I said earlier, once the implementation of the new defence policy and the changes to force structure or command structure start to get articulated, then my team will be asked to kick in, provide advice and help people with planning. There is nothing at this stage.
The Chairman: How do you go about that sort of process if the government mandated a significant reduction in the footprint? What process would the department take?
Ms. Ellis: I was not in the department during 1994-95. I would think we would start with a group of all the key principles at my level taking a look at what was the government's plan and intention. Then we would need to develop a process in the department to take a look at across the country — what do we have, what do we need, how do we think we would reshape it? My team would provide expert advice with respect to disposals of any parts of property. It would have to come again from the operational commands and from the senior military leadership in terms of what their operational needs are, what they think they will need that is different, and then we would advise them on how to achieve that. We would have to work with them based on their requirements.
The department is very good at setting up ways of tackling big issues. We would set up the appropriate group, put our heads together and figure out how to implement whatever government decision there was.
The Chairman: Are there any DND facilities that may be paid for more appropriately by another department?
Ms. Ellis: Could you give me a little more context, please?
The Chairman: We have a sense that the department takes on a number of things that do not seem to have much to do with National Defence. We wondered if someone in the department has been looking at the different tasks and asking whether they should be someplace else. We asked you earlier whether you and your gang should be in Public Works doing the same job. You did not think that was a good idea.
We wonder whether all of the folks that seem to work in the department belong there and whether they should not be someplace else. Do you have any assistance for us in that matter?
Ms. Ellis: I do not. I know it is a very general question, and I am sure it is a concern for the committee, but I could not comment on that. I do not have any specific views. I can only comment on the points I made about my own group. I think it is a good fit, has good value and is serving the department well. That is my own group and that is the extent to which I can comment about being part of another department or not. We fit well with the military institution. Your question is a broader question, and I do not have anything to add.
The Chairman: Then on behalf of the committee, I would like to thank you for attending here today. We appreciate the assistance you have given us, and we may well be following up with further questions, which we look forward to.
Ms. Ellis: Thank you very much for the opportunity.
The Chairman: Members of the public who are viewing this program, if you have any questions or comments, please visit our website by going to www.sen-sec.ca. We post witness testimony as well as confirmed hearing schedules. Otherwise, you may contact the clerk of the committee by calling 1-800-267-7362 for further information or assistance in contacting members of the committee.
Next, we have before us a panel on military family housing. With us is Brigadier-General Steve Irwin, an experienced army engineer who has had a long and distinguished military career. His commands of note have included Commanding Officer for Combat Engineer Regiment, Lahr, Germany, from 1984 to 1986; Commandant, Canadian Forces School of Military Engineering, from 1989-92; Commander of the Canadian contingent in the former Yugoslavia, in 1992; and Director General Infrastructure and Director Land Force Readiness and J3 Land, 1996. Brigadier-General Irwin was promoted to his present rank in June of 2001 and was appointed Director General Realty Policy and Plans J3 Engineers, then Director General Military Engineering, J3 Engineers.
Brigadier-General Irwin is accompanied by Colonel Rochette, who joined the Canadian military forces in 1983 and has a background in industrial relations, logistics and finance. He served as comptroller in various capacities such as Mont Apica, Quebec, National Defence Headquarters in Ottawa, and Goose Bay, Labrador. In 1999, he was promoted to lieutenant colonel and entered the Canadian Forces Staff College. In 2000, he took on responsibilities as Acting Director Pension and Social Programs and was tasked with developing a reserve force pension plan. In the summer of 2001, he was appointed Project Director, Canadian Forces Pension Modernization Program. He was promoted to his current rank in January 2004, when he was appointed to his current position.
Also before us is Commander Ken Lait, who joined the Royal Canadian Navy in 1965. Commander Lait has had a long and distinguished career both on land and at sea. He retired from the regular force in January 2002, after just over 36 year's service. In September 2002, Commander Lait, as a reserve officer, assumed his current duties in the Directorate of Quality of Life as the section head responsible for accommodation policy and liaison with the Canadian Forces Housing Agency.
General, I understand you have a brief statement to make. The floor is yours.
Brigadier-General S.M. Irwin, Chief Executive Officer of the Canadian Forces Housing Agency, National Defence: Thank you for the opportunity to meet with you today to discuss the issue of residential housing for Canadian Forces members. The Canadian Forces Housing Agency plays an important role in implementing the accommodation policy of the Canadian Forces. As the chief executive officer, I will be happy to answer your questions on the residential housing portfolio. Colonel Rochette and Commander Lait are here to speak to policy and compensation issues. They report to the Assistant Deputy Minister Human Resources—Military, who is responsible for all policy matters related to accommodation. I report to the Assistant Deputy Minister Infrastructure and Environment, and my focus is on managing the residential housing portfolio.
Before we answer your questions, I will speak to three issues. First, CFHA is managing residential housing effectively. We have made significant investments in the portfolio and its condition has greatly improved. We do recognize, however, that we still have much work to do to bring the housing portfolio to more contemporary standards. Therefore, we are implementing an extensive program to renovate and modernize our units. Second, we provide an excellent level of service to CF members. Finally, the rent setting process is rigorous and fair.
When CFHA was established as a provisional operating agency in 1996, it inherited a portfolio of about 22,000 housing units, most of them dating from the 1950s. Many of those houses suffered from years of poor maintenance and from health and safety issues. Our original mandate allowed us to invest more than $400 million, since 1998, to address these issues. In 2005, we can say that our married quarters are well maintained and that any outstanding health and safety issue is being remedied. These are not the same houses we inherited in 1996.
In order to ensure that we have the right units in the right numbers, and in the right locations to fulfil the needs of CF members, we rely on consultations with major custodians within the department, the army, navy, air force, for example, who provide us with their requirements. We also rely on housing requirement studies done by the agency. These studies tell us the number and size of units we need at bases and wings across the country by taking into account the number and profile of members who are posted at each location and also the conditions and trends of the local real estate market. These forecasts have allowed us to reduce the size of the portfolio to a little over 14,000 units, a number that better reflects the current demand for residential military housing and allows us to reduce the number of vacant units we have to maintain.
[Translation]
In March 2004, we received confirmation of our status as a permanent special operating agency within the National Defence Department.
That allowed us to launch a large-scale renovation and modernization program and begin building new units at Wainwright to support the transformation of the Canadian Forces.
Our next challenge is to bring that 1950s housing into the 21st century. People live differently today than they did 50 years ago. Canadian Forces members no longer have the same expectations of the place they live. They have different expectations about the size of their yard, the number of bedrooms and even how they will use their basement.
Canadian Forces members have the same expectations today as other Canadians: a home that reflects their lifestyle. That is what we mean when we talk about contemporary housing.
[English]
The agency is working hard to ensure that we have a streamlined, efficient and contemporary portfolio, and to provide CF members with the highest level of service they can get. That is our primary concern. Every day, and at every one of our locations, CFHA personnel are going well beyond what a normal landlord would do, for example, providing floor plans in advance of cross-country moves, helping young parents locate all the services they need for their families, and answering maintenance calls 24 hours a day. We do whatever it takes to make CF members feel at home and to show them that we appreciate that whey do for this country.
Colonel Rochette and Commander Lait will answer your questions on policy, but I would like to say a few words about that now. We only provide residential housing when the market is unable to satisfy the needs of the CF. We provide Crown-owned housing in many locations, including some urban areas, because the size of a given market does not guarantee that CF members have access to rental housing that is suitable for families. It is important to understand that the purpose of this intervention is not to address housing affordability.
The question of housing affordability for our members, whether they live on or off base, is addressed by the post living differential allowance. This allowance is awarded to all members posted to areas where the cost of living is above the national average. Housing costs are one of many factors considered in the equation. It should also be noted that under no circumstances would the occupant of a married quarter be required to pay in excess of 25 per cent of the household's gross income.
Today, 80 per cent of CF members choose to live on the economy. In order to be fair to 100 per cent of our members, regardless of where they live, rents for married quarters reflect the rent for comparable units in the local market. In order to establish fair market rent, appraisers from the Canada Mortgage and Housing Corporation gauge the market value of our units every year. This assessment is based on the type, size, age, location, number and condition of the units and does take into consideration such elements as number and condition of bathrooms, functionality of kitchens and the presence of garages, for example. Rents charged for married quarters are adjusted every year and they reflect all the elements taken into account by appraisers.
The role of the agency is to implement housing policy in a fair and equitable manner. We recognize that we still have work to do to bring the housing portfolio to contemporary standards. We are managing married quarters efficiently today. We have a solid plan to prepare us for the future, and we are striving to continuously improve on our level of service.
Senator Banks: Brigadier-General, we heard earlier from Assistant Deputy Minister Ellis who told us that an order was given a little while ago for a 10 per cent reduction in the square metreage of DND buildings. Did that apply to housing?
BGen. Irwin: No, senator, not at all. Housing is based on the requirements of CF members based on housing requirement studies that we do at each site. The needs of the CF members dictate the size of our portfolio.
Senator Banks: Surely, for housing that was built in 1950 and before, by 2005 the circumstances in those places would have changed from the first time the assessment would have been made. Does that not happen?
BGen. Irwin: Yes, senator; that is exactly what happens. We do housing requirement studies at every site to determine exactly what the population requires. We look at the market in the local area to determine whether we have to intervene or whether the local market can provide. Where they cannot provide, we will provide.
We started in 1995 with about 22,000 units. Those units were built in the 1950s when the force was much larger than it is today. We have determined that, across the country, the current requirement — and it will change with time — in total is about 12,500 units.
Senator Banks: In other respects of the Canadian Forces, when we downsized in an area, whether it was training capacity, facilities, infrastructure or complement, we subsequently found that, when circumstances, changed, we wished we had not downsized. We dug ourselves into a hole and now we are trying to get out of it. We have done that with personnel, training, equipment and infrastructure. Would that same formula or set of conditions apply to housing?
BGen. Irwin: I expect that it would.
Senator Banks: The thrust of my question is: If you get down to the 12,000 units that you say you will need, will we not wake up one day and find that we need 22,000 and ask why we ever divested ourselves of those units?
BGen. Irwin: We may do that in the future. We do these housing requirement studies on an ongoing basis. With regard to the new 5,000 units that were announced the army, navy and air force work together to determine exactly where and how many people are coming in and we examine the markets and at our population to ensure that we have the right number. Housing changes all the time. The life cycle of a house is normally in the order of 25 years. We are making an investment for at least 25 years.
Senator Banks: The life cycle of a house is 25 years?
BGen. Irwin: When you do life cycle maintenance on a house at the end of 25 years, you would expect to have to do major renovations to that house if you want to keep it for the next period of time.
Senator Banks: Who decides who will live in CFHA housing? Who makes the decision? Who gets in and who does not?
BGen. Irwin: A set of policies ensures that all personnel have access to the housing. The base commander can intervene where he feels that there is a significant need for an individual member to be in the married quarters. In general terms, we determine the need based on the availability of the housing, the family size and the requirements of the member.
Senator Banks: If it came down to it, on the ground, the base commander could be making that decision; is that correct?
BGen. Irwin: He will intervene in order to ensure that his base receives the service from the housing that it requires, and we will allocate it based on discussion and agreement with him.
Senator Banks: When you forecast 12,000 units, is what you will need on the basis of 65,000 people, give or take, in the Canadian Forces? As you know, we have loudly voiced the opinion that there ought to be many more than that. Who does not get to go in? I know there are also PMQs, but do I extrapolate from that that 50,000 Canadian Forces personnel are not married or living with somebody?
BGen. Irwin: Approximately 80 per cent of military personnel live off base in the local market. By policy, we are only able to provide married quarters where the local market cannot provide. We have found that we have intervened to the point where about 20 per cent of CF members live in Crown-owned housing.
Senator Banks: Is that figure an average across the country?
BGen. Irwin: Yes, sir.
Senator Banks: What happens to the money that they pay in rent?
BGen. Irwin: That money comes into the agency to be reinvested in the homes.
Senator Banks: It stays in your agency so you can continue to use it; is that correct?
BGen. Irwin: That is correct.
Senator Banks: It does not go into general revenue.
BGen. Irwin: Not at all, sir.
Senator Banks: Commander, you anticipate that you will need about 12,000 units or so. I assume from the answer that the Brigadier-General gave that that will constitute about 20 per cent in the future of the size of the armed forces; is that correct?
Commander K.B. Lait, Commander, Directorate of Quality of Life, DQOL 3 — Accommodation Policy Team Leader, National Defence: That figure is not based on the size of the armed forces, sir; it is based on the requirements and the site specifics at each base. Based on the housing requirement studies in 1999 that were conducted by the housing agency, in looking at the local markets, they determined that those markets could not meet about 12,500. That number is from 1999. We have an ongoing review at each base. At this time we are about to start on a study to look at the single members in DND and their housing requirements as well. The housing agency has met some of those single housing requirements in married quarters.
Senator Banks: The percentage of people in the armed forces who would need access to housing provided by the agency is a moving number depending on the capacity of the markets in which they are to provide housing; is that correct?
BGen. Irwin: Yes, that is exactly right, senator. The dynamics of the local market are extremely important in determining the requirements for military housing, including interest and occupancy rates. We try to ensure that every military family has access to suitable accommodation and that they are able to rent suitable accommodation.
Military families sometimes move more often than the normal Canadian.
Senator Banks: They always move more often than ordinary Canadians.
BGen. Irwin: Speak to my wife, senator. We move on a regular basis. When you are only in a place for several years, it is difficult to build up equity. Therefore, it is difficult to decide whether to get into the market. We try to ensure that the market in the area can provide suitable rental accommodation for our members. If it cannot, we provide it.
Senator Banks: Markets change in months, and in a year or two there can be a huge change in the capacity of a market, at least in the private sector, to accommodate housing needs. Does your flexibility work in that situation? How often do you reassess the need?
Colonel J.G.C.Y. Rochette, Director General, Compensation and Benefits, National Defence: We do a survey once a year through a private firm.
Senator Banks: Then you are on top of it.
When we sit down with officers and other ranks across the country, we are often told that, as soon as they get a raise, their rent goes up. We have heard that from all ranks, in all parts of the country, in all services.
The Chairman: They usually add that CANEX prices also go up.
Senator Banks: There seems to be a cause and effect relationship there. Is that so?
Col. Rochette: Not at all, sir. In fact, we look at pay as comprised of total compensation. We compare our members with public servants, with which we have set up comparator groups. We do a review with Treasury Board Secretariat. We look at the public service and their negotiations. As you know, our non-commissioned members and general service officers just had a nice pay increase.
Senator Banks: However, their rents went up.
Col. Rochette: It was not based on rents, sir. We examined the public service union negotiations. We have a model into which we enter all the numbers. It is weighted with the number of military members and the type of occupations we have to compare with the comparator groups in the public service. Through that, we come up with a percentage. From this we determine base pay for our members. We add to that a component for military factors, which includes hardship, the fact that we move our members often and things like that.
Senator Banks: The General told us that, regardless of what one pays for PMQ, it will not exceed 25 per cent of one's income. If I get a raise, will the 25 per cent follow the raise?
Col. Rochette: It will, senator.
Senator Banks: Therefore, if I get a raise, my rent goes up.
Col. Rochette: That is because of the limitation in our regulations. The rent increases not as a direct result of the member receiving a raise, it increases because his total compensation has increased and his 25 per cent limit has increased.
Senator Banks: Who decides what rent is to be paid? All tenants, whether yours or anyone else's, complain about rent, and they complain more loudly when it goes up when they have just discovered that a tap leaks. Do you decide, General, when rents go up in Halifax?
BGen. Irwin: That is dictated by a Treasury Board housing policy, sir. We are required to review the rents annually. Each year, Canada Mortgage and Housing Corporation considers the age and condition of our housing, and compares it with similar units off base in the area. They set a rent based on that appraisal. There have been continuing increases over the past few years.
Senator Banks: An aircraft technician based in a city where the market is hot and real estate prices are going up will experience a rent increase, whereas an aircraft technician based in a city where prices are not increasing will not experience a rent increase. They did not choose where they would be stationed; someone assigned them to a location. As aircraft technicians of the same class they both get the same pay. Is that acceptable?
BGen. Irwin: That is why we have the structure of allowances. and I will ask Colonel Rochette to respond to that.
Senator Banks: You are talking about the allowances for high-cost areas. Which areas in Canada are regarded as being more costly, therefore occasioning higher allowances?
The Chairman: Could we go through the program first?
Col. Rochette: The program is called the post living differential allowance. It was developed after a review in 1998 by the Committee on National Defence and Veterans Affairs. They recommended an allowance or benefit that would help members to stabilize their cost of living. I often visit the troops and members talk to me about that allowance. They have the perception that whenever they experience an increase in housing or gas prices, their allowance will increase. That is not the case. The allowance is mainly to stabilize the cost of living so that if they move to a higher-cost area, although they may see an increase in their cost of living, the allowance will cover part of it.
Do you want me to explain how we developed the policy?
Senator Banks: We want to know how it works. If I get posted from Chilliwack to Calgary, what happens?
Col. Rochette: A private company is conducting reviews at 114 sites where we have Canadian Forces members. They use a family type, which is a corporal with a spouse who works part time, and one child, with family earnings of roughly $61,000. The company considers three main factors; housing market, taxes and cost of goods. The formula is also weighted with the population from different areas. The company arrives at the cost of living in each locations and at a national average cost of living. If the cost of living in one area is higher than the national cost of living, you get an allowance for the difference between the two.
Senator Banks: When I served on the National Finance Committee, we had the pleasure of asking the then Minister of Finance, Mr. Martin, how the equalization program worked. Only half kidding he said that there was someone who understood it once, but he died about 20 years ago. Is this also an equalization program?
Col. Rochette: It is, yes.
Senator Banks: In my next question to do with taxes, I will again use the example two aircraft technicians, this time living at Camp Mirage. One was posted there from Alberta and one was posted there from Quebec. They are both doing the same job and earning the same amount of money. The guy posted from Alberta is paying Alberta provincial tax, and the guy working daily beside him, earning the same amount of money in the same place, is paying Quebec- based income tax. Does that seem right to you?
The Chairman: And in that country, there are no taxes.
Col. Rochette: Yes, senator. Except, sir, with the new tax relief we have, we help the members in that sense where they do not pay the taxes.
Senator Banks: Tell us about that, please. I have not heard about that. What is new tax relief?
Col. Rochette: I am referring to the tax relief announced in the 2004 budget where, when member go into a specific type of operation, risk level three or four, they will automatically have tax relief.
Senator Banks: I am not talking about people who are in harm's way.
The Chairman: That does not include Camp Mirage. It is not in risk level three and four.
Col. Rochette: That is what I was saying. It is for risk level three and four. For risk level two, we have to submit to cabinet for approval.
Senator Banks: Has that been done?
Col. Rochette: We are currently working on that, sir, yes.
Senator Banks: Is there one overseas posting that would then not be caught by one of those risk levels?
Col. Rochette: Yes, we do have some operations at level one.
Senator Banks: So for a level one person in exactly the same situation I described, it will not solve that problem.
Col. Rochette: Yes, or somebody posted in Washington or Colorado Springs.
Senator Banks: Can we fix that? It does not seem right to us.
Col. Rochette: Before my time, sir, it was looked at by my predecessor and a team on the taxation side. It is a tax issue.
Senator Banks: It is. The point is that the persons did not decide from which place they would be posted. They were sent there. They might have had some choice, but often it is not very much of a choice. Then they are sent to an overseas posting and this disparity occurs. We would like to see that addressed. Is there something in the works to address that?
Col. Rochette: No, senator. As I mentioned, it is not on our schedule. We have many items to consider in the plans on compensation. I mentioned that four years ago it was looked at once, and we were told we could not do anything at that time.
Senator Banks: Who told you that you could not do anything about it?
Col. Rochette: That is a question I would have to verify.
Senator Banks: Would you be able to put it back on the list?
Col. Rochette: Yes.
Senator Banks: Will you put it back on the list?
Col. Rochette: Yes, senator. We can look into it.
Senator Banks: This committee was in Washington, DC, Brigadier-General, last month, and we met with representative Joel Hefley, Chair of the Readiness Subcommittee of the House Armed Services Committee. He explained some US initiatives having to do with military housing that members of our committee found attractive. They included privatized housing. I know you have started to explore that. They mentioned privatized construction of housing for military personnel and their families to commercially viable private standards. They looked at tying rent allowances to the rank and need, as opposed to only rank, and allowing junior personnel to develop equity by emphasizing that they will be returned to home ports for discharge during the course of their careers, so it would make sense to establish equity some place.
Have you considered any of those things? All comparisons are odious, and our situations are different, but that seemed quite attractive to us.
BGen. Irwin: Since March 2004, we have been given full status as a special operating agency, which has allowed us the opportunity to consider these kinds of public-private partnerships and that kind of arrangement. Currently, we are in discussions with Treasury Board, trying to determine the authority levels required for us to do this. This fiscal year, we are considering the different models we can use.
The United States, the UK and Australia are three places where we can learn a great deal. We have already learned a great deal.
In the case of some of our communities, and you talked about home ports, the navy uses an east coast-west coast philosophy, so a sailor knows that the majority of his career will be in one place. He or she is therefore able to build equity and get into the market earlier.
We need to look at all of these options, and I think we need to put into place models that will allow us to leverage off of the ability of the private sector to meet the housing needs of populations quickly. We need some models that will allow us to do that as well.
I would hasten to add, though, that the Americans are provided with housing. They do not have to pay for it. It is part of their compensation package. The approach will be somewhat different because of that.
Senator Banks: We were talking about access. You just said words that strike terror into our hearts. They are ``we are in discussion with.'' How long do you think it will take before that gets pen to paper?
BGen. Irwin: I cannot answer that specifically, senator. I can say that in March 2004 we were given the mandate of a special operating agency, the full provision of a special operating agency. We have started the process of examining these public-private partnerships, which was included in the discussion with Treasury Board at the approval time.
Senator Banks: We do not quite understand why it takes a year and a half to start the process. Not a year and a half, rather a year and three months.
BGen. Irwin: We have started the process. Over the last year, we have been in discussions with Treasury Board. We are building models as we speak now to be able to move into these public-private partnerships. I hope that in the near future we will be in a position to try some of these.
The Chairman: Did I understand the testimony correctly to be that, if the economy heats up in a particular location, the personnel who are posted there will have their rents go up, on one hand, but, on the other, they will receive a compensating allowance, which means it is a wash and they come out exactly the same?
BGen. Irwin: The rent is clearly tied to the local economy. If the economy heats up and the rents go up, then it will be reflected a year later in the rents that our military personnel are required to pay. The post living differential allowance is designed to take into account those economic differences. That is the allowance Colonel Rochette described. If the local economy goes above the national average, then the PLD, the post living differential allowance, will change as well.
The Chairman: Is the individual or the family kept whole?
BGen. Irwin: Sorry?
The Chairman: Is the individual or the family kept whole? Is the amount of the post living differential allowance exactly the same as the rent increase?
Col. Rochette: No, senator, it would not be.
The Chairman: What happens then? Does the individual suddenly find himself short?
Col. Rochette: Yes.
The Chairman: Why?
Col. Rochette: The formula works that way.
The Chairman: We do not like the formula. Can you tell us why there is such a formula that is unfair to these people?
Col. Rochette: In fact, sir, many members, men and women in the forces, have told us that they do not like it. We were planning on a review after five years of the new allowance being in place, and I directed my staff to start meeting in the fall with the personnel.
The Chairman: What is the logic of tying rents to the local economy? People posted to an area have nothing to do with driving the local economy. Rather, the improved economy might have happened because someone discovered oil or decided to build a GM plant in the area. It was not the activity of the members of the Canadian Forces that caused the local economy to surge. As well, they are not benefiting proportionately. The people who live in that community are probably receiving raises because there is greater demand for their jobs or because they are participating in the economy. People in the Canadian Forces are not benefiting in that way, so why do we tie rents to the local economy?
Col. Rochette: Are you asking about the minimum required rent?
The Chairman: I am talking about the policy to pay market rates, which seems unfair.
Senator Atkins: This is government-owned property.
The Chairman: Fine.
BGen. Irwin: The basic issue is that across the country only about 20 per cent of our members live in married quarters. About 80 per cent live on the economy and yet the pay and benefit structure is the same for all. The policy states that you do not subsidize military housing and therefore provide a benefit to some.
The Chairman: Yet, you know that that policy causes grief. I understand what the policy says but it might be a case to put forward that the policy is not good. Do you think it is a good policy, Brigadier-General Irwin?
BGen. Irwin: The policy is the policy, and my job is to implement it. The logic is that, as rents change, post living differential allowances change. If the situation is such that the rent is very high, we limit it to 25 per cent of the family's income.
The Chairman: I understand that. My point is that, if you are in the private sector and you do not like the cost of living, you go somewhere else. Would you not move if you did not like the cost of living?
BGen. Irwin: We do not give our members those opportunities, sir.
The Chairman: That is right. There seems to be something inherently unfair when you say that rents will be matched to the cost of living but salaries will not be adjusted to the cost of living in the local community. That is the policy, but the policy seems to be erroneous. It is true that you did not write the policy but someone has to put forward the case to suggest changing the policy. Has anyone put forward a case that demonstrates that this policy is inherently unfair?
BGen. Irwin: I do not think it is inherently unfair.
The Chairman: You think it is fair to have salaries fixed nationally but to have people in one part of the country able to afford their rents and in another part of the country to not be able to afford their rents.
BGen. Irwin: The idea is that the PLD and the rent will generally go hand in hand. Other factors besides housing are involved in the cost of living in any area.
The Chairman: Earlier I asked if the allowance matched the increase. Colonel Rochette's answer to me was that it does not match the increase.
BGen. Irwin: That is because the PLD takes into account several factors. One is the rent charged both in the economy and on the base. Any increases in rent are considered. As well, other factors are considered. Perhaps those could be described because they are taken into account when we look at the total cost of living and not just at the rents.
The Chairman: On balance, are people kept whole? I saw three heads shaking to indicate that they were not, or were you saying they were kept whole?
Col. Rochette: No, senator.
The Chairman: That is what I was after. There should be some way of keeping people whole. If it is not done by the three of you from the housing agency, someone inside the CF should put forward a proposal to find a way to keep it fair for all members of the Canadian Forces. Is that unreasonable?
BGen. Irwin: I am not sure. You mentioned the term ``keeping people whole. `` When there is a $12 increase in rent, there is not automatically a $12 raise in PLD. The PLD will take into account that increase in rent but it will look at other factors as well.
When we talk about the member being kept whole, the PLD is not directly linked to the rent. Rather, it is linked to the cost of living as a whole. Are people kept whole in terms of the cost of living, not just the rent? That is what the allowance policy is trying to achieve.
The Chairman: I understood that. However, when I asked Colonel Rochette, he told me it did not do that. Did I understand that correctly?
Col. Rochette: As I mentioned, if you have a $12 increase in rent, you will not see the increase in the PLD.
The Chairman: Therefore the person is not being kept whole.
Col. Rochette: Yes, because of the other factors.
The Chairman: How many moves have you had in your career, Brigadier-General Irwin?
BGen. Irwin: I would have to stop and count but probably 10 to 15 moves.
The Chairman: Shall we say 12 moves, on average?
BGen. Irwin: Yes.
The Chairman: Commander Lait, how many moves have you had?
Cdr. Lait: I have had about eight moves.
The Chairman: Colonel Rochette, how many have you had?
Col. Rochette: I have had nine moves.
The Chairman: That is 29 moves amongst the three of you in the course of your careers. Have you ever had a move where you and your partner or wife determined that you came out well financially with respect to relocation costs, such as buying new drapes and furniture that will fit your new home?
BGen. Irwin: Does anybody want to answer that?
The Chairman: Senior service or highest rank can answer first.
BGen. Irwin: I should have brought my wife to answer that question.
The Chairman: We will speak to her on this next week.
BGen. Irwin: Looking back at all of those moves, I do not think that I was ever disadvantaged financially because of the move.
The Chairman: The compensation and the payments you received covered not only the move but your out-of-pocket expenses and the fact that the drapes that worked in one house did not work in the next house, et cetera? There is a system in place to pick up those costs.
BGen. Irwin: Yes, one can claim certain costs associated with the move. There is also financial payment for the move, a portion of your salary, that allows you to pick up the remaining expenses.
The Chairman: We will check with your wife.
BGen. Irwin: She will probably say the same thing, but there are no guarantees. I did not feel that I was financially disadvantaged in any of the moves.
Cdr. Lait: I have had three postings out of the country, and two of those were out of Ottawa. I do not know if that counts as four moves or two moves, although I counted them as two.
We were fortunate enough to keep a house in Ottawa. The military policy is to encourage members to participate in the private sector where there is a better choice. The private sector is more able to meet specific requirements of members. As Ms. Ellis said, you have to maintain the car. Houses are like the original Ford in that you can get the one you want, provided it is black. I do not think one of our wives would agree with that because they all have different requirements.
I was involved in the private sector early on, but I have not gained from that. It took me about the same amount of time as anyone else to pay off my mortgage. There have been disruptions that have not been break-even moves.
The service offers us experiences on which you cannot put a dollar number. Being out of the country, my family has had some great opportunities.
I know some people have had difficulties in their moves because they moved from a low market to a high market and they had trouble buying. In order to meet specific needs, we do have housing available where public housing is not available in the local market.
I believe that we have a good balance from a policy perspective, sir. We are trying to ensure that people are not dependent on the military during the course of their whole lives. We do not want people moving at the end of their careers into what is the equivalent of their first home and facing a mortgage for the next 25 years. We are trying to encourage them into the private sector early in their careers. Our pay and our benefits are meant to help do that.
The Chairman: Colonel Rochette, did you break even on your moves or did it cost?
Col. Rochette: Please, senator, do not call my wife.
It is always difficult, especially moving from one province to another, to adjust to the tax rate and to adjust to the new area. However, we do have some benefits. To move our members, we have what we call the integrated relocation program. It covers all the expenses when we move our members from one location to another. If they own a house and they must sell it, we will reimburse the real estate and legal costs. We pay all costs for the move of the whole family. When they arrive at the new site, our benefits will compensate for reintegrating in the new location. If a member moves with his or her family, the member receives one month of pay, plus a movement grant, which pays for drapes and other items.
Does it cover all of the expenses? Sometimes we are lucky in that our new location has the same size windows, but sometimes it costs a bit. However, with the benefits, we are not usually out of pocket.
The Chairman: Do any of your spouses work?
Col. Rochette: My wife has worked for the five or six years I have been in Ottawa. Before that, I was in Goose Bay, Labrador, where she had part-time jobs. It is always difficult for a spouse to find employment.
The Chairman: Does your spouse work, Commander Lait?
Cdr. Lait: She no longer works. She has worked in Ottawa, Halifax and Victoria.
The Chairman: Was she able to get a job in each location?
Cdr. Lait: It is difficult because you are back to a basic level of job. She is a nurse. We had a good run in Halifax, but when we got posted to Ottawa, she was back to being a relatively regular nurse. It is difficult for the families. There is no doubt about that.
BGen. Irwin: My wife has worked on several postings and in others she has been unable to do so. She is not working now.
The Chairman: Has there been an adverse reaction because she cannot continue her career?
BGen. Irwin: There is no question that she would have wanted to pursue her career, but in some locations she was unable to do that.
[Translation]
Senator Nolin: I would like to come back to something that you said in your remarks, Colonel. You just said that you have received a number of complaints from Canadian Forces members about the supplementary allowance. I may not be using the right expression. What is the correct term for this adjustment allowance?
Col Rochette: Cost of living adjustment.
Senator Nolin: You have received complaints. Give us the reasons cited by the complainants. What are the main reasons that have been brought to your attention?
Col Rochette: As I mentioned earlier, one of the main reasons is that some people feel that when living costs rise, be it in terms of gas, groceries, or housing, there should be a corresponding increase in the post-living differential allowance. When taxes or rent are raised, the post-living differential allowance sometimes remains constant, is sometimes increased, and is sometimes even reduced.
The reason for that is that we use the national average, based on the consumer price index, to calculate the amount due; and that is problematic. The post-living differential allowance is based on the national average, but in a given region, given that our bases are in outlying areas, the cost of living may well be higher than the national average, and, therefore, as living costs rise, the PLDA does not necessarily follow suit.
Senator Nolin: Are you saying that the primary complaint is that an increase in living costs does not automatically trigger an increase in the post-living differential allowance?
Col Rochette: The primary complaint is that where the allowance is increased one year, it is often reduced the following year.
Senator Nolin: You said that you would be undertaking a review of this policy. We will find out the conclusion of this review in due course, but in the meantime, I would like you to tell us what approach you are planning to take to encourage changes to this policy.
Col Rochette: I asked one of my directors, who is responsible for this policy to begin a review in September. It was supposed to be carried out in financial year 2006-2007, but we have brought it forward by a year and we will be starting the process in September. I would like to begin by holding discussions with our colleagues who work in the army, navy and air force, in order to hear their input on the subject.
We could even do what we did when we were studying the reserve force's pension plan. By that, I mean that we could visit troops across Canada and hold discussions with them in order to have their feedback as to what expectations they have, what problems they are experiencing, and what could be done to resolve them. Our current formula is fair and equitable.
Senator Nolin: The current formula is fair and equitable in the sense that it is based on an average. It may well be unfair on everybody, but it is ostensibly equitable.
The fact that you are using an average does not make the formula fair; it simply means that you have a formula which reflects the average situation. That is perhaps the primary flaw of your current formula.
Col Rochette: You may be right.
Senator Nolin: Mathematically speaking, your formula appears to be equitable.
Col Rochette: Mathematically speaking, it is a formula which is applied to everybody in the same manner.
Senator Nolin: And one which may well meet nobody's needs.
Col Rochette: That is highly possible.
Senator Nolin: Is the average-based formula one of the options that you are going to be considering?
Col Rochette: Yes, of course.
Senator Nolin: Because it is very simple to calculate an average.
Col Rochette: Maybe, but the method used to calculate the average is by no means simple.
Senator Nolin: That is why my colleague compared it to our complicated equalization payment system. What options are you considering?
Col Rochette: I have not thus far carried out research as to what sort of model we should adopt. I can say, however, that my first and foremost concern is to find a model which will be easy for people to understand.
Senator Nolin: What is being done in other countries similar to Canada?
Col Rochette: That is something that I would like to check with the Australians, the Americans and the British, but particularly with the Australians, because their armed forces are similar in size to ours. I would like to know what is being done in Australia.
Senator Nolin: It is not so much the size of the armed forces that matters, but, rather, the nature of the country. We have heard some real horror stories about this. For example, the cost of living in Esquimalt is far higher than it is in Cold Lake; yet, servicemen and women deployed in one of these regions receive an allowance, while in the other, the commander has had to set up an emergency fund so that members of our armed forces can heat their barracks. Something is awry in our system, and we cannot simply compare two countries on the grounds that their armed forces are roughly the same size.
Col Rochette: When I mentioned the Australians, it was exactly because of the size of their armed forces and...
Senator Nolin: Their diversified economy?
Col Rochette: Yes, that and the fact that their bases are scattered across the entire country, some being in isolated areas while others are in urban areas. Australia is just one example, we could also look at some other countries.
I also asked those carrying out the review to study the allowance granted to servicemen and women deployed abroad. The allowance they receive is called the PLA, the Post Living Allowance, and is calculated on a formula developed by Statistics Canada.
Senator Nolin: Is the formula similar to the one used to calculate the allowance granted to employees of, amongst others, Foreign Affairs Canada?
Col Rochette: Yes, it is similar.
Senator Nolin: We are familiar with how that works; but, I was actually making a reference to problems with the allowance given to servicemen and women deployed in Canada.
Col Rochette: The Post Living Allowance granted to those deployed abroad is one of the options that we could consider for use in Canada.
We have been in touch with Statistics Canada and they informed us that they could develop a cost of living index for Canada. It is an option which merits consideration.
Senator Nolin: I just mentioned that the current system is dysfunctional and has created disparities between Esquimalt and Cold Lake. To my mind, this case deserves our attention; those based in Esquimalt receive the Post Living Differential Allowance while those in Cold Lake do not.
Furthermore, their commander has had to set up a fund to subsidize the heating bills of those servicemen and women who cannot meet the cost themselves. Are you familiar with this case?
Col Rochette: I have heard talk of it recently.
Senator Nolin: The situation is unacceptable; there is a problem here.
Col Rochette: We will look into it. We will have to speak with the base commander to find out exactly what is going on and why some people cannot afford to pay for their basic needs.
Senator Nolin: Are you going to investigate whether other such deplorable situations exist elsewhere in Canada?
Col Rochette: Base commanders and wing commanders, in particular newly appointed commanders, attend an annual meeting in Ottawa where they are given briefing sessions by various agencies and organizations. Attending these meetings, and making presentations, is always a very valuable learning experience; I went along last year.
Senator Nolin: Do you travel around the country?
Col Rochette: No, the commanders all come to Ottawa and I take the opportunity to meet with them. I give presentations on compensation and benefits; the Post Living Differential Allowance was a hot topic of debate last year. We had some very interesting discussions, particularly with regard to the formula and how it works. Often, when people understand how the formula works, while they may not be over the moon, they at least have an understanding of the methodology and how the formula is applied.
Senator Nolin: I assume that you will ensure that there are no other situations like the one in Cold Lake, and that if there are, you will introduce corrective measures.
Col Rochette: Rest assured that when we encounter such cases, the wing commander or the base commander is quick to contact us to explain the situation. We are awaiting a report from the Cold Lake commander to help us understand the exact situation.
Senator Nolin: We are counting on you, sir. Thank you.
[English]
Senator Banks: This intervention follows on Senator Nolin's question. On that specific point, you told us that those folks came to Ottawa and, once you explained the situation to them, they understood better.
If you went to Cold Lake, they could explain things to you, and you would understand them better. The commander at Cold Lake has, we understand, engaged consultants to assist him in making the case that people under his command there should be entitled to this kind of assistance. He is doing that out of his base budget.
Would not it be better, colonel, if you went or sent somebody to Cold Lake where you can explain how things work in Ottawa? Would not it be an advantage if you knew how things worked in Cold Lake? It is an obstreperous question because I am sure you have been there but, in this particular case, should it not be the first thing you do, namely, send somebody on an airplane to Cold Lake and find out what that is all about?
Col. Rochette: I wish the wing commander had called me first and asked some questions before engaging you. As a starting point, we could have provided all the data that is prepared by the private firm that does it throughout Canada.
The Chairman: He did not engage us. We engaged him.
Col. Rochette: I meant to engage a consultant to do the review. My understanding is that you are saying they have engaged a consultant to look at the numbers.
Senator Banks: My understanding is that he feels he needs assistance in making a better case. He feels that his people need some help because they live in an area where eggs cost a lot of money. Is the solution to ask him to come here, or is it to send somebody to the grocery store in Cold Lake?
Col. Rochette: I will certainly call the wing commander, sir.
The Chairman: Just to ensure the record is straight, he did not come to us and make a case. We dragged it out of him.
Col. Rochette: No, sir, but just to be clear, I was not referring to your committee. My understanding is that the wing commander has consulted some companies to look at the cost of living in the area.
The Chairman: He has, but it was not part of his presentation to us. We blindsided him with questions.
Senator Nolin: It came from the members.
The Chairman: That is the part we want to register. He was not complaining to us. We asked him a question, he answered honestly, and that was that.
Senator Banks: We pursued it.
The Chairman: We pursued it with boiling oil.
Senator Atkins: Just so I understand, why did CMHC turn over the permanent married quarters or housing to the CFHC?
BGen. Irwin: The married quarters were never owned by Canada Mortgage and Housing Corporation. The married quarters were built by National Defence, and they were managed by the army, navy and air force and run by each base commander. They ran into the difficulty of competition between the operations of the base and putting money into the married quarters. The general maintenance of the married quarters was declining, and it was felt that the solution was to set up a special operating agency to ensure that the money that came from rents was invested directly back into the houses.
Senator Atkins: That was my next question. The money from rents is put back into maintenance.
BGen. Irwin: Yes, it is, sir. We are proud of how much of it goes back into housing.
Senator Atkins: Are all the services included?
BGen. Irwin: No, senator. Many services are included, such as those for which you pay taxes. It depends on the area but, normally, an occupant would pay for utilities, that is, heating costs, water, and electricity.
Senator Atkins: That is another variable. You say a normal cycle for maintenance is 25 years.
BGen. Irwin: Yes, senator.
Senator Atkins: I chuckle at that, because I worked as an engineer's assistant in Oromocto in 1954 with CMHC when we were building permanent married quarters. Those have gone through a second cycle. Would it not have been better in many cases to plough them under and start over?
BGen. Irwin: In many cases, that is probably true. We are at the 50-year point in the life of most of those structures. In some cases, they are at the end of their life cycle, and it is time to bulldoze them and build new houses. In other cases, the smaller houses in some markets are quite popular for young, small families because the rents are low. It would be worthwhile for us to put $30,000 or $40,000 into those houses to keep them for five or 10 years and see what happens to the market.
Many houses are sufficiently large and fairly well constructed. We should keep them for the long term, and we should be investing $70,000 or $80,000 in those buildings. It is not a one-size-fits-all situation. It is based on the individual requirements of the market and the houses that they have at each site.
Senator Atkins: Do you have any plans for CFB Gagetown?
BGen. Irwin: Yes. We will be doing some complete house renovations there this summer and this fall.
Senator Atkins: The 80 per cent of our military personnel who are living off base in private homes or rented space, do they sign a rental agreement? If they do and they are subsequently transferred, how does the military handle that?
Col. Rochette: We do compensate them, sir. If they sign a rental agreement, it will normally have a penalty of one, two or three months. If we have to post a member before the end of the contract, we will absorb the cost. We pay for it. They can claim it.
Senator Atkins: Does that apply to NCOs as well as to commissioned personnel?
Col. Rochette: Officers and non-commissioned members who rent a facility will be reimbursed.
Senator Atkins: What if they have purchased a house? Do you find some way to assist in that regard?
Col. Rochette: We assist in that regard also, sir. If somebody owns a house, they have two choices. For example, if a member in Ottawa is posted for a three-year tour and then comes back to Ottawa, they can opt for the rent incentive, which provides them $12,000. This saves us from paying real estate and legal fees. They keep their house and they rent it on their own. They do not sell their house.
They have the choice of that incentive, or they can sell their house. When they sell it, we will reimburse real estate and legal fees. If they purchase a house in their new location when they arrive, we will pay legal and real estate fees for that as well. We also pay for a house-hunting trip, so they can go to the new location to look for a house.
Senator Atkins: What about the situation where a commander owns his house in Ottawa, is transferred, comes back to Ottawa, and you held the property, which I assume you would have rented during his departure? Do you have many cases like that?
Col. Rochette: I do not have the numbers, senator.
Senator Atkins: It seems to me that in Oromocto, many military personnel go away, but they do not sell their houses.
Col. Rochette: If a member wants to sell his house but cannot, we have a program that assists with certain costs such as electricity, maintenance, et cetera. We will have a caretaker go into the house, because the insurance requires that somebody visit the house to ensure, for example, that there is no water damage over the winter. They will shovel the driveway in the winter and cut the grass during the summer. We pay that for a year.
Senator Atkins: What kind of facility do you provide for non-married military personnel on the base? Does it vary by base, or is the accommodation a pretty high standard?
BGen. Irwin: The single member is treated very much the same as every other member. We in CFHA will provide married quarters, which we now call residential accommodation, because families of one still need to have the same assistance as families of more than one. We do open up our residential accommodation to singles, but we try to put the families in the right sized accommodation. Single quarters are provided on the bases. Commander Lait can refer to that.
Cdr. Lait: We are about to start a study where we will go to every base commander and ask him about the uses of the single quarters. We know some are being used residentially, some are being used for training, and some are being used for transient members.
We have a standard for residential accommodation. It should be a certain size for a family of one. It should have a private bathroom, a private bedroom and a living area. We recognize that the current accommodation on bases is not up to that standard in most locations, but there are some around. Once we get the reports back from the base commanders in the fall, we will analyze the data in my office, and then we will go to each of the environmental commanders to put together a good policy for our single members.
Senator Banks: Do those criteria apply regardless of rank?
Cdr. Lait: Yes.
Senator Atkins: Do they apply regardless of gender?
Cdr. Lait: Yes.
Senator Atkins: Does CFHC have involvement in anything other than housing on a base? For instance, in Oromocto, do you have any involvement with the golf course or the arenas, or does that all come under the base commander and under a different budget?
BGen. Irwin: That does not come under CFHA. We attempt to ensure that the development of residential housing is in areas that are best served by those services, but all of those services are provided by others on the base.
Senator Atkins: How do you deal with the schooling question? Do you have any relationship with the municipality in relation to the schools?
BGen. Irwin: No. CFHA does not get involved in that. That is the base commander's responsibility, sir.
The Chairman: Thank you, gentlemen, for coming today. We appreciate your assistance with these issues. It has been most useful to the committee. We are grateful for your assistance.
For members of the public who are viewing this program, if you have any questions or comments, please visit our website at www.sen-sec.ca. We post witness testimony as well as confirmed hearing schedules. You may also contact the clerk of the committee by calling 1-800-267-7362 for further information or assistance in contacting members of the committee.
The committee adjourned.