Proceedings of the Standing Senate Committee on
National Security and Defence

Issue 11 - Evidence, February 7, 2005


OTTAWA, Monday, February 7, 2005

The Standing Senate Committee on National Security and Defence met this day at 9:40 a.m. to examine and report on the need for a national security policy for Canada.

Senator Colin Kenny (Chairman) in the Chair.

[English]

The Chairman: Good morning, ladies and gentlemen. My name is Colin Kenny and I chair the Standing Senate Committee on National Security and Defence. We are here today to review Canadian defence policy.

I would like to introduce the members of the committee. On my immediate right is the distinguished senator from Nova Scotia, Senator Michael Forrestall who has served the constituents of Dartmouth for 37 years, first as their member of the House of Commons, then as their senator. While in the House of Commons, Senator Forestall served as the official opposition defence critic from 1966-76. He is also a member of our Subcommittee on Veterans Affairs.

On my far right is Senator Norm Atkins from Ontario. He came to the Senate with 27 years of experience in the field of communications. He served as a senior adviser to Robert Stanfield, Premier Davis of Ontario, and Prime Minister Brian Mulroney. He is also a member of our Subcommittee on Veterans Affairs.

Next to Senator Atkins is Senator Tommy Banks from Alberta. Senator Banks is the chair of the Standing Senate Committee on Energy, the Environment and Natural Resources, which recently released a report entitled The One- Tonne Challenge. He is well known to Canadians as a versatile musician and entertainer, and provided musical direction for the ceremonies of the 1988 winter Olympic Games. He is an Officer of the Order of Canada, and has received a Juno award.

Beside Senator Banks is Senator Michael Meighen who is a lawyer by profession. He is Chancellor of the University of Kings College and past chair of the Stratford Festival. He has honorary doctorates in civil law from Mount Allison University and the University of New Brunswick. Senator Meighen is chair of our Subcommittee on Veterans Affairs, and is also a member of the Standing Senate Committee on Banking, Trade and Commerce.

On my left is Senator Jane Cordy from Nova Scotia. She is an accomplished educator with an extensive record of community involvement, including serving as vice-chair of the Halifax-Dartmouth Port Development Commission. She is chair of the Canada-NATO Parliamentary Association and is a member of the Standing Senate Committee on Social Affairs, Science and Technology.

Next to Senator Cordy is Senator Jim Munson from Ontario. He was a trusted journalist and former director of communications for Prime Minister Chrétien before he was called to the Senate in 2003. He has twice been nominated for Gemini awards in recognition of excellence in journalism.

Senator Joseph Day from New Brunswick sits at the end of the table. He is the deputy chair of both the Standing Senate Committee on National Finance and the Subcommittee on Veterans Affairs. He is a member of the bar of New Brunswick, Ontario and Quebec and a fellow of the Intellectual Property Institute of Canada. He is also a former president and CEO of the New Brunswick Forest Products Association.

Our committee is the first Senate committee mandated to examine security and defence. The Senate asked our committee to examine the need for a national security policy. We began our review in 2002 and during that year published the following reports: Canadian Security and Military Preparedness in February; The Defence of North America: A Canadian Responsibility in September; and, An Update on Canada's Military Crisis, A Review from the Bottom Up in November.

In 2003, the committee published two reports: The Myth of Security at Canada's Airports in January; and, Canada's Coastline: The Longest Under-Defended Borders in the World in October.

In 2004, we tabled two more reports: National Emergencies: Canada's Fragile Front Lines, in March; and, recently, The Canadian Security Guide Book, 2005 Edition.

This committee is reviewing Canadian defence policy, and during the next few months we will hold hearings in every province and engaging with Canadians to determine their national interest, and what they see as Canada's principal threats and how they would like the government to respond to those threats.

The committee will attempt to generate debate on national security in Canada and forge a consensus on the need and type of military Canadians want for their country.

We have before us today LGen. Caron, Chief of the Land Staff. He is an infanteer by trade, and his regiment was the Royal 22nd. He has commanded at most levels of the army. He has served on a number of overseas missions, in Kosovo as well as in exchange with the British Forces. He has recently been promoted to assume the role of commander of the army, although he was acting commander while LGen. Hillier, the new Chief of Defence Staff, served in Afghanistan throughout the first nine months of 2004.

LGen. Caron, we are pleased to have you here before us. We are looking forward to what you have to say.

LGen. Marc Caron, Chief of Land Staff, Department of National Defence: Thank you Mr. Chairman. My opening remarks will focus on the state of the army, army transformation and regeneration, followed by a conclusion. I will keep my remarks brief. We can go into further detail on these subjects and others that I have touched upon during the question and answer period.

Advancing with purpose: The Army Strategy was released in 2002. The document has been highly successful in guiding the army's transformation efforts. It has had the unique characteristic of being "succession proof'' in terms of living through its third army commander since its publication. This is a testament to the soundness of its intent, vision and objectives.

Over the last three years, we have continued to integrate the major new equipment and rationalized some of our combat capabilities into like units to reduce redundancies and allow our field force to focus on their core capabilities. During International Security Assistance Force, or ISAF, in Afghanistan, we successfully introduced an unmanned aerial vehicle capability to the Canadian Forces. We also initiated the process of retiring some of our Cold War equipment. Most importantly, the process of establishing the Canadian Manoeuvre Training Centre in Wainwright, Alberta, commenced.

The CMTC is a number-one priority, as it will be the focal point for army collective training and central to the new Managed Readiness System, with initial operating capability as of April 1, 2006.

There are still some challenges that the army will face. We must continue to address the need to make the army more sustainable, while ensuring that it is both affordable from a financial resources point of view and that it is sustainable in terms of the ability to generate forces as requested by the government.

The last several years have seen the army stretched by the operational tempo the Canadian Forces have maintained. At its height, when Canada was the largest contributor of troops to the International Security Assistance Force, almost 2,800 army personnel were deployed on operations. The Canadian government has supported a reduced commitment for the army for the next year to allow the army to rest, regenerate and prepare itself to deploy sustainable task forces in 2006.

In terms of our service equipment, the army has a relatively modern fighting vehicle fleet. There are challenges with regard to national procurement accounts, which are the accounts necessary to support spare parts and repairs. The way the army will generate forces to the Canadian Forces to employ will change under the Managed Readiness System. Potentially, elements could be grouped from across the country to form task-tailored forces. These task-tailored forces will be generated under a task force, including the capabilities necessary to remain strategically relevant and tactically decisive.

We are on the cusp of the release of the new international policy statement and the defence policy statement. Our challenge is to make sure that the army strategy merges with the developing Canadian Forces vision of transformation to ensure that the whole is greater than the sum of all its parts. Our reality assets will also require constant attention. However, we feel that the army strategy positions us well to respond to these challenges.

With respect to army regeneration, in September, 2004, I issued my intent to regenerate the army's capability and readiness through an integrated and synchronized approach. The main effort throughout this regeneration period is the creation of sustainment of task forces to meet high readiness tasks. The end state is a combat-capable, multipurpose land force able to meet Canada's defence commitments for an indefinite period. The overall army objective related to this plan remains in line with the overarching army strategy.

We must achieve the right balance between agendas. Our efforts must lead to an improved management of personnel tempo and mitigation of pressures placed on our soldiers.

The regeneration activities, which commenced in earnest with the reduced commitments in August 2004 are on target, and I am confident that by February 2006, the army's readiness posture will be sufficient to meet and sustain the demands at home and abroad.

Beginning in February 2006, the managed readiness plan will take effect. This plan establishes a continuous three- year cycle of recovery, training and deployment that will provide the Canadian government with the sustainable capacity to deploy up to two 1,000-person task forces and a brigade group headquarters. In addition, managed readiness establishes the capability to deploy a third "surge task force'' for short duration emergency situations, while allowing the army to continue to meet its commitments for such operations as disaster assistance response and non- combatant evacuation. A key element of managed readiness is the six-month recovery period immediately following a unit's deployment that serves to mitigate the effects of high operational tempo.

Regarding the reserves, both the regeneration and managed readiness plans direct the design, planning and execution of the full range of tasks for the army, including both the regular and reserve components. Under the managed readiness plan, the army reserve plays a crucial role in the sustainment of all high-readiness tasks.

In the fall of 2004, I stated my intent to increase the role of the army reserve through the implementation of higher operational readiness of key capabilities in support of international and domestic operations. The main effort will be the generation of the initial capabilities supporting the regular component task forces coming in line in February 2006. The end state will provide the army reserves with a focused readiness posture creating the condition for a fully integrated army.

With respect to the future, I would like to turn your attention to where I see the army in the next five to 10 years.

We are changing the way we will fight, the way we will train and the way we will generate forces to operate in the complex, joint, interagency, multinational and public environment at the population centres. "Three-block war'' was a term first coined by a marine general, General Krulak. He envisioned that friendly forces could be called upon to carry out, on the same day, three different kinds of operations within the area of the size of three city blocks. Block one would involve feeding and clothing displaced refugees and providing humanitarian assistance. In the second city block it would keep two factions apart, through stabilization, peace support or peace-support operations. In the third block it would be mid- or high-intensity fighting or combat operations. The three-block war concept has now been adopted by all major countries.

Canada's army must be ready to conduct these operations simultaneously and very close to one another. We must be prepared to conduct them in large urban centres and in complex terrain. In terms of how we conduct collective training for this environment, the brigade training event scheduled for the fall of 2005 will focus on this three-block war concept.

Finally, the managed readiness system I mentioned earlier will be the foundation for generating sustainable forces to operate in this environment. Obviously Canadian Forces expansion will have a major impact on our capacity to generate and sustain forces. The implementation of this system will occur over the next three to five years, subject to resources.

Investment in an expanded Canadian Forces is of particular interest to the army, as we have experienced a higher attrition rate than the remainder of the Canadian Forces, leaving many of our units significantly underpowered. The potential influx of additional personnel will allow the army to bring its units up to strength, and eventually increase the size of the deployable task forces.

The focus of the army expansion is on an increased capacity, both in terms of sustaining domestic and international operations, as well as the enhancement of the army's command and control, intelligence, surveillance, target acquisition and reconnaissance-forces generation.

We will continue to build our new direct-fire capability that began under General Hillier. As you are all aware, the Canadian Forces moved quickly on the acquisition of a mobile-gun system. An initial delivery of the first batch of these mobile-gun systems is still expected in 2007, and new equipment introductions will continue.

Our major efforts have been put into reorganizing our army and our structures for the information-age of warfare. The omnibus ISTAR project, Intelligence Surveillance Target Acquisition and Reconnaissance, will provide a suite of integrated equipment that will produce an interoperable, globally deployable system that can support the land force commanders in non-combat and combat operations across the full spectrum of conflict. However, the army will always be expeditionary army, but the new security environment means that domestic security will also be important. A more direct and concerted effort needs to be paid to the defence and security of Canadians.

The army will form a task force in the role of immediate-reaction units; one in the Atlantic, one in Quebec, one in Ontario and one in Western Canada. However, it is here where domestic requirements play to the particular strength of the reserves. Their footprint across the country will play a valuable role; a complementary role to the domestic task force in support of other government departments and other levels of government. We have established unique capabilities in the reserves that will be useful in supporting expeditionary operations and also uniquely suited for domestic response.

The nature of the potential threats means we cannot look at the domestic environment in isolation. We must consider our potential participation in continental defence and security if we are to meet the goals and tenets of the new national security policy. The army must be prepared to generate forces to respond.

By way of summary, the army has moved forward significantly in implementing the vision that was espoused by General Jeffrey three years ago and confirmed by the operations of General Hillier in Afghanistan.

We are moving to a more sustainable army that will be relevant and responsive to the needs of the country in the new security environment of the 21st century. We will also continue to move forward in our initiatives to strengthen the protection of Canadians at home and in addressing our responsibilities in terms of continental defence and security. Army regeneration will see the move towards an interim posture called the "interim army.''

As the new strategic policy unfolds, there may be a requirement to tweak where the army is headed, but we are convinced that the strategy's overall intent and vision remains essentially sound. As a coherent vision of Canadian Forces transformation begins to emerge, we will have to ensure that we contribute to the whole and deliver the capabilities required by the country.

Finally, we will continue to move towards an army of tomorrow that will deliver strategically relevant, tactically decisive land forces for the country. We stand ready to fix, expand and transform the army in line with a Canadian Forces vision. I am anticipating exciting times for the Canadian Forces. In the army we will have all of the command team in place; something we have lacked for the last 18-20 months. We have experienced leaders in the current security environment. We have a vision and quality leaders to deliver on this vision.

I thank you for the opportunity today to address this important committee and I am ready to take any of your questions.

The Chairman: Thank you very much, General. We were looking forward to meeting with you this morning.

[Translation]

Senator Meighen: To begin, let me congratulate you on your appointment as chief of the armed forces. Welcome to our committee. We appreciate your being here to answer our questions.

[English]

On the first page you referred to a period of regeneration. I am sure you have seen that our reports indicated that we felt a period of downtime was very necessary some time ago. Clearly you agree with us in that regard.

What effect has this hyperactive operation on personnel tempo had on the army? What challenges has the tempo created?

[Translation]

Lgen. Caron: Thank you for your kind words, senator. It is a pleasure for me to be here this morning to clarify certain points and answer your questions.

[English]

The regeneration period is regeneration, it is not downtime. I can assure you that the soldiers in all areas are still very busy. The regeneration will, before I get to the impact, allow us to receive the new recruits, the strategic-intake plan. I am not talking about the expansion of 5,000.

A couple of years ago the strategic-intake plan was instituted to ensure that we are kept at the strength that we should be. As new recruits come in the regeneration period will also allow for individual training.

It takes a long time to create a sergeant. We have to grow them from soldiers, but we have to give them training, something that this regeneration period will allow us to do. There is some technical training that has to take place with professional development. This regeneration period will also allow us to do that training.

Collective training is also an aspect that we will cover during the regeneration period. This regeneration period will allow us to ensure that we are at the proper level for operation.

This high operational tempo and what we call the "personnel tempo,'' the time away from home for professional development or for tasking, has had an impact. The first one is probably on attrition. Even though the attrition rate is improving, a few years back, and even last year, the combat arms attrition rate was higher than the Canadian Forces mean on attrition. We have to create these people; we have to ensure we have those people back in place. The attrition has certainly had an impact. I have mentioned the training, both individual and collective. The high operational tempo also had an impact. Regarding the people, the manifestation of the tempo is the attrition — that is, people were leaving. That has had the greatest impact.

Senator Meighen: On the second page of your presentation, you referred to this managed readiness system that you are reducing. The one thing that I drew from this, perhaps incorrectly, was that in the past you would have the RCRs and the Van Doos going to theatre.

Under the new system, however, it sounds like you will be taking a few people from here, a few people from there; some equipment from here, some equipment from there; and welding it together into a one-time task force.

If that is the case, is it not likely to pose some severe challenges in terms of morale?

LGen. Caron: There are many points to your question, senator. I will first clarify and explain the managed readiness system. I will then talk about the task force concept, which is not new.

The managed readiness system will allow us the predictability on the level of force we can sustain on an enduring basis. It will ensure the predictability of the soldiers coming back from operations. The soldiers will be ready at the lower level and then ready for high readiness and then deployed.

The managed readiness system, for example, will allow the CF to guarantee that two task forces of 1,000 people could be sustained on an enduring basis. That would be about 750 for the actual operators and 250 army folks to support them. They would form the national command element.

In every six month period, we would be able to put out two of those task forces. We also have the plans for the next three years. We also have a plan to have this surge capability. If an additional demand comes through, we have the capability to provide, not on an enduring basis but on much shorter time duration, a third one.

Senator Meighen: I understand that, but where do these people come from? Do they come from one army unit or are they plucked from here and there and everywhere?

LGen. Caron: The nucleus comes from a major unit. We have numbered them. Task force 106 will be based on the nucleus of a unit, for example, 1RCR, 2RCR, 1Van Doos, the RCD, and so on. The nucleus will be there from that unit. In Germany I served from three different Van Doos.

We are formally structuring those task forces of 1,000. We want to make sure that we are able to respond to the broadest number of options. Therefore, those task forces will have a mixed capability. They will have light armoured vehicles. For example, if you tell the 3RCR task force that they need one or two companies of light armoured task force, and the CO of 3RCR says that he cannot do this we will structure the task force to be able to respond to the broadest number of options that you will see in theatre. He will probably have a company of 1RCR just as LCol. Denis had in Afghanistan; he had members from 1RCR and 2RCR in his unit. More than 50 per cent of his unit in Afghanistan came from outside of the family of the 3RCR. It is the same thing with 3Van Doos, and they were highly successful. The regiment will still play a role — that is, the RCR, the Vandoos, and so on.

Our level of training is divided into seven levels. If the unit, that is, 3 RCR, 3Van Doos, or the RCDs, has not been identified for high readiness their task will be to provide company, that is, in our parlance, to train to level 4. Their mission is, first, to receive all the recruits and give them the regimental view of things. Their mission is to train a company, 3 infantry companies, and so on.

Once a unit is in high readiness, we will bring together what is required for the mission. That is to say, the nucleus will be around a unit. However, 3RCR may not employ all of their people, like we did in Afghanistan. He will take it from 1RCR because that is the family that they need. That is the type of cohesion that we are seeking.

An army is trained, cohesive and disciplined. The cohesion we are seeking is in the discipline. Discipline plays a key role and a fundamental role. We want to offer the broadest number of options available and the flexibility to put those teams together. We are seeking a cohesive army.

Senator Meighen: You have responded to my question about lack of cohesion. I am not sure I fully understand what is new but I know my chair has a supplementary.

The Chairman: General, we have heard from witnesses that soldiers fight for their buddies and that what motivates them is not king and country, it is who is in their squad, who they have trained with, and who they have worked with. We have understood for years the core of a soldiers' motivation is the regiment.

We are having difficulty understanding why the army is structured in these regimental families if they are not the ones that are willing to do the heavy lifting when the time comes.

Could you address that, please?

LGen. Caron: The regimental family will remain important, as it has a key role to play. You are absolutely right; to an infantryman his immediate team is of the greatest importance to him. It may not be the battalion, the company or the platoon. It is the section — that is, the 10 buddies that eat and sleep together, and so on.

The level of structuring that we are talking about for high readiness tasks will not go below the level of company because we know that the level of company is fundamental to that cohesion at the small team level. We are not going below that.

We are putting together what is required for the mission at the subunit company squadron battery level. We have always done it. We did it in the First World War, Second World War, Korea and even the Cold War. We have always task organized.

What we are proposing here is even better than my overall experience that I described with the RCD. What I knew of the RCD when I was dropped with them for a week on exercise was the brigade standard operating procedures, and so on. We will put the team together. The nucleus will be a unit, for example, Van Doos, and so on, with two or more of its own subunits, with subunits from other squads. They will come together and they will be tested, certified and build a cohesion at the subunit level that some of us never had the opportunity to do during the Cold War. In those days we would regroup on the move. Now, however, we will put that team together.

When they reach level 5, where combined arms are necessary, a mix of armour, artillery and infantry, they will stay together for a brigade training event, and they will go through the Canadian Manoeuvre Training Centre together. They will do live fire together, so when they are ready for operations they will know each other.

The reason we do not do this is at the lower level is because we do not have units that have infantry, armoured and artillery, living together on a day-to-day basis. There are reasons for this: The individual and specialized training of a trooper and the armoured corps is different from the training of the infantry. However, it is certainly something that we have looked at and we will continue to look at.

We will eventually need to come to a combined arms unit on a standing, day-to-day basis. We are experimenting today with this type of unit; it is called the Direct Fire System Unit. Inside the Lord Strathcona, on a day-to-day basis, there will be infantrymen and anti-tank gunners that exist in the PPCLI that will live with them on a day-to-day basis.

We have nationalized the number of tanks. We have said that we need fewer tanks, and that we need the mobile gun system. We do not need the numbers that we had during the Cold War. We need only that one particular unit that will be able to provide components of the unit, subunits or whatever, to those task forces.

We are breaking new ground here, and people are watching us. We are creating a combined arms unit on a day-to- day basis. Right now they have infantrymen, and soon there will be air defenders and artillery people, because we will move the Air Defence Anti-tank System into that unit. We are taking risks and breaking new ground.

We do not intend to go there for the other units because of the individual training of the infantrymen, the armoured corps and so on, that I have already mentioned.

The regiments and the battalions will be responsible to level 4 company. When that is done, if it is CO3RCR that will come in high readiness, they will take one or two companies of their own units and this direct fire capability will receive artillery and they will take that team and will spend some time with it to build it and make it ready for operation.

Senator Meighen: I am sure some of my colleagues will want to pursue this because on the one hand it is always been done on the other hand you tell us you are breaking new ground. For those of us who did not grow up and spend our adult life in the military it is hard to grasp but it is an interesting concept.

I will change the subject to say that it is pretty accepted wisdom by all concerned that the Canadian Forces have been — pick your own adjective — unfunded drastically, severely, somewhat, but underfunded over previous years.

Can you tell me where that has had an impact on your operations? Has it been in maintenance or training or elsewhere?

LGen. Caron: I deal with the funds I am given. The operating budget of the army is $1 billion. That does not include the salaries of the regular forces, which are paid from another account. It does not include capital acquisitions of a major nature, which also comes from another account.

How we take care of the infrastructure, the reservists, the civilians, and how we train and pay them, is with roughly $1 billion. Fifty per cent of that $1 billion goes to garrison support. Included in the $1 billion are civilian salaries, our infrastructure investment, maintenance, and so on. A quarter of it goes to pay the reservists, and with the rest of it we do the training. We do the transformation. We do what we have to do. It is always a balance between the changed agenda and the sustained agenda.

We do take some risk on infrastructure. In order to manage the risk we have to know exactly what we have out there. It is always a balance, or a managing of the risk of the funds, between meeting the goals of the mission, and care of the real assets that we have such as the equipment, the people and so on.

In regard to the impact, we have to be very careful and watch our infrastructure. We have to be very careful to ensure that we achieve the level of training that we have.

Senator Meighen: Are you?

LGen. Caron: Yes, we are. The proof is in the success that we have out in operations. However, some aspects of training may be dropped because we may not need this particular aspect. We watch very carefully so we do not have a failure.

Senator Meighen: Are you are telling the committee that notwithstanding the limited resources that you have that you are managing just fine, and you are making the necessary adjustments and you are doing adequate training?

I gather that you produced an impact assessment for 2004-05 where, according to my information, you indicated that there was a $355 million funding shortfall, largely in national procurement and infrastructure maintenance.

This committee has been to Gagetown and certainly heard the tales of woe. Tell us where you are under funded in procurement and infrastructure maintenance. Surely that has had a negative impact. Surely you have had to stop doing things that are vital.

LGen. Caron: We are managing our infrastructure. The impact statement notes that in order to respect industrial standards we are under funded by $114 million on infrastructure. However, because we know where we need to apply the funds and we apply them at the right spot, we have avoided catastrophic failure.

The impact statement says that we probably need more funds in order to ensure that we change all of the buildings. There are some good stories and some bad stories.

Hopefully you saw the 2RCR buildings going up in Gagetown. This is good news. I hope that you saw the schools. There is a brand new building, which was a priority, and it is much better compared to what it was before it was rebuilt.

We have placed our priorities on new quarters in Gagetown. We have good news stories and bad news stories throughout the army.

Senator Meighen: That is true, but I for one have been concerned with the number of bad news stories attributable to lack of funding. Obviously we all hope that problem will be rectified.

I want to move to the area of the reserves. As I understand it, General Caron, you see the reserves as being an augmentation. There has been an augmentation role and an increasing augmentation role for the regulars. I interpret your presentation to say that you see the reserves as perhaps the primary home defence unit to deal with floods, fires and the like.

Is that so?

We hear many stories about the reserves getting outdated equipment, not through malevolence but simply because it is determined, and I think appropriately, that the new equipment should go to those who are deployed abroad. It nevertheless leaves the reserves training on old equipment, so if they are deployed abroad, they come up against pieces of equipment with which they are not familiar.

We hear the ongoing story, and this goes back to the question of taking various elements from various units, that the best trainers are plucked from the reserves because they are needed to augment the regular force in Afghanistan, for example, leaving nobody to train the trainees. That concerns us.

I wonder what role, if any, you see for the supplementary reserves. We spend a fortune training people, they get out of the regular forces and in the five years following, I think it is rare that they are called upon. Why is that?

LGen. Caron: Back in the 1990s, I was the operation officer for the army in FMC where we deployed over 4,000 people. We would not have been able to do that without the reserve forces. We would not have been able to get through our recent experience without the reserve forces. We have a fully formed, integrated reserve company. It takes time to bring them up to that level, and I will return to that point. However, we are one team. The reserve forces are part of the army.

On the domestic front, we cannot say whether the reserve or the regular forces will be the first to respond. The municipal and provincial levels are responsible for being the first responder. We will have a better understanding of what is required with better integration, and the army, both regular and reserve, and it could be that reserve that will be the first to help the first responder.

We conducted an experiment here in Ottawa with the chemical biological response team to support the city of Ottawa. We built a scenario and the City of Ottawa came out with its Hazardous Materials Response Team as the first responder. In that scenario, it was obvious that the situation was beyond them. They called on the Canadian Forces. Of course, it was all compressed for the sake of the exercise, but we deployed on a parallel basis a decontamination line using our equipment, using reservists that were trained for that purpose.

Civil/military cooperation in expeditionary operations is a function that reservists have been fulfilling for many years. It will now be available for domestic operations as well.

In the supplemental role, reservists will have roles that do not even exist in the regular forces. We have to understand that the Canadian Forces will respond at the right level. It may be the reservists, it may be the regular army, it may be a mixture that will support the first responder.

Senator Meighen: Is that because of your assertion that the reserves are an integral part of the regular army?

LGen. Caron: Absolutely.

Senator Meighen: Therefore, it would be contradictory to that principle to say to a reserve unit, "Okay, reserve unit X, you are responsible in Halifax for coming to the aid of the civil power initially. If the first responders need some help, that is your number one responsibility.''

My understanding is that was the way we had been moving and that indeed some funds had been allotted for that procedure. We have been finding that the reserves do not know anything about this, nor do the first responders.

LGen. Caron: I was coming to that point. A young reservist is a volunteer. If on a Friday he does not want to show up for the exercise, he will not show up, and we respect that.

We give a reservist about 38 days of training in the year, plus summer training. That is not many days of training but that is what we have. I have a quarter of the budget of the army, over $250 million, for that training.

There is a limit to what you can expect of young reservists with only 40 days training. The gunner course on a LAV III is 40 days. That is why they do not get the equipment. However, if the young reservist is called upon and activated to serve in a LAV III outfit, he will be given the time and the courses required to achieve that level of training. We will not deploy an individual that is not trained. That is why they do not get the equipment.

By the way, even all of the regular forces, when they are at the lower level of readiness, will not get their full complement of equipment. They will get the level of equipment that is necessary to train to the level that we have asked of them.

We ask the reserve unit to provide a trained soldier inside the team and that is what it provides. Of course, there may be some commanding officers with great ambition, but that is not what we are asking them to do.

Senator Meighen: Could you define a trained soldier? Does that mean somebody who can march and salute or does that mean somebody who can operate the latest radio equipment?

LGen. Caron: A trained soldier is given a standard to achieve. He will know how to march, how to shoot and how to use his weapon. He will be familiar with some of the radios that he will see in the army, but I would not expect all reservists to train on the LAV III turret; it does not make sense, as we would be expending resources unnecessarily. However, if a particular reservists needs to be trained on the turret of the LAV III at a particular time, he will be given that training.

In the companies that we deployed in Bosnia, some of those reservists were committed for over 18 months. The 18 month commitment includes the preparation, the deployment and the return of the reservist. That is a big investment. Young army reservists have the basic training to become team members and are given the additional training when it is necessary.

Returning to the loss of the trainers, I do not believe that the army is losing out. The trainer makes that decision. Perhaps a sergeant with the Royal Montreal Regiment sees that they are looking for a sergeant trainer in Saint John. He will decide he wants to go to Saint John because there is an offer of a two or three year contract. In that particular situation the trainer will leave his civilian job.

We also have to realize that reservists live more than one life. Most of them are students, and have their own family life. As a reservist gets older, he or she may become master corporal, leave university and start another life. The reservist will then have a family life, a professional life and a reserve life. They are volunteers and we have to respect that fact.

Volunteers are the foundation of our reserve forces. If a reservist decides not to show up on a Saturday, he will not show up. I am always surprised to see how a unit reorganizes itself depending on who shows up.

Regarding the loss of the sergeant from the RMR, yes, the RMR has lost out. However, I believe the Canadian Forces has gained a very good trainer and we have to make sure that the RMR can grow another sergeant. That is the way I see this issue.

A good portion of our army schools in Gagetown are for reservists. I see that as good news because when we have to reinforce training at the school we do not have to send a regular forces sergeant. That regular forces sergeant might have just returned from Afghanistan and another four or five months presenting a training course in Gagetown would make it too long to be away from his family. We have used reservists with great success.

From a unit CO perspective, I would have thought we would have convinced them that the army is gaining, but obviously we have not completed that communication challenge. The army is gaining a trainer, a reservist, and eventually that reservist will go back to his unit and they will have an individual with great experience who has trained regular forces. A good portion of recruit school instructors in Saint John are reservists. From a larger perspective, we are gaining.

Senator Meighen: In terms of that, I cannot resist adding: as long as the paperwork can be done within a reasonable period of time. You know that story.

Senator Munson: Is it the same in the United States with their reservists, their volunteers, that they can show up if they want to; or they do not have to show up?

LGen. Caron: It is a different system, sir.

Senator Munson: I know. Why do we not have that system?

LGen. Caron: This is not the system we have now. We have to work with the system we have now.

Senator Munson: Would you like to see the system changed?

LGen. Caron: I do not believe so, sir.

Senator Munson: Why?

LGen. Caron: There may be an impact on individuals.

Senator Munson: Based on what you have said this morning, what types of missions is the army sufficiently resourced with both equipment and personnel to undertake all the things that you have said?

LGen. Caron: We will be able to do the three-block concept that I have described, with two task forces out on a continuous basis of about 1,000. I was probably not clear enough: inside those missions there will be some reservists as well. We will have identified them early enough. They will have been integrated with that task force and will have gone through all of the certification and they will be there. We will be able to do humanitarian work. We will be able to do peace support operations. We will be able to do combat operations. That is why you have an army, to do combat.

Senator Cordy: May I ask a supplementary question on reservists?

The Chairman: Some people have been patiently waiting. If it is short, go ahead.

Senator Cordy: On the subject of reservists, with the Prime Minister announcing that we will be having 5,000 new regular forces, some people we have spoken to are concerned that this will have an adverse effect on their reserve units. That is a genuine concern. However, we have also heard that reservists sometimes have a difficult time getting into the regular forces, and this may be their opportunity. Have you looked at that issue?

LGen. Caron: The issue is of component transfer?

Senator Cordy: The issue is whether or not it will have an adverse effect on the reservist forces.

LGen. Caron: We heard in the Throne Speech that there will be an increase of 5,000 for the regular force and an increase of 3,000 for the reserve. The reserve will achieve 18,500, which was announced in land force reserve restructure.

There will be an impact, I believe, on training, to ensure that we are able to train all of them, the 5,000 and the 3,000. We must reinforce the schools. I cannot speak for all of the schools, but I can speak to army schools. They are not geared for a peak. We will have to adjust and we will have to bring in some instructors.

It will more than likely have an impact on all of the other things that we are doing. It will have an impact on reservists and on the regular force unit. However, at the end of this period, when we achieve those levels, they will be back to where they should be on strength.

Component transfer is another issue that is really within the realm of Admiral Jarvis, the Assistant Deputy Minister for Human Resources. We are looking at this process. We need to streamline the process it both ways. There are some challenges going from the reserve to the regular, and going from the regular to the reserve. I believe that they are working very diligently to streamline the process, especially in light of this expansion, where there will be a large number. I expect a large component transfer.

Senator Day: I am not certain what had been done and what you hope to be doing. There is always the question of "tweaking'' your plan when we finally see the Canadian Forces' new policy statement. We are working diligently on our input to that statement. We understand that the new Chief of Defence Staff has sent it back for further thinking and a further rewrite, so we do not know when we will see it.

In the meantime, you are you moving ahead with General Jeffrey's plan of three years ago. Are you just moving ahead on that vision for the army for the 21st century, irrespective of what might come down on the Canadian Forces plan and policy statement?

LGen. Caron: We have not seen the policy statement. We believe that what we have as army transformation and army vision will be more or less in line with what General Hillier will expect of the Canadian Forces. That may be because we know General Hillier; but we believe that what we have been doing, and words such as medium force, command-centric, strategically relevant, tactically decisive, will be very relevant.

Some of those actions take a long time to prepare or adjust. I believe that if we have to adjust, we will have time to adjust. Your first point, senator, was: What have we done? Probably the biggest thing is the Canadian Manoeuvre and Training Centre.

Senator Day: Is that in Wainwright?

LGen. Caron: Yes. We moved vehicles there. There are probably more vehicles there than in any of our bases. We moved people there last year and this year. There were 100 last year; there will be 100 this year moving to Wainwright. Buildings are going up. There is a clear manifestation of transformation going on right now in Wainwright.

Senator Day: Do not lose your train of thought, general. I would like you to tell me about some more fundamental changes that you are in the process of making.

Just while we are on the subject of Wainwright, we as a committee have visited several units across the country; it is part of our responsibility to the public to understand what is going on. We were told that these reservists and regular force people away from Wainwright are finding it very difficult to be trained up to being ready to go to Wainwright to do collective task force manoeuvring, because the equipment that they use to train on has been mandated to be directed and wait in Wainwright for a collective training. They cannot do the individual local training any longer.

LGen. Caron: I will expand on what we call "whole fleet management.'' I will give you another personal experience. I commanded a mechanized battalion, 3Van Doos. I had 69 M113 Armoured Personnel track vehicles. Honestly, they were the pain of my life on a day-to-day basis. I probably used the complete fleet maybe four or five weeks a year, when we all went down to Gagetown. However, throughout the year I had to maintain those 69 vehicles. That is one aspect of fleet management to which I will return.

When you issue to all of the units their operational equipment, it means you have less flexibility when they actually deploy in operation. I will give you another example; 2Van Doos was the first unit that we deployed in Bosnia with the last three vehicles; 3Van Doos is still looking for some of its vehicles, because they are in Bosnia and because of the shuffle. For all of this, we will institute whole fleet management where units will have the level of equipment necessary to achieve the level to which they are committed.

When 2Van Doos is not in high readiness its function is to provide companies, and it will have probably a company and a bit of LAV III. That will be enough to ensure that all of the drivers are trained, all of the crew commanders are trained, all the gunners are trained, and it will have a company to ensure that the company drills are done, and so on.

The more the regular force COs understand what we are doing, the more they say we cannot wait for it because they will not have to maintain all of the equipment.

Where are the fleets going? We need a complete fleet at CMTC. We will not move a unit 1RCR with all of its complement back in CMTC. They will arrive as they arrive in theatre. They will sign for the equipment and have it all there. We need a complete fleet there.

We need two fleets ready to go, so we do not have to put the fleets together when we actually deploy one to Afghanistan or Bosnia and so forth. If they are not deployed, they will be sitting parked and maintained ready to go.

Senator Day: I understand your need to have vehicles and equipment in Wainwright for your manoeuvring exercises. However, will you admit that the discomfort felt about not having the equipment to train their individual soldiers is a concern?

LGen. Caron: Senator, I will admit that there is a discomfort, but they probably do not understand exactly what they are doing yet in the sense that we are used to having all of the horses, carriages and weapons with us all of the time. That was the Cold War mentality. That is the way I was brought up. That is the way they were brought up. We have to change that.

We are transforming and they will adjust to the changes. The major that lives through this transformation will understand when he becomes a CO; it will be matter of fact. He will have 20-odd LAV IIIs, and he will ensure that they will be distributed within the unit. He is at a lower level right now, so he is not called upon to be there. When he is called upon to be there, he will have all of the necessary equipment.

Yes, there is discomfort, but I would discuss it with the CO. If he tells me he does not have the gear to do it, I will say he has over 20 LAV IIIs. I am asking him to train at company level. He has more than enough because he needs 14 to do the training.

Senator Day: It is not a question of not having the money to get the equipment; it is a matter of the psychological change in the future training.

LGen. Caron: It is also a matter of the way we will distribute the equipment.

Senator Day: Can we go on to another major transformation?

LGen. Caron: With respect to training, again, that is difficult because that is where you get the culture. Ideally, if you are able to train everybody at a go it would be easier. The warrant officers who are training the young officers in Phase 3, Armoured Corps and so forth, for example, were trained in a different model. Now he is applying that to the young officer. We have to change the way they think.

The meaning of the three-block war takes a while to understand. I ask my men what they have been doing in places such as Bosnia and Afghanistan. We want to train our new soldiers so that we do not have to retrain them when they are deployed. We want them to be able to switch rules of engagement.

For example, I am here in this first city block doing humanitarian aid. Then I see something happening over there, namely, peace support operations, which is part of my mandate. I need to readjust my rules of engagement. I want the master corporal and the sergeant to have the flexibility of mind to be able to do that switch.

We have to review all the curricula of the courses where we train our people. We are not there yet, and I will admit that, but we are on our way to changing the mentality of what is required to deal with the new security environment.

Senator Day: When you say you are on your way, do you mean it is still a paper exercise, and it is where you want to go but not have started to do so?

LGen. Caron: No, senator, some of the courses have started to change, for example, one that I witnessed last summer, Phase 3, Armoured Corps. It was good to see. They understood three-block war and the requirements for the young officers. It is not a great advance against a mass of armour that we would have trained for during the Cold War. We are not there yet, but we have made some very important steps in changing the mentality of the young officers and COs.

Senator Day: Does part of that change of mentality include the type of multitasked function that you described earlier in answering a question of Senator Meighen?

LGen. Caron: Absolutely.

Senator Day: I believe you said this multitasked function is still an experiment. Was it with the Royal Canadian Dragoons that this multitasked approach is taking place where we are getting away a little from the regiment mentality?

LGen. Caron: We are not getting away from the regiment.

Senator Day: Maybe that was a wrong choice of words.

LGen. Caron: The regiment has its role and will maintain its role. We have employed this task force mentality to some extent in Bosnia and in the big rotation in Afghanistan.

Senator Day: I am speaking from a training point of view.

LGen. Caron: We will employ it.

Senator Day: You have not done it yet.

LGen. Caron: No. We will employ it in BTE 05, Brigade Training Event, in Wainwright this fall. This task force approach will be used in that event.

Senator Day: You would have companies from different regiments with different skills. Will you have them living together?

LGen. Caron: Yes, they will be training together. The nucleus will be 2Van Doos, and the other nucleus is 1PPCLI.

The Chairman: Excuse me, general, but there is a large audience watching that would probably like to know what "PPCLI'' is.

LGen. Caron: It is the Princess Patricia Canadian Light Infantry. That will be the nucleus of one of those task forces. The other nucleus will be the second battalion of the Royal 22nd Regiment. Those are the high-readiness task forces. They are getting ready to be deployed for January 2006. They will have artillery men and women coming to their task force. They will have armoured corps, a surveillance Coyote, and they will be put to the test and certified to ensure that they will be ready to be deployed in January or February 2006.

Senator Day: Will you call them Joint Task Force 3 and Joint Task Force 4?

LGen. Caron: They will be called Task Force 106 and Task Force 206. There is a perception that the regiment will lose its responsibility. To me the regimental role is fundamental. We will ask them to do more than they are doing in some aspects and maybe less than they think they should be doing. The fundamental nucleus, namely, the subunit, is a regimental responsibility. That will remain. They are not joint because "joint'' would mean air force. We just refer to them as a task force. They are an army task force.

Senator Day: It is difficult sometimes, but it is a task force that has a signals group attached to it.

LGen. Caron: Yes.

Senator Day: Would others besides infantry people be there as well, for example, reconnaissance people?

LGen. Caron: There will be others such as reconnaissance, Coyote, communications and service support.

Senator Day: That is what I understood from what you were saying. That is why I called it a "joint task force.''

LGen. Caron: "Joint'' would mean when there are two services coming together to work.

Senator Day: What happened to that term "battle group,'' and how does that fit into this task force concept?

LGen. Caron: "Battle group'' is an old term. It means about the same type of level of capability, but "battle group'' does not define what we are doing with the group of people. They are a task force that we put together for a mission.

Senator Day: You have used an interesting term as you go through this transformation. You hope to get to an "interim army.''

LGen. Caron: Yes.

Senator Day: I think that is an interesting term. That implies that there will at some time be a final army but you are not there yet. Will it always be interim from now on?

LGen. Caron: This temporal basis of army is General Jeffrey's great idea. The strategy describes the army of today, tomorrow and the future. This is to focus the staff, or different parts of the staff, on what is required to ensure that the army remains relevant.

With respect to the army of the future, we have staff in Kingston looking at what the future will be in 15-20 years. They bring ideas forward to the army of tomorrow. It is not necessarily a model for force structure; it is just to focus some parts of the staff to ensure we do not miss anything.

The army of tomorrow is the army we will need in five or 10 years time. However, because General Jeffrey wanted to move more quickly, he wanted to introduce an intermediary step. We are almost there; we have managed readiness, and some the important elements of army transformation will fulfill the interim army. That is the explanation of those different words.

Senator Day: Thank you.

How much of the new recruiting announcement do you need in order to achieve the results that you have described to us today?

You have said in here that there is a higher attrition rate within the army aspect of the Armed Forces. You obviously have to recruit to make up for that attrition. There has also been an announcement of 5,000 new soldiers plus 3,000 reservists right across the board. We understand that none of that will be started until you have funding for it in the budget.

If you had your choice, how many more soldiers do you need in order to achieve the balance to which you referred?

LGen. Caron: I do not have an exact number for you, but I will tell you what we will do with the expansion. I did say that we need to fix some aspects of the expansion. The fix is to ensure that we have what is authorized today. We are at that strength. We are getting there with the effort of the last two years. We are still not there in some of the technical trades, which is a fixed portion.

Senator Day: That is without the 8,000?

LGen. Caron: That is without the 8,000. They are still missing a fire-control system technician, weapons technicians, and lines-of-communication technician. They are still weak in those areas.

We have to watch the overhead. We want to increase the capability. I will give you a real-life example. When Lieutenant-Colonel Stephane Roy, CO of 3rd Battalion, Royal 22nd Regiment, got ready to go to Afghanistan, in order to create two companies he needed to use three. Authorized strength is about 80. You take some people left-out- of-battle and you take other people not available, is why you have to go and take the third company to reinforce the two companies.

Our plan is to ensure that the subunit, the companies, the squadron, the batteries, that key level is at the level that we need for an operation. We want to bring that level to about 120, or 130. When we have to send 3rd Battalion, 22nd Regiment, the CO will not have to break his third company to make the two companies that he needs to go. That is what we want to do. We also want to make some transformations on command and control, on surveillance and RECCI. That is what we want to do with the increased number; we want to bring all of the subunits to the level they should be for operation.

Senator Day: You need an increased authorized number to achieve that goal.

LGen. Caron: We are going to use part of that 5,000 to achieve that goal. People said it was first brought out as a brigade group. What is required now is to bring the current capability to a level where we do not have to rob from somebody else to ensure that it is ready for deployment.

Senator Day: You indicated that you have gaps and you have needs now, irrespective of this 5,000 that was announced.

LGen. Caron: That is correct.

Senator Day: Is the reason you have these gaps and have you the problems now because you have not had the funding to fill these positions?

LGen. Caron: The reason that we have the gaps in the technical fields is that we do not have the people there yet. They have decided to leave or what have you, and it takes time to train them. A fire-control system technician can take over 18 months to train before he is usable on the LAV III.

Senator Day: If you had the individuals would there be sufficient funds in your budget to fill those positions?

LGen. Caron: I cannot answer that question because those technicians are generated or trained by Admiral Jarvis. The strategic-intake plan that I mentioned earlier is meant to address some of those points.

Senator Day: Did it include a request for more funds in your budget?

LGen. Caron: That is really outside of my expertise.

The Chairman: General, after the meeting could you provide us with a note that defines the role of a regiment? In your mind is the role of a regiment role going to be that of a force generator?

Senator Atkins: LGen. Caron, in General Jeffrey's proposal what elements of the army have been eliminated?

LGen. Caron: I do not believe that any of the capabilities that existed when the strategy came out have been eliminated. Some were adjusted.

Senator Atkins: You have not eliminated the airborne.

LGen. Caron: The airborne was eliminated before that. The direct-fire capability was adjusted. The direct-fire capability used to be based on the Leopard tank. There was a decision to go to the mobile-gun system. The direct-fire capability remains, but how we meet that capability has been adjusted.

Senator Atkins: Can you compare your requirements for these task forces with what the army pledged to do in the 1994 White Paper?

LGen. Caron: Senator, I guess you are referring to the commitment in 1994 White Paper to commit a MCF, a main contingency force. The words used then were "two battle groups'' on a consistent basis.

Senator Atkins: In a conventional context?

LGen. Caron: Yes. There are some analogies between the two, but we are not referring to the MCF. We are referring to what we will offer to the CDS which will be predicable and at a level of force we know we can sustain on an enduring basis.

Senator Atkins: Can you comment on the tempo that has been asked of the army over the last 10 years?

LGen. Caron: The tempo has been very high. The operational tempo back in the 1990s was over 4,000 people out at any given time. Of course, we were a bit bigger then, but we were joined in Germany, and so on. That level of commitment put a large strain on the army. At that time, we had contingents of over 50 per cent reservists.

There was a bit of a lull when we pulled out of Cyprus and adjusted our commitment in the Balkans from two to one. At that time our numbers fell to around 2,000.

More recently our numbers have gone up to almost 3,000 with the deployment in Afghanistan of almost 1,800 people and 1,300 in the Balkans.

Senator Atkins: What about Haiti?

LGen. Caron: When there is a finite time it is a bit easier. That is why, with the Afghanistan mission and the Bosnia mission, the CLS of the time went to the CDS and said they could not commit to that level. That is why we readjusted in Bosnia, where we have about 80 people now, and we have adjusted down in Afghanistan from our original commitment. The first tempo is still there, where you need to maintain your skills and your leadership qualifications.

The impact over the ten years has been great on the army.

Senator Atkins: The military does not have a crystal ball. There are demands that the government makes on the Armed Forces.

How did you adjust to the demands to send the military to Haiti when you had other commitments at the same time?

LGen. Caron: We always have a non-combatant evacuation element, a company that is always prepared. We knew that our work in Haiti was of a short duration, originally four months, we took the troops that were associated with that commitment so that we would not be able to make that commitment any more and we went to Haiti.

For this managed readiness process, you have are to realize that we have set a limit of 1,000. In some circles, it may be interpreted as a cap, but that is our response to an enduring-basis commitment. You want to do this. With the force level that we have now, we can sustain two forces of 1,000 each. If you want to send more, there will be consequences, and you will end up in a situation such as we are in now. There is predictability on the time arising, and there is predictability on the level of force that we offer that will prevent us from being in the situation that we are in now. Right now we have asked for a bit of a regeneration period. We do not want to be in this position. It is awkward for a soldier to say, "I cannot do this.'' It is very awkward.

That is why this managed readiness process will ensure predictability on time and predictability on the level of forces available. This is also an important step.

Senator Atkins: Does it change the training program?

LGen. Caron: No, because every individual should know when he is recuperating, when he is in training, when he is in high readiness training and when he is deployed. That will facilitate the up tempo. He will be able to plan with his family and tell them where and what he will be doing for the next two years.

Senator Atkins: We have been to Gagetown twice and talked to the training commanders. One of the biggest complaints we heard was the fact that the instructors were mobile. They came in and out, and they were on call and moved to other units. How do you fix that in a way that you talk about continuity of training?

LGen. Caron: It is good to complain that way to you. Usually they complain to me about something else. The issue with the trainers is that they have been there for too long. We have not been able to move them away from the schools. There are some warrant officers there who were first posted there as master corporal. You want to be sure that your instructor is at the right level to pass on. This is a new one to me; that they are too mobile.

I know that we have an issue concerning instructors. The way we are dealing with it is investing more money in moving people from the bases to the schools to ensure that they remain with the right level of experience to pass on to others. I will need to further investigate this mobility issue.

Senator Atkins: It applies more to NCOs at a lower level than maybe warrant officers.

LGen. Caron: The instructor level is sergeant warrant officer at the schools.

Senator Atkins: I should tell you that the reserve officers that have appeared before us have been very impressive.

You talk about funding, and everywhere that we go we get the complaint that there is not enough money. If a unit were to have a full contingency turn out on a regular basis, they could not afford it. If the reserves are going to become a more important element in the army, that is a serious problem. How can you fix that problem?

LGen. Caron: The funding model that we have for the reserve force allows us to ensure that we can pay everybody that shows up. There are different levels. We do not expect all of the reserve units to parade 100 per cent of their files 100 per cent of the time. There are some mitigation measures included in the funding model that, to my knowledge, have not put a CO in a position where he cannot pay his soldiers.

Senator Atkins: The percentage rate that we are getting is somewhere between 70 per cent and 80 per cent. If I were a commanding officer of a unit, I would want to turn out my men, if I could, on a regular basis, but they cannot.

LGen. Caron: This funding model has been in place for many years, and it is based on long years of looking at units. I will investigate if there are issues. I know that you have talked to a few others.

The reserve force funding model is based on long years of experience where we put the appropriate level to ensure that we do not face this type of situation.

The Chairman: On behalf of the committee, General Caron, thank you very much for coming. It has been an instructive start to the morning. We appreciate your remarks very much, and we look forward to having you back shortly. We will look forward to having you back after the government releases the paper.

LGen. Caron: Thank you very much, senator, for the experience.

The Chairman: We have before us today Lieutenant-General Ken Pennie. He is the Commander of Air Command and Chief of Air Staff. He assumed these appointments in July of 2003.

Lieutenant-General Pennie joined the Royal Canadian Air Force in 1966. A helicopter pilot by trade, he has commanded at most levels of the air force. He is a former Deputy Commander of NORAD and former Director General Strategic Planning at the National Defence Headquarters in Ottawa.

He is a graduate of the Canadian Land Force Command and Staff College in Kingston, the Canadian Forces Command and Staff College in Toronto and the Royal College of Defence Studies in London, England.

General Pennie, welcome to the committee. We understand you have a short statement for us. The floor is yours.

LGen. Ken Pennie, Chief of Air Staff, Department of National Defence: Honourable senators, it is an honour to speak to you today. It is an important opportunity to help the committee in its work by providing an accurate picture on the state of the air force and our plans to meet the challenges of the 21st century.

[Translation]

The security context in which Canadian Forces are called on to perform their essential duties has changed radically since the terrorist attacks of September 11, 2001.

[English]

The threats to our security have multiplied and are increasingly dispersed around the globe. We must be prepared to defeat those threats wherever they may appear. Security at home is inseparable from security abroad.

In this security environment, how does the air force contribute to Canada's national interest?

The air force is at a critical time in its evolution. Somewhat fragile after a decade of downsizing, we have one-half of the number of people and one-half of the number of aircraft that we had at the end of the Cold War.

Over the same period, the number of air force personnel deployed on operations has roughly doubled with no sign that future operational tempo will decrease.

Currently, aging fleets and infrastructure impose further strains on the air force's ability to fulfil its roles. The gap between national procurement funding and the need, and the diminishing experience levels of and the ability to retain our personnel exacerbate these existing problems.

In short, the air force faces a sustainability gap in its ability to generate operational capability as it transforms to fulfill its roles in defence of Canada and Canadian interests.

In the post-9/11 security environment, the changing nature of the threat places even further demands on these stretched resources.

Notwithstanding today's stress, there is a determination to address the tough choices that must be made to meet these challenges of the future security environment. We must ensure that we are positioned to make the most efficient use of the resources that we have.

Last year, the air force issued its vision called "Strategic Vectors'' — you will get copies of these documents at the end of the proceedings today — and an aerospace capability framework that lays out the first steps towards achieving this vision. It is a vision in line with the departmental strategy 20/20, a vision that is consistent with where we are trying to go as a department.

[Translation]

The Air Force proposes to transform itself from a combat force designed for cold war threats into a force capable of meeting the unique challenges posed by an asymmetrical threat and the growing demand on our forces to intervene in States that have failed or are failing. This new aerospace force will be sustainable, adaptable and able to harmoniously support joint efforts to protect the interests of Canadians at home and abroad.

[English]

How does the air force plan to transform? The aim is not simply to restructure or re-equip but rather to blend existing structures and systems with emerging ones to create significantly enhanced capabilities in specific areas.

The strategic vectors document describes eight paths or vectors to this transformation goal. They can be grouped into three broad themes: to be modern and relevant in the future, to be transformational in terms of our capabilities and skill sets, and lastly, to improve communications and collectively to maximize our efficiency.

Transforming to maintain a relevant and adaptable aerospace force means taking the steps necessary to develop a force that is capable of supporting and contributing to the joint effort domestically and globally, one that is sustainable and uses the most current command control and communications and intelligence-gathering technologies in a network- enabled sense, and one that contributes and measures its ability to fulfil its defence roles not just by numbers of aircraft but in terms of capabilities and results.

Domestically, we will focus on capabilities that enable us to cooperate in the defence of Canada in defending our sovereignty and our resources.

Abroad, through our concept of an aerospace expeditionary force, that piece that is able to deploy, we must be able to protect and, when necessary, defend national interests in a timely manner, either with our sister services jointly or in concert with our allies.

[Translation]

To achieve these results, we base our vision on maintaining a combat capability, which is the basic and most demanding role of the Air Force. However, we must show adaptability and versatility and be able to take part in a wide range of operations and conflicts, as well as work effectively with other elements.

This change in the nature of the threat also requires us to review how we command and control our forces. We seek improvements in such areas as surveillance and control, intelligence gathering, mobility, and search and rescue. We continue to cultivate our excellent relations with the navy, the army and the other departments, in order to acquire aerospace power capabilities capable of meeting their needs with greater efficiency and effectiveness.

[English]

The transformation of our abilities allows us to remain responsive to the changing security environment and to ensure that we maintain cutting edge where we need to. A critical component of this is exploitation of new technology. For example, following the success of recent experiments on the East and West Coasts, we have initiated the establishment of an organization to begin the integration and use of uninhabited air vehicles. Similarly, we are establishing the Canadian Forces Aerospace Warfare Centre, a focal point for maintaining and expanding aerospace operations excellence and effectiveness in areas such as synthetic mission rehearsal, identifying and applying lessons learned, concept development and experimentation. We will also do doctrine development and professional development.

[Translation]

Finally, Canadians have a right to know that their money is being invested wisely in a vital national institution that is in the process of being transformed to meet their security needs. We will engage Canadians by informing them of our role in Canada's defense, and we will ensure an effective and efficient resource management.

[English]

While the present sustainability issue must be addressed before we can completely transform, we are working hard on this. There is much we can do with resources that we currently have.

In the end, the successful implementation of our strategic vision will result in an aerospace force that remains capable of effectively defending Canadians and our interests, in cooperation with army and navy elements and with our allies at home and abroad.

Essentially, what that boils down to is that we have to fix the force we have today, grow it, and transform the team. That is exactly what we are trying to achieve.

Senator Banks: Good morning, General. Congratulations on your command.

I want to tell you in advance how very highly we all regard the work that you and your marvellous people do. We have found that all of the forces are, in sometimes difficult circumstances, doing miracles. I want to say that in advance, because some other aspects of my questions will reflect a certain cynicism, and I have to confess, in my personal case, a growing cynicism about the extent to which the government is prepared to allow you to do your job properly. I know that you cannot get into those kinds of areas, but we have. I do not know if you have read any of our reports.

Speaking personally, I am becoming extremely frustrated by some of the things that sound to me more and more like euphemisms for doing the best we can under the present circumstances, and the present circumstances are not happy ones.

You mentioned the strategic vectors document. The first vector concerned aerospace, if I recall. Would you define aerospace for us, please? You mentioned an aerospace expeditionary force and the fact that you are now establishing a Canadian Forces Aerospace Warfare Centre. That is a very direct term. We are talking about the North American aerospace defence system and now you are talking about aerospace as opposed to air force. What is meant by aerospace?

LGen. Pennie: The reason we have chosen the word "aerospace'' is that the connection between what happens in space, in the air, on the ground and over the seas is all more closely connected than ever before. Of the three services, someone has to have that ability to generate the skill sets and understand how to leave those assets.

I am not talking about anything more than communications, for the most part. Any time we are conducting an air operation anywhere in the world, we are generating weather information from satellites. We are communicating and networking using satellites. A lot of our intelligence assets, of course, come from satellites. The entire NORAD warning system is somewhat space-based, in terms of identifying missiles that might be launched.

It is that connection to space that we are emphasize here because we are the service that probably most identifies with that and has to train the people so that we can pass that information along to the CF.

Senator Banks: In the Canadian Forces Aerospace Warfare Centre, the extent that that is involved with warfare has to do with communications and surveillance, not anything else.

LGen. Pennie: That is right.

Senator Banks: It is not inconsistent with the policy that we do not want to have weapons in space.

LGen. Pennie: Absolutely not.

Senator Banks: In the strategic vector, the first vector that you talked about, we talked about surveillance, aerospace and Maritime surveillance, monitoring the approaches to our country, and I presume that that includes air and sea and others. That document indicates that the air force will actively pursue the acquisition of aerospace surveillance capabilities, capable of monitoring, detecting and identifying unauthorized and unwanted activity and approaches to and intrusions into Canadian sovereign space.

Do you have now the kind of equipment that is needed to do that? Are you planning to acquire it? Do you have the means of acquiring it? Do you have the technical capability of dealing with it properly, and is that something that you can do now?

LGen. Pennie: Let me just react to some of your comments, senator. Certainly, I do read all the reports that the Senate committee produces and appreciate them very much. I appreciate your comments as well on the quality of men and women we have in uniform. I would not be so pleased to serve as long as I have did we not have that quality of men and women. We would not have got through the 1990s without their talents and skills.

With respect to surveillance, Canada has the longest coastline in the world. The area that we might want to surveil is huge and the resources that we have to put against that are finite. I do not think any commander of air command would not wish to see more assets available to actually provide that kind of surveillance. It is a big challenge. We are very fortunate in that we do not have many challenges right now.

Clearly, we seek to expand that capability in the future. One of the most cost-effective ways of expanding that capability right now is through the use of uninhabited air vehicles, UAVs. Potentially, in longer term in the future, even satellite-based sensors could help us provide a piece of that surveillance. It is part of a cobbling together, if you will, of many different assets, including assets that are commanded by the army and the navy, putting together and fusing that information to get the best picture possible in the right time frame possible. We are looking to enhance our contribution to that.

Senator Banks: The question I am getting at is with respect to present capabilities matched against present undertakings that you are asked to do; and all comparisons like that are odious, and you folks do literally work miracles with the resources that you have. Even though there is nothing at the moment that is emergent, you have to have resources, because you must be prepared to do something, not just always doing it.

I know you cannot comment on the future. We have expressed our unhappiness with the level of funding. In your view, do you now have the resources that you need today, this week, to do the jobs that you have been asked to do by the government?

LGen. Pennie: We do the best with what we have. It is our mandate to do that. We work hard to get the best out of what we have.

Senator Banks: You do better than the best. You work miracles. However, it is our contention that that is not enough. For example, in your impact assessment for the fiscal year that has just passed, you said that the air force was underfunded by $224 million, including operations and maintenance numbers, and acquisition, capital assets, procurement and maintenance of your corporate assets.

That is a stated fact and it is public information. We know that there is that shortfall. If we have a $224-million shortfall in the operations of the air force, and similar and commensurate amounts for the navy and the army, I presume, which keep adding up every year, this is a huge contingent liability that is becoming gigantic. Does it continue to do that or do you get some of that shortfall made up from Supplementary Estimates, for example? Were you able to reduce that $224 million last year with funds from Supplementary Estimates?

LGen. Pennie: We got some small amounts during the year. The department tries to give what relief it can to the various services. We did get a minor amount, although nothing near the figure you mentioned in my last year's impact study.

Senator Banks: Is that figure correct?

LGen. Pennie: It is in the ballpark. I cannot remember specifically, but it sounds like it was in the order of magnitude. In this year's impact assessment, you would probably see the figure a little larger because of the "bow wave'' challenge that we have to face. This is an ongoing challenge that we come to grips with every year. We make tough choices and we live with the resources we have and get the best output we can for Canadians.

Senator Banks: It is that that frustrates us — and I am sure it frustrates you even more, although you may not be able to say it.

You said a number of things. You talked about the transformation of the air force to take into account the new realities that you will be asked to do, asymmetrical threats and that kind of thing. You also have talked in terms of doing the best with what you have. We have argued in our respective reports that the funding for the forces in general, including the air force, needs to be very substantially increased in order to allow for the number of people to do the jobs that are required.

Since you have read those reports, would you disagree with any of the things we have written?

LGen. Pennie: I think you have made a very important contribution to the debate.

Senator Banks: Thank you. Talk about the tough choices. You have used the term on several occasions, in the vector document as well as just now when you were speaking to us, "tough choices,'' a phrase that is usually applied to things that are unhappy or difficult. What are those tough choices? What are the choices that you face? Are we talking about giving up some capability in order to be able to meet another one? What are the tough choices to which you refer?

LGen. Pennie: I give some pretty direct advice to the CDS and the minister. I am not at liberty to tell what that advice is in this forum. I think you understand that.

Senator Banks: We would not ask you to.

LGen. Pennie: These tough choices work at every level, from the lowest to the highest. We have to work through our organization to find how we can prioritize to get the most important thing done better and then to let go some of the less important things. There are some tough choices throughout the whole system that we face fairly regularly, right at squadron level, at wing level in Winnipeg, at the divisional level, at my level and at the departmental level as well. Of course, the minister has the same challenge. This is throughout the whole system.

Senator Banks: You set it out pretty clearly. You said that we have half the personnel and half the aircraft and twice the job to do. You said that a few minutes ago.

LGen. Pennie: We have twice that piece that is deployed overseas; that operational tempo has gone up.

Senator Banks: It is not hard to see that that would lead to tough choices.

LGen. Pennie: It does.

Senator Banks: I will move to a slightly different area. I will not ask you to talk about the future. We have just returned from Newfoundland, examining a number of things there. I know that you cannot talk about the future plans for Goose Bay, but could you talk about the military operational value of Goose Bay?

LGen. Pennie: Goose Bay is a unique site. I think you are well aware of the issues around Goose Bay. We really do not have an operational need for Goose Bay since the end of the Cold War. While the Cold War was ongoing, there was a plausible need for it. In fact, one could characterize the way we bedded down our fighter force over the years as really providing protection for a potential enemy coming across the Arctic. Of course, that is no longer as relevant as it once was. Goose Bay's part in that was important during the Cold War, but it is much less important after the Cold War.

We have tried to make Goose Bay into a low-level flying training centre for our allies. Low-level flying training was very much valued during the Cold War and that carried on for a number of years post-Cold War. Increasingly, our allies are not prepared to do as much of it and are not prepared to pay for that which they can do.

Senator Banks: Are they going elsewhere to do that training?

LGen. Pennie: They are doing significantly less of it. If you look at Afghanistan and Iraq in the 1990s, look at Kosovo where we were engaged, and look at the latest war where the Americans took out Saddam Hussein's forces, you will see that there is less and less training over time. There is less low-level requirement on the part of air forces. Air forces can now operate from significantly higher altitudes, yet, through the use of satellites and precision-guided weapons, they can now hit targets in close proximity to friendly troops with a high degree of precision and accuracy. I can give you a number of examples of that, and that has made a big difference.

Senator Banks: Do they not still need a place to train to do that where if they make a mistake they will not hurt anybody? Is Goose Bay not situated where it is safe to do high-, mid- and low-level flying, training, bombing, target practice and the like?

LGen. Pennie: Some of the changes we are working on now with the various authorities to put it in place would enable more training at higher levels. One of the challenges with Goose Bay is that the high-level airspace is very much used by North American and European air transport. That limits how high you can go. There is still a range there where allies could expand their training.

They have other options. There are training ranges in many different locations. The Goose Bay range, which is a great range with lots of airspace, not too much conflicting traffic and no population centres to disturb was attractive for low-level for these reasons. There are other options for the allies when it comes to medium-level operations.

Senator Banks: How much does it cost approximately in a year to operate 5 Wing at the moment at its present level?

LGen. Pennie: We are talking roughly $90 million a year. If you look at the previous memorandum of understanding, which is now expiring — this is the cause for concern in the community in Goose Bay, a reasonable concern on their part, I must add — we had made the allies pay for a significant share of the cost of running Goose Bay. That drove their costs higher. They said they no longer want to pay for Goose Bay. They will come to train there if the costs are much less. The government has reacted to that, and we are now offering the allies much less cost. It means the department, presumably, or the government, at least, will have to absorb much of those $90-million costs that were not absorbed previously.

Senator Banks: Are efforts under way now to get the allies to return there to train?

LGen. Pennie: Yes, exactly, and we have never stopped marketing Goose Bay. We have a marketing team in the air force that goes to all the air shows, markets Goose Bay, among other facilities, and tries to attract allies to train in Goose Bay.

We are trying to expand the use of Goose Bay into other areas, for example, special operations training, medium- level and night work. We are trying to expand a number of other areas to entice the allies back.

Senator Banks: We all hope those efforts will be successful.

One thing we have learned in the last couple of years is the difference in the way the air force reserves are used and integrated into the service in comparison with the other two aspects of the armed services.

When you made your impact assessment last year, you said that the air force cut personnel too deeply in the 1990s, and it was forced, obliged or found it practical to use reserves in many cases on virtually full-time service. We have seen many of those personnel.

Has the regular force personnel situation improved to the extent that you will be using fewer reservists full time, and, at the same time, how much longer will you be unable to fund it? We have found that some of your units have been unable to fund the full establishment of reservists. That is a two-pronged question, but can you answer both of them.

LGen. Pennie: Both link into the resource challenge that we face presently. Certainly, as we went through the 1990s, we had in 1994 a defence expenditure review where we did close a number of facilities. Then we had a program review one and a program review two. As we went through especially the program review two, we did not cut any operational capability out of the air force. The decisions made in those days were simply to tax all the wings and squadrons. They were essentially taxed about 30 per cent. They had to draw down their numbers, and they were not given much discretion. That is how the department decided to respond to those pressures.

That means we have a bunch of wings and squadrons that are probably under a fair bit of stress in terms of having less people than they would prefer to do the job we are asking them to do. I do not think there is any doubt about that. You will probably hear that from every squadron and wing you will talk to.

To a certain degree, we really put them under a lot of pressure over the past 10 years to try to mitigate that by reengineering, trying different ways of doing business, trying to find ways to move positions around and finding ways to relieve some of that stress. Part of that has been very successful, but it has not closed the gap. We still have a sustainability challenge in that gap.

Another part of the puzzle that you will see in the field that I hear regularly and we are dealing with as effectively as we can is that, when we downsized, Treasury Board was not about to allow us to recruit while we were paying people to go out the door, which we did. We had a force reduction package, basically, paying people to leave early. We did not recruit in many occupations across the military, for about eight years, as we went through that downsizing process.

Senator Banks: That sounds dangerous in terms of people who fix airplanes.

LGen. Pennie: It has created a challenge, and that is across the CF, not just the air force. However, it has caused a significant challenge on our air force maintenance teams. Now we are opening the doors and recruiting again. If you look at our numbers, our positions are filled, but if you look underneath that and find out what qualifications those individual technicians have, in many bases and wings, 40 per cent and, in some cases, a much larger number, are not qualified. There are young people coming in going through the training process.

Senator Banks: They are not qualified yet.

LGen. Pennie: They are not qualified yet. They are qualified recruits, but they are not qualified to sign an aircraft as being serviceable or not serviceable. They are not qualified to sign off on that work because they are still learning; they are on-job training. That training process can take up to five years to get an individual qualified to fully sign off. That puts a real burden on those remaining behind. Do not forget that we reduced their whole organizations by a significant margin. The aircraft are not getting younger; the aircraft are getting older. That is a significant component of this.

Senator Banks: Therefore, they require more servicing.

LGen. Pennie: The work required has gone up a little. The number of people working on it has gone down, but the number of qualified people has also gone down. The people who are fully qualified have to support all of our overseas operations because you need to send fully qualified people to do the job overseas. When they come home, they have to train this cadre of young folk. We have been working on this now for a couple of years, but it will not be until about 2008 or so that we get down to a more stable workforce pattern. We are dealing with part of a transition problem, too. That is part of a sustainability gap problem. Part of my job has been to try to figure out which is which and do some work to define that.

Senator Banks: Is there a lesson to be learned there?

LGen. Pennie: You may well come to that conclusion, senator.

Senator Banks: I was hopeful that you would.

When we finally get someone to the point that he or she can sign off, for example, we have trained an electronics technician or any of the people who do the essential job of maintaining aircraft, do we then pay them enough to keep them in the force? Do you find that you are losing them to the private sector that comes along and say, "We have a completely trained aircraft technician here that we can hire for "X'' dollars?'' How is that working out?

LGen. Pennie: Fundamentally, I do not think we can ever pay our men and women in uniform what they are worth.

Senator Banks: Of course, but can we competitively?

LGen. Pennie: Specifically, it depends on how the economy is doing. If the economy starts going, and they need qualified people, they will come and recruit our qualified pilots and qualified technicians, as well as other highly qualified occupations in the air force — and all services, in fact. There are some trades that get stressed when the economy starts to move because they are in demand. That is a challenge for us.

Senator Meighen: This will be my only question, supplementary to Senator Banks. Maybe you can tell us if this situation has been rectified, but we have heard over the years the stories of people being attracted away, when the economy is booming, from the air force, for example, and then wanting to return, and finding it was an absolute nightmare in processing the paperwork and getting back, even though allegedly they were very desirable to have. Has that situation improved at all?

LGen. Pennie: We are working on it, and it does need to be improved. We are very good at recruiting 19 year-olds. Our system is optimized to the ab initio recruit. What I have had to do in the air force is have a team of three people that does nothing but help one person at a time come back in and work through that bureaucratic process to help them get through it faster. That system has been working. It has helped us not only recruit people back into the air force but, it has helped us retain people who might have otherwise elected to leave.

We call that team, that philosophy behind it, "one person at a time.'' We have a number that they can call and then we will help them get through that process. We have been successful in re-enrolling a number of pilots and some technicians who left the forces.

Senator Meighen: You will forgive me when I say that that just absolutely baffles us. How could it take six months to find someone's record who was a full-time serving pilot in the air force, left to private industry and wanted to return?

Why is this such a difficult problem? Is it because everybody is listed on index cards and you have to go through all of them? In this day of technology it seems incomprehensible that the problem cannot be fixed. Is it lack of resources? What is it?

LGen. Pennie: I can not give you a qualified answer. I think that is a question you should probably pose to Admiral Jarvis. Clearly we have wound down our operations in many different endeavours to deal with the cuts of the 1990s. The recruiting system was also driven down, and now we are trying to rebuild it.

Senator Meighen: I guess we wound down far too much, far too quickly, and now we are having a devil of a time cranking it back up again, whether it is reserves or processing of applicants or what have you. I take your nodding as agreement.

The Chairman: Do you mean let the record show the witness nodded?

Senator Forrestall: General, it would be a delight to spend the next hour on post-9/11 and on questions having to do with lessons learned, and NORAD into the future with Northern Command and whatnot, but we have other problems.

Can I say at the same time that it is welcome news to see the Snowbirds back in the air?

The sympathy of all of us, of course, goes out to everybody involved, certainly the family.

Has sealift overtaken airlift in priority with respect to the new Canadian Armed Forces?

LGen. Pennie: I would not phrase it that way, senator. We need both.

Senator Forrestall: We need both?

LGen. Pennie: Yes.

Senator Forrestall: Are both parallel in planning? For example, if that is the case, what do you want to replace the C- 130 with, the bigger one?

LGen. Pennie: The reason the joint support ship is proceeding a little bit of ahead of time is because we already had a project to replace the oilers. That one is further advanced simply because the programmatics were further advanced on that particular one.

The airlift question is a complex one, as I am sure you understand. We have essentially three components to our airlift challenge or more, depending on what you want to add in, but three fundamental components. One is the domestic part, where we move things around and support the CF in Canada. The second is the tactical piece. When you fly into Kabul today you will see that tactical piece in action. You can fly in and do that. We use the Hercules for that and for the domestic piece today. Then there is the long-range strategic piece, the inter-theatre piece. The Hercules is not optimized for that particular function because it has short legs; it is slow and does not fly as high. The challenges we have with the longer range piece is that when you are flying with the Hercules you have to go around and get approval for many different countries, and it takes time to do that. It takes two weeks to get your diplomatic clearance and get the crews in place. Doing a long-range flow with the Hercules is a bit of a challenge, but we have been able to work that for the last 20-30 years.

The tactical piece is also important. If you go into Afghanistan today, you will see the forces in Afghanistan tend to use five airfields. Certainly ISAF did so when General Hillier was there. The Hercules could use all of those airfields, so it is tactically very good. It has a certain advantage that is important. The larger planes, like the Anatov or the C-17s, could only use the main airfields, so they were limited to one and one-half airfields. I view the whole spectrum here.

You should be aware that we are reviewing that whole spectrum from a requirements perspective to determine what the CF needs. Once we finish that piece we will start rolling into options analysis. This is an end-to-end look at things, as opposed to looking at each piece in isolation. We need to do that end-to-end work, and we will see where we are after the next budget and see what we can afford into our 15-year plan and work with it.

I am really neutral as to what the solutions ought to be at this stage. We do have a requirement for all three, and how we service those requirements needs to be further developed. We are doing that.

Senator Forrestall: You maintain the sense of urgency with respect to replacing the C-130s, though?

LGen. Pennie: It is one of those aircraft that is over 40 years now, at least the older ones. Some are relatively new, some are old. There are between 19 and 23 of these older aircraft that we need to get at in the relative near term, in terms of replacing them with something else.

Senator Forrestall: We have herd the term "air expeditionary units,'' and that they must be deployable, sustainable and supportable. Could you expand on this concept and its progress with respect to implementation in the Canadian Forces?

Is there a layman's understanding of air expeditionary units?

LGen. Pennie: It is actually quite simple. Let me take the Hercules as an example. Right now we have two Hercules, and we have had up to two or three based in the Middle East. They are supporting our operations in Afghanistan. We have had them there for some time. The people there need to be replaced on a regular basis. How do we organize, train and equip our people to be able to do that on a sustained basis?

We have other capabilities that we have sent abroad; our helicopters, our fighters, our Auroras, in various operations at various times. The concept here is actually quite simple. We are taking a page from the army and the navy. We just organize and manage our readiness in such a way that we always have people ready to go. The bottom line is not the equipment; the bottom line is the people. Are the people qualified, trained and ready to go? That is really where it counts.

We are starting to do this work. It will take a couple of years to be completed. We organize ourselves into a number of pieces; we just call them expeditionary units for the sake of having a name for them. These are the pieces where people will be ready to go, so there are two big advantages, from my perspective. Number one is, for the individual airmen and airwomen; they know when they are in the window to deploy. They know, in that particular time coming up, that they have to have all of qualifications completed, and all of their training done, because they might be deployed somewhere for that period of time. Once that window is over, you are deployed or not, but once that window is over you are back doing your force-generation work. That is an advantage to both the men and the women of the organization. They know when they are vulnerable to deploy, and they know when they are not. We can flow through the readiness and make that cost effective.

When I am giving advice to the CDS or to the minister, if I can explain it more simply in terms of blocks, then it is easier to explain and it is easier to the public as well. For instance the army maintains one battalion. They need a number of other battalions behind, so they rotate them on a conveyor belt. We are building our conveyor belt to match how the army does its business.

Senator Forrestall: I wish you good luck with it. I suspect that you will get a few more dollars in another couple of weeks. If you had an extra billion, would you know how to spend it?

LGen. Pennie: That would not be a problem, senator.

Senator Forrestall: Would you let us in on some of your dreaming? We are curious as to where you think you will be in five years' time. If we can get a proper funding regime in place, and if the concept of the new Canadian forces blossoms, where would the air force be in five years?

The Chairman: We agreed that we would ask the General that question when he came back, after the paper was released. We have a commitment that he will be back; we just do not have a date pinned down.

Senator Forrestall: I was not aware of your in-house planning. Thank you very much.

Senator Day: Alternate service delivery is an area that I would like to talk about. Our group will be visiting the West for pilot training. That is one of the areas where alternate service delivery is now involved. They have an outside contractor involved with the pilot training. You may want to tie that into your answer here.

Are you finished outsourcing functions and services that used to be done by the Armed Forces for the air force, and are you reviewing how that is working? Is there a plan afoot to determine whether this is a good thing? In Newfoundland, we heard from one of the commanding officers that some of the civilian personnel are doing some of the technical jobs, but the commanding officer said that he cannot plan to meet a lot of his missions because he cannot ask the civilian personnel to do other than their eight-to-five job fixing, say, a particular piece of radar. Sometimes, you have to be able to ask Armed Forces personnel to do jobs that are out of their job description.

Can you talk about that general concept of alternate service delivery and how it is working?

LGen. Pennie: That commanding officer has it about right on. That is our challenge at every level. When it comes to trying to be as efficient as we can with those dollars that we are entrusted with, we have to look at things like alternate service delivery to find the most cost-effective way of doing business. Each time you do one of these things, however, you lose some flexibility.

There are some limits as to how much flexibility we can lose and still have that ability to respond to the unexpected. Certainly, government expects us to respond to the unexpected. Hence, we must have a certain amount of flexibility built into our system. That limits how aggressive we can be with alternate service delivery. It is still alive and well, and we are still looking at it.

There are various examples out there that I cannot specifically recount — however, one that I was briefed on a short while ago was with respect to aviation fuel. It is about finding different ways of doing business that actually save money but not taking away flexibility. Where we can find those, we jump on it right away. We managed to save over $1 million in that specific initiative. We keep looking for those opportunities.

One of the challenges, however, is that of losing flexibility. When we contracted out the maintenance for the Cormorant, for example, we found ourselves not having as big a maintenance pool to support some of the overseas operations. In the sense that we can provide the service to Canadians, however, we can do that with contracted maintenance.

However, there is some lost flexibility with respect to our overall flexibility to handle other kinds of contingencies, because we no longer have those extra people in uniform that we could use for a temporary period of time.

Senator Day: Our concern is this: Have you gone too far? Have you come to the conclusion that you might have gone too far and that you were forced to do this for cost-saving measures, resulting in an Armed Forces that is not as flexible as it needs to be?

LGen. Pennie: I would not characterize it as having gone too far, but we have come close to our natural limit. That is why we are not as aggressive in pursuing further ASD initiatives on a bigger scale. We contracted out our flying training system. We have two contracts in place that run our flying training system, and that works. We are getting good quality training, and it is world-class. However, it does not give us the flexibility to change that we had when we had it in-house.

We are sensitive to the fact that, when we operate abroad, we need to have people in uniform — especially that first deployment. We need to have enough people of those skill sets to do that.

Hence, I would not characterize it as having gone too far, but we have to be cautious about what we do now because we are so thin on the ground, so fragile.

Senator Day: We may pursue that issue further another time, because there are lots of examples. Can things like strategic lift be contracted out? Why should we be thinking in terms of getting big aircraft when we can hire someone else to do this for us, if it is just a lift from here to there?

LGen. Pennie: That is exactly what we have done over the past 15 years. As long as we do not need to go somewhere within 48 hours or within a week — that is, as long as we can wait a week — then this works fine. The longer you can wait, the easier and the more cost-effective it is to line up a contract.

Senator Day: I understand these aircraft are somewhat in demand, which leads me to wonder why we do not get into the business of providing strategic lift for others.

LGen. Pennie: I am sure you understand, senator, that we are not a business. We are a military force. We are not for hire; we are here to serve the people of Canada.

How we provide the lift that we need must be reviewed and decisions have to be made along that path. What I am most insistent about is that we have a balance across all of our capabilities. We need some domestic support, and we need some tactical lift and we need strategic lift. Where we make those calls and decisions, at the end of the day, we are several months away from being able to actually put option space together here. We are doing an end-to-end review of our complete lift, based on all real examples we have used.

Senator Day: We were talking about Goose Bay earlier and how we helped our allies out and got credit by providing a facility for training. Could not we help our allies out and get credit if we had a strategic lift that helped not only our allies but also ourselves?

LGen. Pennie: Of course. We have done that. We provided Herc lift to the French in Africa. The allies help us more than we help them, to be frank.

We would work with our allies. We would work with them to get them to help us and we would help them wherever we could. That is what allies are about.

Senator Day: Continuing on this theme of alternate service delivery, what about recruiting? We are hearing many stories about recruiting being less than favourable. You had a discussion here earlier on the delays. Why could not recruiting be something that could be offered by the private sector?

LGen. Pennie: It is probably a question you might want to ask Admiral Jarvis. We do have a recruiting organization; it does work.

Senator Day: Poorly.

LGen. Pennie: There is room for improvement. Essentially, we have ground down the organization to where it is minimal efficient to do what it must do. That is how we dealt with the pressures of the 1990s. We are now seeing some of the consequences.

Senator Day: Now we are trying to rebuild that when you are trying to rebuild a whole lot of other things. None of us knows what the future holds, so you have to go through your transformation with the same kind of resources that you have right now.

LGen. Pennie: The more resources we have, the easier it will be to go through this transformation journey.

Senator Day: Could this transformation that you have described to us this morning — and you have presented us with a written report, which I appreciate — be achieved based on the traditional historic funding that you have had?

LGen. Pennie: If my budget did not change — I mean the air force part of the CF budget — we could not achieve everything we are aspiring to. We could achieve close to that, but it would require some really tough decisions.

Senator Day: I will not pursue that any further at the present time. Could you tell us where you are anticipating locating the Canadian Forces aerospace warfare centre? Is that public knowledge yet?

LGen. Pennie: We have been entertaining two logical locations, both of which have synergy with existing centres of excellence. One is in Winnipeg, where our School of Aerospace Studies is located; the other is in Trenton, very close to the Staff College, close to RMC and close to the army's centre of excellence, and not far from the experimentation centre in Ottawa. Those are the two that are being assessed currently.

Senator Day: You had experience with the U.S. aerospace command when you were in NORAD. Would this be a similar activity to your NORAD exposure?

LGen. Pennie: I did not really get exposed to that. That was a United States air force centre. They have two — one in Nellis and one in Maxwell. They have professional development with their air force staff college in Maxwell, and they an operational centre of excellence at Nellis Air Force Base, where they do a lot of experimentation and advance work on this. Their scale is so large that it is hard to relate, but we would be doing similar kinds of things.

We relate more to the Australians and the British when it comes to the scale of doing business. We are trying to build something more along the lines of what they have built.

Senator Day: Have they built an aerospace centre, a warfare-type centre?

LGen. Pennie: They may not call it exactly that. I think the British actually use a term that is very close to that, but they are building the same sorts of things, to deal with connecting all the dots and connecting with the other services in a significant way, so that you can actually produce a joint capability faster and understand it better, as opposed to a whole series of stovepipes, trying to build things and then working them all together.

Senator Day: Would you see this staffed by army, navy and air force personnel, or only air force?

LGen. Pennie: It would be primarily air force, but we would see naval and army officers in there clearly. We have air officers in Kingston and air officers in the Maritime Warfare Centre in Halifax.

Senator Day: Is this dependent on the new Canadian Forces review policy statement and further funding, or is this something that will happen notwithstanding that?

LGen. Pennie: We started this initiative a couple of years ago and we would intend to pursue it anyway. It is somewhat independent because it is important.

Senator Munson: Given the present strength of the air force, what is the approximate number of personnel that the air force can sustain on overseas missions on a continuing basis?

LGen. Pennie: We are doing the work to define that. We have been sustaining about 350 to 400 people abroad, but that is only a couple of small components. If we were to send many different components, then we would probably be faced with sustaining a larger number than that.

I would be guessing if I gave you a figure — I would have to come back and give it to you — but it would be whatever components are deployed plus the support elements of those components, and that is what we are going to have to structure and design for.

Senator Munson: Do you not have a general idea of what the figure might be?

LGen. Pennie: It will be in the order of, I would guess, 800 plus, but I do we not think we have actually defined to it that level of detail yet because we are still doing the work. We have not actually designed these units. We have not designed the command and control of them. We are working hard on the support concepts, and we have part of it in place, but we still have not completed that work. That is why I cannot give you a specific answer.

Senator Munson: You talked about reserves earlier in your comments. I would like to get more detail on the use of reserves. I do not know if you answered this before, but can you tell us if your regular force personnel situation has improved?

LGen. Pennie: It has not fundamentally changed, because the number of people we have been allocated has been relatively fixed. We are still dealing with roughly the same kind of challenges. As we move forward to get through the bubble of training, particularly on the maintenance technician trades, then things will get a little better by about 2008 or so.

Senator Munson: With all the talk of the extra 5,000 full-time military coming, the 3,000 reservists and the recent speculation that most of these people will end up in an elite army force or regular army, do you feel left out?

LGen. Pennie: We all deal with this as a CF challenge. The government has a specific intention to upgrade our ability to do peacekeeping. In the end, there will be an air element part of that that we will have to define and work through. We are now working through that possess in the defence review.

Senator Cordy: A couple of years ago, our committee visited Shearwater. My question is a follow-up to one that was answered earlier, concerning the maintenance personnel and the lack of trained personnel — as you said earlier, the numbers are very high. There is a shortage in the numbers of personnel that can actually sign off on work that is being done. When you look at the technicians on the Sea King, we have heard that one third of them actually are not qualified to sign off, which creates a problem, given the number of hours dedicated to maintenance of the Sea Kings.

We have heard that one of the solutions is to change the training time from four years to two years. Is that really a solution? It may be a solution on paper. In reality, however, are they going to be as well qualified after two years as they would be after four years? On the other hand, perhaps my information is incorrect, that the training time will be reduced. Can you elaborate, please?

LGen. Pennie: We are certainly targeting to reduce the training time, to get it as low as we can reasonable get it. I do not think we will ever get it down to two years. That is optimistic, for reasons that you well understand and to which you are alluding. Five years is a long time, however. If, systemically, we can reduce that to less than four years, there will be a big impact on numbers. We think we can do that.

That may not happen in all cases, because some individuals learn faster than others. When we apply computer- assisted technology to the learning process and we make more training aids available — we have a whole series of initiatives to facilitate faster and more effective training. The standard will not change, though. Therefore, when the technician is qualified, that standard will not change from what it is today.

Senator Cordy: I was a teacher in my other life, so I do know that everybody learns at a different rate. How do you make determinations though? Is there testing done? How do you determine what method of training is the most efficient? You said that reduction will make a major impact as to the number of qualified technicians, but again you have to be a bit careful. What are the standards? Is there testing? Is there individualized training?

LGen. Pennie: A technician will go through our training course. It is presently in Camp Borden. That training course is over a year. That technician will go through fairly rigorous training like any vocational high school, like any postsecondary institution, where they focus on learning their skill sets. We need to add some computer-assisted training and we are trying to do that. It is fairly rigorous, and the standard tests and performance objectives have to be met before the individual will graduate.

The individual then goes to the unit — in the case of Shearwater, to the Sea King. The individual then goes through a series of on-job training. He must qualify for certain performance objectives, and he gets tested on doing those qualifications. Once he passes those qualifications, he is signed off as being qualified to do whatever piece of work the individual is then allowed to do.

One of the initiatives that the Sea King community has done — and others as well — is that they have built a training hulk. They have acquired an old air frame and put it in the hangar so that technicians doing their apprentice work can go to that hulk and work on it hands-on. The technicians then get assessed by the instructors, because every unit has instructors to teach this stuff. They oversee the journeymen, who are doing part of the teaching. It is a fairly complex process, one in which I am only just touching the surface.

We do have standards and they are measured. An individual will not be qualified unless he or she measures up to those standards.

However, we think we can reduce the training time by a number of these initiatives that I mentioned. When we hit steady state — 2008, 2009; hopefully by then — we will be in a situation where will not have one third not qualified. We will have that number under 20 per cent. The experts are telling me that they can probably get that number to about 17 per cent or 18 per cent, steady state, with time. That is our target. That means that we have to follow through on these initiatives and find the best way possible to train our technicians. We are doing much of that, as we speak.

Senator Cordy: There are always those who are unqualified because that is the nature of continuous training, but one-third seems quite high.

LGen. Pennie: Exactly.

Senator Cordy: Is it similar to the private-sector apprenticeship program, wherein once you get your basics you have to put in so many hours?

LGen. Pennie: Exactly. In fact, we call our technicians apprentices and journeymen.

Senator Cordy: You talked about the establishment of an organization to integrate the use of uninhabited air vehicles. Can you tell us what in fact the uninhabited air vehicles will do?

You have said that are experiments are taking place on the East and West Coasts. Would you tell us where on the East and West Coasts and what exactly these vehicles would do, or can do?

LGen. Pennie: Two years ago, we had an experiment on the West Coast where we leased from a company in the United States an uninhabited air vehicle. It flew a series of routines for us on an exercise. We networked that and experimented with how we would network that into the West Coast command centre, how we would input, coordinate and fuse that data with all the other data that goes into the command centre in Victoria. That was a successful experiment.

This past summer, we did the same thing again on the East Coast. We leased a different vehicle, a larger vehicle, and we did three experiments with that particular platform, all of which were successful. We learned a number of things in each scenario.

One scenario was out over the Atlantic Ocean, doing sovereignty surveillance. Another scenario was supporting the army in Gagetown and networking. The third scenario was up in the Arctic, Narwhal. This UAV was part of that exercise and we flew it up to the Arctic and back. We flew it out of Ottawa. The information was available to Halifax, Gagetown, the Arctic and Ottawa, all simultaneously. We learned a lot, and this was just an experiment to get our skill sets up. That is the way we are leaning.

The nature of combat today is such that information superiority becomes an important part of situational awareness and of making appropriate decisions before the other side can react. We see this as an important part of this package. It can be deployed or used domestically, and it can fly up to 50,000 feet. It depends on what air vehicle we end up acquiring, but right now, we lease it for purposes of the experiment. We are assessing the vehicles so that when we get into acquisition later, at least we are informed.

Senator Cordy: Who will be responsible for operating them, if in fact we do acquire these vehicles? Will it be the military, the air force or another department?

LGen. Pennie: It will be certainly be military. I do not think we will have another department doing that, although different departments will make their own decisions.

In the air force, we play a role under the Aeronautics Act in terms of airworthiness. My organization has a very direct impact on whoever operates an uninhabited air vehicle. The larger ones we would see as being air force manned and flown.

Just because we are operating a vehicle like this does not mean that the user does not get the information the user needs. If I am operating a UAV in support of the navy, that information is going straight into the Halifax headquarters information fusion centre so that they get the information directly. It does not go through any intermediary. I may be operating the machine to serve their needs, but they are getting the information directly. That information today can be simultaneously seen in Esquimalt, Halifax, Ottawa and Winnipeg, and wherever else it needs to go.

The United States Air Force is fairly well advanced in terms of using UAVs. They are called uninhabited, but we still have to have a crew to man them. Someone has to man the sensor and the flight profile and someone has to maintain the vehicle.

Today, you can take off an uninhabited air vehicle from virtually anywhere in the world. It can be flown from a site in the United States and it can provide information to anywhere in the world.

Operating it is more of a mechanical exercise of training the crews and making sure that it operates within airworthiness parameters and flight parameters, but the information that it derives will go directly to whoever needs the information most and is available to anyone who needs it, networked throughout the world, if necessary.

That is the type of concept we are leaning toward.

Senator Cordy: The military would get the information but in fact could give it to DFO if DFO required it; correct?

LGen. Pennie: Absolutely. Whoever needs it would get access to it.

When you are doing surveillance and you find a ship that might be leaking oil, the environment department might need to know that particular information, or if you suspect someone is smuggling, then the law enforcement authorities will need that specific information.

Senator Cordy: How many hours can a UAV fly at a time?

LGen. Pennie: It depends. Each machine is different. Some are so small, they are the size of your hand. A soldier can take one and throw it around the corner to see what is around the corner.

Some are so large, they are the size of the real airplane. They are bigger than this room, and there is everything in between. There is quite a spectrum.

The technology is moving forward in leaps and bounds. Entrepreneurial companies see the market potential here and are jumping on this. There are a lot out there that are not well built at this stage, but they have interesting capabilities.

Senator Day: I would like to know what if any role the air force had to play with respect to the unmanned or uninhabited air vehicles that were used in Afghanistan recently by the Canadian Armed Forces.

LGen. Pennie: We played a significant role. Some of our technicians were there. Some of our aircrew were coordinating the air space of this vehicle. Every time there was an incident, our flight safety people investigated the flight safety conditions.

Our engineers have been working out how to make this thing more robust in terms of its capabilities. In March, we will be doing cold weather trials in Cold Lake. We are very much involved.

Senator Atkins: Just to follow along, I assume a UAV can be armed.

LGen. Pennie: Yes.

Senator Atkins: For the larger ones, what kind of a control centre would they require?

LGen. Pennie: I actually have a slide that I show when I do some of my vision work. It shows the crew of an uninhabited air vehicle. About nine people are operating this particular UAV, and that is just one example.

Your crew operating it could be as few as two or three or as many as nine or 12, depending on what sensors are on board and who needs to monitor those sensors to ensure proper functioning.

Of course, if that UAV is up for, say, three days at a time or one day at the time, then you have to have shift changes. It can be very labour-intensive.

When it lands, of course, you need the crew to be able to maintain it, put the gas in it and make sure all the bits and pieces are in the right working order. Operating a vehicle that is relatively large requires about the same size crew as is required for operating an aircraft of the same size.

Senator Atkins: Do you see this as the way to go for coastal defence?

LGen. Pennie: The defence function and whether we would put weapons on one of these vehicles, we have not yet got to that point. We are now at the point of seeing this as being very important and relatively cost-effective for surveillance, as opposed to buying an Aurora, which has a crew of 10 and all that goes with that.

The control function, where we will be potentially delivering a weapon, we see that primarily in manned aircraft at this stage, although the American air force and other organizations have experimented with putting weapons on a UAV, with some success. However, we are not quite at that point yet.

Senator Atkins: What type of missions is the air force sufficiently resourced with both equipment and personnel to undertake?

LGen. Pennie: We have over 300 aircraft and, including our reservists and civilians, a team of about 17,000 people. We have a fair capability. We can conduct air sovereignty with our F-18s and air to ground with our F-18s, and we can conduct sovereignty patrols with our Auroras up to the Arctic or anywhere across the ocean and the world. We fly our Hercules worldwide. We use them for domestic, tactical and strategic lift where we are able. We have a good capability in those crews. We do search and rescue coast to coast across the country, providing 24-7 coverage. We respond to 6,000 to 7,000 incidents every year with these assets. We have a fairly robust training system that, in many respects, is world-class, in particular the fighter portion. We will look to upgrading the rest of our air crew training system to that level.

We have the Sea King detachments, or "dets,'' that go aboard our ships at sea. We provide as many detachments to our ships as possible when they go to sea because our colleague, Admiral McLean, likes to have that helicopter detachment.

The Chairman: Would you explain the purpose of the det?

LGen. Pennie: It is a helicopter detachment with crews and maintenance that go onboard ship when the ship is deployed. The det remains under the command of the ship's captain for the duration of the voyage. There are some limitations for safety purposes but that is a peacetime issue. We have a helicopter force that supports the army. They deployed to Kosovo, Bosnia, Haiti, Egypt and Honduras. We have a fair capability; we are resourced; and we use our resources and people to the best effectiveness.

Senator Atkins: Are you at all frustrated by the availability of component parts for the 300 aircraft?

LGen. Pennie: One of my top priorities, were I to receive more funding, would be to top up the national procurement accounts. The air force depends on these accounts more than the other services depend. This is historical legacy. The air force never had third-line facilities. We always relied on Canadian industries, such as the aerospace industry, to provide us with that third-line capacity. Our dependence on the national procurement account in the air force is higher than it is in the other services. However, the other services are growing to become more dependent on national procurement. It is a huge challenge for all of us. Certainly, we could alleviate much of the burden on our maintenance personnel and our ability to generate missions if we could enhance the national procurement account.

Senator Atkins: General, we have heard that it is next to impossible to get some of the necessary parts for the CF-18 because they no longer make those parts.

LGen. Pennie: This is true of any old aircraft. When you operate aircraft for 40 or more years, you find that the original parts supplier has moved on to parts for newer equipment. You can always have a part made, but at a cost, and that drives our cost up. That is the challenge we face. If there is enough money to replace the fleet of vehicles on a more frequent basis, then it does not cost as much to support them as they age. It is much the same as owning a car: a that is 40 years old costs much more to maintain than a newer one.

Senator Atkins: When we purchase a CF-18, we do not purchase an inventory of parts that would address any kind of circumstances that might prevail throughout the life of the aircraft. Is that correct?

LGen. Pennie: It is that way with any capital project, and the CF-18 is no exception. It applies to everything that we purchase. Our engineers and logisticians look hard at each project and make a thorough and rigorous assessment about what spare parts they need to buy up front. That involves predicting, because they cannot project 20 years into the future and predict utilization rates on certain spares. Based on their knowledge, they will buy spare up front. However, they do not necessarily buy enough for 40 years of operation because, for all the parts, it would be so expensive that I am certain waste would occur that we would not want to accrue.

Such an assessment is made each time we buy. It is revised periodically by the maintenance, logistics and engineering staff. They cannot predict the future and know which part will go next. When an airplane, ship or army vehicle is relatively new and put through a routine inspection cycle, it might take about two to three weeks if it is complicated equipment such as an F-18 or a Hercules. In the first 10 to 20 years of its life, that is what happens. The 40-year old Hercules, for example, has the highest flying time of any aircraft in the world. Each time one goes in for an inspection that normally would take three weeks, many surprises are found. The engineers and the maintenance crew, whether ours or from an outside contractor, have to fix those surprises. The average time that an aircraft spends on these routine inspections grows as the aircraft ages. The Hercules, which once took 20 days to inspect, now requires about 60 days. That applies to virtually everything we operate in the Canadian Forces and is one of the costs we have to bear because of having older equipment.

Senator Atkins: We started off with 130 CF-18s. Is that correct?

LGen. Pennie: I think we purchased 137.

Senator Atkins: What are we flying now?

LGen. Pennie: We will be down to 80 when we get through the modernization process. We have a few more than that flying now as we go through the transition.

Senator Atkins: How about the Hercules?

LGen. Pennie: We bought a number of them and we have 32 left in service. About nine of them are relatively new, which means 20 years old or less. There are 19 to 23 older ones and about four in between the old and the new.

Senator Atkins: Are those 20-year old Hercules reliable on a day-to-day basis?

LGen. Pennie: We have some challenges, which were in the press last year. The ability to have only 12 of 32 aircraft in the air on a given day is not a good percentage. I have accounted for that in my previous comments. The men and women who work on these aircraft do so with great effort to get those 12 available. At one time, when I first came to this job, the number of Hercules available had dropped to as low as seven. That generated a great deal of attention in the media. We worked hard to try to get them back up.

Senator Atkins: In Trenton, we met a number of the people who work on the Hercules and we sensed that they work very hard. It is tough work.

LGen. Pennie: It is extremely tough work. We have imposed many changes over time and the aircraft are older. We do not have enough money in the system to spare it properly. We have neither the manpower nor the qualified technicians that we had before. For all of these reasons, we have challenges. If it were not for the talented, dedicated, hard-working men and women who work on these aircraft, we would be far worse off. We are blessed to have them.

Senator Atkins: Are some of them leaving the air force and coming back on contract?

LGen. Pennie: From time to time that happens, such as when we contracted out the Cormorant maintenance. The contractor hired ex-military people, some of whom were still in uniform. That is a two-edged sword; it can work both ways.

The Chairman: When you were reviewing what the air force could do, you talked about the Hercules and about the helicopter detachments for the navy. You referred to all of it as being good capability and yet you have described to us how much service goes into keeping only one half of the Hercules fleet up in the air. We all know the stories of the problems with the helicopter detachments. Do you want to revise that phrase "good capability'' for the committee?

LGen. Pennie: No. I am proud of what the men and women can do.

The Chairman: It is not a question of pride, because we are all proud of the men and women.

LGen. Pennie: They produce good capability.

The Chairman: It does not strike me as good capability if only one half of the Hercules are fit to fly and if only one Sea King can take off out of every two missions.

LGen. Pennie: I understand your message, senator, and I do not disagree with you. My reference is to the times that these aircraft are in the air and they do a damn fine job.

The Chairman: We accept the fact that they do not fly unless they are safe, and we accept the fact that the men and women who service them are terrific people. However, we do not accept the fact that you have good capability if only one half of the fleet can be in the air.

LGen. Pennie: I understand what you are saying.

The Chairman: You are looking for replacements for your search and rescue craft and for your tactical lift ability. Do you think it is possible to do that with a single platform?

LGen. Pennie: We will look at that more closely. As we go through the review, there might be some revisions of the requirement. We will have to wait until the review before we can finalize these things. The tactical lift is important. We do not want to jeopardize that in terms of the balance at the end of the day, but I cannot specify which platform because of the weight issue.

The Chairman: Are we missing a heavier-lift capability in our helicopters? Do the Canadian Forces need a helicopter with more lift capability?

LGen. Pennie: The events overseas in Kosovo, Bosnia, and certainly in Afghanistan, and the prospect of what we might have to do in Africa demonstrate our lack of lift capability. We eliminated our heavy-lift capability when we stopped our focus on Norway and moved it to the central front of Europe.

The Chairman: Did we sell them to the Dutch?

LGen. Pennie: Yes. We sold the Chinook helicopters to the Dutch when we moved to central Europe because of the army thinking at the time, which was entirely logical. In that location, there were many trains, roads and a good general network that eased the need for helicopters. The army believed that supply to the central front battle could be assured without utilizing these larger, heavy-lift helicopters. Given the pressures of the 1990s, the decision was made to not maintain that heavy-lift capability. Looking at the operations we have today, I would have to say that we are revisiting that decision.

The Chairman: On behalf of the committee, I thank our witnesses. The testimony has been helpful and has filled in many of the gaps for us. We look forward to hearing from you again after the paper is out so that we might compare notes.

For members of the public, questions or comments may be expressed on our website at www.sen-sec.ca, where witness testimony is posted along with confirmed hearing schedules. Otherwise, the Clerk of the Committee may be contacted by calling 1-800-267-7362 for further information or assistance in contacting members of the committee.

The committee continued in camera.

At 2:00 p.m., the committee suspended its sitting.

At 2:05 p.m., the committee resumed its sitting in public.

The Chairman: I call the meeting to order. Good afternoon ladies and gentlemen. Welcome to the Standing Senate Committee on National Security and Defence. My name is Colin Kenny and I chair the committee.

I would like to introduce the members of the committee that are here today. On my immediate right is the distinguished senator from Nova Scotia, the Honourable Michael Forrestall. He has served the constituents of Dartmouth for 37 years, first as their member in the House of Commons and then as their senator. While in the House of Commons he served as the Official Opposition Defence Critic from 1966 to 1976. He is also a member of our Subcommittee on Veterans Affairs.

Also on my right is Senator Tommy Banks from Alberta. He is Chair of the Standing Senate Committee on Energy, the Environment and Natural Resources, which recently released the report entitled: The One-Tonne Challenge. He is well known to Canadians as a versatile musician and entertainer. He has provided musical direction for the ceremonies of the 1988 Olympic Winter Games. He is an officer of the Order of Canada and he has received a Juno Award.

On my left is Senator Jane Cordy from Nova Scotia. She is an accomplished educator with an extensive record of community involvement, including serving as Vice Chair of the Halifax Dartmouth Port Development Commission. She is the Chair of the Canada-NATO Parliamentary Association and is a member of the Standing Senate Committee on Social Affairs, Science and Technology.

On my left as well is Senator Jim Munson from Ontario. He was a trusted journalist and former Director of Communications for Prime Minister Chrétien before he was called to the Senate in 2003. Senator Munson has been twice nominated for Gemini Awards in recognition of excellence in journalism.

Beside Senator Munson is Senator Joseph Day from New Brunswick. He is the Deputy Chair of the Standing Senate Committee on National Finance and also of our Subcommittee on Veterans Affairs. He is a member of the Bar of New Brunswick, Ontario and Quebec and a Fellow of the Intellectual Property Institute of Canada. He is also a former president and CEO of the New Brunswick Forest Products Association.

Our committee is the first Senate committee mandated to examine security and defence. The Senate asked our committee to examine the need for a national security policy. We began our review in 2002 with three reports: Canadian Security and Military Preparedness, in February; Defence of North America: A Canadian Responsibility, in September and An Update on Canada's Military Crisis: A View from the Bottom Up, in November. In 2003 the committee published two reports: The Myth of Security at Canada's Airports, in January, and Canada's Coastlines: The Longest Under-Defended Borders in the World, in October. In 2004 we tabled two more reports: National Emergencies: Canada's Fragile Front Lines, in March, and, recently, The Canadian Security Guide Book, 2005 edition.

This afternoon we are looking at the question of border infrastructure. We have before us Mr. Denis Lefebvre, Executive Vice-President, Canada Border Services Agency. Mr. Lefebvre was named to this office in December 2003 at the inception of the CBSA, Canada Border Services Agency. He last testified before the committee in May of 2004.

We also have Ms. Maureen Tracy, Director General, Enforcement Programs Directorate, Enforcement Branch. She last testified before the committee in April 2003 when she was Acting Director General of the Policy and Operations Division of the Canada Customs and Revenue Agency.

Supporting our main panellists, we have Mr. Gerald Frappier, Director General, Marine Security, Safety and Security Group, Transport Canada. We also have Mr. Brion Brandt, Director, Security Policy, Safety and Security Group, Transport Canada.

Mr. Lefebvre, I understand you have a statement.

Mr. Denis Lefebvre, Executive Vice-President, Canada Border Services Agency: Yes, senator, but first I would just clarify a point. You mentioned that this panel was to discuss infrastructure. Actually, however, the panel on infrastructure will follow this panel, and my understanding is that this afternoon we are to talk about container security.

The Chairman: You are absolutely correct, sir. It was my error and I appreciate your drawing it to my attention.

Mr. Lefebvre: I could talk on either topic, of course.

The Chairman: You are going to talk on both topics. We will see you again very shortly. We understand you are a multi-talented man. We are looking forward to a pleasant afternoon with you. Mr. Lefebvre, you have the floor.

Mr. Lefebvre: Thank you, senator. I propose to make a very short introductory remark and then I will ask my colleague, Maureen Tracy, to take you through the journey of a container that leaves foreign shores and comes to Canada.

We are pleased to be here for a discussion of marine container security. This is a very important issue to which we have given a lot of attention in the last several years. We will be pleased to explain various initiatives that have been put in place recently to ensure the security of marine containers.

Marine containers are the principal means by which goods are moved around the world. It is of the utmost importance to ensure their security of movement, for we know that a major incident involving a marine container could have serious consequences on the international trade chain, not to mention the potential negative consequences on humans and the environment. Because of the negative consequences that such an incident could have, all governments, as well as the private sector, have a vested interest in working together to secure marine containers.

As we all know, the emerging terrorist threats of recent years have changed the way we look at marine container security. Today, we propose to walk the committee through the controls that the CBSA has put in place to ensure the safe journey of marine containers, whether they end up in Canada or continue in transit to another country.

Given the number of containers that come to Canada every year, our approach is one of risk management. To do otherwise would bring the whole international chain to a halt. Our risk management is based on advance information and the use of technology to bring that information to our frontline officers in a timely manner.

Our risk management is also based on partnerships and the timely exchange of information with other departments and law enforcement agencies in Canada and around the world, as well as with the private sector. Our efforts aim at identifying risks and examining all containers that are high risk before the containers reach our shores or, at the latest, at our marine container ports.

Once a container leaves a port, we are satisfied that it does not present a security risk for Canadians — or for the residents of another country, if the container is in transit to another country. Because our economy is largely integrated with the economy of the U.S,, we have developed, through an effective partnership, the means of ensuring that a marine container that lands in either country is subject to an equivalent level of scrutiny. In other words, if a container is allowed to leave a port in Canada and enter Canada's commerce, or move in transit to the U.S,, it is likely that the same thing would have happened if the container had landed at a port in the U.S. Similarly, if a container is allowed to leave a port in the U.S,, it is likely that it would have been allowed to leave the port in Canada.

At this point, honourable senators, I would ask Ms. Tracy to take you through the voyage of a container that leaves foreign shores to come to Canada, indicating the various points at which security measures are applied by the CBSA to ensure that such a container is not a threat to Canadians.

Ms. Maureen Tracy, Acting Head, Customs Contraband, Intelligence and Investigations, Enforcement Branch, Canada Border Services Agency: Honourable senators, first, I would like to provide about a 20-minute walkthrough of the Canadian Border Services Agency's treatment and risk-assessment processes that are employed with respect to marine containers destined for Canada. Very broadly, the presentation will provide a picture of our treatment of containers before they leave the port of origin, while they are on their way to Canada, and once they arrive at our marine ports here in Canada. Second, I will provide a very general outline of the risk-assessment processes and tools that are available to us to identify high-risk cargo. Third, I will speak briefly about partnerships that we have developed with our international partners, particularly the United States, as well as the contributions of the private sector. Finally, the presentation will touch on our future plans in the area of marine container security.

Prior to the implementation of our advanced commercial information initiative, the ACI initiative, carriers were only required to report cargo on arrival at a Canadian port. That severely limited our ability to risk-assess that cargo properly. ACI introduced new requirements for industry to provide better and more timely information to the CBSA for targeting purposes. This included more detailed data on goods and people involved in the transaction — for example, the ultimate consignee — and a more complete cargo description. It also introduced the requirement to transmit data electronically, with no exceptions, in order to facilitate the use of technology in assessing risk. Perhaps the biggest change, and the most valuable addition to the CBSA risk-management efforts, was the introduction of the requirement to report data to the CBSA 24 hours prior to the cargo being loaded onto a vessel at the foreign port.

Pre-arrival cargo information is received electronically into the National Risk Assessment Centre, the NRAC, in Ottawa. The cargo in 100 per cent of containers destined for Canada is assessed. The CBSA has introduced a state-of- the-art, intelligence-based automated risk-scoring tool to assist targeters in completing a first sort of the thousands of entries received every day. The system, which queries a number of CBSA and other databases, will provide each shipment with a score, which represents a degree of security risk. Entries that have scored the highest are examined more closely. Additional checks are done, domestic and international partners are consulted, and a decision is made on how the container will be handled. Containers that score very high are issued a "do not load'' notice and examinations are conducted by local customs officials at the foreign port.

In order to ensure the most effective decision making possible, it is essential that we maintain close links with the U.S. national targeting centre and with foreign law enforcement agencies.

At the present time, we maintain a second tier of targeting, which is done at the regional level. This is done to identify potential non-security-related contraband threats. Regional targeters consider the threat level assigned to each container by the automated targeting system and perform further checks to confirm or negate risk with respect to contraband.

In addition to our own risk-assessment processes, we have partnered with the United States on the joint in-transit container targeting initiative. The U.S. has placed targeters at each of the three largest container ports in Canada to risk-assess containers that are arriving in Canada and moving in transit overland to the United States. With the same objective in mind, Canada has placed targeters at the ports of Seattle, Washington and Newark, New Jersey.

A risk assessment would not be complete without a focus on the crew and the vessels themselves. A process is in place for these areas as well. The CBSA receives information on vessels destined to Canada 96 hours prior to their arrival. Databases and other references are queried and high-risk vessels and crews are targeted for greater scrutiny.

I should also mention that Canada has the capacity, in very high-risk situations, to intercept and board a vessel at sea.

Finally, on arrival in Canada, targeted containers, vessels and crew members are examined. With respect to vessels, an examination could range from a cursory check to a full rummage. Similarly, in the case of crew members, varying degrees of verifications are conducted, depending on the level of risk they pose. Container examinations are most often conducted on arrival. Again, examinations range from tailgate checks which are conducted on the pier, or full offload examinations, which take place at off-site examination warehouses.

I must emphasize that all containers arriving in Canada, whether they are staying in Canada or proceeding overland to the United States, are screened and examined for security and contraband risk at the first port of arrival in Canada. Containers that are moving in transit to the United States, or that are to be released at a location inland in Canada, travel in bond and under seal with bonded carriers for the sole purpose of protecting duties and taxes.

This in-bond program is supported by compliance verification audits and investigations where criminal activity is suspected. In addition, civil and criminal sanctions are also applicable.

Our pier and offload examinations have been assisted in recent years by the introduction of a variety of state-of-the- art technology. For instance, the VACIS gamma ray scanner allows us to get a very clear picture of the contents of a container without necessarily having to open it up. We have also made significant progress in the area of radiation detection. We have introduced vehicle-mounted detectors that can identify the presence and nature of radiation emissions. Over the next six months we will be installing portal radiation detection equipment that will give us the capacity to scan close to 100 per cent of containers arriving in Canada for signs of illicit radiation.

As a third, we continue to research the viability of mounting radiation detection sensors on gantry cranes. The advantage of this is that all containers can be scanned immediately as they are being offloaded from the vessel.

The CBSA has also invested in technology that will facilitate underwater examinations of the hulls of vessels. The remote operated vehicle — the ROV — is an underwater camera device that allows CBSA officers on the dock to view the underwater exterior of a vessel and to identify potential parasitic devices.

I should mention that the ROV was responsible for the detection of 83 kilograms of cocaine at the port of Sydney, Nova Scotia, in June 2004, and again at the port of Belledune in New Brunswick, when 80 kilograms of cocaine were detected. Both loads were found in the sea-chests of the vessels.

The CBSA maintains close partnerships with other government departments, police and other domestic and international law enforcement. Our targeters and intelligence officers communicate on a day-to-day basis with Transport Canada officials at the local level as well as RCMP and local police forces of jurisdiction. We participate in joint threat assessments and we are, or soon will be, active members in a wide array of joint force operations such as the marine security operation centres on the east and west coasts and the integrated national security enforcement teams.

No risk-based program can be fully effective without the participation and cooperation of the private sector. For this reason, the CBSA has introduced the Partners in Protection Program, or, as we call it, the program, which, like the U.S. Customs-Trade Partnership Against Terrorism — C-TPAT — is aimed at enlisting the assistance of industry in preventing illegal activity and, when it exists, working with government law enforcement agencies to identify and intercept those who are responsible.

is a voluntary program. Private sector companies sign a memorandum of understanding with the CBSA in which they commit to taking personnel and physical security measures to lower the risk of internal conspiracy within their companies. A security profile is completed and reviewed by regional liaison officers. To date, almost 1,000 Partners in Protection agreements have been signed and so far this fiscal year regional liaison officers have received 21 tips with several resulting in large seizures — for example, 85 kilograms of ecstasy, two kilograms of heroin, and the recovery of three stolen vehicles.

For our part, the CBSA has delivered 58 awareness sessions to 1,020 people and conducted 133 outreach activities, reaching another 280.

We recognize that, despite the progress that has been made over the past two and a half years, there are still measures that can be taken to further improve our capacity to detect and interdict security and other contraband threats in the marine mode. For example, over the next year the CBSA will be introducing customs controlled areas, which will give our officers additional authority to question and examine suspect individuals who have access to secure areas. We will also pilot our container security partnership with the United States Customs and Border Protection whereby CBSA and CBP officers will team up at certain foreign ports to do joint risk assessments with the host customs administrations.

We are also moving towards providing industry with a single window through which they can provide information to the Government of Canada. This will not only streamline reporting requirements for the private sector, but will also facilitate our risk assessment processes.

Finally, we will continue with the very important research and development of new non-intrusive inspection technology, such as gantry crane mounted radiation devices and chemical and biological detection technology. In addition, we will be participating with the government of the United States and the Canadian ports and industry on the testing of smart box technology via the Canada-United States Cargo Security Project.

Honourable senators, that concludes our prepared presentation. We would be pleased to entertain questions and comments.

Senator Cordy: Thank you to the two of you for preparing your presentations and being here this afternoon.

You both talked about the importance of risk assessment in determining which containers should be looked at more closely.

Ms. Tracy, you talked about the importance of partnerships in cooperation with other countries in order to do risk assessments in a better way. You talked about staying in close touch with the United States automated targeting centre. When the Canada Border Services Agency appeared before us in 2003, you said that we would be in fact developing a risk-assessment system similar to the United States' automated targeting system. What is the status of our work in that particular area?

Mr. Lefebvre: We have done so. The system is up and running. Now we have our own Canadian-made, if you wish, automated system that will take all the information received from the suppliers of information, be they the freight forwarders or the shippers, and the automated system will query all our databanks that might indicate risk and will, basically, rank the risk.

It is a first screening to try to distinguish between the very low risk containers and the others. Our officers can then take that information and can drill down if there is information that the container could be a risk.

Senator Cordy: In the United States, a recent report by the United States General Accounting Office highlighted concerns with their Customs and Border Protection Service and also with the automated targeting system. The report stated that, while the strategy of CBP — Custom and Border Protection — incorporates some elements of risk management, it does not include other key elements such as a comprehensive set of criticality, vulnerability and risk assessments.

It then indicates that, again, CBP's targeting system does not include a number of recognized modelling practices such as subjecting the system to peer review, testing and validations.

What changes have been made or are being considered by the Canadian Border Protection Agency to address these types of issues? I am wondering whether or not you have actually read the report and whether or not you are looking at continuously evaluating it and looking at ways to improve it.

Mr. Lefebvre: Our system is newer. We believe that we have built the best machine we could think of as we built it. Frankly, I am not familiar with the report to which you refer.

The Chairman: Do you have peer review? What sort of testing do you have on it and what sort of validation do you have? That was essentially the question. Who does your peer review? Who does your validation?

Senator Cordy: In other words, who is testing the testers? We have the program in place, but are we continually monitoring how effective it is? In other words, are we getting the information that we should be getting?

Mr. Lefebvre: How long has the system been up?

Ms. Tracy: It has just been up since the beginning of December.

Mr. Lefebvre: Our machine or software has been up only since the beginning of December, so we have not evaluated the system as yet.

Senator Cordy: Do you have a system in place to evaluate?

Mr. Lefebvre: Do we have a plan in place for that?

Ms. Tracy: It depends on what you mean. As a matter of routine, through the intelligence risk-assessment cycle through the year, we will review significant seizures and review our results in terms of the examinations that we target. We look at those together with the indicators that we have in the system. Through that process we will constantly be looking at and ensuring that the indicators that are programmed into the system remain fresh and relevant. From that perspective, through the post-seizure analysis and post-examination analysis, there is a capacity to keep fresh the information that is in the system.

However, as Mr. Lefebvre has pointed out, the system has been up for only a few weeks; so there has not yet been a formal evaluation.

The Chairman: Do you mean you designed a system without any method of evaluating it once it was going?

Mr. Lefebvre: We have a lot of experience. This is just putting it in electronic form. The idea of doing risk management and risk assessment is age-old in our agency. We have now put everything in an electronic form, so we can scan and get much more information about all containers than we used to. With respect to the much larger amount of information we receive, we have equipped ourselves with the tools to rapidly apply the risk factors that before were applied manually, which was much more labour intensive.

As Ms. Tracy said, we will evaluate the efficacy, and we have always, through looking at results, tried to analyze the validity of our risk indicators to ensure that they are kept current.

The Chairman: You are not aware of the American problems that were uncovered by GAO, the General Accounting Office, and you currently do not have a peer review system that you can advise us of. Is that correct?

Mr. Lefebvre: No, we do not.

Senator Banks: Good afternoon, gentlemen and Ms. Tracy.

Ms. Tracy, could you go back to your opening remarks about examination after arrival in Canada and tell us what you said in the sentence that you began with, "All containers are...?'' I did not hear exactly what you said. I cannot remember what the next word was. I did not write it down.

Mr. Lefebvre: "Finally, upon arrival in Canada, targeted containers, vessels and crew members are examined.'' Is that the sentence you were referring to?

Senator Banks: The one I was referring to started with the words "All containers.''

Mr. Lefebvre: It is "all targeted containers.'' It is not all containers that are examined.

Senator Banks: That is what I was asking; thank you. I must have misheard you.

Just as a matter of interest, we had a look at an ROV the other day when we were in Atlantic Canada; so we do talk to your folks frequently, and as we have heard from you and from other people, the risk assessment is based on intelligence of one kind or another. It has to be. The data banks to which you referred must have intelligence in them. How would you describe the intelligence that CBSA, the Canada Border Services Agency, needs to have? What sort of intelligence is there? For instance, you said that prior to lading, 96 hours before anything will happen, you need to know what will be in the container. The shipper, I presume, tells you that. On the basis of what kind of intelligence do you say, "That guy is probably telling the truth, or maybe not?'' What sort of intelligence do you require?

Mr. Lefebvre: There are literally hundreds of risk factors. One example that Ms. Tracy mentioned in her presentation, and that you have seen in the massive amount of information we have sent you, is that we ask for information about the final consignee, which is information we did not have before. If the name of the final consignee is a high-risk individual or company in any of our data banks, that will be a risk factor.

Again, we have literally hundreds of risk factors. First and foremost, they are based on our own experience. If people have been engaged in contraband before in any way, shape or form, we will have that in our data banks. If people or other agencies or our partners have identified them as risks — for example, as being in a business that we should be watching for, they may have shared that information with us. The same thing applies to the other law enforcement agencies of Canada.

Senator Banks: If I were a stupid criminal, I might send something that I wanted not to be detected to a non- criminal, and in all likelihood your people would be keeping an eye on him, but a smart criminal, if he wanted to send something from Rotterdam to somebody in Canada, would develop a contact in a high profile, well known, safe, big company, and he would have somebody in the shipping and receiving department of that place. By what you have just told me, that would not be looked at because we know who they are and we trust them. Therefore, there must be some other kind of intelligence. Is it codified some place? Is there a list, a book or manual that says this is the kind of intelligence on which we operate to determine these risk assessments?

Mr. Lefebvre: Yes.

Senator Banks: Good. We may come back to you with more detailed questions on some of these things later, but is there a formal process for establishing what is in that manual of intelligence? Is it established by CBSA per se, or is it established at the instruction of somebody else?

Mr. Lefebvre: It is established by us on the basis of the best information we have from whatever source as to what could pose a risk.

Senator Banks: Are your officers at the various places where they come into contact with shipments or, in this case, containers, well informed about those intelligence criteria so that it can be a two-way street?

Mr. Lefebvre: We have information at the national level that is in our data banks. In addition, especially when it comes to contraband, because of these commodities and the different travel patterns that take place in various parts of the country, our targeters in a particular part of the country will have some local knowledge about further indicators of risk. So they are also put to task.

Senator Banks: Does that locally gained information find its way into the data bank?

Mr. Lefebvre: Yes. Sometimes there is not a personal analysis, but the analysis by the local targeters will start to drill down. Once they have some uneasiness about a shipment, further work at the national, international or regional level will take place.

Senator Banks: The colloquial term would be a "hunch'' or something like that.

Mr. Lefebvre: Yes. Again, initially, we try to identify very low-risk containers and distinguish them from unknown and potentially high-risk containers, but that is just the start.

Once you have singled out the containers that are either unknown or could present some risk, then further analysis is done.

Senator Banks: When information on persons, parties or places of interest shows up in the data bank, is it shared as a matter of course, on a practical basis, with other government agencies?

Mr. Lefebvre: The other agencies certainly will be a party to our inquiries, yes. If need be, we will contact other agencies to satisfy ourselves that there is no risk there.

Senator Banks: If you find something that you think might be of interest to another agency you will, as a matter of course, make it available to them? That is a question.

Mr. Lefebvre: The answer is that, when our targeters are looking at container shipments, their job is to assess risk. They are, at that time, in a mode of obtaining information, and they may have to share information in order to get to the bottom of it. The purpose is either to be satisfied that there is no risk or to give a no-load instruction for the container to go on board ship, or, at the port, to order an examination.

Senator Banks: I can see that in the case of a particular container, but my question has to do with your data bank, this compendium of information that has things in it about people, places, shippers, but does not necessarily address the particular container. When there is information that you think might be of interest to other government agencies you make it available to them, or make it known to them; is that correct?

Mr. Lefebvre: Senator, I think it is important to make a distinction. When the container is coming here and we have received the information, the purpose of the query is to satisfy ourselves that there is no risk; we will not share all the information we have received about that container, but only the information that is necessary.

Senator Banks: Pardon me for interrupting. I am not asking you about information having to do with the container. I am talking about information having to do with the shipper, or the receiver, or the deliverer, or the line that is bringing it or the routing of it — not the things that are in the container, but the intelligence that would lead you to say, "We have to look at that container.''

Mr. Lefebvre: I distinguish between when other agencies would like to know whether we have information to help them in their investigation and when we are in the business of clearing a container to say it is of no risk. When we are clearing a container, we will not give out information about the various parties to the transaction. We are simply asking them if they have something that should either satisfy us that there is no risk or that there is.

Senator Banks: I am not making myself clear, for which I apologize.

Mr. Lefebvre: Perhaps Ms. Tracy can respond.

Senator Banks: I will give you a hypothetical example. Let us say you have somehow obtained intelligence that has nothing to do with a particular container; it might be, for example, intelligence that the shipper, who has brought this container by truck to Amsterdam for shipping to Canada, is a bad guy, or there is something that makes him a person of interest. That information, which does not have anything directly to do with this container is, I presume, kept someplace. Is the information that this person seems to be somewhat of interest, shared? First, is it shared with your officers, or do they have access to it, and, second, is it shared with other agencies of government that you think might be interested in knowing that that person is now a person of interest?

Ms. Tracy: The answer to the first part is, yes, it is shared with our officers, and it is available in certain databases. It is not necessarily available to every single officer that we have, but it is certainly available to any officer in the business of risk-assessing.

As to the second part of the question, yes, we do have the capacity to share information. It is controlled under the Customs Act. I would love to give you examples, but I would hate to be wrong. We do have a very good capacity to share information with law-enforcement agencies and international partners under controlled circumstances, but certainly we consider it to be appropriate and that we have adequate authority.

Senator Banks: I would never ask you to give me an example.

The Chairman: Could we have a note of where you have the authority to share information, please? Could you provide the clerk of the committee with that?

Mr. Lefebvre: It is section 107 of the Customs Act.

Senator Banks: I would never ask a question in which I would ask you to be specific.

Ms. Tracy: Oh, no. I understand.

Senator Banks: Are the requirements for the intelligence to be used in the process of risk assessment reviewed? Are they reviewed often, sometimes, never, or frequently, and are they updated?

Ms. Tracy: I would call them indicators — circumstances that are put into the system that would give us pause. In my presentation we talked of country of origin, for example. If you are talking about the indicators, yes, very frequently we do look at our success levels and we do look at the circumstances that are at play in large seizures or other enforcement actions. Yes, we do keep those evergreen, if you will. Intelligence is a constant process. We do review; we put information into an intelligence system, and the system itself has triggers for us: in so many months the person who inputted the information needs to take a second look at it to determine whether it is still valid. Yes, we do that as well; there are methods to update and keep the information fresh.

Senator Banks: This is Senator Cordy's question to you again about the intelligence rather than the risk assessment, per se. I am distinguishing between those two things. Do you have the means — I think you just referred to it perhaps, Ms. Tracy — of testing that intelligence to ensure that the conclusions at which you have arrived, based on that intelligence, are in fact correct and can likely be used with success the next time.

Mr. Lefebvre: The elements of risk are not always ours. For instance, police forces, other law enforcement agencies in Canada, can ask us to look for certain individuals. It is their assessment that these people present some risk, and we do not necessarily do an independent analysis of that risk. We will put names in our lookout, in our data banks, in our intelligence, if you wish; we will put in names, but after 30 days there are procedures whereby, unless the law enforcement agency asks us to maintain a name past a certain date, the name drops out.

There are many reasons why certain information may be in the data bank whereby we give instructions to our people at the border to give closer scrutiny to some people, but that is not something that will be carried on forever.

Senator Banks: I have other questions, but we are running out of time and I want to allow my colleagues a chance. I will ask the clerk to send you more questions along those same general lines. Thank you very much.

Senator Day: There have been a couple of articles in the newspaper and the electronic media in the last few of days, about Mr. Celucci, the out-going U.S. ambassador to Canada, expressing the importance of border security and the importance of trade between Canada and the U.S. I think Mr. LaPierre recently opined that he does not sleep well sometimes, worrying about a security risk being staged here in Canada and entering the United States.

Obviously, we recognize the importance of trade with our cousins to the south. It is very important that they have confidence in the security system we have set up, and it is equally important that we have a system we all have confidence in. Along those lines I would like to ask a few little questions about the specific process that we have set up so that we do not stifle that trade. That too is important. We certainly do not want to adopt the attitude that we are just going to stop everybody, just stop trade, and say that nobody goes across the border.

We want to enhance the relationship, enhance the security and enhance the confidence in that security but at the same time ensure that our trade routes remain viable.

We have developed two programs; one is the free and secure trade program for the transfer of goods. I assume that works both ways, but let us talk about it from the point of view of goods going from Canada to the United States. That would include automobile parts suppliers that just want to be able to get the product to an assembly plant in the United States quickly. We know they are doing this and doing it on a regular basis, and we have established a program for that. That I believe we call the FAST program or free and secure trade for movement of goods.

There is also the NEXUS program in which people who travel across borders on a regular basis are identified following pre-registration. These programs require self-assessment on a regular basis after pre-approval.

Could you explain to us what you do to set people and companies up for these programs in terms of validation of their assessment and their pre-approval?

Mr. Lefebvre: You are quite right. There are two programs at the border.

Before answering your question specifically, I would like to make the point that exactly for the purpose that you have mentioned, we need to protect both economic security and national security. It is our goal to ensure that things and people coming to Canada from abroad do not pose a risk.

In addition, of course, you have to think of the law enforcement agencies in Canada that have to take care of that and liaise with the U.S. Certainly for goods and people coming into Canada, normally through seaports or airports, we think that we have to be up to a standard that matches that of the U.S. in order for them not to be concerned that people are coming through Canada and then going to the U.S.

With respect to your specific question about how we approve FAST participants, who are either importers, carriers or truck drivers, or NEXUS participants, who are travellers, we have joint programs with the U.S. These two programs go both ways.

We have a joint program by which our people are located across Canada together. A joint application is made by a traveller, a truck driver, an importer or a carrier. The application is screened through our data banks. We do a risk assessment from the information we have, whether through immigration or other law enforcement agencies. The U.S. does the same thing on its side. The truck drivers and the NEXUS operators have to provide fingerprints. Those go through the FBI fingerprint databank and the RCMP fingerprint databank.

As you will see on the form, we verify where people have lived for the last five years and where they have been employed for the last five years. It is a fairly thorough check. We know that the people involved have been part of a community for a period of time, and that they are known and are a low risk.

It used to involve four agencies, but now it involves only two because immigration and customs have come together. It is only when all of those checks take place that person is approved to on one of those pre-approved programs.

Senator Day: I have not seen the form that you mentioned. Would it be possible to have a copy of that?

The Chairman: The committee has that. They did not arrive until Friday.

Senator Day: I will see it then. Maybe some of these questions would not have been necessary if I had a chance to see that.

When somebody says on this form, "I have lived in Hampton, New Brunswick, for the last five years,'' do you send somebody out to find out?

Mr. Lefebvre: No. Again, it is a matter of risk. I should have added that at the end. First you do that application. You can do it through Internet, on our website. You will get the form and can make your application. We will check all the information you put on the form. It is based on risk. We will choose to dig deeper or not. We will also —

Senator Day: Can you stop there? How do you determine whether it is risky or not to live in Hampton, New Brunswick, without verifying it? I just chose that as an example.

Mr. Lefebvre: We will check databanks for criminal records of people, a number of things. Again, it is based on experience. We might have to send someone to verify employment. It is also followed up at the end with a personal interview. The person has to show up for an interview with the officers to ensure that the officers are satisfied with the information they have been given, and the officers might also do a personal assessment of the applicants.

Senator Day: Just looking at them.

Mr. Lefebvre: Yes.

Senator Day: Apart from that, do you do a random check with certain of these people who are doing a self- assessment and trying to get pre-approved? Do you have anything set up to do that?

Mr. Lefebvre: I doubt it.

Senator Day: If I made an application to be pre-approved, am I required to tell you if I have moved?

Mr. Lefebvre: Yes, my understanding from the form is that you have to say where you have lived for the last five years. If you were living in different places, you have to tell us that.

Senator Day: Let us say after I have been pre-approved, I move.

Mr. Lefebvre: You are approved, if I remember correctly, for five years and you pay a fee for that. Every year, we will run a check on the people who are in the system to see whether there have been some intervening convictions, for instance, or we will look at our own customs databanks. The people who are in the program are under constant scrutiny throughout.

Senator Day: Did you say you do that every year for everybody who has been pre-approved?

Mr. Lefebvre: Yes.

Ms. Tracy: Yes.

Senator Day: Is it once a year every year, or how does this happen? Explain to me what triggers this review and random checking. I suppose it is not random, it is periodic checking.

Mr. Lefebvre: Yes, It is periodic checking. My understanding is that it is every year. Of course, this is still fairly new, but if you are caught by customs or by border services with contraband after you are a member, we will look at that to determine whether we should instantly take steps to remove you from the NEXUS program.

Senator Day: I would hope you would do that. Those are the easy ones. It is the ones you do not catch who are the ones we are worried about.

What triggers you to look at each one of these on an annual basis? Is it the day of the year or the month, or a year from when they applied? What triggers it and what do you test when you do this reassessment?

Mr. Lefebvre: Again, it would be a matter of looking at all of the information that we have from our own sources or other law enforcement sources to see whether these people have been outside the law or on some watch list giving us some reason to have closer scrutiny or to yank the privileges.

Senator Day: If you received notification from a law enforcement agency, then you would test, but do you not random test those you do not have any reason to test other than for the fact they are on your pre-approved list? Do you do any random testing of these people?

Mr. Lefebvre: As to the exact frequency of when we recheck people in the databanks, I would have to look at that. I know we want to keep them evergreen and ensure that if someone falls outside the law, we look at whether we should remove their privileges.

Senator Day: Could you check your office and find out for me just what the plan is? I appreciate that this may be fairly new, but perhaps you could check and let us know what your rules are with respect to random testing.

I would also be interested in knowing what you are finding through this random testing process. Are you finding that a significant percentage of those you are testing, for no reason other than a look at the self-assessment, should not have been pre-approved or that the information is not correct?

Ms. Tracy: I cannot comment on random testing, but when we do the annual checks, it is rare that we come up with one of the members of NEXUS or of the driver registration that has a criminal record. If there is a criminal record, then it is not directly related to a border. The best example would be an impaired driving conviction.

Senator Day: Are you testing only for a criminal record?

Ms. Tracy: No. They go through the entire range of databank checks when they are first initiated. With respect to random checking, in any of their border crossings, they could be subjected to a random check at any time.

Senator Day: How frequently does that happen?

Ms. Tracy: I cannot tell you the frequency, but it varies.

Mr. Lefebvre: It happens fairly frequently.

Senator Day: Would that be 1 per cent of the time?

Mr. Lefebvre: Our policy is such that people in the NEXUS lane are not checked as often as people who are not members of the program.

Senator Day: I would think so because that is the basis of the program.

Mr. Lefebvre: Again, we are learning about this. We are not checking them as often, but we are checking members regularly. The frequency can vary by point of entry.

Senator Day: It is frequent and regular.

Mr. Lefebvre: Yes, but less frequently than if you were not a known or pre-approved traveller.

Senator Day: You cannot tell me a percentage of times that a member of NEXUS might be subjected to a random test to ensure that everything is okay. Would it be 1 per cent or 10 per cent of the time? Is it somewhere in that range?

Mr. Lefebvre: I would think that it is less than 10 per cent, although it would vary by port. If you are a NEXUS traveler arriving at an airport off an international flight from a country that might present greater risk, you might be —

Senator Day: Would the customs officer or the immigration officer know that? If you have a NEXUS card, do they ask what part of southeast Asia were you in, for example? Does a NEXUS member simply breeze through customs after showing the identification NEXUS card?

Mr. Lefebvre: We have a pass for air travellers arriving in Vancouver called NEXUS Air. I am sure that the percentage of times that a pre-approved traveler is checked varies with the port. The frequency of checking a NEXUS member would be based on the history and whether we find something or we do not find anything after numerous checks. The ratio would change accordingly. That is one way of affecting the behaviour of our customs officers. It is basically left to the discretion of the customs officers.

The Chairman: I have a follow-up on that line of questioning. When we visit ports, we are frequently told that it is dependent on resources rather than on planning to determine whether the extra check is performed. Is that a fair statement?

Mr. Lefebvre: If that is what you have been told, then that is what you have been told. Certainly, high risk containers or people are examined whether there are adequate resources or not. That is not a factor. The amount of resources at some point might affect the number of people sent on a random basis to secondary checking. That might be a factor, I suppose.

Senator Munson: I would like to talk briefly about the integrity of the Advanced Commercial Information initiative to provide container information through the Advanced Information Program. How is the information verified before the goods arrive in Canada?

If the information is not verified, what gives the Canada Border Services Agency confidence in the accuracy of that information? We are told that there is a 24-hour notice. What happens between that time and the time that the goods come to Canada?

Mr. Lefebvre: We have the National Risk Assessment Centre within the Canada Border Services Agency. The information is supplied 24 hours before lading in a foreign port and is filtered through our electronic software that will analyze for potential risk. Some of the containers will be deemed a medium risk or a high risk or no risk.

Certainly, all high-risk and medium-risk containers will be subject to further analysis on the part of our targeters. The first screening of the computer simply indicates whether the container should be examined more closely and then the work of analyzing why begins. The risk factors have been built into the software program to accurately identify the containers that are potentially risky. We look at all the elements and we ask additional questions to determine whether a container should be examined more closely.

Senator Munson: Could you give us an idea how many times that happens?

Mr. Lefebvre: This is a new program and we have had no-load instructions issued many hundreds of times. Most of the time those instructions to not load were because the information was incomplete. Once the information was completed, we were satisfied that they could load the container. The actual examination of containers abroad is few in number. We have asked our sister agencies to examine containers for us and those have been non-resultant.

Senator Munson: What kind of analysis takes place in respect of that information you collect? Where does it go? What happens to it?

Mr. Lefebvre: I am not sure I understand the question, senator. The first screening indicates whether a container presents some risk.

Senator Munson: I understand.

Mr. Lefebvre: If it presents a risk, then we want to know why. Is it the routing of the container? Is it one of the parties involved? Is it because the freight forwarder, or the broker, or some participant in the trade chain identified in the information is known to us? We want to know more facts. If we are not satisfied that the pre-screening was unjustified, then we will ask to examine the container.

Senator Munson: Are there penalties imposed for the reporting of inaccurate information?

Mr. Lefebvre: If the container is not reported to customs, there is a penalty.

Senator Munson: What is the penalty?

Mr. Lefebvre: Not reporting to customs and/or making misrepresentations are serious offences.

Senator Munson: I am curious on the penalties. Do you get fined $10,000? Do you get charged?

Mr. Lefebvre: I think you can be charged. Not reporting at customs is a customs offence for which you can be charged. If you get caught, we can seize the conveyance, and we can seize the merchandise.

The Chairman: Could the clerk be provided with that information?

Mr. Lefebvre: Yes.

Senator Munson: How many penalties were imposed last year?

Mr. Lefebvre: I want to clarify. We have an administrative monetary penalty regime that was implemented two years ago. It covers every infraction. It used to be that we were dependent on seizures to do our work. The present system is very broad, and it covers anything that is misclassified, even if it is not intentional; so people need to be diligent. We have a very wide array of penalties that we impose for anyone that underreports or misreports. We can talk about the regime at large, but it is working very well for two reasons: first, because we have collected a lot of penalties, and second, and more important, because it is a serious incentive for traders to be diligent in their reporting of what they ship.

Senator Forrestall: I will start off by asking the difference between lading, point of lading and point of loading. I ask it in the sense of break bulk cargo containers, for example. Where does lading take place?

Mr. Lefebvre: For break bulk?

Senator Forrestall: Both.

Mr. Lefebvre: The regime is different. For containers, it is 24 hours before lading.

Senator Forrestall: Let me simplify that. Does lading always take place at the point of stopping? Is lading the last thing that happens before you seal?

Mr. Lefebvre: Yes.

Senator Forrestall: Then it could happen at the point of origin.

Mr. Lefebvre: Yes.

Senator Forrestall: But you suggested in your comments, perhaps inadvertently, that it happens at the port.

Mr. Lefebvre: No. When we say 24 hours before lading, we mean at the foreign port before the container is put on a ship to Canada. If a ship goes from Tokyo to Amsterdam and stays on board and comes to Canada, the point of lading is Tokyo.

Senator Forrestall: You are not going to give me the answer. You will give it to me and take it away from me. I do not care what the port is or where it is. The bill of lading must be written at the time the container is sealed; otherwise, what is the use of it? How does whoever writes up the bill of lading know what is in the container. He does not.

Mr. Lefebvre: No.

Senator Forrestall: If you do not want to give me the answer, that is fine. I was curious because you left a question in my mind.

Mr. Lefebvre: I will try. The information we receive is not only from the shipper. It is also from the freight forwarder, who has the information about what is inside the container. It is from both the freight forwarder and the shipper. The shipper may have information about the routing of the container that we want but that the freight forwarder does not have, so all of that information must be sent to us 24 hours before the shipper puts the container on the ship that will bring it to Canada.

Senator Forrestall: You are perfectly clear in what you are saying, but it does not make any sense to my knowledge of the waterfront and bills of lading. They are there for a purpose, but I will not pursue that.

Perhaps that flows back to a line of questioning that I just want to pursue for a few moments. The committee sent CBSA a list of 66 questions in December. I am sure you remember them. You responded to 60 of them, but six of them you declined to respond to, citing security sensitivities. Unsatisfactory answers were eventually received to these six, I might add, but you failed to provide the committee with a satisfactory answer to any question that pertained to the total number of times it conducts a given type of inspection, whatever that inspection might be.

Given that, and given the fact that you are constantly updating and throwing away used information because you have better procedures and what not, can you tell us why that type of data is sensitive to national security? Where is the danger?

Mr. Lefebvre: With respect to the odds that one shipment may be examined, we would not want people to factor that in as a cost of doing business. The odds, of course, if you look at it from a national basis, may be one thing. At a port, it may be different. On any given day, it can be different still. Although we will admit that the number of shipments that are actually examined compared to the totality of the shipments that are received in Canada is small, again, it varies from day to day and place to place, and in every case where we think that there is a risk, we will examine the shipment.

Senator Forrestall: I thought I had asked why it is sensitive. In what way is it sensitive to national security? I do not know that you have answered that. However, I will not sit here all afternoon and try to persuade you to answer it. You obviously are not going to do so.

What statistics does CBSA keep on containers it inspects with more than just simply a risk assessment?

Mr. Lefebvre: What statistics do we keep?

Senator Forrestall: Yes. Do you keep monthly data? Do you keep it annually? Does it go to some great computer in the sky so we can all draw on it?

Mr. Lefebvre: The number of containers we examine?

Senator Forrestall: Yes.

Mr. Lefebvre: We keep statistics on that, yes.

Senator Forrestall: Do you keep them daily or monthly?

Mr. Lefebvre: They are kept daily. They are kept up-to-date. Accessing them may be something else.

Senator Forrestall: How long do you keep them?

Mr. Lefebvre: We keep them, I am sure, for a period of time. I do not know if it is two or six years, but I do know we keep them for a fair period of time. We keep the statistics for a very long time.

Senator Forrestall: Security policies and practices are not applied uniformly at all ports and border crossings, we have learned. While a great deal of emphasis and interest has been generated for high-profile crossings and ports of entry, other port crossings have had very little attention paid to them. To what degree does port size, container and vehicle traffic influence enforcement and the application of decisions taken by you?

Mr. Lefebvre: We conduct regular risk assessments by port, and more recently we have conducted those risk assessments by ports together with the U.S. If we have 130 ports or so across our land border, we conduct regular risk assessments as to the type of risk that is present there. It can be because of the commodities that transit through those ports or the population. A number of circumstances can affect the risk. We analyze the results we have had in those places and all other factors, and we will rank them and try to be fairly focussed as to why a risk is low, medium or high at each of those ports.

Senator Forrestall: Would you increase the number of containers in which you perform more than a risk assessment if you were given more resources to do so in terms of personnel and equipment?

Mr. Lefebvre: We are now examining all containers that in our view present a risk and probably some more at random. You can always examine more, but when you are in that business, there is a point of diminishing returns in opening containers and emptying them when you consistently find nothing.

I can tell you that for those containers that we are examining, which is often by totally emptying the container at some cost to us and also to the importer, the number of times that the examination is resultant is not very high. Whether you talk about the tailgate examinations, the full emptying of the container or the VACIS examination, the ratio of resultant examinations is very low. If you continue beyond what you have evaluated as presenting some risk, there is a point at which it is just not a good use of resources.

The Chairman: Mr. Lefebvre, coming back to Senator Forrestall's first question, you have told us that you inspect every container that you think is at risk. Is that correct?

Mr. Lefebvre: Yes.

The Chairman: Then, why are you concerned about providing information about how many containers you inspect? If you are inspecting all the ones you think are risky, what difference does it make if you provide information on how many you inspect?

Mr. Lefebvre: Going through customs and being caught is one thing, but going through the border services is a deterrent per se. To publicize the odds of people engaged in contraband being caught does not, in our view, help the deterrent effect of having to go through a border.

That is why it is preferable not to give that information publicly.

The Chairman: Well, let me put it this way: we have knowledge that at the Port of Saint John, for example, they inspect with a VACIS of 98 per cent — that was the figure they gave us — all of the containers coming in. On the other hand, we also know from personal experience that at the Windsor-Detroit crossing you are only operating your VACIS machine for one shift a day. Do you think that the people going through those ports do not understand that? Do you think that someone wanting to smuggle goods in does not know that they are getting 100 per cent treatment at one port? Do you think that truckers do not have the capability to talk to one another and say, "Hey, the VACIS is operating; the shift is on; give that one a pass?'' The bad guys know.

This is Parliament that is asking the question. We are asking on behalf of the people of Canada in order to get a better understanding of how these things work, and, frankly, you have not given us a good explanation as to why Parliament should not know this, because it is information that is very easily obtainable at any one of the ports that you visit. The truckers certainly all know.

Mr. Lefebvre: We certainly have no objection to telling Parliament. It is just that the attendant publicity could be damaging to the effectiveness of our operations.

The Chairman: We have had you here before us, you or your colleagues, and you have talked about back-ending or destuffing between 2 and 4 per cent. We heard your explanations and we dealt with that. Did you find there was an uptake in smuggling after telling us that it was 2 to 4 per cent?

Mr. Lefebvre: No, we did not notice that.

The Chairman: The fact is that the equipment you have is improving on a regular basis; you are going to a much more focussed system, a much more targeted system; you have an electronic system that processes the data for you faster; you have VACIS machines in place that provide you with a much clearer picture much faster, and therefore you have more inspections than you had before and the number is likely to increase. A year or so ago, when we were asking these questions and you were just destuffing and back-ending, you were telling us the figures. Now that your inspections are increasing, all of a sudden you have difficulty telling us these figures. We do not understand that.

Mr. Lefebvre: There is no other reason than the one I have mentioned.

Senator Atkins: Mr. Lefebvre, a container at risk is a container at risk. Have you ever lost a container?

Mr. Lefebvre: I am sure it has happened.

Senator Atkins: However, you do not know that it has?

Mr. Lefebvre: We have heard reports about the Halifax container, yes.

Senator Atkins: How about Montreal?

Mr. Lefebvre: It probably happened there too.

Senator Atkins: You talk about shippers and receivers. What about the people who handle containers on the docks and the long-shore men? Do you have any assessment of them and what risk there is in relation to their handling of containers?

Mr. Lefebvre: We do not.

Senator Atkins: How does CBSA —

Mr. Lefebvre: Senator, if I may, we are in the process of drafting regulations that will give us the authority at airports and seaports to install customs control zones that will enable us to do examinations of people who enter those zones and exit those zones, albeit they are only employees and are not arriving from foreign countries. For the moment, we are only legally authorized to examine people who come from outside Canada and shipments that come from outside Canada, but once we have those zones that will give us an additional tool to control the people who ingress and egress those areas.

Mr Gerald Frappier, Director General, Marine Security, Safety and Security Group, Transport Canada: It is important to realize that Transport Canada is in the position now of introducing new regulations that will require security clearances for dockworkers who work in and around the container terminals. That will provide a certain level of comfort, if you like, that the workers are reliable.

The Chairman: I would just make the observation that the committee is of the view that the minister has been quite courageous in that and that the steps he is taking in Vancouver are to be applauded. We would like to see the program proceed with vigour, though. We saw some push-back and we do not understand the reason for the push-back. The push-back was from the people who had to go through the process, but we would like to publicly commend the minister for taking what we think is a very important step.

Senator Atkins: How does CBSA ensure the integrity of containers while they are waiting to be unloaded or shipped onward?

Mr. Lefebvre: Many containers are sealed, but the art of sealing containers is not perfect and there is some research going on to ensure the integrity of containers. The project started as safe commerce after 9/11 with New England States and some U.S. organizations participating. Now Transport Canada is participating and we are participating. Provinces have also joined in the project. The project is to look at a better way to track containers, and a better way to seal containers through a number of devices. That research is ongoing and, hopefully, we will end up better protecting the integrity of containers; but there is still some way to go.

Senator Atkins: What efforts are in place to conduct random evaluations and searches of containers while in the control of the railway or trucking companies? In other words, is there any form of inspection between point A and point Z once they hit the Canadian port?

Mr. Lefebvre: We do our security and contraband risk assessments and examinations while the container is in the port. Once the container leaves the port, from a security and contraband point of view, as far as we are concerned, it is as if the container is in Canadian commerce. It is no longer under our jurisdiction.

The only exception is that we have some in-bond containers — because they are in transit, for instance, through Canada to go to the U.S. — but they are only in bond for commercial reasons, to make sure that the importer pays the attendant taxes and duties, and we have some audits to take care of that.

There is also, of course, the Partners in Protection program, which lets us work with railways to ensure that their security is as high as it should be. Our railways are also members of C-TPAT, the U.S. program that ensures that their security is as high as it should be to ensure the integrity of the containers while they are carried by the railways.

Basically, however, we do not have a specific program to control the integrity of containers once they have left the ports.

Senator Atkins: Whose responsibility is it to do so?

Mr. Lefebvre: In our view, if there is a risk to a container once it has left the port, it is as if the container is in Canadian commerce and the risk, I think, belongs to all enforcement agencies. If someone tampers with a container and does something to the container while the container is in Canada, it is not unlike a container that would start its journey from Canada.

The Chairman: Mr. Lefebvre, if I understand you correctly, if a container, for example, is coming in at Halifax and is transiting through to Chicago and will leave Canada at Windsor/Detroit, you follow it in bond for the purposes of collecting duty, but you do not follow it for national security reasons, or to make sure that no one messes with it or that nothing gets put on in the process?

Mr. Lefebvre: No.

The Chairman: If the truck stops and takes a funny route, or if the train takes a day and a half to get made up or pulls over on a siding, what confidence do you have that that container we are shipping into the United States has not been tampered with and does not have something on it that the Americans would not like to receive?

Mr. Lefebvre: When the container comes into a port in Canada, like Halifax, the Americans are there to clear the container from a security and contraband point of view.

The Chairman: Are there two inspectors? How many do they have?

Mr. Lefebvre: They only have two but we do the work of examination. We do the examination for them. They are just targeting, as they would if the container was coming into Newark in the United States. The same examination is made in Halifax, and we do the same thing, too. In fact, it is more scrutinized if it is in transit, since we do the scrutiny because it is coming into Canada, and the U.S. does the scrutiny because it is in transit to the U.S. We both conclude that there is no risk to that container.

We are a border agency. We do not have a mandate to ensure that something will not happen in Canada, any more than it could happen to any shipment starting in Canada.

The Chairman: You say you keep it in bond, but then you qualify it quickly by saying only to make sure that you collect duty.

Mr. Lefebvre: Yes. If we were to secure it in bond, for security reasons, I think that our onus of ensuring that there is no tampering would be much higher, and we would have to devote a different level of resources than would be the case when just securing taxes and duties.

The Chairman: No doubt, but what you are telling us is that you and the two targeters in Halifax may say that everything is terrific in the harbour, but if the truck, instead of taking two days, takes 10 days, or if the train takes a week to get made up and things happen to it in the middle, it is their problem when it hits Detroit or Toronto.

Mr. Lefebvre: When a container has left the port, it has been admitted in Canada. Our duty is to ensure that, if there is a security risk, the container is examined. Once we have discharged our duty —

The Chairman: Collected your taxes, you mean?

Mr. Lefebvre: No, when we have done our assessment whether there is a risk or not, the container leaves the port. We cannot constantly redo the same thing. At one point in time, we must release the container in Canada. As with any shipment coming into Canada, we have advance information and we use that information to ensure that a high-risk container or a container that presents risk does not come into Canada. But we cannot hold on to that shipment forever. It is a standard procedure at customs or at the border that once you have done your assessment, once you have chosen to do an examination or not, you release the container. Basically, our jurisdiction ends there.

The Chairman: When you say that a container is being shipped from Halifax to Detroit in bond, all you are saying is that somebody is going to collect the taxes on it down the road, but it has nothing to do with the security of the container, is that correct?

Mr. Lefebvre: Yes.

Senator Atkins: Just to clarify one thing, if the American inspectors in Halifax make a request on a container, then your people would automatically make that inspection.

Mr. Lefebvre: Yes.

Senator Atkins: What is the downtime for inspection equipment, repair and maintenance, and what contingency measures are in existence to ensure compliance with security requirements?

Mr. Lefebvre: We have a lot of equipment now to help us do our job. For the VACIS machine, to which you may be referring, we have now our own technicians that are trained by the manufacturer. They are located in the regions and they can be called. It is still a new program, but we have set up this maintenance crew and they will be called to repair the machine.

If, in the interim, there is some downtime for the gamma scanner, we will revert back, whenever we think there is a risk, to the old method of emptying or opening the container.

Senator Atkins: As I understand it, you have 15 VACIS machines.

Mr. Lefebvre: Yes.

Senator Atkins: Right across the country.

Mr. Lefebvre: Yes.

Senator Atkins: What kind of a maintenance crew would you have?

Ms. Tracy: We have one technician for Atlantic Canada, one in the province of Quebec, one in the province of Ontario and one in the West.

Senator Atkins: If you happen to open a container and find a red Z-71 Chevrolet truck with licence number "Norman,'' will you let me know?

Mr. Lefebvre: We will.

The Chairman: Thank you very much Senator Atkins. That car has been gone for years, trust me.

Senator Munson: I may be the new kid on the Senate block, but I thought, Mr. Lefebvre, that you had an opportunity to make a stronger statement on behalf of the Canada Border Services Agency. I was making notes to myself and I felt you did not. You were vague on the number of containers inspected. You were vague on the fines or imprisonment on reporting inaccurate information, and you were vague on Senator Forrestall's questions.

Just listening to it all, and I appreciate all the information that we have, you could have delivered a tougher message today to the bad guys out there, that you and Canada mean business. I just wanted to have that on the record. I really appreciate some of the information that we are getting, but I do not think we are getting all of the information. The message could have been a bit tougher.

Mr. Lefebvre: We know for a fact that the immense majority of people and goods coming into Canada are honest- to-goodness people and goods that come into the country or are brought into the country for legitimate visiting or trading purposes. We have to find a balance in the amount of interference we make at the border. We never hesitate, whenever there is any indication of risk, whether for people or goods, to take the steps necessary to satisfy ourselves that there is no risk before we allow people or goods in. We believe we have struck a balance, but every day we have to continue to amend the balance, if you wish, of resources and where to deploy the resources to maintain that balance of enforcement and facilitation.

The Chairman: Mr. Lefebvre, on behalf of the committee, I wish to thank you and your colleagues for appearing before us. We appreciate the information you provided us. We also acknowledge that a great deal of effort and work went into preparing the information that preceded this hearing. We value that. We and the staff of the committee will spend a considerable time reviewing it and examining it. It is of great assistance to us in understanding the work you do and the importance of it.

For your appearance here today, for the information you have promised us in the future, and for the information you have provided in the past, I would thank you very much on behalf of the committee.

For members of the public who are viewing this program, if you have questions or comments please visit our website by going to www.sen-sec.ca. We post witness testimony as well as confirmed hearing schedules. Otherwise, you may contact the clerk of the committee by calling 1-800-267-7362 for further information or assistance in contacting members of the committee.

Honourable senators, the next panel of witnesses appearing before us will be dealing with border structure. Our first witness is Ms. Kristine Burr, Assistant Deputy Minister, Policy, Transport Canada. Ms. Burr has the responsibility to develop, recommend and coordinate modal and multimodal policies. Multimodal policies refer to more than one mode of transportation, including transportation connectors, choices, cooperation and coordination of various modes of transport. Her job is to provide advice, analysis and intelligence on border transportation issues, system performance and stakeholder positions.

We also have with us again Mr. Denis Lefebvre. He is the Executive Vice-President of the Canada Border Services Agency. Mr. Lefebvre was named to this office in December 2003 at the inception of the Canada Border Services Agency. He last testified at this committee about five minutes ago and, prior to that, in May 2004.

Also with us today is Mr. Ron Sully. He is the Assistant Deputy Minister, Programs and Divestiture, Transport Canada. Mr. Sully is responsible for the development and management of programs and strategies based on sustainable development principles.

Finally, we have Mr. Guy Bujold. Mr. Bujold is Senior Assistant Deputy Minister, Policy and Communications, Infrastructure Canada, and he is responsible for the department's policy, research, communications and corporate services functions. Prior to this, he held the post of Deputy Commissioner of the Canadian Coast Guard in the Department of Fisheries and Oceans.

We welcome you to the committee. I believe Ms. Burr will make the opening statement.

Ms. Kristine Burr, Assistant Deputy Minister, Policy, Transport Canada: Honourable senators, it is my pleasure to be here today with my colleagues from other federal departments to discuss what the Government of Canada has accomplished in recent years with respect to border infrastructure. Given that we have already forwarded background material, I will present a brief overview of the government's efforts to improve the flow of legitimate trade and traffic at the Canada-U.S. border. Of course, my colleagues and I will be pleased to answer any questions that you might have on the material that was provided to you.

By way of background, I would note that border issues gained increasing prominence in Canada with the implementation of the North America Free Trade Agreement and the resulting dramatic increase in north-south trade flows. By 2003, 87 per cent of Canada's exports went to the U.S., and bilateral trade accounted for 78 per cent of Canada's overall trade.

Owing to the extent of Canada's integration in the North American economy, a secure and efficient border is a matter of national and economic security. Today, post-September 11, concerns about security shape our thinking about all aspects of trade and transportation facilitation. We recognize the dependence of Canada's economy on efficient trade with the U.S. That being so, the federal government is committed to pursuing the technological, procedural and infrastructure solutions to the challenge we face at the border.

As a result of this growing integration, Canada-U.S. efforts to cooperate and coordinate in order to improve the efficiency and security of our shared border pre-dates September 11, 2001. For example, the Canada Border Services Agency, Citizenship and Immigration Canada and U.S. Customs and Border Protection share a key binational mechanism in the form of the shared-border accord which was announced back in February 1995. As of last year, Transport Canada and the U.S. Department of Transportation, commonly known as US DOT, have been invited to shared border accord meetings as well. Additionally, in the year 2000, the U.S. Department of Transportation and Transport Canada signed a memorandum of cooperation that highlighted the importance of coordination between our two countries on border transportation. Following this, Transport Canada and US DOT formed the Transportation Border Working Group. The working group brings together multiple transportation and border agencies from border states and provinces and both federal governments to coordinate transportation planning, policy implementation and deployment of technology to enhance our border infrastructure and operations.

As such, this forum fosters ongoing communication, information sharing and the exchange of best practices to improve the transportation and inspection systems that connect Canada and the United States. In addition, the federal government continues to work collaboratively with Canadian and U.S. partners on current and future smart border initiatives that were put in place following September 11.

In concert with this emphasis on improved coordination, in 2001 the federal government started funding select investments in its most strategic infrastructure at the border. Since then the federal government and its partners have announced more than $1 billion in border infrastructure improvements. These are funded mainly through infrastructure Canada's $600 million border infrastructure fund, and partly by the $65 million border component of Transport Canada's strategic highway improvement program. The multitude of infrastructure projects that are contained in these programs are concentrated largely at Canada's top six border crossings and address border congestion by providing additional infrastructure capacity and dedicated lanes to support enhanced border programs such as FAST, the Free and Secure Trade initiative that I know you are familiar with.

We also realized early on that new technology could help to address transportation problems. Transport Canada has $30 million set aside under the Intelligent Transportation System, or ITS component of SHIP, to research, develop and deploy advanced technologies.

We intend to look into the application of ITS at or near border crossings, including systems to manage traffic as well as new applications to collect trade and traffic data, to measure wait times and to advise travellers of delays at international crossings.

Allow me now to turn to the frontier that is of most concern to you, namely the Windsor-Detroit gateway. During your visit to Windsor in December of 2004 you witnessed firsthand how busy the Windsor-Detroit corridor is and how important it is to the Canadian and U.S. economies. Because truck traffic flows through the heart of Windsor, issues around congestion and delays in the movement of goods and vehicles create problems locally and for international through-traffic.

Although travel demand on the Ambassador Bridge will not reach capacity until 2015, all levels of government recognized some time ago the need to mitigate congestion on the roads accessing the existing crossings. Together with provincial, municipal and U.S. partners, the Government of Canada has developed a comprehensive strategy to implement short-, medium- and long-term solutions to deal with the problem of congestion in the Windsor gateway and to advance long-term planning for new crossing capacity by 2013.

To this end, in March of 2004 the governments of Canada, Ontario and Windsor announced the $300 million "Let's get Windsor-Essex moving'' strategy. one of the strategy encompasses short-term measures to improve traffic flows and access to existing crossings. Five phase one projects are presently underway for a total investment of over $80 million. These include improvements to the Windsor-Detroit tunnel plaza, a rail grade separation at Walker Road and an upgrade of vehicle detection video equipment on Huron Church Road, which was an early win under the ITS border action plan. Discussions on medium-term phase two projects have been ongoing. Canada, Ontario, Windsor and Essex have agreed to a set of principles that will guide project selection

As you are probably well aware, the city commissioned a consultant in the spring of 2004 to help develop a perspective on medium-term projects to improve traffic flows and support international trade under the Windsor-Essex strategy.

The consultant's report was made public on January 21, 2005. We are pleased that the City of Windsor commissioned this report and officials are currently assessing the various concepts it proposes. We hope to resume discussions with the province, city and county of Essex very soon. As well, last December, Deputy Prime Minister McLellan and Secretary Ridge announced the "25 per cent challenge.'' Under this initiative, both governments, together with bridge, tunnel and ferry operators, are committed to reducing the transit time across the Windsor-Detroit gateway by 25 per cent over the next year. This will be achieved in part by the addition of 30 new CBSA inspectors.

With regard to a long-term strategy, since the spring of 2001 Transport Canada has been actively engaged in the Canada-U.S., Ontario-Michigan binational partnership, which is working to provide additional capacity between Detroit and Windsor. In January of last year, the partnership completed the first stage of the binational process by producing a planning needs and feasibility study. That study concluded that the Windsor-Detroit corridor will require additional crossing capacity by 2015, and it presented five potential corridors within which additional cross-border capacity could be built. On the basis of the feasibility study, the partnership has now entered the next important stage, which is the environmental assessment process. The environmental assessment process will examine the alternative corridors in the Windsor-Detroit area, as is required by existing legislation on both sides of the border. It is anticipated that the preferred corridor will be selected toward the end of next year, 2006, after which the environmental assessment will focus on exact routing and preliminary design. Construction of the new structure is expected to begin in 2010, and it should be operational by 2013.

The four governments are undertaking this process in order to ensure that any capacity expansion fully takes into consideration all legal and environmental requirements, including all necessary consultative steps as part of their due diligence for a project of this magnitude. It is crucial that the binational partnership does not lose sight of the importance of having new-crossing capacity in place by 2013. However, it is equally important that all the statutory processes are respected. Indeed, we are aware that unless every stage is appropriately addressed, parties can be subject to legal action.

Parallel to the environmental assessment, the binational partnership is also developing a preferred governance structure for the crossing. This will provide a speedy transition to the design and construction phases of this initiative. Additionally, Transport Canada is considering re-tabling amendments to the Canada Transportation Act. The amendments would provide the federal government with powers to approve any new crossings and would ensure an appropriate level of government oversight.

While the development of new infrastructure options is important, it is also recognized that there may be opportunities to take new approaches to long-standing practices as a way to aid border flows and improve security. Land pre-clearance is one such opportunity. Land pre-clearance describes a process whereby customs, immigration and other border functions of one country are conducted in the neighbouring country. When they met in Detroit in December 2004, Deputy Prime Minister McLellan and U.S. Department of Homeland Security secretary Tom Ridge announced an agreed framework for putting in place two land pre-clearance pilots. One in the Fort Erie-Buffalo Peace Bridge, where U.S. border functions will be relocated to the Canadian side of the border, and at one other crossing where Canadian operations will take place on the U.S. side. Canada is actively exploring sites for the Canadian pilot.

Land pre-clearance achieves both efficiency and security objectives. It has great potential to improve border flows. Pre-clearance will allow border facilities to be located where it makes most sense and where land is available. This will help reduce traffic congestion and maximize the benefits of our NEXUS and FAST programs. Land pre-clearance will be particularly helpful at infrastructure constraint crossings, such as the Peace Bridge where there is limited space in Buffalo to expand the customs plaza. Land pre-clearance also provides infrastructure and national security benefits, as travellers, cargo and conveyances will be screened prior to crossing the border.

In conclusion, I would like to emphasize that border files receive the highest priority from the Government of Canada. To illustrate this point, a coordinating group of ministers has been formed to manage border issues, with a particular emphasis on the Windsor gateway. Members include Deputy Prime Minister and group Chair Anne McLellan and Ministers Emerson, Peterson, Godfrey, Volpe and Lapierre. Also, the Canada-U.S. cabinet committee and the security cabinet committee have a high degree of interest in border files. What is more, mirror committees have been established at departmental official levels, and there is a continuing dialogue between the Deputy Prime Minister and the U.S. Secretary for Homeland Security to advance the objectives of the smart-border declaration.

A secure and efficient border is a matter of national and economic security and will remain a priority in both Canada and the United States. Solutions to border management and transportation challenges must address both security and congestion, and no single solution will suffice. The federal government will continue to work collaboratively with Canadian and U.S. partners on current and future smart-border initiatives and will continue to pursue procedural, technological and infrastructure solutions.

We would be pleased, Mr. Chairman, to answer any questions the committee might have.

Senator Munson: Good afternoon. I have three short questions.

Infrastructure Canada is responsible for the formal funding, given the creation of the $600 million border infrastructure fund. In terms of non-allocated funds, the $131 million, is this money available now and how can it be accessed by interested parties? What criteria are required for access to the funding, and also, can infrastructure money be used to support security initiatives such as controlled port access and fencing requirements?

Mr. Guy Bujold, Assistant Deputy Minister, Infrastructure Canada: Thank you, Senator. On the availability of funds, yes, those amounts are available right now. Indeed, all of the infrastructure fund was made able from the moment the announcement was made in Budget 2001.

The amounts remaining would be available to project proponents, usually cities, border communities or provincial governments. The criteria that we try to use to allocate the moneys are a demonstration that they will indeed result in an improvement in the transiting of goods and persons at border crossings; so there must be a business case to demonstrate that there is a requirement at the border crossing.

The funds are available to deal primarily with hard infrastructure. We have, however, through some of the projects been able to identify as one of the sub-elements infrastructure that goes to security-related features; for instance, fencing around rail corridors, if that is the project.

Senator Munson: How much has been spent?

Mr. Bujold: Roughly $450 million of the total has now been allocated to projects. This does not mean in all cases that the final projects themselves have been defined; indeed, the Windsor situation makes that point very clearly.

As Ms. Burr was indicating in her comments, the two levels of governments, ourselves and the Province of Ontario, identified jointly $300 million of investments that would be in the Windsor gateway. In the first round, five projects have already been identified which will use up $80 million in total, of which some $37 million or thereabouts comes from the federal government, the remainder coming from the province and the City of Windsor.

Senator Munson: Of the five projects, which is the major one or top two?

Mr. Bujold: There are a number of projects, as Ms. Burr indicated. There are the improvements at the existing plaza; there is a pedestrian overpass over Huron Street. They are all fairly small. There is a railway overpass that is part of that first tranche.

Senator Munson: Do you see more money being spent?

Mr. Bujold: In Windsor?

Senator Munson: No, just across the border.

Mr. Bujold: We certainly believe that we are going to exhaust the $600 million that was provided for border crossings. If there are other requirements, then the government will have to deal with them at that time.

Also some of the investments that we are making with the strategic infrastructure fund dealing primarily with roads have a border implication in that they facilitate the movement of goods to those various border crossings.

Senator Atkins: Can you tell us what is happening at St. Stephen-Calais?

Mr. Bujold: Yes, and I may ask my colleague, Mr. Sully, to assist me here.

We are in the process of negotiating with the Province of New Brunswick for a new border crossing. As you are aware, there will be a bridge built there jointly between ourselves and the Americans. There is a new border facility and we will be transferring some money from the border infrastructure fund to our colleagues in Mr. Lefebvre's agency to assist in that.

Senator Atkins: You are overcoming the problem of moving through town.

Mr. Bujold: Yes, we will be bypassing the community all together with the new border crossing.

Senator Forrestall: North?

Mr. Bujold: I believe it is north. If I have my geography right, I think it is north.

Mr. Ron Sully, Assistant Deputy Minister, Programs and Divestiture, Transport Canada: I am sorry, I cannot tell by the map, but I can get you the information.

Senator Cordy: Thank you, Ms. Burr. You are right, we did go to the Windsor-Detroit crossing. Indeed, "busy'' would be an understatement. It certainly must be a priority.

You said the new crossing will be ready in 2013, not just started. I know you have told us about short-, medium- and long-term measures that are being taken to help alleviate some of the pressure at that particular crossing, but is there any way to speed up the crossing before 2013?

Ms. Burr: We are looking at all possible ways of expediting the efforts, especially for the long-term planning and initiative. In fact, the environmental assessment process started last month and will be fast-tracked to the extent possible. Nonetheless, the requirements are laid out in legislation for environmental assessment processes on both sides of the border, so there is only so much we can do to expedite the long-term planning.

In working with the city and the province, however, we are looking at short-term measures, including using technology like ITS to help with traffic flow in the shorter term.

The Chairman: Could you explain again what ITS is, please?

Ms. Burr: It stands for intelligent transportation systems. It is generally the application of computers or information processing technology to transportation activities. Quite often, they are measures that help with vehicle flows or panels that tell truckers or motorists that a roadway is congested so they can pick another route or tell them what the wait times would be at a border crossing. It is technologies like that.

Senator Cordy: You did say, and I agree with you, that if you do not do things properly, then indeed you may be caught up in legal battles in the court system, which would make it, in fact, a lengthier process.

I thought you said you would start the design process after the environmental study has been done. Is it possible to do any of the designing as the environmental assessment is being done? Why is there a need to delay? Can you not start the design before the environmental assessment has been done?

Ms. Burr: According to the way in which the project will proceed, the environmental assessment will be done on all five options that are currently identified for the long-term solution.

As we carry out these environmental assessment processes, which involve extensive consultations in the community, we will look at possibly starting some of the design considerations around all five options. The key to this is not to be seen to pre-judge the outcome of the process, but at the same time, by doing a little bit of design work in advance, we might be able to shorten the overall time a little bit.

Senator Cordy: Nothing is easy politically when you are dealing with that many levels of government.

You did not talk about private ownership and its effect. It is one more thing added to the mix. You are dealing with the County of Essex, with the City of Windsor, with the province and with the federal government. In addition, there is the private ownership aspect. How does that impact on the infrastructure efforts and security concerns when looking at a crossing?

Ms. Burr: One of the criteria we are using in the binational process is definitely security. That will include looking at issues like redundancy.

When it comes to the private-sector consideration, there are several proponents, as I am sure you are aware, of various options in the long term — the five options that are on the table. There are several private sector interests involved.

At this stage, there has been no decision taken as to whether the final crossing outcome would be public-sector or private-sector managed, and everything is on the table. Everything is open at this stage.

Senator Cordy: Have the United States representatives indicated how they feel about private ownership?

Have they given any indication as to what their preference would be?

Ms. Burr: They have not, at this stage.

Senator Banks: I had intended to ask only one question but Senator Cordy has given rise to two questions.

My first one might be simply theoretical, because we have visited the issue a couple of times. It would seem patently clear that the difficulty of changing anything or improving anything is made greater by the number of jurisdictions involved, which Senator Cordy has outlined. Among them is the fact of the private ownership of the bridge.

The bridge owner has successfully contested certain government undertakings in the past and one court case. Is there such public interest involved in such things as the bridge that bridges ought to be precluded from private ownership and that private ownership of them ought to be ended so that governments can deal with them in the public interest and only in the public interest?

Ms. Burr: We are looking at all of the options around governance structure. Decisions around private ownership versus public ownership will probably be left to ministers at some time in the future. We would certainly look at all possibilities. My colleague, Mr. Ron Sully, is responsible for bridge policy and programs within the Department of Transport. He might want to comment on that.

Senator Banks: I just think it is silly that the largest single conduit of traffic between the two largest trade partners in the world is owned by one person. That is mind-boggling. I am a private enterprise person, by the way, but there are times when it just should not be permitted.

Mr. Sully: May I just say that that particular bridge was not always privately owned. At one time it was a public enterprise but, for whatever reason, it changed hands. It is difficult to rewrite history, which tells us that there are 24 international crossings between Canada and the U.S. and the Canadian government has an interest in only four of them in terms of direct ownership. The rest are owned either on one side by a state or on the other side by a province, or they are privately owned.

There are many combinations and permutations of ownership interests and the way in which they are managed. That is the status now. We are just beginning to analyze all of these possible combinations to determine what might be the best in the future, recognizing that what is history is history.

I would offer the opinion that one should keep in mind a division between who owns a bridge and how it is managed and how it is regulated, if it is regulated at all. The government has options available to it other than straight ownership, if I may put it that way.

Senator Banks: I want to make clear that I am not being critical of the company that owns the bridge. Just to use one example, when we were there — and this is referred to in the text that you gave us as well — we learned about the opening of four new customs booths on the U.S. side that were built by the bridge owner. The building began in 2001, I believe, and finished in the summer of 2003, but they did not open until the summer of 2004, one year after they were ready. Why did it take one year to go through the bureaucracy, or the legalities or jurisdictional questions, to get those booths opened? They have had a salutary result on the lessening of the line-ups of traffic on Huron-Church Road; so why would something like that take one year to be resolved?

Mr. Sully: I cannot speak for the bridge operator and why it took that amount of time, but I would point out that even where you have —

Senator Banks: I am sorry for interrupting, but I do not think it was his fault; rather, the fault lay elsewhere.

Mr. Sully: The Blue Water Bridge is an example of pure public ownership, with the American side owned by the State of Michigan and the Canadian side owned by a federal Crown corporation, the Blue Water Bridge Authority. In the aftermath of September 11, it happened that our side moved much more quickly to put security enhancements in place.

My point is that even when there is public ownership, such as the Michigan Department of Transportation, it is not necessarily the case that they will do the right thing at the right time, or act totally in sync with what we are doing. These are some of the issues we need to look at as we go forward.

Senator Banks: The difference is that when a large, overriding public interest is being ill served by governments, there is recourse. When it is being ill served by private ownership, quite correctly there is no recourse. You have the gist of my question. I hope that in your deliberations the public interest will be kept foremost in everyone's mind.

Senator Atkins: In respect of booths, we were told in Windsor that the ones used for inspection purposes are outdated and that the equipment is not up to the latest technology. Could you comment on that?

Mr. Denis Lefebvre, Executive Vice-President, Canada Border Services Agency: This is the first that I have heard about that, Senator. We have other places that are truly old primary inspection lines, PILs, as we call them in our jargon.

I visited Windsor and looked at the booths. I did not find them wanting and no one reported to me that they were wanting. We do, however, have other locations across the country where the booths are less than state of the art. The booths are provided by the bridge authority. Under section 6 of the Customs Act they have to provide our facilities at any port where there is a toll. I cannot say that we have any complaint to make about the quality of the booths; however, I will look into it since you say that this was mentioned to you.

Senator Atkins: Mr. Chairman, am I correct in my comments on this?

The Chairman: You are absolutely right. The union spoke to this at great lengths.

Senator Banks: I think the complaint was about the equipment in the booth.

The Chairman: It was also about the design of the booth.

Senator Atkins: The U.S. Government appears to be requiring the installation of mobile VACIS machines at all rail border crossings in Windsor and Sarnia. That will require the construction of secure corridors on the Canadian side of the tunnels. Please explain the origin of this requirement.

Mr. Lefebvre: The U.S. decided some time ago that they wanted a VACIS for every train entering the U.S.; they proceeded to build VACIS machines, or to install fixed VACIS machines at nine crossings, I believe, on the U.S. side of the border. At both Windsor and Sarnia, the places you mentioned, because of the circumstances of those ports, it was not feasible to have the examination done on the U.S. side; it was not feasible because our railways preferred to have the inspection done on the Canadian side of the border rather than on the U.S. side.

The U.S. is bearing the cost of installing the equipment, but we at the CBSA have agreed, and there is an agreement to this effect, that if ever they identify a wagon that needs to be inspected on our side for security reasons, we will do the inspection so that it can be examined and the train can proceed on its journey.

Senator Atkins: Are there projects in place at the moment?

Mr. Lefebvre: In Windsor, before it could happen, there was a need to do an upgrade so that it would not unduly disrupt traffic. There were meetings with the City of Windsor and their engineer. As well, there was a need for funding from the federal level to contribute to one level crossing to assist in a reconfiguration. Basically, the whole thing stemmed from a U.S. decision to VACIS all trains.

Senator Atkins: Who mans the VACIS, and are they owned by the Americans?

Mr. Lefebvre: Yes, they are owned, manned and maintained by the Americans.

Senator Atkins: Apart from our own VACIS machines, how many VACIS machines would the Americans have on Canadian soil?

Mr. Lefebvre: Just two: one in Windsor and one at Blue Water in Sarnia, where I believe it was more convenient for all to have it on Canadian soil.

Senator Atkins: Is there a possibility there will be more?

Mr. Lefebvre: No, I think all others can be done on American soil and are being built or are already operational on the American side.

Senator Atkins: If the Americans are putting VACIS machines at railroad crossings in Canada, are we considering putting in any on the American side?

Mr. Lefebvre: No. We do not believe that the security risks justify our VACISing or X-raying all trains coming from the U.S. to Canada, and we are not taking steps to do so. We do the control of trains in the same way as we do the control of any other shipment. Most of the examination of a train is done at the railway yard once the train has reached a railway yard in Canada. We work with the railways. We have information about the shipments that go on the railways or that are coming through the railways, and we work with them and their security at their railway yards. We are satisfied that we have a program now that is commensurate with the risks, but we do not plan to VACIS every train.

Senator Atkins: We do not really consider that there is that high a risk with respect to trains coming into Canada as the Americans consider going the other way; is that correct?

Mr. Lefebvre: It was their assessment that they needed to do that.

The Chairman: If I may just be clear on this, Mr. Lefebvre, the tracks go both ways, presumably. Is there a north- bound track and a south-bound track? Or do trains go both ways on the same track?

Mr. Lefebvre: I do not know if it is double tracked at that place or not.

The Chairman: I guess my question is this: are you describing to us a situation in which VACIS machines are in place, but the trains inbound to Canada pass by the VACIS machines and that we choose not to look at the pictures that the VACIS machines would provide us?

Mr. Lefebvre: Our highest priority at the CBSA is, of course, terrorism and engines or weapons of mass destruction. We believe that the higher risk is at seaports and airports and that the risk of weapons of mass destruction coming from the U.S. is not high. We put our focus mostly on airports and seaports when it comes to security, and we do not believe that the risk of such engines coming through the border justifies VACISing. A significant investment must be made. It is not just building the machine; it is also manning the machine and maintaining that equipment. Our priorities lie elsewhere.

The Chairman: That is your position, notwithstanding the fact that the Oklahoma bomber was a person in the United States, notwithstanding the fact that there are 7 million illegals in the United States, and notwithstanding the fact that people smuggling into Canada is a common thing and that we have any number of people who are trying to get across our borders to obtain refugee status?

Mr. Lefebvre: I do not think the U.S. is VACISing trains between Chicago and Oklahoma, and we do not VACIS trains between Winnipeg and Toronto.

The Chairman: In this case, the machines are there. They are in place. My question is, do we not bother to turn them on when trains are travelling north? And your answer is no, we do not, and it is not important to us.

Mr. Lefebvre: They are installed by the Americans on American soil at nine places. They are manned by Americans and maintained by Americans. I do not think it is just a matter of turning the switch on or off for Canadians to VACIS all trains coming north. It would be a significant investment.

The Chairman: It would be an investment in people watching them and probably sharing in the maintenance of them; there is no question about that; but I thought that was what border inspection was. I thought that was what your agency was all about.

Mr. Lefebvre: Our agency is about prioritizing our work so we spend our resources where the higher risk is.

The Chairman: This is not one?

Mr. Lefebvre: No.

The Chairman: Thank you.

Mr. Lefebvre: It is not that there is no risk, but we believe that, for train transportation from the U.S. to Canada, we have in place the risk assessment steps, the information we need to gauge the level of risk and to act when risk is found and to examine trains when required.

Senator Atkins: Would these VACIS machines be run on a 24-hour cycle?

Mr. Lefebvre: My understanding, from what the U.S. told us, is that they wanted to VACIS all trains. If the trains are running all the time, I assume that their scanners are working all the time, but I have no way of ascertaining that.

Senator Forrestall: Mr. Lefebvre, are you the bus driver? Does the buck stop with you before it gets to Minister McLellan, or is there somebody between you and Minister McLellan?

Mr. Lefebvre: There is the president of the agency, Mr. Alain Jolicoeur.

Senator Forrestall: Why is he not here?

The Chairman: Because Mr. Lefebvre is such a competent witness.

Senator Forrestall: That is fair. I just want to meet the bus driver, that is all. I do not mind the spare.

Mr. Lefebvre: He runs the company; I run the bus.

Senator Forrestall: Then you are the man I want to talk to.

With respect to the booths and their upgrading or their inadequacy, we hear constantly about the inability of an officer in one of these booths to communicate with other authorities whenever someone runs the barrier and does not bother to stop. Information on their electronic machinery is less than adequate and is very slow. Those are just two points, and I am sure there are more than those.

I would be appreciative if you took a quick look at this, even if it means that the Government of Canada, or Customs itself, has to undertake this responsibility, because it is one thing to be frugal and save money, but it is another thing entirely to expose our citizens to a danger that is unnecessary because we could have done something to better protect them.

Mr. Lefebvre: Senator, at those booths, we have over the last several years constantly upgraded the equipment, the communications, and means and access to databanks. I think, we have moved by leaps and bounds. There is certainly more progress to be made.

Senator Forrestall: I remember a man selling vacuum cleaners to people in the North Mountain in Nova Scotia 22 years before they got electricity. That is what I call entrepreneurship and leadership out in front. Why do you not get way out in front like that and I as a Canadian will feel a lot safer and I am sure the Americans will feel a lot safer.

Coming back to the New Brunswick border and where the bridge is located, I am very pleased that you will by-pass the community. As one of those who have great pleasure in driving up frequently and going to the United States that to me is the crossing of convenience and comfort. When you are doing something with trucks, it is impossible. You cannot get through at all.

Just going further up the Saint John River, are there any other border crossings that are being upgraded or is any further work being done?

Mr. Bujold: We are spending $10 million to connect route 2 at Woodstock-Holton. We will be twinning that road, which is a continuous four lane that connects to the interstate on the main side, the I-95. As far as New Brunswick is concerned, those are the border crossings right now that have been targeted for investments under the border infrastructure fund, senator.

Senator Forrestall: Thank you. In the discussions and consideration of how we will upgrade the Windsor situation, I have not heard any mention of going upland into the hinterlands, maybe 10 to 12 kilometres from a crossing, and establishing one-stop shopping — what I have always referred to as one-stop shopping — for both north and south traffic, where we are face-to-face with our friends from the United States and we do everything there and then secure them from that point until they are firmly in the United States. Is there some reason that we have not heard anything about that today?

Mr. Lefebvre: Senator, it is not impossible that the future will hold such developments. There was a decision announced jointly with the U.S. by Minister McLellan and Secretary Ridge to pilot pre-clearance at Peace, and one on the American side by the Canadians at some other port. But it is just a pilot. We have to develop the agreement; we have to develop the legislation; and we have to develop a mutual understanding of how those ports will work. It could lead, indeed, in the future, if that pilot is successful, as we believe it will be, to having both services on one side of the border.

Senator Forrestall: Is there a time-frame?

Mr. Lefebvre: We are starting in earnest in our discussions with the U.S. There are some steps to take place to iron out an agreement, and then we will need legislation. The discussions with bridge authorities and the examination of the site for Canadians to work on the American side are progressing in earnest. It should not be too long in the future before the actual work starts.

Senator Forrestall: Is there included in these discussions the subject of arming?

Mr. Lefebvre: The Americans who work on the Canadian side will not be armed, and the Americans have agreed to that, but we will have to discuss the level of security we need to give to the American officers working on the Canadian side.

Senator Cordy: I return to my earlier question related to jurisdiction, and the idea that there are so many interests, so many levels of government involved and private interests involved. Would you give the committee an idea of the role of the federal government in ensuring that everybody is working together and that everybody is moving forward on the file when we deal with infrastructure, or is the federal government taking the lead role in determining that everybody works together for the betterment of the various projects?

Ms. Burr: Senator, are you referring particularly to Windsor?

Senator Cordy: Particularly to Windsor, but I guess you could look at it overall. Someone made reference earlier to a number of crossings that are not just owned by the federal government, but I think particularly of Windsor, because that is one that we all understand easily; that is the one that we look at involves the municipal, provincial, federal and private interests.

Ms. Burr: Back in the 1990s when the government began to realize that the growth in trade was so significant that we had to do something about border infrastructure, there was a decision taken that we needed some kind of mechanism that brought all these diverse parties together. I mentioned in my presentation, and I believer we mentioned it in the deck as well, that there are these transportation coordinating processes that involve the Border Services Agency and our counterparts on the other side of the border as well as the provincial governments.

When you look at Windsor, specifically, we also have a mechanism that is focussed on all of the border crossings between Michigan and Ontario, plus the U.S. Federal Highways Administration, which is part of the U.S. Department of Transportation, and ourselves, Transport Canada, and the Province of Ontario, and that group gets together regularly and talks about broad challenges associated with transportation. More specifically, we have the binational process, which has focused totally on Windsor and involves the U.S. state and federal governments, the Province of Ontario and ourselves. While it is a partnership initiative, none of us could solve this by ourselves. One of the roles that we see the federal government having, as well as providing funding, is certainly to be a bit of a catalyst in bringing people together to try to sort out what makes the most sense.

Senator Cordy: When you say you get together regularly, what would regularly be? Twice a year?

Ms. Burr: It is twice a year for the broad umbrella organization I was mentioning and twice a year for the Canada- U.S., Ontario-Michigan process and fairly regularly nowadays on the binational process, the one that is focused specifically on Windsor. There are a number of subgroups and working committee that report to the binational process. These days, they are meeting fairly regularly, as well.

Senator Cordy: For continuity, are they the same bodies attending the meetings? It is fine to say that there is a representative from Transport Canada, but if it is a different person each time, there is not much continuity. Is it a specific person's job to be the representative at the meetings?

Ms. Burr: Generally speaking that is the case. There are some instances where, perhaps, you would have a specialist from a particular area come into a meeting to give advice and who would not be a regular member of a working committee.

Senator Cordy: I can understand those types of things.

Ms. Burr: It is generally the same people, certainly from the Transport Canada side. In my area, which is policy, and Mr. Sully's area, which is programs, we collaborate with our provincial and American colleagues.

Senator Cordy: Who exactly is in charge? You are from Transport Canada, but then we heard the announcement from Minister McLellan that the wait time would be 25 per cent less. Who is in charge?

Ms. Burr: Minister McLellan is in charge overall for border issues. She chairs this group of ministers that look particularly at Windsor, but more generally at border issues as well.

Within the federal family, we divide up the work and come together to look at how we are managing going forward. On the phase two work for Windsor, because it is focused mainly on transportation issues, it is Minister LaPierre who is leading that component of the broad Windsor strategy.

Senator Cordy: The minister at the cabinet table would be Minister McLellan, if it is a border issue; but, if we are talking about the infrastructure, is that Minister Lapierre?

Ms. Burr: It would be Minister Lapierre working in collaboration with Minister Godfrey, who is the Minister responsible for cities and communities and, of course, the office of infrastructure.

We have Minister McLellan chairing the ad hoc committee of ministers. Other ministers who have an interest are Minister Emerson, Minister Peterson, because of international trade, and Minister Volpe because of the Ontario dimension. It is very complicated, but we all know what we are doing and I think it is working quite well.

Senator Forrestall: Are you sure of that?

Senator Cordy: Did I understand you to say that, while there is a committee with the various jurisdictions, there is also a federal committee? There are two committees then: a committee of ministers led by Minister McLellan and a committee of bureaucrats.

Ms. Burr: It is a mirror committee to support the ministers in their deliberations. The people you see in front of you represent the departments that are most directly involved in all of this.

Senator Cordy: How do we ensure that all of the jurisdictions work in a timely way so that we are actually moving from point A to point B to point C and not rehashing things that have already been decided? Is it that we hold the purse strings? Would that be a big enough hammer to make sure everyone is working well?

Ms. Burr: It certainly focuses the attention. However, coming back to your point, senator, it is very important that there are regular meetings and that there is a clear work plan and principles that have been enunciated by the province, the federal government and the city. Any of the work we are doing on both phase one and phase two of the Windsor strategy is based on these principles.

Senator Cordy: To a lesser extent, the same types of models — perhaps not the same number of meetings — could hold true where we have different jurisdictions. In New Brunswick, perhaps it would be the state and New Brunswick and the federal government. The same types of things, to a smaller extent, would be used there as are being used in the Windsor scenario. Is that right?

Ms. Burr: That is correct, yes.

The Chairman: I cannot help but observe that from 9/11 to 2013 is an unacceptably long time. I have not heard anything today that gives me or this committee any comfort that people can move faster. It is not an acceptable period of time.

Ms. Burr: We, too, are concerned about the length of time and the fact that this is our most important border crossing and we have to ensure that it works well. One of the points that arose from the first feasibility study of the binational process and was corroborated in January, when the City of Windsor's consultant, Sam Schwartz, released his report, was that the capacity is there for the current crossings until about 2015. If we can keep focused on a work plan that is challenge-free in terms of litigation or legal challenge, and if we can focus on the phase one initiatives that are dealing with the short-term congestion problems in the City of Windsor and then move on to phase two and upgrades that are in the medium term, we are hopeful that we will be able to have a new facility in place before we are really at a capacity crunch in about 2015.

The Chairman: Capacity is not what worries people; it is the fact that people are crossing the bridge uninspected. People get across the bridge and no one has looked at the vehicle. Anything could happen on the bridge and we all know it. There is no redundancy, and it is absolutely an unacceptable situation.

Mr. Lefebvre: The number of bridges we have and the inspection of vehicles are not necessarily correlated.

The Chairman: But they should be, should they not?

Mr. Lefebvre: I think that the level of inspection that we afford shipments or people coming across the bridge is based on our risk assessment.

The Chairman: They come across before you inspect them.

Mr. Lefebvre: Yes.

The Chairman: That is too late.

Mr. Lefebvre: It is not too late to prevent some unwanted shipments from entering Canadian commerce.

The Chairman: No, but it is too late for someone making a mess of the bridge halfway across.

Mr. Lefebvre: That is why pre-clearance has been approved and will be piloted, starting immediately. This is one of the factors that is driving —

The Chairman: With respect, it is not starting immediately. You have one project. You have not figured out where the second project will be on the Canadian side. You have not named Windsor as being a pre-clearance site yet. You have only talked about the Buffalo one. Please do not tell us that it has been approved and it is starting immediately.

Mr. Lefebvre: I submit that this is a major step forward. I think that pre-clearance has served us very well at airports in Canada for a number of years. Through a significant amount of persuasion, we have obtained an agreement with our colleagues in the United States to do this at the land border. It is very promising for security reasons; but also, to optimize the use of FAST and NEXUS, we need to proceed where the infrastructure can allow us to do this optimization and also to reduce the timelines to cross.

The Chairman: Pre-clearance will be in place at all the bridges by what date, sir?

Mr. Lefebvre: We have to start somewhere and we are starting this right now. It was a major step for both countries to decide to move forward in that direction.

The Chairman: Does this have to be done sequentially, one bridge at a time?

Mr. Lefebvre: No, but I think that we have a lot of issues to iron out. The U.S. had views on the nature of the agreement that they wanted before this takes place. They have now agreed, and we have agreed, to the basic principles that will guide us in the development of the agreement. Once the pilot is a success, I think that this can be replicated wherever it makes sense.

The Chairman: You made the point earlier that the principle was established years ago at airports and it works well there.

Mr. Lefebvre: It does at airports.

The Chairman: What is the delay, why the foot-dragging?

Mr. Lefebvre: It is a partnership. Before you can launch a program such as this, both countries have to see eye to eye on how it will develop. That is what has been achieved. We have achieved a meeting of the minds on the basic principles that will regulate the way we each enforce our customs and immigration statutes on the other side of the border. That is a major step forward.

The Chairman: So you are willing to do it. Canada's position is that it is prepared to have reverse inspections; we think it is a good idea; is that correct?

Mr. Lefebvre: Yes, we think that having a legal framework that will allow us, whenever it makes sense, to work on either side of the border is a good thing. We have pushed very hard to have it and now that we have the agreement in principle it is a matter of giving life to it.

The Chairman: Are there economic reasons why the Americans are going slowly?

Mr. Lefebvre: I do not think they are going slowly. The issues were surrounding the level of powers they would need to operate on this side. Their basic position, initially, was they wanted to have full powers, which they do not have at airports, because it would be against our Constitution to allow them to operate as if they were in the United States. They are in Canada. The Charter of Rights applies.

They were concerned that if they did not have all of the powers they have in the United States, and if they could not act as if they were in the U.S., it would not enable them to deliver their mandate in a way that they thought was appropriate.

The Chairman: This was not just a bargaining technique, because they get a second kick at the cat as soon as the person crosses the border?

Mr. Lefebvre: I think it was a genuine belief on their part that they needed certain powers at the border. Through further negotiations between the two countries, and much attention paid to this and for the good reasons that you mentioned — that this would be beneficial to both countries, from the commerce point of view, the economic security as well as the national security — both countries have now agreed that pre-clearance would be piloted. We are moving as fast as we can to make it happen. I believe that the U.S. is now keen to move forward. That is certain from every indication we have received. We will make it happen.

The Chairman: I will only observe that I am disappointed that you feel that this is as fast as you can go.

Senator Banks: I think that it is not as fast as we can go. I guess it is as fast as we will go in the present circumstances. In an emergent situation, such as existed when, to be curmudgeonly, people like C.D. Howe and Harry Hopkins were in charge of things, stuff happened a lot faster when there was an emergency. It would be possible for it to happen a lot faster.

From that standpoint, I would like to go back and ask Senator Cordy's question again, as I did not quite get the answer.

Maybe this is part of the problem. Driving the bus, to use that metaphor of the infrastructure question again, who is in charge on the Canadian side? There cannot be five ministers in charge. That cannot be right.

Ms. Burr: Senator, if you are referring to the transportation elements, the investment in the transportation infrastructure will help to make things move more quickly. It is Minister Lapierre who is responsible for phase two and for the upcoming discussions with the city and the province on how we can best invest funds to make things happen.

Senator Banks: With respect to transportation infrastructure, the answer is Minister Lapierre?

Ms. Burr: Yes.

Senator Banks: Thank you. Talking about those myriad of jurisdictions, and to be ecumenical, rather than trying to find a dictator, I will ask the question in respect to Minister Godfrey's interest, the municipal interests. When all of those things are going on and infrastructure costs are mostly shared between the federal and provincial governments — and, I suppose, the federal and state governments on the other side — what is the commitment, if any, of money of the municipalities and where do they get to plug into the negotiation process? Where and when do they come to the table and where and what are their responsibilities?

Mr. Bujold: On the border infrastructure fund, given the nature of where the assets have been located, these deals have been primarily between the federal and provincial governments, but not exclusively.

Some of the projects that will be done in British Columbia that we have already agreed to involve the Greater Vancouver Transit Authority and some other entities there. We go out and try to negotiate the deal that brings all the parties to the table. We try to maximize the amount of investment that we can get from the provincial and municipal governments so that at the end of the day you get more bang for your buck.

Senator Banks: It will not work if the municipalities are not onside.

Mr. Bujold: You are absolutely right. That speaks to the issue in the City of Windsor in spades. We will not be able to do a solution in Windsor around the phase two projects that will help deal with the current capacity issues unless we have the City of Windsor and La Salle and the other local interests behind those projects. We are not the project proponents. We are the facilitators. At the end of the day, we are the funders of the infrastructure projects that deal with the problems.

Senator Banks: What is the impediment to achieving that buy-in?

Mr. Bujold: In many cases, it is being able to, at the same time, deal with issues of national interest — getting to your comments, Mr. Chairman, and your colleagues' comments — and local interests around how to actually resolve the problem. Whether you put the road here or there is very much a local issue. Our concern is to ensure that we can move the goods across that border crossing in the most efficient and safe manner.

Senator Banks: To get it down to the very bottom end, the NIMBY principle has come into play. Someone who owns a house in Windsor or Detroit will say, for perfectly legitimate reasons, "You cannot put it here because it will ruin my property values.'' That is one of the things that cause this to go less quickly than it otherwise would.

Mr. Bujold: This is why we have in this country and in the United States, and in state and provincial jurisdictions, processes around environmental assessment that will allow us to identify those issues and to mitigate them as much as we can — not to stop the projects from going forward but, at the end of the day, to find a resolution where, in some cases, you will not satisfy the neighbour, but he or she will have had, through a legitimate process agreed to through legislation in the various jurisdictions, an opportunity to voice his or her concern. This is why it is so important, and it explains much of the timeline that we are dealing with in the case of Windsor; there are environmental assessment processes of the jurisdictions that we will have to follow. We will have to get closure on those so that we can go forward without facing the possibility of someone who has a backyard taking the whole process to court and knocking us back to square one. That is the concern that we are trying to deal with.

Senator Banks: Once you dig the holes for the first footings, how long will it take to build a new bridge or dig another tunnel?

Mr. Bujold: It will take three years.

Senator Banks: Backing that up from 2015, does that mean that by 2012 you will have a spade in the ground?

Ms. Burr: We are actually looking at 2010.

Senator Banks: In 2010, five years hence, all this will be signed off and everybody will be happy, or will have been subject to or had access to the process.

Ms. Burr: We are hoping that we will have the last crossing or the first crossing, depending on how you want to term it, identified by the end of 2006. At that stage, we look at the design and implementation issues that we were talking about earlier.

Senator Banks: It is a double-edged sword, but from the standpoint of saying that this is not an emergency, it is hard to say to some people in Windsor that this is not an emergency when they look out their front door and see a line of trucks that cannot go anywhere.

Mr. Bujold: Senator Banks, we want to separate the two issues here. One is that the second round investments that we are proposing to make with that $300 million, and indeed the possibility that we might require a little more, are to deal with the trucks on the streets right now. The new crossing is to deal with the capacity shortfall that will exist at some point in Windsor. We want to make sure that what we do on that second round investment does not prejudice that new capacity that we will put in place between 2007 and 2010. There is a linkage between what we have done in the short term, those $80 million that we spoke about that we have already announced, and what we will be announcing in the near future as a result of our collaboration with the Province of Ontario, the City of Windsor and other interested parties on our side of the border, and any third round of investments that may require some federal and provincial money to actually put in place some new capacity in the Windsor corridor area.

Senator Banks: It "may'' require some money?

Mr. Bujold: Yes, it may require some new money. If the economics of it are such that it can generate its own stream of revenues, it could fund itself. There is no a priori assumption that governments will be required to pay.

Senator Banks: You have to make sure that those things you are doing now with the first $300 million do not end up with one of these.

Mr. Bujold: Correct.

Senator Banks: It must connect. It might be a toll bridge.

Mr. Lefebvre, you talked about trains. I am referring to a previous question about trains and VACIS machines. You said that trains that are coming into Canada are examined as required. I do not expect you to answer this now because I am asking for a number. Would you tell us how many times in the last five years a train, a boxcar or a container on a train coming into Canada from the United States has been examined?

Mr. Lefebvre: Yes, I can provide that information. In terms of what underpins the security of trains, both our railways and the American railways now, most of them, are C-TPAT or PIP approved so they are conscious of security. When you are a member of PIP, it means that you upgrade your own security and you are security conscious as an enterprise. It also means that the suppliers upstream of you are also security conscious.

Our policy is to examine the trains, not to stop them at the border, whether they are passenger trains or freight trains; because they do not make that many stops, and it is not that easy to interfere with trains, we do our examination, if need be, when they arrive at the first rail yard where they stop. They normally have some security around them and we can perform our examinations. We will provide you with the examination that we do of trains.

In terms of mode of transport, trains have proven, in our experience, to be of fairly low risk.

Senator Atkins: I will move from infrastructure. I heard that you are adding 30 new inspectors. Is that at Windsor?

Mr. Lefebvre: Yes.

Senator Atkins: Is that because of additional funding, or is it because of some shift of allocation of funds?

Mr. Lefebvre: From the agency, because this is such a priority port, we will reallocate from elsewhere, but not necessarily from another port. We will reallocate money to Windsor so they can hire 30 people.

Senator Atkins: I must say, that is good news. When we talked to the people from the unions, one of their complaints was that, if an inspector held a car up for too long, for example, for two and a half minutes, when that inspector went off, he or she could be lectured about delaying that automobile too long. Their complaint is that if they have a suspicion about a car, sometimes it takes a lot longer. They seem to be penalized for the notion that they are delaying the automobile.

Mr. Lefebvre: We have to manage our workforce. I will not deny that there can be some conversations between officers and their direct supervisors. It is not our policy to say that you do not do what you have to do because someone else is waiting in line. We are conscious of the fact that people are waiting in line, but if an officer has to refer someone for a secondary examination we will do that. The proper place to do the bigger examination may not be at primary. Maybe you have to clear primary and go to secondary. However, we do not have a policy that says you do not do what is appropriate because some people are waiting.

Senator Atkins: I am sure you do not. However, I think they feel that they are being criticized for trying to do their job.

Mr. Lefebvre: It is difficult for me to comment on individual cases.

Senator Atkins: It was a broader comment than just an individual case, but I leave that with you.

Mr. Lefebvre: Thank you.

The Chairman: I have a couple of questions to finish up. Could you help us with the difference between the U.S. screening with VACIS at Sarnia and Windsor and pre-clearance? Is it one and the same?

Mr. Lefebvre: They VACIS the trains only for security purposes. They are not doing the full range of customs work. It is only for security. If the train is not a security risk, they will allow it on the other side, and it is on the other side that they will do primary and secondary. Whether they would do it at the border or at the point of arrival in the rail yard, I do not know.

You are quite right. To some extent, every mode is different. We have airports where they have limited powers to do secondary. In the case of trains, it is limited to VACISing for security reasons only. Their position with respect to the land border for cars and trucks was to do it only if they had full powers to act as if they were in the U.S. without regard to our Charter, which, from a legal point of view in Canada, was not found to be possible.

The Chairman: You are answering another question now. Is that correct?

Mr. Lefebvre: The VACISing of trains is as I have said it is. The pre-clearance we are working towards now is to have both primary and secondary on the Canadian side, the full customs process, which is not the case with trains.

The Chairman: Just so I am clear, in the event an anomaly shows up on the Canadian side, we are not informed. They wait until the train gets over there, and they deal with the anomaly.

Mr. Lefebvre: If it is security in their view, they will ask us to intervene, and we have agreed, as a sister agency, to intervene if it is a security risk. If they find something else, if they see what they think is not security but contraband, for instance, they will have the information and the train will move on the U.S. side, and that is where they will deal with the examination.

The Chairman: Are the machines sufficiently far from the border that there is time to stop them and for the proper authorities to get to the car that has the anomaly?

Mr. Lefebvre: If it is a security risk, yes.

The Chairman: Why does the CBSA have a concern about disclosing the number of containers searched when you have no concerns about telling us when we are not VACISing any trains coming across the border?

Mr. Lefebvre: That is because we are not VACISing any trains.

The Chairman: If you are prepared to say we are not inspecting any trains coming across the border, why are you not prepared to talk about where you are inspecting?

Mr. Lefebvre: One is more obvious than the other. The number of examinations that will take place at a port is not as obvious as the fact that we are not VACISing trains that are crossing into Canada.

The Chairman: It is pretty obvious when you are just running one shift with a VACIS at Windsor.

Mr. Lefebvre: A VACIS is one thing, but we do some back-end examinations and we do some destuffing. That can take place any time of the day.

The Chairman: We understand that it is 2 per cent or 3 per cent.

Mr. Lefebvre: As I mentioned, it is a low percentage compared to the number of trucks that are coming through.

The Chairman: You have given us that information publicly before.

Mr. Lefebvre: It is preferable. We strongly believe at the agency that giving detailed operational information like that renders our operations less effective. Again, we would be quite delighted to provide the information to the senators, but we believe that the publicity attendant to this being widely communicated just renders our operations less effective.

The Chairman: Having said that, we are convinced that the bad guys know already and that they have the capacity to communicate easily with one another. It does not make much sense to us to keep secret things that are already broadly known and are easy for people with bad intentions to find out.

Clearly, the percentage of back-ends or destuffing does not say whether your truck is the one that will be picked up. It does not even tell you how many there are per port. It just gives a global figure for Canada, which does not tell them.

Mr. Lefebvre: We try not to help them acquire the knowledge.

The Chairman: My point is that when we have been at the borders we have seen truckers who are knowledgeable about precisely what is going on at the customs plaza, and they pass the word back quickly. It is not a secret, Mr. Lefebvre. That is the last word.

Mr. Lefebvre: I will leave you the last word.

The Chairman: You are very kind.

Actually, my last word is to thank you all for coming. We appreciate your helping us understand this issue. I am sure you did detect a certain frustration with the pace that it is taking at Windsor. I suspect you may have a similar frustration. We intend to vent ours at some length at a future time. However, you have been very helpful to us in understanding the complications and the difficulties that you face, and that has given the committee a better understanding of what is clearly a complex and difficult challenge. We respect the fact that you are doing your best to address it, and we admire your taking on such a difficult challenge.

To all of you on behalf of the committee, thank you very much for taking this time to share your understanding with us and assist us in understanding the problem.

For members of the public who are viewing this program, if you have any questions or comments, please visit our website by going to www.sen-sec.ca. We post witness testimony as well as confirmed hearing schedules. Otherwise, you may contact the clerk of the committee by calling 1-800-267-7362 for further information or assistance in contacting members of the committee.

This meeting is suspended and will continue in camera.

The committee continued in camera.