Proceedings of the Standing Senate Committee on
National Security and Defence
Issue No. 8 - Evidence - Meeting of November 14, 2016
OTTAWA, Monday, November 14, 2016
The Standing Senate Committee on National Security and Defence met this day at 1:05 p.m. in public to study issues related to the Defence Policy Review presently being undertaken by the government; and in camera for the consideration of a draft report.
Senator Daniel Lang (Chair) in the chair.
[English]
The Chair: Welcome to the Standing Senate Committee on National Security and Defence for Monday, November 14, 2016. Before we begin I would like to introduce the people around the table. My name is Dan Lang, senator for Yukon. On my immediate left is the clerk of the committee, Adam Thompson.
I would like to invite the senators to introduce themselves and state the region they represent, starting with the member on my right.
Senator White: Vern White, Ontario.
Senator Beyak: Senator Lynn Beyak, Ontario.
Senator Day: Joseph Day from the beautiful province of New Brunswick.
[Translation]
Senator Dagenais: Senator Jean-Guy Dagenais from the Montreal region in the province of Quebec.
[English]
The Chair: Thank you, colleagues.
Today we will be meeting for four hours. In the first two hours we will continue our examination of issues related to the defence policy review, followed by an in camera session to consider a draft report.
Joining us in our first panel, as we continue our examination of issues related to the defence policy review, is Dr. David Perry, Senior Analyst, Canadian Global Affairs Institute. Mr. Perry is a well-known academic and commentator. His strong research and analysis related to Canada's military spending and procurement have helped to shine a much-needed light on how the Department of National Defence works.
Mr. Perry, welcome. I understand that you have an opening statement. We have one hour for this panel.
David Perry, Senior Analyst, Canadian Global Affairs Institute, as an individual: Thank you very much for the invitation to appear before you. I'm glad the timing worked out because it's a very important time as we're going through this defence policy review. I'm glad that you're looking at these issues.
I was asked to speak specifically about the capability gaps of the Canadian Army and the Royal Canadian Air Force, and I will focus on those in my opening remarks. But I can see from some of the questions that were prepared ahead of time that you might have interest in things a little bit broader than that, and I'm quite happy to go into any of that material.
Let me start off by providing a broad frame around the army and air force issues that I will address specifically in greater detail in a moment, and frame four broad capability gaps that I think are of concern relative to the Canadian Armed Forces and the Department of National Defence as this policy review goes forward.
First, we still face a personnel gap for couple of reasons. Our military is under strength. The Canadian military is authorized and funded for 68,000 positions but currently sits at roughly 66,000. And the Report on Transformation 2011 identified a need for the Canadian military at that time to grow by several thousand additional positions, above 68,000, to address capability deficiencies in areas like cyberdefence, space and intelligence, amongst others. Those are only the identified deficiencies as of five years ago; I think in the intervening time that deficit in personnel has actually grown.
Second, DND has an infrastructure gap because its real property holdings are increasingly antiquated, with far too much of it dating to the 1950s or even earlier. This is, in part, the result of chronic under funding and under investment in the existing defence infrastructure. At the same time, I think the military faces a need to expand its footprint in some parts of Canada, particularly in the Canadian Arctic. Given the changing threat environment there driven by Russian military modernization, there's a need for additional facilities that could provide logistical support for northern operations on the water and in the air.
Currently, virtually all of Canada's military capabilities that can be used in the Arctic must be deployed there temporarily from bases in southern Canada and supported by a very small number of very rudimentary forward operating locations. We need additional Arctic logistics support.
Third, there is a lingering readiness gap. To cope with budget cuts after 2010, the funding for national procurement, which is the budget line that funds equipment maintenance, repair, overhaul and spare parts, was reduced quite significantly. This saw declines in the national procurement budgets for some air fleets drop by as much as 25 per cent and contributed to the army parking half of its "B'' vehicle fleet. While the overall funding levels for national procurement have largely been restored to roughly 2010 levels, the military is still dealing with some of the lingering impacts of maintenance, repair and overhaul activities that were deferred due to a lack of funding.
Fourth and most pressing, under the existing defence budget plans, the Canadian military faces a huge capital equipment gap. Public documents show that the unfunded capital equipment plans needed to translate the existing defence policies into actual military capability range between $20 billion and $40 billion, at least, over the next couple of decades. Addressing this deficit, which is equivalent to at least a couple of billion dollars a year in additional capital equipment funding is, in my estimation, the single most important issue that must be addressed through the defence policy review now under way. If this capital equipment gap is not addressed, and the status quo funding situation remains in place, the Canadian military will not be able to afford to keep the same broad mix of equipment it currently holds.
This situation applies to both the Canadian Army and the Royal Canadian Air Force, each of which faces several unfunded equipment procurements, which will become capability gaps in the future if National Defence is not provided with additional fiscal room to make equipment purchases. This would include several army communications and command and control projects, as well as multiple projects for army engineering and logistics support equipment.
For the RCAF, these unfunded liabilities, which will again become capability gaps if left unaddressed, include an eventual replacement or life extension for the fleets of our maritime patrol aircraft, our search and rescue helicopters and our tactical helicopter fleets.
Let me now switch the focus of my remarks to Canada's operational capabilities relative to Canadian strategic priorities. With respect to our ability to conduct land-based operations, in my estimation this is largely a function of Canada's level of ambition rather than particular strategic need. Broadly speaking, I think we're relatively well positioned to continue the same level of land-based engagements as we have in recent years, thanks to the increase in the ranks of the Canadian Army in the mid-2000s and its recapitalization over the last decade.
One point of concern would be that the Canadian Army's ability to conduct operations against conventional peer states, such as Russia, is potentially not where it should be, given our army's focus on counter-insurgency operations for the last decade and peacekeeping operations for the decade prior.
With respect to Canada's ability to counter possible air and space-based threats to Canada, I think we do face several different operational capability gaps that should be addressed. The first is related to ballistic missiles.
At present, Canada has no defence whatsoever against ballistic missiles. North Korea has been developing this technology for several years and has now expanded to working to launch those missiles from their submarines. While the United States has developed a ground-based mid-course defence against these missiles and previously asked Canada to participate in that system, Canada declined to do so in the mid-2000s and has subsequently never formally revisited that position. This decision should be revisited as part of the defence policy review. We should discuss the possibility of Canada joining ballistic missile defense with the Americans, and if the terms are favourable to us joining we should formally join.
A second area where I think there is an operational capability gap relates to Russian air- and sea-launched cruise missiles. The Russian military has significantly upgraded its air and naval forces in recent years, and it continues to do so. Over the last two years in particular, the Russians have subsequently demonstrated that this new equipment is effective and that they are willing to use it to advance their own interests in Eastern Europe and in the Middle East.
In Syria, Russian forces successfully employed a new class of sophisticated conventional air- and sea-launched cruise missiles that have greatly enhanced range, are difficult to observe and are capable of precision targeting. Three aspects of this development are problematic. First, these weapons come in both nuclear and conventional variants; second, they can be carried by Russian long-range patrol aircraft and their newest and most capable submarines; and third, because of the increased distances at which these new missiles can successfully hit targets and their low-observability characteristics, the current arrangements for defending North America, based on NORAD and the North Warning System, must be upgraded in order to counter them effectively.
Because of this increased Russian activity around North America, we also need to enhance our ability to know what's happening in all three of our coastal approaches, and especially in the Canadian Arctic. Since 2007, the Russians have conducted long-range aviation patrols towards Canada's Arctic air space and done so in ways that indicate an inclination on their part to link this activity to strategic confrontations with Canada elsewhere in the world. Similarly, Russian submarine patrols in the Atlantic have reached levels not seen since the Cold War. We therefore need an expanded mix of air- and sea-based intelligence surveillance and reconnaissance platforms.
Finally, we need to maintain our ability to respond to aerial threats to North America. As Russia continues to modernize its air forces, this will require Canada to keep pace with improvements in Russian technology. As such, we need to move quickly to purchase a fleet of fighter aircraft capable of detecting the most modern Russian aircraft and sharing that information with the rest of the North American defence system.
With that, I thank you and I'll be happy to take your questions.
The Chair: Thank you very much, Dr. Perry.
Senator Beyak: Thank you for an excellent presentation. You've answered most of my three questions already. However, in light of the election in the United States and the discussions over NATO, could you tell the folks at home, as well as the committee, why Canada's commitment has been below 2 per cent? How much pressure will be on us to come up to the 2 per cent of GDP?
Mr. Perry: I think we're going to be under significant pressure from the Americans by the new president-elect's administration once it's formed to increase what we're contributing to NATO. That's been a perennial pressure under virtually every American administration. I certainly think that when President-elect Trump becomes president, if he goes even halfway to carrying forward with the type of rhetoric he has displayed towards that alliance and the under- contributions by a number of members — and Canada is twenty-third out of twenty-eight member nations in terms of our contribution as a share of our gross domestic product, now at under 1 per cent of GDP — we're going to face a lot more pointed and more vocal pressure to do more.
I wouldn't necessarily see that pressure being limited specifically to our contributions to NATO. Canada more broadly and North America benefit from a whole host of different programs that we work with collaboratively with the United States, where they carry the bulk of the load financially in terms of human resources.
There's a need to upgrade the North American defence infrastructure, as I pointed out. Historically the United States has carried different fractions and different shares, but in every case the majority of the funding has been borne by the United States for those previous efforts. I certainly think that under this incoming administration we may be under significantly more pressure to carry more of our own weight, both in terms of broader contributions to the alliance, as well what we do in Canada to contribute to North American defence specifically.
Senator Beyak: The number one job of government is to protect its citizens. How important do you think it will be to our Prime Minister and to Finance Minister Bill Morneau to make sure that the money is there? We've gotten away with underfunding it for years if what you're saying is correct. Is it time to step up to the plate?
Mr. Perry: I would totally agree with that. I think underfunding on defence has been a bipartisan effort, going back decades depending on when you start the clock on when this situation began, but it certainly preceded the last government and preceded the one before that, of both political stripes in office.
I hope this defence review will be different from some that have happened in the past. The Department of National Defence has spent a lot of effort improving its practices for planning and the way they develop capability packages and can present the costs on those. I think one of the advantages going into this defence review is that the Department of National Defence has a much better and more detailed ability to articulate the impact of different spending decisions and different potential budget lines.
Quite clearly, the government is in the process of being told right now that, as I was alluding to, if the status quo funding for the Department of National Defence is not addressed, we will see a number of different capabilities come out of the inventory of the Armed Forces because they don't have the money to fund them.
There is a whole host of strictly national reasons that we should put additional funding into the Department of National Defence so that we can retain, at a minimum, the same broad types of things that our military does and look to expand those in some areas. If funding is not injected, then for our own national reasons we're going to end up with less capable Armed Forces. And in the broader context I think there will certainly be significant pressure from the United States for the rest of the alliance to carry more of that weight.
Senator Beyak: Thank you very much.
Senator White: My question will zero in on potential deployment of Canadian resources to Mali in particular, and whether or not you see us having the capability to deal with a 500-person peacekeeping mission to Mali at this point in time, based on what else we've already committed to in Latvia and what else we already have on the ground in the Middle East.
Mr. Perry: I think broadly we will, at least for an initial rotation or two, depending on the length of those rotations. A lot of it will depend on exactly what type of mission and what type of assets we deploy. I say that because a lot of the speculation was that we might be moving towards more of a capability development training assistance type of force rather than one that's based on a battle group or a battalion type of a construct. Those types of missions are more resource-intensive for the junior officers, senior NCOs, or at least they have been in the past when we deployed that kind of mission in Afghanistan.
Even though the numbers overall aren't as significant as they could be if we were to deploy a more conventional force package than Canada has deployed in the past, that puts a significant strain on the relatively low-density numbers of positions in those types of leadership positions to do training because they are the same ones that are needed at home. If we do deploy that mission and it's along the size that the government has outlined, we would then have three relatively significant missions: this one in addition to the ones in Eastern Europe and the Middle East right now. That would put some pressure on our logistical support abilities to keep three lines of operations going, which I think would have two implications.
First, the forces will become stressed if three lines of effort of that kind of magnitude are kept in place for a significant amount of time because it's really the rotational base that becomes difficult to sustain. Second, with all three of those lines of effort, if the Department of National Defence is not provided with incremental funding to offset those incremental costs, that would, at some point, start putting some fairly significant pressure on the department's ability to basically eat within its own budget line the costs of those operations. So I hope the government is topping up the budget to account for the operational impact.
Senator White: Thank you very much for that. The second piece to that is that, in the case of Mali in particular, it is most likely to be predominantly a francophone mission. Does that change what you just said, or would that make it more difficult from a rotational perspective since we'll be drawing on primarily one major unit?
Mr. Perry: Well, I think it would depend because we do have strong bilingualism provisions in our Armed Forces. So if they're not looking at sending fully formed units, then I think it would become a little bit easier, but, definitely, having the language skills would present more of a challenge than it would if we were just looking to send the Van Doos themselves. Amongst the other regiments, though, depending on exactly the kind of force mix, depending really on the length that we intend to keep that there and in the configuration, we can probably find enough bilingual positions to keep that staffed, but it depends really on the length of time.
Senator White: The last question I have, at this point anyway, surrounds the air force, and you briefly spoke to it. According to some of the discussions we have had with some countries that are in Mali, as an example, the impact on the use of the helicopters has dramatically decreased very quickly. Do you see us as having the capability to carry on a five- or six-year mission with the aircraft we have now, helicopters in particular, or would we have to commit to purchasing more?
Mr. Perry: Again, it would depend on the size and their scope of operations.
Senator White: Eight helicopters.
Mr. Perry: But it would depend on exactly what the deployment footprint looks like. If it's going to be largely static and it's going to be close to an air hub, that would have a significantly lower pressure and demand for inter-theatre airlift.
Senator White: But if, for example, it were used primarily for medevac, your perspective would be that their ability to continue would decrease dramatically?
Mr. Perry: It would. That will increase the demand. When the discussion of this mission moves from the theoretical to the actual, it will be a lot easier to give an answer. I think those types of considerations are, in part, what's led to the long period of time to get the planning that's taken place right for this. Other countries that have made their deployments have included an air component to those missions for very good reasons, and I would expect that we're looking at doing the same.
[Translation]
Senator Dagenais: Mr. Perry, thank you for your presentation. With regard to our troops — nothing's perfect, of course — often politicians make commitments without really knowing whether the troops have the capability to act. Can you provide more details on some of the Canadian Army's gaps in that area, in particular with regard to the Royal Canadian Air Force and the Royal Canadian Navy? Are all the capabilities of our troops related to the budget, or do other gaps exist that aren't necessarily related to the budget?
[English]
Mr. Perry: So it's both, but, at least over the long-term perspective, we're facing an issue that's budget-limited right now. As part of the changes that have gone into how National Defence does planning now, which the Treasury Board has brought in over the last roughly a decade, the department can only plan to acquire things that it actually has funding for and can demonstrate a funding source for. In the past, it had more flexibility to basically move forward and do planning for things in the event that funding became available down the road. They are far more constrained now and limited, not being able to proceed with projects until there's an identified funding base. So we have kind of perennially had a problem of shortfalls, particularly with capital equipment, but right now the Government of Canada policies that allow National Defence to actually move forward and plan are much more tightly governed towards the funding availability, I think for a lot of good reasons. But what that's done is made the funding source far more critical. Having money is always important, but before, you could at least do far more of the planning than you can do now without having identified funding and not wait for the event that funding becomes available. They are very strictly limited right now, and that significantly limits the forward planning they can do without identified funding.
I focus on the money, so I think my answer will be that, absolutely, the money is the most important thing. But finding the personnel that can work and provide areas I think is increasingly becoming problematic. The forces have been under strength for a couple of years now. They're having a hard time getting back to the full strength that they are funded for. The same kinds of issues apply to the reserves, which are under strength and not up at the authorized strength that they are supposed to be. There's an effort under way right now, which I think is quite admirable, but it's going to be a huge challenge for the Armed Forces to try to increase the ranks of female members. It seems, in the aggregate, to be kind of a modest expansion, but, if you look at the math on that, they're going to have to spend an inordinate amount of time and effort trying to increase the female membership of the Armed Forces by a percentage point each year.
[Translation]
Senator Dagenais: I want your view on the type of schedule the government should set for a 10- or 15-year period to avoid losing its current capabilities. You said that many positions are vacant, so I think the government should set a schedule to avoid losing its acquired capabilities. What do you think?
[English]
Mr. Perry: I think what we need to do is come to an agreement, hopefully on a multi-partisan basis or, if not, just on a bipartisan basis, about what type of Armed Forces we want to have to a much more significant extent than we've been working towards in the past. I think that right now there's a fairly significant degree of at least bipartisan consensus about the need to replace the capabilities for our navy, the need to replace the bulk of the capabilities for our Armed Forces. I think that there's some promise there, in some cases a lot more than you would otherwise think just by reading headlines. But come to a long-term view about the type of Armed Forces we want to have, and then map out the capabilities. Then decide whether or not we're going to fund it.
My strong preference would be to fund it adequately, but if the consensus politically is that we're not willing to fund it the way that you would need to fund it to keep those types of armed forces, then actually come to an agreement about which types of capabilities we take out of service by design rather than simply have the progression.
What's been happening now is that, based on the existing, too-limited funding, we have particular types of capabilities that we're going to lose because they are old, not because we have decided that those would be the ones, given the amount of money we're willing to spend, that you would choose strategically to take out of service. If you took a more long-term view and got some multi-partisan endorsement behind that, you could map out the different capability areas and when we need to make decisions and try to do some time phasing and then calibrate the capacity in the Government of Canada to actually acquire that equipment.
One of the issues we have been facing over the last several years is that, because of previous decades of inadequate spending, we have been trying to make up for lost time, and the system of government right now simply can't move enough equipment and materiel through this procurement system to deliver on that.
So we keep pushing back procurements that the money was allocated for several years prior. The need to make those actual acquisitions doesn't go away, but you keep acquiring the need to make new ones on their original schedules if they don't actually slip and fall behind.
So what we're developing is a cumulative demand that's not going away, and there's a need to develop a greater capacity in the Government of Canada to actually meet that. So you need to have long-term planning, and it has to actually be met, both with the financial resources to deliver on it and the human capacity in the Government of Canada to actually execute that program on scale.
Senator Day: Mr. Perry, could you expand further on the point you were just making with Senator Dagenais about lapsed funds? We hear so often, in the budget document that comes out in the spring, that all of this money is going to be used to acquire certain equipment, and then when we look at this from the back end, a lot of the money wasn't spent. It lapsed. But it's my understanding that then the next year, that has to be brought up again. It's not there waiting to be used. Am I correct on that?
Mr. Perry: You are. This has been a subject of some disagreement. The Department of National Defence tries to spin this in a positive direction. To my mind, lapsed funding at the end of the year is bad, no matter what accounting rules or constructs are in place.
The one that was introduced in the mid-2000s under accrual accounting means if money is not spent at the end of a year, there's a much greater ability to not just lose that money forever but to move it forward and reprofile it to future years so that the money is not lost to the Department of National Defence.
If equipment is not bought on schedule, the money lapses. The purchasing power of those dollars is diminished because it's not fully inflated. If the money rolls forward, you get to keep it, but it's yesterday's money at tomorrow's interest rates, effectively, so you have reduced buying power. You're not moving forward to replace the equipment on the schedule you want to, so the equipment you're trying to maintain while waiting for a replacement gets older and more expensive to operate, and then you run into scheduling problems.
In the forces, there was a significant need to do recapitalization in the mid-2000s. Starting with the Martin government and then followed by Prime Minister Harper, significantly expanded capital, multiple billions of dollars, was made available to National Defence to spend. But the capacity to move that hasn't been there. If projects slip one year and there is supposed to be another one starting the subsequent year, if you lose a year on one project, you are effectively having that need stack on top of another.
There are a number of issues. The Department of National Defence doesn't lose the money in the way it used to, but not moving that program on schedule has hugely negative impacts, even though it's a slightly better situation from an accounting point of view than it used to be, where if the department couldn't spend money by March 31, it would lose it. It keeps the money now, but there are a lot of implications.
Senator Day: I hear you saying that this lapsed funding is fundamentally a result of bad procurement policy. The cynic might say this was purposely implemented to allow a government to make an announcement at the front end about all the things they're going to do and then not do them. You don't adopt that second cynical approach to things?
Mr. Perry: You can look at it in different ways. A different way of looking at the same situation is that there are some structural problems with our procurement system, and if they are not addressed, the department will keep lapsing money year over year. In terms of whether there is some intentionality behind what happened, without having access to the cabinet discussions, it's impossible to know that. There are some capacity issues, and there have definitely been some process issues.
We've introduced a lot of processes over the last six or seven years which have introduced more steps and hoops for the Department of National Defence to jump through before buying something. The demand keeps aggregating, and for a long time the workforce had decreased and then effectively stayed at the reduced level.
There has been some effort to increase that. The Department of National Defence has been trying to hire more people to do procurement. It has taken them years to hire people. Unfortunately, we're in a situation where there are a number of different problems with government processes. HR is one of them. We're in a situation where it's taken years to hire a couple hundred people to deal with the procurement backlog. There are a number of processes that are highly problematic.
In terms of intent, the best way to look at it is if this current government wants to spend that money, it needs to take significant and decisive action. If it doesn't, the money will keep lapsing at the end of the year.
Senator Kenny: Dr. Perry, I want to thank you for the work you do. You're a terrific witness and incredibly knowledgeable, and you're becoming the gold standard for the testimony you give. Keep it up.
Following up on Senator Day's comment about the problem of hiring people to help source equipment, what side of the shop does it fall on, on the DND side or on the CDS's side or both, and where should we be poking the stick to get them moving?
Mr. Perry: It's both sides of the department, and the CAF. The one I was referring to specifically is the Materiel Group under the DM. They have been trying to hire people, and I keep asking what the verb tense is on trying to hire — have actually hired or are hiring or will hire or are in the process of — and that's taken a long time.
There's a need for our Armed Forces to treat procurement and some of these resource management and strategic issues as higher priorities than in the past. We continue to put people into procurement-related positions, developing requirements, doing force generation, with effectively no training and education to enable them to succeed. We put them into positions and hope that by virtue of the other types of leadership training and their other experiences in the Armed Forces they will succeed and do well in spite of a complete lack of preparation to enable them to succeed.
There's definitely a need to increase the capacity on both sides of the DND and CAF construct.
Senator Kenny: Funding seems to come easily to national security issues after a big bad event, and then the will and the interest of governments taper off, and a decade later the government doesn't remember the bad event, it isn't the same government, and the population isn't applying any pressure.
If we want to wait until the next big wave comes along and then move a lot of equipment through the system, you're telling us you don't think that's going to be possible because the movers aren't there to do it.
My view is that it's more than that. It's what Senator Day had to say, a lack of interest on the part of most governments to spend money on defence and national security. If you're not going to have a bad event, the burden falls on the minister and on the department and members of the Canadian Forces to describe what they do and why that might be useful to a government at some time in the future that no one can clearly predict.
What are your views on what's missing? Mine clearly are there's a lack of will on the part of the government to make this a priority, and there's a lack of determination on the part of the Department of Defence to come forward and explain why they're a useful organization.
Mr. Perry: I agree with that. Just to echo your point, there would be a significant time lag now. If you're currently working on 16-year procurement cycles, the ability to respond to that, it's not that you'd be effectively delivering on capability one event after the next big thing; at this point you'd be lucky to get there two or three events after what drove you to make a purchase.
The department is still trying to spend the significant budget increase that Prime Minister Martin delivered. That was more than a decade ago.
One of the points you're touching on about the information is that there is a significant knowledge gap that, to a certain degree, the politicians but also the wider public and even people in the bureaucracy around Ottawa have not been aware of. National Defence historically hasn't been able to communicate, even if it was inclined to, effectively as well as they can now the types of implications of spending money or not spending money on certain programs.
You're the politician. You'd have to tell me how the willingness would change if there is a clearer articulation of the impact of deciding to fund something or not, or by keeping at our current share of GDP, which is now under 1 per cent, or whether we can move to a more reasonable number of 1.2 or 1.3 per cent in the interim. The 2 per cent target is good to strive toward, but given the actual limitation structurally in the Government of Canada, it would take us a long time to get to a situation where even given a budget that large, it could actually be usefully employed. If we set an interim target of 1.2 or 1.3 per cent of the GDP, which would be about a $6 billion increase in our budget line, that would be a move in the right direction and is something I think the Department of National Defence can absorb if the government was interested in doing that and had a willingness to do so.
It would also have to come with direction to the rest of the bureaucracy that the government's intent wasn't just to put money in the front window, make an announcement and have it return at the end of the year. That money would have to go out the door to be spent on equipment and the actual Armed Forces, and not have it lapse at year's end.
Senator Meredith: Thank you, I really appreciate you being here today. This committee just returned from New York, where we heard about intelligence and reconnaissance capabilities and surveillance, which are critical to any mission. In your opinion, do you feel Canada is making the necessary investment in these areas, as we should be?
Mr. Perry: I think that's an area where we should try to do more. It's one where there's the most complementarity and overlap with the core, traditional missions Canada has undertaken historically. Intelligence, surveillance and reconnaissance capabilities are applicable to surveilling and defending Canada on our own and contributing to North American defence or any type of international engagement, either through NATO or outside of it, with the UN or any other organization.
Because of our unique geography, we have more of a need to enhance the type of ISR assets that we have right now, and expand on them. That would also give us something that is desirable to coalition operations, such as the one we're engaged in right now in the Middle East, previous operations in Libya and elsewhere. Those types of ISR assets and specializing enabling functions are often the ones that coalitions are most lacking in. I think there are a number of reasons why we should spend more money on those types of things.
Senator Meredith: So much Canadian technology is being developed to improve military capabilities, like UAVs and so forth. Where are we with that in terms of space spending and those kinds of investments? Would you recommend that this is an area we should also focus on as we look at the overall policy?
Mr. Perry: I think it is. We should be looking at a mix of space-based assets and different piloted and unpiloted airborne platforms. I think the right mix depends on exactly what kind of technology you want to buy, which should be driven by what types of things we want to have intelligence on and what types of surveillance we want to engage in. I don't think there is any one type of system we should prioritize over another. It's a question of having the right mix.
Right now, though, we are almost exclusively in satellite capacity, which is limited but improving, and piloted capacity. Domestically, I don't think we're taking enough advantage of the developments in technology in unpiloted UAVs. The army and navy use it operationally, but we don't draw on that type of capability domestically.
Senator Meredith: You talk about space in terms of satellites and so forth. Why has there been a lack of investments in that area, given the tracking mechanisms that are available now with these systems to see who the enemy is? Why have we not made those kinds of investments?
Mr. Perry: To be clear, we are making investments in those areas. I just think that's an area where it's in our interest domestically, and increasingly so given the changing strategic environment, to invest more. A lot of it comes down to funding competition. Across all branches of the Armed Forces, as well as the joint forces, of which space is one, even though the Air Force is the capability champion for them, they're all competing for too-limited resources across the board.
What the department has tried to do is best rationalize the available money to the huge competing demands which vastly outstrip how much cash is available. You're seeing effective under-investment in every sector you look at relative to what the policy direction given to the military would lead them to say, given the policies that previous governments have outlined. The capabilities you need vastly outstrip the funding line. It's really a question about funding limitations, which are restricting the amount that can be spent in any particular area you can look at. Space is one of them. That's one the department has identified as a growth area because there's recognition of the need to do more.
Senator Lankin: Thank you very much. I wanted to go back to the issue of lapsed funding, and I have two specific questions.
The first is with respect to the lack of capacity. You spoke about the need for better training of procurement personnel, particularly in the CAF, but you also spoke about the problem in DND with the backlog in hiring for more than 200 positions. Do you have insight into what the hiring challenges are? Is it security clearance, a lack of qualified applicants or low morale discouraging people from wanting to work in the department? What are the challenges that need to be addressed, and how would you go about clearing that backlog to build the capacity?
Mr. Perry: The two that are most significant are that we seem to have a process designed to hire people fairly, but not necessarily to hire people with the type of highly sought-after skill sets that have huge applicability in the private sector. We have processes right now set up to intake generic public administration positions, which are ill-suited to hiring people that you would ideally want to have running multi-billion-dollar procurement programs. In the private sector, those people don't have a very hard time getting a job.
If you have a process in the Government of Canada for which the intake for those positions is 12 or 18 months, you need to be leaning on people's patriotism at the expense of any other rational inducement or structure to get people like that in the door. Right now, the department is trying to bridge in students to a much higher extent because it's a hiring mechanism that can get a person in the door that they can hope to train in a reasonable time frame. But that's not a very strategic approach to managing people with specialized skill sets that are in high demand.
To add one other thought to the capacity discussion, the department right now is facing a situation where the rate at which they're getting approvals through the Treasury Board has been declining steadily year over year. That's because of that cumulating backlog of projects and having added a whole bunch of processes across the Government of Canada. They now have a situation where, unless the Treasury Board starts meeting more often specifically to deal with defence files, that backlog is not going to be reduced. They have too much demand to put through the system, and unless there are more windows for them to get through, they're effectively not going to be able to move that cumulating stack of projects through the system, even if you do increase capacity, because Treasury Board only meets so many times a year.
Senator Lankin: My second question is with respect to the procurement processes. There's a problem with the backlog that you'd just indicated, and with timing of approvals. You made reference to more hoops and hurdles being built into the system over a period of time. Normally that happens in governments when there are some triggering events, such as a government having been criticized for failures in procurement. Have there been particular events that have brought about what some would call a knee-jerk response to tighten things up?
I'm particularly interested because I had the opportunity, when Minister Baird was in Treasury Board many years ago, to chair a blue ribbon panel for him looking at the administration of grants and contribution agreements in the government and to try and eliminate red tape. Has there been such a review of the procurement process government- wide or specific to Defence? If not, is that what's going to be required to try and streamline procurement to get good value for money, fairness in the competitive market out there for vendors, and timely decisions?
Mr. Perry: I'll take the last point first. In terms of red tape, yes, there is. The problem is that one effort was launched internally in the Department of National Defence in 2012, and to the best of my understanding, as of a week or two ago it wasn't yet effective policy. That's exclusively within National Defence. There's an effort to try to streamline the project approval process for those that fall within the Minister of National Defence's approval authority. Vice-Admiral Donaldson was the VCDS when that project was initiated, and he has been retired in Victoria for three years. It's not officially in action yet.
A second, wider cross-government effort that was initiated as part of the Defence Procurement Strategy that the Harper government brought in in February of 2014. I have no idea what tangible implications or results have come from that effort to streamline across government. If there's good news lurking behind the scenes, I wait eagerly for it to be revealed because there's no tangible publicly available output from that process that was initiated close to three years ago. That was designed to effectively be policy-compliant with the different types of policies that have brought in over the last couple of years.
How can you legally move forward and spend money but not go through the same processes that have historically happened sequentially rather than looking at what types of things can be done in parallel or going through a once-past- the-post type of approval process so long as you stay within certain parameters: your schedule, your costs or your requirements stay within a 10 per cent or 20 per cent variance? You don't have to get re-approval if something changes, because often things do change, and that would be a more logical approach to allow people to get approved once, and as long as you stay within certain expected bounds, you don't have to go back for authorization because that can really be time consuming.
In terms of the process, there have definitely been triggers that I'll talk about in a minute. A lot of this is the impact of the Federal Accountability Act and the changes brought in when Prime Minister Harper took government. For many good reasons he tried to put in place more rigorous policies around financial management, so that brought in the need to do long-term investment planning. That's what I was alluding to earlier about Defence being in a different situation now because it can't even start doing the planning effectively on some projects unless the money is there and the projects are in a long-term investment plan.
The rigour that came along with that and the way it has been interpreted in National Defence is that they have to go through multiple instances on the length of a procurement project where you do costings to see whether or not there's space in the investment plan. If there's any kind of change, as you go through the procurement gates, you do a re- costing to see if the project still fits in there.
Back in the 2009 time frame the government changed its approach to doing project management. That policy had the benefit of taking away a strict dollar filter on whether or not a project had to be approved by Treasury Board or whether the Minister of National Defence could approve the project. It shifted the emphasis to doing it based on project complexity and risk, which had a benefit, but previously if a project went through there was an easy filter about whether it went to Treasury Board or the minister did it, and that was how much it costs. Now they have to go through an assessment process which is fairly time-intensive to assess the risk and complexity along with it. The benefit of doing that is that if it's a low-risk project, then the minister can approve it, and that process is shorter than going through the Treasury Board, but the down side is that doing that assessment each time for each project when the department has close to a thousand projects in total is very laborious and resource-intensive. That preceded a lot of the trigger events.
Anything that ends up in an Auditor General's report in a negative context tends to have negative knock-on implications. Definitely the reports into the previous project to acquire the Joint Strike Fighter had a hugely negative knock-on implication and undermined confidence in what National Defence was doing and how they were going about articulating requirements, which led to other changes, like the creation of an independent review panel to look at defence requirements inside National Defence as a direct outcome of that project.
Some of the costing changes that have been brought in also come from that Auditor General's report in particular, as well as the one into the Chinook helicopter and the Maritime helicopter projects. Those are three big ones that had significant knock-on implications and led to some of the other changes: the enhanced views on requirements and whether or not they're adequate, as well as more intense focus on costing, which has been good and will ultimately be beneficial.
Again, hiring people who have skills to do long-term costing in a highly complicated environment is not easy to do when you have a process designed to fairly hire administrative positions and that's the kind of dynamic they're working with.
Senator Beyak: I have to echo Senator Kenny's comments: You are the gold standard, very balanced and non- partisan, and you place the blame equally. That leads me to my question on countries I have heard of that have a non- partisan military procurement committee that survives the change of governments and has a strategy and plan always in place so that they don't go through this wasteful spending over and over.
Do you know about those countries and whether it would work here in Canada?
Mr. Perry: The most obvious model is Australia, which has a more bipartisan approach. As part of their most recent white paper they published a long-term investment plan that was independently cost-assured. When talking about gold standards, as we go through our defence policy review that should be the gold standard. My expectation about what comes out of the defence policy review process in Canada is to have a strategy that outlines interests in the world, sets priorities, outlines the types of capabilities in a broad sense that should be acquired. Then they had a 20-year plan, independently cost-verified, that laid out not just the specific projects but quite narrow bands on costs and laid them out sequentially over time when they needed to happen. That's what we should definitely be shooting towards.
Senator Day: I'm going to echo Senator Beyak and Senator Kenny. You've talked about a lot of very interesting things that are very helpful to us, Dr. Perry, and I appreciate you doing so.
I'm going to try to focus on two specific items now, although I'd like to continue the discussion of budgeting and procurement at some time. Your comments with respect to Joint Strike Fighter procurement put one qualifier on that, and that is an aircraft capable of intercepting. You were talking about Russians potentially in the North and then communicating that information to our allies. Would you like to indicate any other requirements that you feel are necessary? If you feel comfortable, which one of the aircraft do you think would probably meet those requirements?
Mr. Perry: When the Government of Canada went out this summer with an industry questionnaire, my read of that was that it expressed a clear preference and desire that whatever solution be provided be built in North America. That means there are effectively two contenders, and it involved the Super Hornet or the Joint Strike Fighter. Regarding any other potential contenders, on my read of the questions that the government was asking, because of interoperability concerns and the ability to share information and get around intelligence classification, means it's got to be North American, effectively.
There's no question that the F-35 is going to be by far the most capable aircraft. There are a number of other priorities that the Government of Canada could have, including domestic economic benefit, and I think on that issue there are potential advantages and disadvantages between the F-35 and the Super Hornet.
On the issue of costs, having looked at this very carefully over time, a lot of the costing information in the public domain is complete garbage. The only effective way for the Government of Canada to make the best choice — which I hope would be a best-value procurement, not simply looking for the lowest cost-compliant bid — would be to hold a competition and see what the best mix of cost, domestic economic benefit and return and capability would be and go through a process and simply set the parameters. The government should make it clear what it wants to have delivered, outline the type of capability performance it's looking at and then see who submits the best bid.
Senator Day: There has been some suggestion to do that, but it hasn't happened yet in terms of an open competition.
Realistically, we're not going to go up $6 billion more in the first year, up to 1.3 per cent or 1.5 per cent of GDP. That's going to move up slowly. You talked about personnel gap and the real need for certain equipment. Somebody will have to make that choice. Do you want to make a recommendation to us as to where the extra dollars should go? If we can convince the government to put more dollars in, it's not going to be enough.
Mr. Perry: I think the focus should be on the long-term capital equipment. During Afghanistan we saw that personnel are more oriented towards land-based operations. We need them both for all kinds of military operations. There's a need to retain technical capacity, which is hard to turn on and off quickly, but the capital investments are the ones where you continually need to be making investments over time and more significant investments over time than we have.
As a metric of that, the Department of National Defence at various times in the last decades has set different targets for how much money it will actually spend on capital equipment. Those basically range from the high 20 percentages down to a minimum of a 20 per cent investment target under the Canada First Defence Strategy.
Over the last six or seven years we've been averaging between 12 per cent and 14 per cent. If we keep notionally allocating the same kind of money we have and lapsing it at the same rate we have been, we're going to fall well below those targets and not reinvest. I think the biggest deficiency is on the capital side, and that's the one that's much more difficult to adjust quickly and respond to crises.
Hiring some types of people you can do quite quickly. Right now we're in a 16-year procurement cycle for major capital acquisitions. You can't turn those taps on and off very fast. What we're dealing with right now is trying to catch up from at least a decade if not more of spending too little on capital investment. You simply can't turn around the system to do that. I hope we can make the system better and make it more nimble, but I don't think you could expect that it's going to get as nimble as it would be to be able to bring somebody in if you had an effective HR system. You can train people to do some types of things in a couple of years. You can't buy a complicated piece of equipment in anywhere close to that time frame, even if we improve it.
Senator Day: We'll resist the temptation to call the last 10 years "a decade of darkness.''
Senator White: The biggest complaint in every NATO country is the procurement of equipment. Who does it best?
Mr. Perry: I don't think there's any one country that has totally solved this. I keep looking for other examples, though, of different countries that can't actually spend the money they have, and that's a comparative point that I've yet to find. You can take lots of different areas for improvement from many of our allies in different ways, but none of them have this uniquely, as far as I can determine, Canadian problem. We also have a lack of money, as I hope I've made clear, but we also have an inability to use what we have, which is bizarre.
An Hon. Senator: Ask him who does it worse.
Senator White: Yes, who does it worse? That's right. It could be us; that's the thing.
The Chair: I'd like to follow up with a couple of questions so that we get it on the record here. As to the question of the reserves, you said they were understaffed. Obviously, that reflects on the budget. That reflects on our personnel and our ability to be able to operate as a military force in the world.
Can you further explain "understaffed''?
Mr. Perry: I believe the previous government authored — and it is still considered extant — an increase in the reserves from, I think, 27,000 to 28,500, give or take. My understanding is that the reserve strength right now — and there are different ways to count it — is well below 20,000. So that's a fairly significant shortfall. In the past, on major operations, we have had up to 20 per cent or 25 per cent of deploying rotations being staffed by reservists. So if we're somewhere at 50 per cent or 60 per cent of what the authorized capacity for the Reserve Force is, that's going to be quite challenging.
The Chair: Just put this in perspective for the viewer and for ourselves as well. We're talking about a personnel of 66,000. Along with that now, we're looking at another 25,000 for a complement of roughly 80,000, maybe 85,000, to be full up to strength. Is that correct?
Mr. Perry: Yes, roughly.
The Chair: Ballpark.
Now, if I could follow up on that, you said that you felt that we were understaffed in the military, on a permanent personnel basis, so could you give us a number on that? You said a couple thousand? Could you refine that?
Mr. Perry: Just looking at what the authorized strength is now, it's about 2,000 positions under strength, relative to what's authorized, and that's within the broad scope of the Armed Forces and what they are authorized to have establishment positions for. In 2011, the Report on Transformation said there was a need to increase our capacity in cyber, to increase it in space, to increase it in intelligence positions in a couple of different ways. There are Air Force squadrons that are under strength. There are army battalions that aren't full strength. There are multiple different areas, even without getting into the conversation about whether or not we would need to, as I would argue, both maintain and enhance our submarine capability. If we were to go through those types of capability enhancements down the road, that would come with a personnel bill. Basically, we are short on the status quo right now, continuing to do the same types of things, and, if you look to expand into any number of different areas — In Canada, somehow, we consider space to be an emerging domain when it's been around for quite some time now, and we still haven't fully staffed that. Cyber is the same thing. Cyber is not really new, but, in Canada, it's not staffed.
The Chair: I just want to get a sense of the numbers that we're talking about. Do you have any idea of the numbers, ballpark?
Mr. Perry: I think, in terms of the Regular Force, somewhere between 3,000 and 5,000 positions.
Senator Kenny: Chair, a follow-up, if I could. The way you phrased your question, there's quite a difference between the reserves and the air force, the army and the navy. Perhaps the witness could, just for the record, clarify that what you were saying was mainly directed to the militia, wasn't it?
Mr. Perry: That's correct, yes.
Senator Kenny: Do you want to just very briefly say why it's different than the navy and the air force?
Mr. Perry: Yes, the employment model for the militia in Canada is significantly different than for the air force and the navy. I'm most familiar with the navy concept, although it has actually kind of evolved to be more along the lines of what the militia has done. They have moved to basically a one-navy concept, where they have a mix of personnel deployed on any of their ships.
The militia is usually kind of split between the part-time activity, which happens on an annual basis, and then drawing upon those positions when there are international deployment opportunities. I think that, as an aside, though, there's a potential to give the Reserve Force some more dedicated tasks and give them designated capability areas. As an example, the U.S. does all kinds of its non-combat flying in the United States based on reserve or National Guard units. I don't think there's any reason we couldn't approach similar activities, like strategic transport, with a similar type of model.
The Chair: My final question is this, just for the record again: Our commitment to NATO has been referred to a number of times and the fact that we are, as far as an agreement is concerned, committed to 2 per cent. Can you give us a dollar figure between what we're spending now and what would be expected if we were to meet our 2 per cent target?
Mr. Perry: Yes, $20 billion.
The Chair: Okay, thank you.
Mr. Perry: That's how much we're undershooting that spending target.
The Chair: And we're spending how much presently?
Mr. Perry: This year, about $18.5 billion, assuming we spend it all, and I have no actual thought that we will because I'm quite confident that, unless something changes, we are going to let lapse several hundred million dollars at year's end.
The Chair: Well, I want to thank you very much, Dr. Perry. You have, once again, brought to our committee a lot of information that is of a great deal of interest to us and very worthwhile. We very much appreciate what you do and how much work and effort you and your organization put in to ensure that our military is brought to the attention of the public as well as the government, its importance and why we should be investing in the military for today and tomorrow. So I'd like to thank you for attending.
Joining us in our second panel as we continue our study of issues related to the defence policy review is Lieutenant- General (Ret'd) André Deschamps, Honorary National President of the Air Force Association of Canada, a national aerospace and community service organization established to commemorate the noble achievements of the men and women who have served as members of the Canadian Air Force since its inception and to advocate for a proficient and well-equipped air force and for support for the Royal Canadian Air Cadets. Lieutenant-General Deschamps retired from his position as Commander of the Royal Canadian Air Force in September 2012 after 36 years of service.
In the last three years of his service, he led the RCAF through combat missions in Afghanistan and Libya, the humanitarian airlift to Haiti, support to the 2010 Vancouver Olympics and numerous other search and rescue missions and assorted training and operational tasks.
Mr. Deschamps, it's been four years since your last appearance in 2012 when you were Commander of the Royal Canadian Air Force. We welcome you back in your new capacity with the Air Force Association of Canada.
[Translation]
Lieutenant-General (Ret'd) André Deschamps, Honorary National President, Air Force Association of Canada: Thank you. It's an honour for me to be here today as a representative of the Air Force Association of Canada to discuss a very important subject, namely, the possible operational capability gaps in the Royal Canadian Air Force.
[English]
Before getting into a detailed discussion on this subject, it would be useful to situate the RCAF Association and its particular interests and mandate.
The RCAF Association was established in 1948 by direction of cabinet via a cabinet conclusion and was provided an annual grant to deliver its mandate of advocacy on behalf of the RCAF. Essentially, the association was expected to keep its members informed on air force issues and requirements so that they, in turn, could keep the general public abreast of important issues. It was also to encourage service members to join civilian organizations in their communities and take part so that they could become known and not considered outsiders. Finally, since the RCAF did not have the resources to have establishments in every community, the association was to represent the greater interests of the air force in as many communities as possible.
Over the years, changes in demographics and technology have modified some of the ways by which the mandate has been delivered, and the current approach can be summed up as follows: advocacy, which is the support for a well- equipped air force for Canada; traditions, preserve and perpetuate the great traditions established in the RCAF since its inception; air cadets, support to the Royal Canadian Air Cadet corps in close collaboration with the Air Cadet League of Canada; community, participate in local, civic and community programs identified by Wings and undertake charitable and other projects of both a national and local character; and civilian and military air, recognize the achievements in civil and military aviation through annual awards of the RCAFA.
Therefore, one can best summarize the association's role as advocacy, youth and heritage.
The association currently consists of approximately 6,300 members distributed across North America in 58 wings. We even have wings in Mexico and the U.S.
This brings us to the discussion for today, and we would like to express our continued admiration and respect for the excellent work done by the men and women of the Canadian Armed Forces, and more specifically the members of the RCAF.
Over the last 10 years we have seen the operational tempo remain at a very high level, both at home and abroad, while at the same time the air force has dealt with significant transformation efforts internally.
We are grateful to past governments for their continued investments that have brought in new equipment such as the C-17s, C-130Js, Chinooks and Cyclone helicopters. We have also been strong proponents of a reinvestment in the CP-140 fleet. We were quite pleased to see the recent commitment to modernizing 14 of the aircraft, although the association believes, given the growing challenges at home and overseas, that all remaining available aircraft should be modernized to give Canada the most flexibility for the coming decades.
Over the last 10 years, the association has published 34 position papers on a wide range of subjects touching on air force readiness capabilities, and we would be willing to share these reports with this committee, if so desired.
As we look to more current procurement efforts and potential gaps, we remain strongly convinced that a manned fighter with robust, multi-role capabilities will be needed for at least the next few decades.
It is well understood why a competition is normally the preferred means of acquiring such platforms. However, we would caution against the impulse to adjust operational requirements to fit the competitive mould. A decision on the way ahead needs to be made soon because the end life of the current fleet will be upon us in less than 10 years.
Another area of concern is the slow progress toward the acquisition of unmanned aerial vehicles. Much has been learned over the last decade about the use of these systems; however, technology keeps progressing, and the search for the perfect fit for Canada has caused many delays in getting this program moving. We would suggest that the defence policy review needs to address this with some clarity and provide the strategic space for a mix of possible solutions. No one platform can cover all our needs.
Although great progress has been made, much remains to be done as we look to the fleet renewals for fighters, search and rescue assets and training platforms, while grappling with emerging domains such as UVAs, space and cyber. We expect that the defence policy review will seek to address the coming challenges and provide a renewed framework for defence planning and RCAF capabilities.
We welcome the opportunity to engage in this important discussion and are happy to answer questions at this time. Once again, we appreciate the opportunity to bring the voice of our membership to this table.
The Chair: Thank you very much.
Senator Beyak: Thank you for an excellent presentation. Presentations always answer my questions, but I need you to fill in a bit more. What capability gaps do you see in the air force when it comes to the training of search and rescue technicians and pilots?
Lt.-Gen. Deschamps: I think the air force writ large faces training challenges, as do all the services, as far as being able to attract people, train and provide them with the equipment necessary for them to do their jobs.
The air force is doing okay right now, if I had to put a grade on it as far as maintaining sufficient numbers of personnel on both the aircrew and the maintenance sides to keep our operational capability sets viable. Our tempo is high, but we're doing okay.
The challenge is the demographics. There are a lot of retirements happening, as we see across society as baby boomers retire, and that's certainly creating a big challenge in both attracting and recruiting more people to fill those gaps. And we're still recovering, in many respects, from the gaps that were created when we did our big force adjustment in the mid-1990s, when we let go of a lot of people to try and meet new balanced budget levels. What happened is a lot of the people who left were in that 5-to-15-year experience bracket, and those numbers that left the military, 10 to 15 years later is where you're looking for that experience. There's a bit of an experience gap that we suffered and are suffering right now.
The good news is that because of the advent of new technologies for training, we have been able to accelerate it. In other words, it used to take, let's say, 10 years to bring people's experience levels up to a certain degree to be able to take on supervisory roles. With new technology, we can accelerate that dramatically. That's allowed us to fill some of that experience gap that normally would have taken us decades to fill; we can now do it in half the time. You still need to expose people to operational environments. You can't shortcut learning, as hands-on is important, but simulations allowed us to really concentrate training and make it as effective as possible.
That's why the Air Force, with a very young demographic of folks, is doing the business that we are in the world. We did have some concerns in 2010, when we launched on these multiple operations at the same time, that we were pushing our boundaries in using very young line personnel to do these missions. That was with supervision, though not at the level we would have used 10 to 20 years before, but they did extremely well. That speaks to the training they received and their competencies as individuals.
The Chair: What is the average age?
Lt.-Gen. Deschamps: Mr. Chair, I couldn't tell you right now. I'd have to ask the VCDS, but the age of the average warrant officer and senior NCO and NCM has dropped fairly dramatically. The average age used to be in the late forties, like 48 to 50. That number is dropping fairly rapidly into the low forties. That's a big shift, because that means everybody else has to bump down three to four years to follow that rank structure, so we see a lot of promotions at a much younger age, now, for our NCOs or NCMs, and for the officers and junior officers. It's just a demographic push that's causing us to have to rapidly expose these people to more advanced training and to get them challenged in new positions and new ranks.
[Translation]
Senator Dagenais: Thank you for your presentation, Mr. Deschamps. Modern military operations are effective as long as we have the support of the air force, which takes care of surveillance, support for ground troops and supplies. I want to hear more about the Royal Canadian Air Force's current capability gaps. Let me explain. What capability gaps could Canada face in the next 10 to 15 years if it continues to make such timid investments?
Lt.-Gen. Deschamps: Thank you for your question, senator. It's a good question. I believe Mr. Perry discussed capabilities in his presentation. I also briefly mentioned capabilities in my opening remarks.
At this time, there are capability gaps. In other words, we don't have equipment, period, or we have equipment and staff, but not enough to properly support the operations. We're fragile. The capability gap can mean either a complete lack of capabilities or a low level of capabilities as a result of the resources allocated. I'll give you an answer for both contexts.
In terms of the capability gap, we simply don't have a platform for remotely piloted surveillance and a platform to fill the intelligence, surveillance and reconnaissance roles, or ISR roles, as mentioned earlier. The UAV model, which we discussed, represents an operational gap that has existed for several years, since Canada's withdrawal from Afghanistan. We haven't filled this operational capability gap. Some projects seek to replace or create a capability on that front, but they haven't been launched yet. These projects are still at the study stage, and we think they'll be carried out by the end of the decade. The operational gap will present challenges both at home and abroad. It's a gaping hole.
With regard to the gap or decrease in air force capabilities, we have a great deal of good equipment that has been renewed. In terms of transportation, we're truly on the right path. The resources are limited, but very effective. We want to upgrade our search-and-rescue aircraft fleet. We hope to achieve good results this year for the next development step. In the meantime, we have enough capabilities to manage our rescue missions in the country.
The issue is the number of missions we want to undertake on an ongoing or concurrent basis. We're more vulnerable and fragile in that area. We have a limited number of members who are trained and ready to be deployed or employed, with the necessary equipment. We can have small deployments here, with a certain number of aircraft and with the necessary personnel. However, the amount of time we can devote to the deployment must still be determined. There is a logistical curve for the mission that must enable us to replenish personnel and equipment. It would be based on a definite point, and there would be costs. The gaps or shortfalls in operational readiness must be determined. Certain gaps exist.
Some capabilities have been reduced from an effectiveness perspective. Technology is advancing and equipment must be renewed. Fighter jets are a good example. They must be renewed. Some investments have been made in recent decades to upgrade them, but more investments are needed to make them ready to use, at best until the next decade. In other words, the capability is decreasing.
Aircraft age over time. When aircraft age, the effort required to make them fly increases. The operating costs increase. It may affect our capability of managing a number of missions. The skill level of the personnel doesn't change, and the fact that the aircraft can be piloted if they're ready to fly won't change. However, the level of capability required to support efforts and to be effective in different environments does change quickly.
[English]
Senator Kenny: Welcome, General. Could you talk to the committee about the JUSTAS project, tell us why it's so badly screwed up and what needs to be done to make it work?
Lt.-Gen. Deschamps: Thank you for your question, senator.
The Chair: That's a very direct question.
Lt.-Gen. Deschamps: I suppose I might make a comment about all the politics behind it. Again, part of my challenge is to make sure I represent the association's views and not strictly my own as the former air chief. I will try and bring the middle ground of that assessment.
In my opening comments I did mention the fact that we have been looking for the perfect solution that would work for Canada, domestically and internationally. We have yet to find it because it's such a different demand that we're asking the platforms to execute.
Our geography is daunting. We probably have the most difficult geography, outside of Russia, which has its own very demanding geography. That's always challenged us to find platforms that can conduct both the domestic and the international roles, and that's why oftentimes when we build requirements we tend to pile more in than, let's say, the Americans would. We'll jam more demand into one platform because we can only afford to buy one, but by gosh it better be able to do a lot, because we have to try to execute that domestic mandate, which normally requires great range and durability so that it can survive our very harsh climates. At the same time, it has to be tactically relevant in domains where there are threats, such as offshore when we do coalition work. When you blend those two needs, it's hard to find a one-size-fits-all solution. That's where the JUSTAS program has been caught for the last two years. Afghanistan was the genesis, if you will, of the need for the JUSTAS program. That program has tried to launch on several occasions under different governments to achieve a capability set.
The Chair: Could you explain to the viewing public what the JUSTAS program is?
Lt.-Gen. Deschamps: Yes. Sorry, Mr. Chair. The JUSTAS program's origins came about after 9/11 as Canada became more engaged in southwest Asia, and the fact that it was clear we were required to be more engaged offshore in these operations to deal with the war on terror, if you want to call it that. If we deployed troops there was going to be a requirement to support them with equipment that would be suitable for the environment.
When we went to Afghanistan, it was clear there was a lack of accessible intelligence, surveillance and reconnaissance that our troops could rely on for their mission planning and support. We went through a phase of analysis trying to find what they needed but at the same time looking ahead at what would be required. It goes back to the 10-year to 16-year planning cycle to try to get something in the long term.
The joint forces, if you will, looked at the requirements and quickly came up with a medium-altitude long-endurance platform, the MALE system. We tried at the time to put a requirement on the table that would deliver a fairly robust capability to the theatre, and the process became somewhat mired in the issue of competition and sole sourcing.
That basically became the anchor on this program. It still is, to a certain degree. At the time there were not a lot of options for platforms that met the core requirements that the CF identified, and the government was not in the position to sole source. They felt it wasn't the right way to do it, and therefore we had to look at other options.
Eventually the option that was landed on was to lease a non-weaponized platform to at least give core ISR services. We started with our own aircraft that the army bought through the Sperwer system. That was bought in the early days in Kabul and then it was moved down to Kandahar when we went down there in 2006.
The platform was very challenging in that environment, and that's why there was an urgent program put on top to find a better system for the Afghan campaign, and that's how we ended up leasing the Heron aircraft through MDA Canada.
In the meantime the JUSTAS program was still there as a long-term requirement, but we had to find a short-term solution to satisfy immediate operational needs while trying to get the long-term requirements accepted and eventually into the process to acquire. And we're still there.
We're still in option analysis because every time there's a thought that we're ready to get this program back out, many questions are raised about the capability sets and the weaponization. It tends to put things back into a study mode until a better solution comes out.
This is the challenge with the JUSTAS program. It tries to address tactical needs that are supporting the joint forces on the ground. Normally you need the all-weather sensors with the right range and endurance. Also, the issue of being able to carry weapons to assist our forces is part of that tactical requirement.
If you go to domestic requirements, you're looking at distance, with a massive country to monitor and open oceans. You need a larger, more robust platform to be able to travel vast distances, operate autonomously, do the business of collecting intelligence surveillance and bring that information back to those who need it.
You're competing on the skill sets, if you will, requiring the platform, and to try to do all of it with one platform right now hasn't been a solution that's accessible to us. That's the dilemma the department faces.
Senator Kenny: That's helpful, general. Although you've answered the question, the problem is that the government and perhaps the Canadian Armed Forces are just looking for one platform when common sense says it's going to take two or three platforms to provide what's needed.
Could we switch to search and rescue? The CH-146 aircraft is slow and small. We seem to be depending on it a lot. I'd like to know what your views are on converting the VH-71 that we bought from the Americans and having them serve with the Cormorant fleet.
Lt.-Gen. Deschamps: That is actually one of the papers that the association produced a few years back to offer that this might be an option that the government should consider in trying to solve the resource level for helicopter search and rescue. That paper does pose that question and offers some views of how it could be done as far as integrating this process goes with what's going to be required for the Cormorant mid-life because the airplane has been flying for 10 years. It doesn't take long, and you're talking about mid-life projects, where you need to refresh the aircraft's avionics, navigation systems and so on. It's the moment at which you would re-baseline your fleet.
When you do this mid-life assessment, the association proposed to look at the option of looking at those platforms and modifying them so they can become a common fleet; go to the standard of the new mid-life Cormorant, thereby raising the number of platforms available so you can replace the Griffons that are currently doing the mission in Trenton.
Senator Kenny: Is the air force doing this? We haven't heard from General Hood. I don't know what the position of the air force is on this.
Lt.-Gen. Deschamps: Our understanding is that this is a program that's been looked at for quite some time. The air force is looking at Cormorant mid-life, so they have to look at options now to keep the fleet viable and useful into the next decades, and of course there's still a challenge with the Griffon fleet in Trenton. Therefore they have to look at options and solutions they can offer government to rectify this. This was intended as a short-term solution pending outcomes of work being done with the parent companies of the Cormorant to raise serviceability levels — in other words, bring the number of platforms available on a daily basis up to higher numbers so we can then hopefully reprofile aircraft back into Trenton.
The reality is the availability of spares and repair and overhaul couldn't achieve the return to service of fewer platforms because we lost the platform. We went from 15 to 14 due to an accident. Then when you add on the issue of repair and overhaul cycles, the current number of aircraft will not allow us to go back to Trenton. That's the dilemma. You have to either add aircraft or find other solutions that give you more robust search and rescue in Trenton.
Senator Kenny: But if we have nine of the VH-71s, that would take care of Trenton eventually after the mid-life refit.
Lt.-Gen. Deschamps: It is one of the options. There's a cost to doing such modification. It's similar to comparing a C-130 Legacy Hercules, the old Hercules, with the new C-130J models. They look the same but they're not the same. The brains are different, the engines are different, and the technology is different.
The commonality of the equipment is important and the configuration of the VH platform, or VIP. The whole back end is not configured for SAR. It needs ramps, sliding doors, hoists — a whole bunch of things that don't exist in that current configuration.
It's not a small thing. The aircraft would have to be rebuilt basically from scratch to re-baseline it to a current Cormorant SAR configuration, and then you would need to do the avionics on it to be in compliance with what the revised Cormorant fleet would look like. Whatever models of airplanes should all be the same so you don't have the problem with training and spare equipment, et cetera.
It's certainly possible. It's there as an option. There is a cost to doing it, and that needs to be factored in by government.
Senator Kenny: Is the cost of buying seven new CH-149s a greater cost?
Lt.-Gen. Deschamps: That particular aircraft is no longer in production. Again, that would be the same thing. You'd have to re-baseline your current fleet to whatever is in the market so you have one common fleet. This is the challenge with acquisitions that don't have sufficient durability. You don't have attrition. Then you face those challenges when you suffer attrition halfway through the life of the aircraft. Now you have to look at how to top up the fleets when you start running out of airplanes. That's a problem you have across military fleets.
The Chair: Could we get a further clarification to this question? I don't think the viewer understands basically where the VH-71s are and why we purchased them. This goes to a number of years ago. I think it should be clarified for the record so that we fully understand what we're speaking about. Can you just clarify that a bit?
Lt.-Gen. Deschamps: Yes, Mr. Chair, absolutely. The VH-71 was bought from the U.S. on an opportunity basis. It became known to us that they were going to divest these platforms. The U.S. government decided —
The Chair: When you say platforms, helicopters?
Lt.-Gen. Deschamps: The helicopters. It was a government program bought for the sole purpose of flying the President, as the presidential helicopter fleet. Several billions of dollars were spent buying this fleet, putting it into operation. For a series of reasons, it ran into serious opposition inside the U.S. establishment, and the program was shelved, boxed, put in a corner.
We became aware of the fact that they were looking at divesting the platforms. At that time, we were looking for ways of improving our spares' availability. The challenge with the Cormorant fleet, throughout its existence, has been the adequate supply of spares and repair and overhaul, transmissions, engines, you name it, the components that make the airplane fly. There was always a challenge in finding sufficient spares to keep the number of airplanes available to fly, and even working with the company to bring that up was very difficult to achieve. This became a very quick way of injecting a fresh amount of spare parts — because there are a lot of common parts — into our fleet to bring our numbers of available platform up. It did exactly that.
The government was able to purchase these platforms at a significant discount from the U.S. The sole purpose was as spare parts for our current fleet of Cormorants, and the injected parts had the results that were desired. There was a dramatic increase in our spares' availability, and it managed to give us a more stable and predictable Cormorant availability for SAR. It did achieve that goal. The long-term is a different issue. You still have to have a sustainable repair and overhaul system, a sparing system, and that's still being worked on. The sole purpose of buying those helicopters was to shore up our sparing and repair and overhaul problems.
The Chair: Thanks for that clarification. I think the viewer now fully understands what we were discussing. I think it's worthwhile.
[Translation]
Senator Carignan: I want your opinion on the F-35. What should Canada do on that front? The new American president gave a rather negative opinion on the new aircraft. The project is too advanced for him to back out, but there are still concerns regarding the matter in the United States.
Lt.-Gen. Deschamps: Thank you for your question, Senator. Once again, the association is taking a more or less neutral stance on the type of aircraft that must replace the F-18 and the manufacturer. The association published an analysis of the procurement system that led to a dispute regarding the F-35. The association's opinion above all aimed to establish the facts regarding the F-35, which were somewhat muddled. It wasn't necessarily an endorsement of the platform, but a clarification of the facts so that people were at least informed about the options and capabilities of the aircraft. The goal was to clarify the different opinions expressed regarding the F-35 between 2011and 2015.
The association recommends a competition so that the project can move forward. It had been said a number of times that the F-18 was reaching its limit. A decision must be made to move the process forward. The government plans to launch a call for bids. The association applauds this decision, as long as the competition is open to all the platforms. The F-35 must compete, although some say it should not be part of the competition. The process must be the same for all competitors. A great deal of information has been provided on the performance and capabilities of the F-35. Independent committees have studied and verified the Department of National Defence's work over the years and have collected a great deal of information and capability analyses. This has resulted in both classified and unclassified reports. We haven't seen the classified reports. The government is responsible for analyzing those reports. The work took over 40,000 hours. I hope the government takes the work seriously and that it takes the work into account, at a basic level, to establish the call for bids effectively.
Senator Carignan: What's your opinion on the delays, because it's getting late?
Lt.-Gen. Deschamps: The F-35 was caught between two opposing forces, which resulted in delays. The platform itself experienced delays in terms of development and operational declarations. This also resulted in a delayed window of opportunity to take possession of the aircraft, if we were to choose the F-35. In other words, the deadlines changed. The government had to review its position so that it could defend the position in terms of industrial benefits and operational requirements.
To move forward, the Senate and the other levels of government must continue to work with the military on reviewing the defence policy, if new capabilities need to be added or if operational requirements need to be repositioned. When the analysis was conducted between 2008 and 2010, the perspective was based on the threats, needs and policy requirements at the time. The review exercise must again validate the situation concerning missions. What level of risk is the government ready to accept in the different missions? This will give the military the flexibility needed to review operational requirements as part of the call for bids. This work must be carried out right now if the government wants to launch a competition.
Senator Carignan: As well as honour our international commitments?
Lt.-Gen. Deschamps: Yes. We must honour the commitments we've already made regarding national and international missions. I don't see any significant changes. Our obligations to NATO and the Americans haven't changed. The types of missions and level of risk must be discussed in the government so that the government can decide which resources to allocate so that it can cover all the missions.
Senator Meredith: Welcome, Mr. Deschamps. My French isn't very good, so I'll speak to you in English.
[English]
Thank you so much for being here today. Just getting back to the point of the helicopters and the fact of a pending deployment to Mali, we heard of the risks associated with search and rescue should any of our helicopters get damaged. You talked about a reduced cost of buying those from the U.S. Maybe you can tell us what that figure was. What would be the replacement cost if any of our platforms were damaged?
Lt.-Gen. Deschamps: Thank you for your question. I couldn't give you a current cost estimate. It depends on what platform we're talking about. If you look at the Chinooks we just purchased, they're still being brought to operational readiness. Those are expensive platforms. They're very capable, very strategic in effect, but they do cost more than the average helicopter.
Senator Meredith: Ballpark?
Lt.-Gen. Deschamps: I couldn't really give you a good one. It depends how many you buy. If you're buying a lot, it's volume. If you're buying one, it's a higher price. It depends what lot you're buying. Once again, we bought a version of the Chinook. We bought what we felt was sufficient to meet our needs for the foreseeable future. The issue of attrition is always a challenge. Defence procurement typically does not allow for an attrition buy. So when you're trying to buy platforms for the duration of a program, we have never been able to fully deal with the question of attrition, because it depends on the kind of aircraft; it can vary. For fighters, it is typically between 7 to 10 per cent. The same with other training or operational accidents; aviation has a risk.
Typically when you have attrition, hopefully you have enough resiliencies in your fleet and hopefully the attrition number is low enough that you can rebalance the fleet and carry on with your mission, but at some point numbers matter.
With our Chinook Foxtrot, the fleet is sufficiently robust that attrition can be managed at the front of the program. But 20 or 30 years from now, it is a different story if your attrition has been eating away at your capabilities over the years. It's hard to speculate because it's based on the platform and the type of mission and the attrition you would face.
In Afghanistan, we bought and were seconded six airplanes from the U.S. Army to fill our mandate. Over the mission, we lost two. That's 33 per cent attrition. That was a common environment. The fleet was retired. It was an interim fleet, and now we have 15 of the Chinook Foxtrot.
That's a good question. Every mission you go on, a question that has to be understood as you are going in is our ability to absorb, whether it is human or equipment casualties. Do we have enough resiliency to carry on with the mission if that occurs? That is part of that risk management that the government has to make when they commit to these missions, understanding those variables and the risk they entail.
Senator Meredith: Do you know what contingencies are put in place? You talk about the mission to Afghanistan as well as the Libya mission with respect to we have to rescue those individuals or our men and women if they, for example, are in a down situation. Can you elaborate on how that is put in place with respect to procurement of those necessary platforms that would be needed as we are fulfilling those mandates?
Lt.-Gen. Deschamps: The best way, to bring that back to a higher level, it goes back to our commitments in these missions that we can potentially get drawn into. When government looks at them, they have to ask Defence what the options are and what we can do. The chief and his service chiefs will analyze what the government expects and what outcomes are desired. You look at the mix of forces required to bring those results to government.
In that discussion, they will identify that if we do this, here is the cost in material and the potential downside. You normally identify that if this happens, we have these options. I would suggest the issue of attrition is not one addressed in detail in that we expect 20 per cent attrition on this mission.
It's impossible to predict, because a lot of these missions tend to look benign at the front end and sometimes stuff happens during the mission. The degree of unpredictability doesn't lend itself well to an analysis you would typically have with a normal military operation against a known enemy, i.e. the old-style NATO mission analysis which had laid-out attrition models.
That doesn't exist for this counter-insurgency environment. There's nothing really that you can go through. Common sense and judgment are part of that analysis given to government as to what will likely occur and mitigation strategies. Beyond that, the degree of attrition prediction in the plans is not specific to the nature of the missions.
Senator Meredith: At the outset of your statement, you mentioned UAVs and the spend that needs to take place. Why is there an apprehension regarding the effectiveness of technology in training personnel? You have talked about the timelines. Why has there been an apprehension in the investment into these technologies as you looked at the geography of Canada and also our international obligations?
Lt.-Gen. Deschamps: To go back to UAVs and the JUSTAS program, the focus when we started on this process was about delivering support to our joint troops deployed in Afghanistan. That was the force function that had us looking at specifically how we deliver ISR to the troops in Afghanistan in this rugged, demanding terrain. That's where JUSTAS started from.
Over time, as we look forward, the mission analysis says we need to use UAVs in domestic situations. How do we do the Arctic? The scope became fairly large. This is where finding the perfect solution that fits that larger scope of domestic security and the narrow scope of tactical support is difficult to reconcile in technology.
Things are changing rapidly. There has always been, "Well, if we wait a couple of years, we will probably have something that works better.'' That goes back to waiting to be perfect is sometimes the enemy of good enough.
The other thing Canada has a hard time dealing with — and I don't think we ever have — is called "spiral development'' or "spiral acquisition.'' Other militaries do that. They know the technology is not mature enough, but they know they need to start, to get smart on it, and then modify the requirements as they get smart and go for what they feel is the final end product.
In Canada we typically don't do acquisitions that way. We have to understand perfectly at the front end what the entire life of that aircraft will require. That's what makes the process of requirement so difficult.
We are trying to understand new technologies as we try to predict what we will use them for. There is a school out there where we should also consider spiral acquisition. In other words, you get sufficient capabilities, perhaps not delivering the full spectrum, but the ones you need more immediately, you get smart on it, and then you can look at the longer-term acquisition. It's money that you need to invest on the way to perfect knowledge, if you know what I mean.
The U.S. has done spiral development on many fleets. They do that for technology. That's how they learn and modify. That's our limitation in Canada. We're not in that mindset where we accept spiral acquisition. We have to wait for something good enough to cover just about all the requirements that we're identifying.
Senator Day: General, thank you for being here. I'd like to take you back to search and rescue, not the platforms necessarily, but the entire concept of search and rescue.
Internationally, the air force participates with NORAD and NATO in missions, but nationally, search and rescue is a special part of the air force. We, as a committee, have visited search and rescue units on a number of occasions. They are a very dedicated, hardworking group of technicians and pilots who work in that area. Has there ever been any thought or discussion of treating search and rescue as a separate entity outside of the normal air force budgeting?
Lt.-Gen. Deschamps: It's a good question: How do you apportion resources or account for those resources? For the last decade, the department has been looking at a business framework that allows it to capture money coming in and being spent on activities. The framework is being revisited as the system gets smarter on business accounting, and the new government desires to have that visibility.
We looked at how best to do search and rescue and how much money is being dedicated to it. We managed to target that fairly well. We understand the number of people involved and the amount of money that normally funnels into the fleet and the personnel salaries. There's a fairly good knowledge of the money invested in and the capital programs to replace them.
Trying to divorce search and rescue, if you will, from the main operational stream of the air force will be problematic. We leverage assets all the time. Search and rescue is a secondary mission for all our aircraft; whether it's a Chinook, a Cyclone or a Sea King, we tap whatever asset is the closest to the problem to start the mission of search and rescue. There are very specialized skills that our search and rescue platforms can bring for extraction or insertion. Other aircraft have great sensors, like the CP-140. All our fleets are available to conduct search and rescue. That's the management of what the air division has to do when there's a crisis. They always look at what's closest and fastest to respond and how we get people assisting as fast as possible. And then you direct those very specific assets if more are required.
To divorce that into a separate stream and introduce another chain of actors trying to coordinate things would complicate that process. It's a really good organization. We are world-class: People come to us to see how to do search and rescue. If you look at the amount of resources we actually dedicate to search and rescue and what we get out of it, it's very impressive. I have no problem saying it's world-class.
You don't want to mess with success. I think the issue is making sure the force is balanced. The resources are required for increasing demand as far as the Arctic goes. We know about the changing climate, and people are sailing and flying in conditions they would normally not be, so the calls will be more frequent. The issues of basing and the number of resources are always part of the debate that we're having, but as for command and control and the way the resources are allocated, I think it's a good system. I wouldn't want to play with it.
Senator Day: Just as a follow up on that, you mentioned the other aircraft in the Canadian Armed Forces' fleet that are available. How do we explain, then, the situation where search and rescue was not able to go after that individual in the North who was stranded because they said they had only one other aircraft? They had an aircraft, but it had to be on standby and couldn't, therefore, go up and help out in that situation as it would if all of the aircraft of the air force were normally available.
Lt.-Gen. Deschamps: Again, I'm not exactly sure which situation we are referring to. It doesn't come to mind. I think what happens is normally other actors are involved, like the Coast Guard and the RCMP. There are other assets that are part of this big response pool. I know that the coordination centres always look at what other assets can be made available, like ground search parties. It doesn't always have to be the primary SAR aircraft that responds. Who can actually access the sites depends on who's closest, and the weather. Sometimes the weather is so awful that there's very little air response available because of visibility, winds or precipitation. Sometimes a ground party might be the only way to get there and get eyes on the problem.
It has to be managed on a case-by-case basis. There's never a perfect solution because the geography and the weather are so challenging, but they always look at that mix of what we have, what other people have, and the logical task of deciding who should go and look at this problem.
Senator Day: Just to clarify the record, though, search and rescue in Canada, from an air point of view, is the air force.
Lt.-Gen. Deschamps: That's correct.
Senator Day: But are the Canadian Armed Forces not involved in search and rescue other than from an air force point of view?
Lt.-Gen. Deschamps: Ground search and rescue, such as for somebody lost in the woods, is a municipal and provincial responsibility, although we do get called. They will do what they can. If they need support, they call the coordination centre, and it will bring support, but their primary response is not to go to the RCCs. For our rescue coordination centres, the primary focus is air accidents, air losses and maritime.
Senator Day: I just wanted to clarify the record on that.
Senator White: Thank you very much, Mr. Chair. General, just out of interest, there are often complaints that Public Works is meant to work for the military, but in fact the military ends up working for Public Works. Do you still see that as an issue, as it was when you were in the position you were in?
Lt.-Gen. Deschamps: Thank you for the question. I think Dr. Perry did speak to the process issue. A lot of demands are placed on Public Works' back to deliver across government on a range of programs. To be fair to them, they do have their own challenges given the scope on which they have to deliver, defence being a pretty onerous problem. As you point out, there are something like a thousand small to fairly big acquisition programs in the queue.
So it goes back to process, accountabilities and expectations. I think it also goes back to that triangle of policy, ambition and resources. If it's in balance, it's a great thing, but it hasn't been in balance for a while, so the challenge is to find that middle ground where you can actually deliver on expectations.
I think Public Works is struggling with the demand that's being placed upon its organization to be accountable, but at the same time the bulk of the demand that's being put out from Defence is, I suspect, straining them severely, given the current process that they have to work through. That's just the reality.
Senator White: Thanks very much for being here.
[Translation]
Senator Dagenais: Mr. Deschamps, I want to quickly return to the UAV issue. You said the progress on the use of UAVs was a bit sluggish. Have acquisitions still been included in budgets? To speed things along, should we include new funding in the 2017-18 budget, for example? Is that why things aren't moving forward?
Lt.-Gen. Deschamps: The UAVs are part of the Department of National Defence's procurement plans. In 2017, there should be renewal of activities that will lead to a decision, so that we can have operational UAVs in 2020-21.
The budget required to deliver the UAVs is linked to operational requirements. We must ask ourselves the following questions. What are we expecting? How much will it cost? Where can we find these capabilities? Should we consider one type or two types of UAV? There are costs involved. If we decide to create two fleets, the costs will rise. We must therefore decide whether we want to try to meet all domestic and international needs or whether we should limit ourselves to what we can do at this time. We can move forward and ensure we have the overall capacity and room in the long term to give Canada options that, over time, will be more useful than our current options. At this time, we have strategic satellites and manned CP-140 aircraft, but not much between those two things. We need to fill this gap fairly quickly.
Senator Dagenais: Thank you, Mr. Deschamps.
[English]
The Chair: I would like to refer to an area that you touched on, and that's the early warning system in the Arctic. Perhaps you could speak to the necessity for the replacement of the Arctic early warning system and expand on how important it is to Canada's national defence and that of North America.
Lt.-Gen. Deschamps: Thank you, Mr. Chair. The association has yet to address the Arctic early warning system. I believe that will be looked at in the near future in a position paper. Suffice it to say there's already been testimony by senior commanders of NORAD before this committee on the importance of Arctic surveillance for North America, and certainly Canada is part of that.
There are a lot of challenges in understanding what the future will bring as far as the environment is concerned, as the temperature and the icefields change. How the activities and patterns in the Arctic change will also challenge the technology that's currently there. Clearly, the renewal of the early warning system is front of mind for NORAD commanders. It's a big long-term program that requires a fair amount of engagement by the two nations to find out what will be acceptable to both in terms of what the program needs to be able to deliver to meet future needs. There's a lot of evolving technology from other actors that has to be taken into account, and it is technology that will challenge us quite a bit, so some innovation is going to be required, and also a layering of early warning systems.
Right now we have a certain amount of belt, if you will, and a tripwire system. New technologies will challenge that. You will need to have more in-depth, longer-range detection. That is the big issue; low-observable systems are a significant challenge.
The Chair: This will be a very significant investment by Canada when we move forward to replace what's there.
Lt.-Gen. Deschamps: I believe it will require a very important discussion in our government as to what Canada wants to see for our own sovereignty in the High Arctic, our engagement and our capabilities, and also what part we need to play in the defence of North America, as viewed by our partners in the U.S. They have a certain view that we're going to have to understand and adapt to.
The Chair: Colleagues, we have come to the end of our time here. I would like to thank the general for taking time out of his schedule to come before us and represent his organization. I think he brought a great deal of information that will help us in our deliberations as we move forward with the defence policy review that's under way.
(The committee continued in camera.)