Proceedings of the Standing Senate Committee on
National Security and Defence

Issue 1 - Evidence - Meeting of October 3, 2011


OTTAWA, Monday, October 3, 2011

The Standing Senate Committee on National Security and Defence met this day at 4:01 p.m. to examine and report on Canada's national security and defence policies, practices, circumstances and capabilities (topic: Transformation Report 2011).

Senator Pamela Wallin (Chair) in the chair.

[English]

The Chair: Welcome, ladies and gentlemen, back to a session of the Standing Senate Committee on National Security and Defence. As you know, we have had quite a broad and wide-ranging agenda for the last year or so. We will continue to look at the issues of transformation and of reserves today in a very specific way.

For years, the Canadian Forces were underfunded and under-equipped in what the then Chief of the Defence Staff, CDS, General Hillier called a "decade of darkness." That began to change after 9/11, driven largely by a war in Afghanistan. Today we are primarily in that country in a training role, but we are also doing this in the context of a changed fiscal climate.

All federal departments, including the Department of National Defence, DND, have been asked to reallocate funds as part of a strategic review. There is also a strategic operating review.

Our first witness on the questions of transformation and money is Lieutenant-General Andrew Leslie, former Commander Task Force Kabul, former Deputy Commander of the International Strategic Assistance Force in Afghanistan and more recently Chief of Canada's Land Staff.

Over the past year, General Leslie, along with a team, has led a transformation exercise that has recommended some pretty fundamental changes to the way the Department of National Defence and the Canadian Forces, CF, operate. This is to save money and reallocate personnel and funds away from headquarters to meet operational demands, but also to help create a new vision of what a modern military might look like.

Later we will hear from the author of another report on rethinking the reserves, but first we will welcome General Andrew Leslie. Do you have opening remarks, sir?

Lieutenant-General (Ret'd) Andrew Leslie, as an individual: With your concurrence, senator, I do.

The Chair: Welcome, and I know your time is short.

Lt.-Gen. Leslie: Senators, transformation is all about the future, reducing the overhead, investing in the front line troops, making the Canadian Forces and the Department of National Defence leaner, better able to respond and more deployable. The Canadian Forces have delivered tremendous results over the last decade, both at home and overseas, be it fighting or helping save lives. However, the triumphs of today do not guarantee the successes of tomorrow. The international economic climate is grim. What happens out there has an impact at home and resources are finite. As alluded by the chair, DND and CF can expect to contribute a proportional share to deficit reduction to better ensure financial security here within our nation.

We have to become more agile, more deployable and more ready to respond. Our resources will diminish slightly, and the assumption behind the team's work was that our vital ground was our people, the operational equipment and their training.

All of this is increasingly expensive and has to be focused on producing capability for wherever the government chooses to send us. We will have to reduce overhead and invest in output; we have to become slimmer to trim the top and the middle while protecting and investing in the various systems that result in the people and the ships, in the battalions, in the regiments and in the squadrons of aircraft — regular and reserve — doing the tough and often dangerous work that Canadians are so proud of. In short we will have to reduce the tail of today while investing in the teeth of tomorrow.

The main guiding principle was to make every dollar count in terms of the pursuit of operational efficiency. Our remit was to suggest to the minister, the chief and the deputy minister ways to become more efficient and effective.

The second principle point is that we need to ensure that the essential current and future outputs of the Canadian Forces — which are those well-trained young Canadians in battalions, regiments and ships or who fly the aircraft and support them on the ground — are insulated in so far as possible from any potential reductions resulting from internal shifts or overall funding reductions.

The third principle was to establish the facts about where and how we have grown since 2004. To do so, we established three way points, 2004, 2007, 2010, because that way you can start to get a curve. One of the hoped-for consequences was to reduce as much as possible some of the emotion from what we suspected was going to be an emotional issue, namely transformation.

The goal, as mentioned, is to reduce overhead, improve efficiency and effectiveness, so as to allow reinvestment from within to meet the demands of the future. Transformation is all about the future.

We started 10 months ago. The first thing we did was start to collect data, listened and talked to the development experts and a variety of other people, across National Defence headquarters. We identified areas that will require investment in the not-too-distant future, indeed starting now. These are the Arctic, an air expeditionary wing, the Canadian Rangers — who do such great work — investments in cyber defence, space, special operations, deployable all- source intelligence centres, human intelligence operators, counter-improvised explosive device teams, nuclear biological chemical defence, returning sailors to sea — which I will talk more about later — returning reserve supervisors from full- time service in headquarters to part-time leadership responsibilities on the armoury floors across every battalion and regiment, and of course increases to deployable support personnel.

The sum we came up with was around 3,500 regular force people that we need to invest in the future. That acted as a starting point for our work in terms of trying to identify 3,500 regular force people we thought we could shift from one position, mainly in headquarters, back out to the field.

Several thousand additional reservists were also implied in this task, as were a commensurate number of civil servants.

In terms of methodology, the first priority was to establish the facts. There were about 1,400 pages of them. It took months. Analytical rigour was established, and I was blessed to work with a smart, capable team of young two-star and one-star colonels, all the way down to master corporals, corporals and privates. We formed transformation advisory networks and special interest teams who were charged with trying to delve down into levels of detail, based on common sense and their own experience, to achieve a certain degree of consensus. This is not an individual's efforts. It is actually a fairly large collective.

We looked at every major organization in the CF, both vertically and horizontally — vertically in the sense of what the army, navy air force and others have in terms of specific numbers and budget allocations — and then we started to group like with like. What were the information management people, transportation specialists and radar specialists doing across the entirety of the CF and DND? The list goes on. Every single method of classification of employment was looked at and grouped.

We then took at look what our allies were up to, and Canadians are blessed in terms of the economic impact in our nation as compared to our friends and allies. Almost all our friends and allies, alongside whom we fought in Afghanistan and elsewhere, are going through a very similar process. Indeed, most of their military budget reallocations are far more severe than we could possibly envision as we look forward. Some of the overall reductions range from 20 or 30 to 50 per cent. In a lot of cases they did not have the time nor the ministerial guidance, which my team was blessed to receive, to do some hard brainstorming and come up with tough options that would better position your Canadian Forces and DND for the future. We are prepared. They unfortunately have not been prepared, so the impacts for many of our friends and allies' nations have been very dramatic.

Key findings are based on an awful lot of research. Overall, since 2004, the taxpayers of Canada, and your government, have increased funding for DND by 51 per cent nominally. Thank you for that. The regular force grew by about 11 per cent or about 6,500 people, about half of which went to the army. I am very grateful for that because I was the Army Commander, and most of the remainder went to non-army headquarters. Reservists grew by 23 per cent, or 6,651 people to be precise, most of who are full-time reserves in headquarters and not part-time leaders on the armoury floor. Most of those reservists are to be found in headquarters in administrative positions.

Civilians grew by 33 per cent or 7,300 people, most of whom went to headquarters and headquarters support roles. The tail has increased by 40 per cent. The tail is personnel in headquarters support functions, which are important, but you have to rack and stack them in relative priority. The teeth, which are the operational front-line units, increased by 10 per cent. The tail grew by 40 per cent, the teeth by 10 per cent. The tail grew four times as fast as the teeth.

Consultants, contractors and professional service contracts consume about $2.7 billion of your taxpayers' money with at least 5,000 people providing individual staff augmentees in the National Capital Region and other headquarters around the land. All these people are working hard, but where do they rack and stack in terms of the overall priority as compared to ensuring a ship is well equipped or has the latest technology to do what it has to do far away?

The Canadian Forces employs roughly 9,000 full-time reservists, most of whom were essentially mobilized to assist with the war effort. The vast majority have ended up doing headquarters and support functions. That is an increase of between 4,000 and 5,000 since 2004. A small proportion is going to the teeth units, the deploying battle groups, where they have all done great work.

The department is an organization with multiple layers of military and civilian bureaucracy that mitigates against the required managerial flexibility and agility to efficiently and effectively prosecute its assigned resources. That is witnessed by fact that every year several hundred millions of dollars are not spent, and that number is growing.

The executive leadership as defined by Treasury Board grew at a rate higher than that of the overall growth of the lower-ranking personnel. In the regular force between colonels and generals there was a 2 per cent overall growth; in reserves it was 75 per cent, with most of those being full-time employment in a variety of headquarters; for civilian EXs and technical equivalents, it was around 25 per cent.

In terms of recommendations, after a great deal of discussion and a lot of really clever ideas from some very junior officers and some more senior ones, a variety of big ideas were articulated, which are as follows.

First, after a lot of hard work and second- and third-order-consequence analysis, the team believes we can find in the order of $1 billion in administrative efficiencies with which to either pay some of the budgetary reduction funds or allocations that may well be assigned to us by the Government of Canada over the next couple of months or to pay off the "tax" that may be sent our way to help reduce the deficit. This will not be easy, nor is it a trivial exercise.

Second, we believe that the number of headquarters should be reduced fairly dramatically to free up those incredibly valuable personnel — regular force and public servants — to be invested into the future areas which were articulated at the beginning of my opening comments.

We have already talked about the 3,500 regular force personnel that we need to invest elsewhere. We have already talked about demobilizing a number of the full-time reservists; we are recommending about half of those, 4,500. We are not saying they will be given pink slips, but send them back to the armoury floor on a part-time status as compared to full time, which we asked them to do several years ago.

Third, reduce by about 30 per cent, over a period of about three years, the $2.7 billion spent on professional services, consultants and contractors. Reinvest about 3,500 civil servants from what they are doing now to the demands of the future or invest the funds elsewhere.

Finally, create a joint force support command to try and realize efficiencies overall for the next three to four years of around 12 per cent, refocusing the strategic level headquarters on strategic things and not necessarily running things out in the field. Group a variety of the enablers within the joint force support command and work our way down through the second and third order of consequences to make sure we realize the savings to better invest in the equipment of tomorrow.

Essentially we saw the transformation exercise as an opportunity. There was a lot of support, especially from those who were interacting and part of the team. However, consensus in such endeavours is never 100 per cent. I am sure there is enough information in the report to ensure that just about everybody is upset with something that in there because it is detailed.

This is an opportunity. We were presented with the circumstances to do all we can to make the organization of the DND and CF leaner, more agile and better focused on output instead of process, to invest in our future as Canadians, and help build an organization that will become a model of managerial excellence.

Arguably this is the time for those decisions; sometime over the next while but not too long to make those decisions that a number of us have talked about for years — decisions that we have not had to make or we have managed to postpone because we could.

The Chair: I will ask you to conclude in the next few minutes.

Lt.-Gen. Leslie: I will conclude now. Thank you for your attention.

The Chair: Thank you very much. That is a great overview. Just to be clear — I know this is quite confusing because there are so many reports out there at this point — when you embarked on the transformation process, this was supposed to be about an internal exercise. In addition, did you take into account the strategic review together with the cuts that contemplated, and the strategic operating review, or did you keep the blinders on and say no, we are thinking about transformation here and that is a separate issue?

Lt.-Gen. Leslie: To answer your question, the transformation energy came from the Minister of National Defence; the terms of reference were signed off by the Chief of the Defence Staff and the deputy minister. It included the work that had already gone on as part of strategic review. Indeed, one of the key team members — my civilian fire team partner or second boss — was himself a senior civil servant, so his advice was invaluable. We considered the probable impact of SOR, but at the time of signing we had not had the actual directive from the government on what percentages would be allocated.

The Chair: You did say that this was bound to have an emotional response. We all know what former CDS Rick Hillier has said about this, that if you implement this report, you will destroy the military.

Lt.-Gen. Leslie: He is a friend. Just because occasionally friends disagree does not mean they stop being friends. Everyone is entitled to their own opinion, and General Hillier is more than entitled to his.

The good news is, shortly after those comments — and I do not think immediately because of them — the Minister of Defence, bless him, released the report so that the public could read it and make up their own minds. That took intestinal fortitude because, of necessity, when the minister, the chief and the DM ask the team and I to do this sort of work, if we are told to go off and find efficiencies, not all the news we deliver will be pleasant. In a large, complex organization such as DND, it is inevitable there will be inefficient, ineffective subsets that people can make better.

I have been a soldier for almost 35 years. I have carried a rifle, fought for my country and my troops. I would never recommend anything that would destroy the Canadian Forces.

[Translation]

Senator Dallaire: I want to take this opportunity to draw attention to the presence of a new member of our committee, Senator Dawson.

That being said, General Leslie, you were responsible for the transformation but someone else is now in charge. How will your recommendations be implemented? Do you expect to get what you anticipated from the minister and, more particularly, from the Chief of the Defence Staff and the deputy minister in the implementation of this transformation, knowing that your contribution was based on a single policy document, Canada First? In other terms, how does the government want to use the forces in the future beyond this reference document? You need some imagination to guess how things will turn out. How do you view the next phase?

[English]

You started this a year ago. Last year there was the 5 per cent reduction that is yet to be known, and there is a current exercise that really went on during the summer, when I believe your study was pretty well finished. You must have been in your last draft as people were gathering together to figure out what the 5 and 10 per cent and whatever other per cent reviews would be going on for implementation next year.

Are these two exercises really integrated or are they off line? Do you expect to be picking and choosing in your transformation to implement that or is it already too late for them to do that?

Lt.-Gen. Leslie: I believe there are five subsets to your question, so if I do not get to them all, I know you will steer me back.

Vis-à-vis the implementation, the team's mandate was to turn the report over to those who signed the terms of reference. That was the team of the Chief of the Defence Staff and the deputy minister.

There were 43 major recommendations. They varied in terms of their complexity and their ease, their facility by which you could get it done. At the same time, the strategic review, the 5 per cent reduction, was essentially working its way to a state of becoming a fact. We were well aware of that, but the hard work for the strategic reduction, the 5 per cent, had already been done. Our transformation exercise builds on the work of the strategic reduction.

Vis-à-vis implementation, it is up to the Government of Canada to either accept or not the recommendations and to actually conduct the implementation. Of course, that is arguably the toughest part of all. This must be an activity driven by the Government of Canada. The agents, the instruments who will carry out that activity are of necessity the minister, the Chief of the Defence Staff, the deputy minister and all the supporting actors inside National Defence Headquarters and across the Canadian Forces. What stage those deliberations are in right now, I do not know, because I have been retired for three weeks and things are moving quite quickly inside National Defence Headquarters.

The third subcomponent of the question has to do with the next stage of activity, the strategic operations review, which is either another 5 or 10 per cent budget reallocation. I do not yet know the numbers. I will find out the same time you do on national television.

One facet of the transformation report is that we have suggested areas where one could, with work, find $1 billion to pay that tax. However, transformation is more than reduction. It is a vision for the future. It seeks to take what we are doing now, build on that which we want to keep, which is essentially the operational output — the frigates, the battle groups, the aircraft that deliver supplies or drop bombs, the helicopters — and reduce the overhead to free up the resources, both human resources and money, to invest in those things that we will need tomorrow, or even actually we need today, but we cannot logically expect to go to the government and say, "Please, sir, can we have some more?" when we have such large numbers of people in headquarters as proven by the growth since 2004.

I will give you a couple of vignettes. Just under 20,000 people are paid by DND in the National Capital Region. The size of the Royal Canadian Navy is under 20,000. We have more people in Ottawa doing headquarters and headquarters-like activity than we have in the entire Royal Canadian Navy. The Royal Canadian Navy is short of sailors to the tune of about 1,000. We know where they are; they are here in Ottawa. They are working in staff jobs. Are they important? Yes. How important are they in comparison to getting a frigate out the door? That is essentially transformation, taking what we have today, making some moderately tough choices and investing in the future.

[Translation]

I think I forgot the fifth question.

[English]

Senator Dallaire: Getting to the specifics of it, and you have alluded to it, the 5 per cent and 10 per cent review that is going on now was done in July, August and so on; you were in the last throes of your report. Was there crossover on the deputy minister side? Was there crossover from the CDS side in that exercise in what you were proposing? Surely as you were bringing forward this significant piece of restructuring and so on, you had an idea of an implementation plan or milestones, which you allude to. Was there any indication in your address? You briefed them; you just did not drop it on them. They were watching you throughout this. Did you see that there was a willingness to move along those lines, or was there a reticence because of the budget-cut exercise going on parallel to that?

Lt.-Gen. Leslie: It is a very busy time for those currently in National Defence headquarters. As you have alluded to, senator, you have a variety of pressures that are currently coming to fruition.

[Translation]

Soon after I submitted the report, I went on vacation. I understand that while I was on vacation, the deputy minister and the Chief of the Defence Staff established a group under the leadership of the —

[English]

— Vice-Chief of the Defence Staff and the Associate Deputy Minister to start working through some of the details on how you merge the ideas that would cater to the strategic operations review and, if you would, the quick hits in transformation, which is good work. However, as to the specifics, I am afraid I am not aware.

[Translation]

Senator Nolin: Good afternoon. It is a pleasure to see you again. In the course of your study, I assume you contacted some of our allies to see what they are doing. I did not read all of your report but, based on what I read, I was impressed by the Danish model. I understand that Denmark is a small country and that its military strategy is different from ours. However, it is an ally that we know well. Less than 150 people, including military personnel, work at the Danish defence headquarters. Can I assume you were thinking of this kind of model when you started working on your study?

This is not my main question but I hope that this model guided your work. So, what kind of comparisons did you make with our allies? You said something about it in your statement.

Lt.-Gen. Leslie: Yes. We reviewed about 30 of our allies. Of course, we devoted a lot of time to the United States.

[English]

The difficulties they are currently going through, essentially having approached the stage of financial culmination and the impact of their long contributions to the war on terror, you are far more of an expert than I, as are most Canadians. The financial impact, I will just say that what their armed forces is going through is very grim in terms of fiscal reductions.

The scale then sweeps from Poland, Czech Republic, Germany, Denmark, France. The one we are perhaps closest to in terms of approach and culture is the British example.

[Translation]

I had some discussions with Lord Levene.

[English]

He was an external leader of a blue ribbon panel that chaired the future vision of the British armed forces. Their overall reductions are in the order of — depending how you classify them — anywhere from 18 to 25 per cent, and some very vigorous and bold recommendations have been put in place. The effects are quite dramatic.

The Danish example is a very good one; they chose, as you articulated, to essentially ruthlessly target their headquarters, while not giving an inch on their deployable assets. I would caution, every country is unique, of course; our geography is such that every time we leave our bases, it is a major deployment. To go to the Arctic is easier in many ways than going to northwest Europe, and some of the examples do not necessarily translate across.

Yes, we invested a great deal of time and effort in learning from our friends and allies, and NATO has set up a NATO transformation command.

Senator Nolin: That is my next question.

Lt.-Gen. Leslie: Then I will stop there, sir.

Senator Nolin: To what extend have you consulted with your colleagues in Norfolk, and how deep are they involved in what you propose? Do they agree with all your recommendations, if you can talk about that?

Lt.-Gen. Leslie: Senator, I think the only person who agrees with all my recommendations is me.

It is a difficult and complex issue, and it does generate strong emotions. It is all perfectly understandable. Talking with our friends and allies down in Norfolk, where you had 60 different nations, far more than NATO's members, all struggling with the same issues of reduced finances in an ever-increasingly complex and more dangerous world, allowed us to share experiences, but in the final analysis every nation has to decide for itself.

The overriding principle is to reduce overhead, invest in output.

We also consulted with several dozen Canadian businessmen discreetly. We studied good examples of Canadian industries that have thrived over the last five or six years who have focused on their core business and reinvented themselves with great success. We also took a look at several that are no longer with us because they could not evolve quickly enough to meet the demands of tomorrow. That was very useful.

Senator Lang: I would like to begin by making one inquiry about our commitment to Afghanistan, the fact that we were there for the period of time that we were and the money that was invested by Canadians to allow us to be there. We are in the process of withdrawing. I believe we have another two years of 1,000 mentors and then we will be out of Afghanistan.

Was any costing put on what that particular theatre cost Canadians from the point of view of the overall National Defence budget versus what is the normal National Defence budget if we are not involved in such a theatre?

Lt.-Gen. Leslie: A very accurate cost capturing is done for the deployed missions. Afghanistan, being the largest and most expensive for many years, has lots of people who track those numbers with a high degree of precision.

I do not have those numbers here because the government provides a certain percentage of the funding as a supplement. At the time the report was baselined — so from here on we are looking forward — the assumption was that we would be out of combat operations in Afghanistan, which has proven to be the case. The combat operations' cost is far more expensive, both in blood and money, than the current mentoring and training mission.

Senator Lang: You speak about procurement in your report and then you break it down to two particular areas, one on the maintenance side and the other on the capital side. I noticed in your report you have not mentioned — or maybe I overlooked it — the requirement by the Department of National Defence to purchase equipment as it is being made, in the process of it being manufactured, or making a long-term commitment for a tank or something of this nature that might be paid for three years from now. Subsequently, no money has been set aside for it, but you are expecting to go back to the public treasury at that point to pay for it.

Has any thought been given to putting a capital trust fund together so there are no surprises five years down the road when you have made the decision today to go ahead with a major investment but the money has not been allocated until the year that it comes up? Is there any thought of that?

Lt.-Gen. Leslie: I think the idea has a great deal of merit. We did not specifically drill down into such an idea during the course of our deliberations. Minister Fantino is now a member of the Department of National Defence, a very high-energy leader. He is focused like a laser beam on ensuring procurement works better, faster and smarter.

I will reinforce your point by saying in the period of study in the report, in one of the annexes, money has been lost to the department that was set aside for capital acquisition of planes or other types of equipment. A specific example I am thinking of is planes, which for a variety of reasons could not get the approvals done across town, and that money lapsed. It fell off the edge of the funding envelope at the end of the fiscal year — money that should have been spent on that capability and that everyone thought would be spent on the capability. It is now gone, yet the capability still has not been purchased.

Senator Lang: You speak of reserves versus the regular force in a number of areas in your report. Looking at the number of reserves that we have presently, I believe it is in the neighbourhood of 35,000. Is that the number?

Lt.-Gen. Leslie: Yes, sir.

Senator Lang: There are just under 70,000 for our regular troops, so it is a 2:1 ratio presently. Of those reserves, approximately 10,000 are full-time reserves, which basically means they are on full-time employment within the Armed Forces in one manner or another.

With the transformation and where you would like us to go, could you further inform us what numbers exactly you would be looking for in the reserves? Would you have a general guideline of how many reserves per members of the regular force or how you would go about that?

The reason I ask this is my concern — and I think probably I speak for a number of members around the table here — that one of the easiest areas would be to eliminate the reserves, which eliminates a lot of cost. Yet at the same time, when we get into a situation like Afghanistan, we expect them to be in place and we expect to be able to call upon them tomorrow.

Perhaps you could go a little further and expound on your thoughts about the reserves and how you see this playing out across the country? Also, could you give us some idea of how you would see us improving the resources to the reserves?

Lt.-Gen. Leslie: You have seen the report. We probably say 30 to 40 times in there not to touch the regular and reserve battalions. Do not touch the ships. Do not touch the squadrons. When it comes time to invest in the future, find the resources elsewhere, because they form the base on which Canadians and our friends and allies have come to rely. They are the people who actually go and do the work. It is not a simplistic argument in the sense that no matter how sophisticated a force generation mechanism might be, no matter how efficient, there is a certain critical mass there.

There are about 35,000 reserves now. You are quite right; the numbers are 9,000 or 10,000 full timers, which means that you end up with around 25,000 of what you and I would consider the classic reserve, the part-time soldier who does so well. That 10,000 over the last while have been asked to step up to the plate and serve full time.

Most of those are in headquarters. Those headquarters were arguably needed to get us through the incredible tempo that the Canadian Forces were experiencing over the previous decade. We believe you can reduce that number of full- time reservists to around 4,500, which would cut them in half.

However, do not give them pink slips. Ask them to go back to the armoury floor, from whence they came, and do part-time work while they pursue civilian careers, providing the leadership needed in the armoury floors to get the job done — or in the reserve ships or in the naval reserve flight detachments.

Ideally, you will end up with roughly 70,000 regulars and 30,000 reserves, which is an amalgam of the part-time and full-time reserve numbers, and roughly 25,000 or 26,000 public servants. By the way, that was part of the original assumptions behind the Canada First Defence Strategy, which Senator Dallaire referred to earlier. It lays out, I think in a sound manner, a future pipeline of funding to ensure that the stuff that we need in the future — be it ships or fighters or replacement for tanks, whatever — can be met as you look forward 20 to 30 years.

That is the really good thing about the Canada First Defence Strategy. It does have a longer vision and there are timelines that people can work toward or around. Of course, there are always disruptive activities, because none of us can predict what the threat will be 10 years from now.

When we looked at the vision for the future, we identified cyber and space and returning sailors to sea — the list went on. That is incorporating what we think we will need over the next little while. If we do not find it from within, the odds are when we go back to government, hold out our glass and saying "sir, can I please have some more," they will say: "You have how many people in Ottawa? What are they doing?" I think hard calls are required on a variety of levels and areas to make sure we can better position ourselves for what is coming tomorrow.

The Chair: I am sure we will return to this. Essentially, if I have your message here, you are saying to those who have become full-time reserve or want to stay in that category: Choose. Go back and be the weekend warrior, the citizen soldier, or join the regular forces, but we will not have this big bundle in the middle. Is that fair?

Lt.-Gen. Leslie: Yes, it is. There will still be some full-time reservists, quite a large number.

Senator Manning: I would like to touch base on the part of your report that dealt with the contract for service. In other parts of government, sometimes the contracting of services or consulting work or whatever the case may be tends to be an avenue for saving millions of dollars. When I look at your report, you suggest that we take a harder look at the contracting of services and maybe cut back on that so we can save dollars. Am I reading that correctly? Is that the message you are trying to give us? Maybe you can elaborate on it. I notice there has been a major increase over the past number of years and maybe you can, through your findings, elaborate on what exactly we are dealing with here.

Lt.-Gen. Leslie: Senator, currently the CF and DND are spending somewhere in the order of $2.7 billion a year in consultants, contractors and professional services. That number has grown by roughly $1 billion over the last three or four years. That represents a significant portion of the funds available to DND and the CF. For all those activities that the consultants and professional services do, someone has asked them to do it. They have gone through a competitive process to get the job done. It is not money wasted per se. They are all doing stuff that we needed them to do. The question is, where does that fit into the priority list as compared to getting crews on frigates? Arguably, you could not put a frigate to sea without consultants, contractors and professional services working in the fleet repair units on both of our major naval bases. There are different types, different priorities within consultants, professional services and contractors. You have to identify that which you want to keep and that which you want to really cut back on so you can better position the CF for the future.

One area is the individual staff augmentees, people brought in as individuals, not only in the National Capital Region but in many other large municipal centres where there are large headquarters, to help process the flow of information and paperwork that is required to coordinate and synchronize between a multiplicity of headquarters. Simplistically, if you have one headquarters looking after eight or ten battalions, chain of command is established, but the headquarters can be relatively lean depending on what they are asked to do. As soon as you get two or three headquarters taking care of two or three battalions each, and they have to talk to and between one other, staffs build, to synchronize, to de-conflict, to prioritize resources.

When you have 40 to 50 such headquarters and many levels above that which run battalions, they inevitably consume more and more resources. You need more people to synchronize the flow of information and paperwork and priorities between them; and the next thing you know, you have 20,000 folk in Ottawa. Here we are.

By the way, that number does not include the roughly 5,000 consultants, professional services and contractors who provide individual augmentation to the various headquarters in Ottawa.

The Chair: To be clear, you are saying that the people who service the top-heavy system are one thing to look at, but we also have people on contract servicing our Leopard tanks or who are the doctors dealing with the soldiers suffering from post-traumatic stress disorder. Those are also contractors.

Lt.-Gen. Leslie: Absolutely, Madam Chair. I am sorry if I did not address that. Thank you for bringing it back.

We cannot do without a significant number of those funds being spent on consultants and contractors. We cannot do without. It is, what do you have them doing? If it is flight training, taking care of the Leopard Main Battle Tanks, taking care of the ships, that is obviously bins in the report into a really good category. Take a hard look at it, but do not cut this; whereas some of the other activities, and there is a detailed annex that goes through the list as suggestions, are worthy of critical review.

Senator Manning: General, in your report, are you suggesting that there is a possibility that we could have a 30 per cent overall reduction in the consulting contracting? I hate to say across the board, but is that what your suggestion is, that if we really find some of the things we would like to do and prioritize, that we could look at a 30 per cent cut in net cost?

Lt.-Gen. Leslie: Yes, sir, we are, over a period of time, over three to four years, so 10 per cent per year.

Senator Manning: With regard to the comment from General Hillier, I realize we all have different opinions, and as you said in your 40-plus recommendations, you will have several people who will not agree with all the recommendations, but when you make a comment about destroying the military, it is a heavier comment than "I disagree with Recommendation 26." Do you have any idea why or the difference of opinion, when he talks about the headquarters operation? You discuss putting more men and women in the field. I am trying to come to terms with the fact that the two of you have been great leaders in our Canadian Armed Forces and I am sure you both have a wealth of experience on your shoulders. It seems to be a heavy difference of opinion for people who have such experience in leadership roles as yourselves. Maybe you cannot answer, but I will ask the question anyway.

Lt.-Gen. Leslie: Senator, at the request of the minister, the chief and the deputy minister, all of whom were involved in the terms of reference that my team and I implemented, we spent 10 months glued to computer screens and spreadsheets, lurking in the basement, so to speak. We established networks of extraordinarily capable young combat veterans, in many cases, civil servants and regular and reserve officers to work through and think through some of these issues.

Probably not a week went by when I did not have an "Oh, my God" moment where I discovered things in the CF that I had no idea were in the state they were in — not that they were disastrous or bad; it was just a surprise. I often found things in the army, which I had the privilege to command for four years at the height of the Afghan war, things I probably should have known, but there was no way to collate the information. There was no means of actually plotting the trends.

General Hillier made the comments that he made. I cannot offer an opinion as to why, and that is between you and him. However, I can tell you that I learned an enormous amount about our Armed Forces and our Department of National Defence over the last 10 months, things I had not picked up in the previous 33 years. I think I was joined on that journey by all the members of the team, and it was an eye-opening experience.

Senator Finley: Good afternoon, General. I have not read your report, I am afraid. I am just a passenger on this committee for today. However, I am intrigued by your comment that transformation is all about the future. Transformation indicates going from one stage to another stage, and the stage we are at today is probably a consequence of prior transformations. Did you and your group look at the history that got us to where we are today?

Second, did your group consult with some form of scientific, technical and geopolitical bodies to determine where this transformation should lead us to? You have some very sexy, high-ticket goals here, including space, cyberspace, the Arctic and a range of things.

In relation to those, you have talked about the redeployment of up to 3,500 regular forces from headquarters to be allocated to these initiatives in the future, like cyberspace. Do they have the skills to do this, and have you included in your thoughts the cost of retraining, development and so forth?

The last part of my very long question is where do you see the $1 billion of administrative efficiencies coming from?

Lt.-Gen. Leslie: A full study was done by one of the senior civil servants on the team. She did great work, going all the way back to 1964. She and her sub-team from a variety of disciplines took a look at all the previous transformation reports, plotted the recommendations, grouped them into similar streams and then tracked which ones had been implemented, which ones had not and which ones kept on coming up year after year.

Through no coincidence, a variety of the recommendations, especially in the middle category that has to do with joint force support and some of the other structures, map those recommendations, because they are almost universal truths. Yes, work was done to take a look at history and we also talked with people who had been through previous transformation efforts.

In terms of scientific analysis and support internal to the Department of National Defence, we have a robust and extraordinarily capable science and technology department. It has about 3000 people. We were allocated a team from CORA, the Centre for Operational Research and Analysis, who were invaluable in providing analytical rigour and a challenge function, as well as in trying to help us better position some of the thought papers as we looked at the capabilities of tomorrow. These are people with huge brains and multiple doctorates. They can also work really quickly; they are just a joy to work with. We also have an organization called Chief of Force Development, CFD, and the chief of CFD was one of my senior partners on our work, so there was fairly good synchronization.

In terms of skill sets and time to retrain, it was mentioned. However, we did not have the time to do a detailed consequence analysis. For example, if we have an infantryman who has spent 20 years in Ottawa, and we want to send him back to a battalion in Edmonton but he cannot go for a variety of reasons, how might we use him in cyber?

Especially when you are talking the numbers we are talking about, that is something that the team there now will have to think through. You are quite right; all our people deserve to be treated with respect. They have to be retrained and you need to get the skills developed in them so they can have a future they can understand.

The fourth question I missed. I am sorry.

Senator Finley: The $1 billion saving in administration.

Lt.-Gen. Leslie: It seems a lot — $ 1 billion is a lot of money to anyone. It will not be easy, but we currently spend roughly $1 billion in information management technologies, so even percentages of reductions can generate significant savings.

There is a detailed annex, which I think has 30 to 40 sub-items. There is no one thing that stands up and says here is $1 billion, but when you do the cumulative total of the 30 or 40 sub-recommendations — because that is only 1 recommendation out of the 43, subdivided into hundreds of pages — with work and a bit of pain, it is achievable.

The Chair: Perhaps you could comment briefly on the overall question that seems to be a thread here: When there is a shortage of money, why do we hand money back?

Lt.-Gen. Leslie: I believe it is because we have multiple layers of bureaucracy, military and civilian. We have multiple levels and centres of challenge. We have multiple organisms whose remit has been to provide oversight to the extent where the oversight mechanisms now need oversight because they are so large.

Unfortunately for those concerned, we have tracked the growth numbers. We know where they are, we know what rank they are, we know how much they cost and where their location is. We have tracked the dozens and dozens of administrative centres in the National Capital Region, where we used to have only a few.

In my opinion, it is good, hard-working people who are doing what we have asked them to do. However, as we received lots of money — thank you, we needed it very badly, especially to fight the war in Afghanistan and elsewhere — the oversight regulatory mechanisms grew faster than the pointy end. Now here we are. What do we do about it? You put your thumb right on the issue at hand.

Senator Day: That is a helpful question, because I was trying to get there. First, let me thank you, General Leslie, for your many years of service to the Armed Forces and the many times you have appeared before this committee. We have always valued your advice and leadership. We wish you well in your new endeavours after 35 years of service.

One of the last times you were here, you were very persuasive in convincing us that you should be getting more money in the army side of things for rolling stock and trucks and tractors. I am wondering if, in this review, that could not help but have been part of what was in your mind — that is, you have to get more money out there to get equipment and get things for the people who are performing the roles that are expected of the Armed Forces.

Lt.-Gen. Leslie: Going back to Senator Finley's question vis-à-vis did we study the lessons of history through the prism of transformation, the answer, of course, is yes. One area that historically has been the easiest for a variety of organizations to cut when budget reductions or deficit action plans have arrived has been the spare bits that are required to keep tanks and armoured vehicles rolling or ships sailing or planes flying. You can recoup very quickly money without seeing an absolute degradation in operations for a year or two.

Then skill sets fade; the team's skill sets, built on the individual, cannot really get synced together properly. Sometimes you only find out the hard way, when you are on that two-way range and people are shooting back at you, that you have let your troops down by skimping on their training money and their spare bits.

I would watch like a hawk, from this moment forward, the monies that are allocated to national procurement. If they go down by one cent as compared to last year, I would ask some really hard questions as to why the money is coming out of spare bits and not out of headquarters and overhead.

Senator Day: You would be concerned that maybe your report might have been misinterpreted by certain people.

It has been five or six years since General Hillier worked on the plan for transformation. Then it was slowly implemented and four different commands were created. We heard some rumours that that military and civilian bureaucracy in defence headquarters that was associated with the Deputy Chief of Defence Staff that should have disappeared when these various operational commands were created did not. I am wondering if your review was not originally intended at least to review what had been done. It is quite common to plan, implement and then look: "Did we do it right? Is it okay?"

Was that part of your mandate, or did your mandate evolve into something else? I have heard what you have said, and I have read the mandate that you have attached, but it looks like it might have evolved into something other than taking a hard look at the real core decisions that were made. Was that the right thing to do?

Lt.-Gen. Leslie: I believe so, senator. General Hillier's transformation in 2006 certainly made sense for the time. Based on a vision, the four headquarters were created to essentially focus on operations or operational support.

A lot has changed in the eight or ten years that have gone by since that initial vision. As budgets increase, it is very often easy to instill growth or easier to instill growth without making the commensurate hard calls as to where you will find that growth from, if you have to find it amongst your own ranks.

Ten years have gone by. The world has changed a great deal in ten. So has our profession, as are the lessons we have learnt, often purchased through blood in dangerous and complicated places.

Underlying some of this as well is almost an emerging, not a philosophy, but an idea, that in years gone by headquarters had to be very powerful, very manpower intensive, to essentially coordinate a significant amount of the detail that would happen on levels below them in the field. Yet, our soldiers now are smarter, better equipped, tougher, and have more combat experience than ever since the Second World War. Their equipment consists of things we could only dream about five or six short years ago. They are more linked in with our allies. They have a broader and more sophisticated understanding of the battle space, being it helping or fighting. They do not need a detailed level of supervision and synchronization. They do not need that 10,000 kilometre screwdriver from Ottawa to poke them in the —

The Chair: "Elbow" is the word.

Lt.-Gen. Leslie: Yes, elbow. Our troops are better than they have ever been, and they need the resources to spread their wings and fly a little bit further than they have currently been allowed to in terms of supervision and oversight from centralized staffs.

Senator Day: Maybe the confusion is mine because I am tying the word "transformation" that was presented so effectively back five to ten years ago in terms of restructuring our armed forces into this review that you have just implemented over the past year, which is more of an efficiency, effectiveness review and is not intended to go back and review whether the structure of the armed forces in its fundamental state is correct, but rather to look at what is and say, "Now how can we improve efficiencies?"

The Chair: I want to clarify the record because it was not implemented; it was a study delivered, just so there is no confusion.

Lt.-Gen. Leslie: The study that was delivered does not go back and criticize the past; we just state facts. Criticism of the past is not valid or warranted, because it made sense at the time. In 2006 I was a three-star, I was running the army and I had the privilege of carrying that on until 2010, so I was very much involved in the decision making. Things have changed. The models that are presented in the transformation report are significantly different than how the current armed forces looks. There is an awful lot less headquarters, dramatically so, which has caused a little bit of the intensity of some of the debate.

Senator Day: There are a number of points I could pursue, but this one I thought was interesting. You, in your report, indicated that you were asked not to pursue the civilian side of Canadian Forces DND because that would be addressed in the future by upcoming developments of the institutional alignment options. In terms of the 3,500 civilian positions that you are recommending could be implemented, what kind of credibility would you get for that recommendation unless you had either done a study, which you were asked not to pursue, or you had PCO, PMO or Treasury Board people on your team that could help you with that figure?

Lt.-Gen. Leslie: We certainly had representatives from Treasury Board and experts who had served on Treasury Board, and public servants who were members of the team. We had even more who were members of the larger advisory network.

The "please stop working on the civilian issue" was brought to a head on or about December 1, so we had had about three and a half to four months to do a certain level of detail prior to that December 1 time frame. You are quite right, it was stopped with the view of a subsequent process called institutional alignment that was going to kick in sometime now and resolve the civil servant numbers and where they would be.

What you have in the report, when you get to the appropriate annex, is a great deal of detail on the military side and a bit of detail on the civilian side, because in terms of the second- or third-order consequence, we could only go down to a certain level. Thirty-five hundred are apportioned against fairly high-level structures, and they are, we believe, achievable. Whether or not it is 3,500 after a couple of months of study, and the team over at NDNHQ will sort that out, or it is 2,500 with 1,000 being re-rolled into cyber or space, I do not know yet.

Senator Dawson: I am the new kid on the block and will try to listen more than talk for now. I will reread what my colleague referred to, that it will be addressed in the future by the upcoming development of institutional alignment options.

It is not making it very clear. We have probably not had enough time on the last implementation to decide that it was bad or good. I hear the expression five to ten years, but is it five or ten, and I think it is closer to five and a half, but have we given it enough time to say it was wrong? I know that the circumstances of the Afghanistan war created a distortion on how money was spent and used, but many things have happened since then.

There is the whole trend of unspent funding in defence, where year after year we are realizing that millions, quasi- nearly billions of dollars, are put on the table and not spent. The difference is that in the past this money used to be redeployed for inside the department. Now it is disappearing. It is permanently lost in the department as opposed to money carried forward or redeployed in later years.

You are saying that we think it has been a failure. I will not defend Mr. Hillier and his comment on your report, but have we given his actions enough time to fail or succeed? External circumstances including the war in Afghanistan distorted enough issues inside the department that maybe a little bit more time should be given to that activity.

My second question, which has nothing to do with this first comment, is, in the past when there have been these kinds of actions, you have hit some regional activity. A good example is, you have to sometimes say we will not reduce every operation by 10 per cent, but we will have to make decisions like closing down the Saint-Jean base. There sometimes are some very strong geographical effects on some of these repositionings. I am starting today; I did not see a lot of regional analysis of what some of your recommendations would have. Obviously, if you are reducing Ottawa substantially you will have some major reductions here, but are there other regional effects on your recommendations?

Lt.-Gen. Leslie: I encourage you to seek expert advice from General Hillier. In his transformation efforts the main focus was on the entirety of the commentary on the success of the four operational headquarters, which, by the way, have been successful, they have produced results, but three of the four operations are operational support. Ourselves and the Americans are unique in having more than one headquarter that does that for their deployed forces, be it at home or abroad. The Americans are slightly bigger in terms of their armed forces than us.

General Hillier's transformation did not fail. It was actually very successful. It in no small part contributed to the success of the troops and sailors and crew when they deployed. It is just that as we look to the future we try to identify where we find the people, and in the defence pillar people are the most valuable resource. They are also the most expensive. Something around 60 per cent of every DND dollar is spent on people. The assumption of a couple of years ago was that 51 per cent of every dollar would be spent on people. If you spend more on people, you have less to spend on ships or fighters or tanks and training. A decade has gone by. Where do we want to position ourselves next and where do we make the moderately hard calls to find the people to redeploy to higher priority items?

In terms of the passage of time, in days gone by military structures would not change one iota for literally 50 to 100 years. That was obviously quite a long time ago, but since then the pace of military technology, the contemporary operating environment, the demands our citizens place on their soldiers has changed. The military organizations of our friends and allies do not completely reinvent themselves every couple of decades, but there are significant changes.

We are entering one right now, because $1 billion or $2 billion has quite an impact. It is 5, 10, 15 per cent over three years. You either make the call to reduce the deployable troops, reduce the number of ships, battle groups or squadrons, or you find the people elsewhere. It is either the front line or the support.

In terms of base closures, there was no recommendation for any base closures in the report, and that is because there are so many areas that we can currently look at before we have to do that.

Going back to the Danish example that was used, I met with a senior Danish officer. He plotted all his bases. They have a very competent armed forces and they have regimental garrisons that are 80 to 100 kilometres apart. Mind you, they can drive from one end of their country to the other in the time it takes most people to get from one side of Toronto to the other in rush hour. That is both untrue and inaccurate, and the Danish ambassador will call me on it, so I apologize. I should amend that to from Montreal to Ottawa.

Maintaining the status quo, I would argue, is always an option. Do not change a thing: steady as she goes. As our people, equipment, training and fuel get more expensive, and as our resources start to get shaved, what will suffer? Something will. Our historical review has shown us that invariably it is our reserve armouries, the battalions; it is the spare bits for the vehicles, for the ships and the planes; and it is the future capital equipment acquisitions, because it is easier to actually meet the bills of today and not worry too much about five or ten years from now.

I would submit that the Canada First Defence Strategy is actually a very sound document because it lays out what the people of Canada said they want their armed forces to do for quite a while, and there is very little wiggle room. The numbers of capital programs are there. Things can all change as time progresses, but to maintain the consistency of purpose and to meet that vision, some hard calls will have to be made.

Senator Dawson: What about the unspent funds that used to be redeployed internally and now just leave the department?

Lt.-Gen. Leslie: Every year there is a certain amount of money which the department, if it does not spend, is allowed to carry forward. There are many more sums, in the hundreds and hundreds of millions of dollars, that are not spent and disappear. There are sums, some of them quite large, that are reprofiled to future years to pay for equipment because we could not spend it this year or last year.

In the past, you are right, sir, there was transference between various types of money. It is all Canadian taxpayers' dollars, but between operations and maintenance or capital or statutories. That flexibility disappeared a couple of years ago. There are some discussions in the building to try and get it back, but that is now outside my lane, because I am a civilian.

Senator Segal: General, I wanted to ask about two parts of your very impressive report. One relates to the reserves and the other relates to your perspective, however that premise might have been diminished as of December because of the decision to let the civilian side sort itself out, which strikes me as a reckless decision by whoever made it, and I hold you innocent in that respect, on the size of the civilian proposition as a drain on DND overall. I am told there are 3,500 human resource officers based somewhere through the Department of National Defence, which I am told is a large number. That service has decentralized so that literally in almost every operational headquarters, RMC and others, there are reserve officers telling the actual commanding officers what they can and cannot do, slowing down the process endlessly. While I respect the distinction that you made about the civilian side, I would be interested, not so much from your report but in terms of your overall perspective from a distinguished, long service career, on that dynamic and whether there are aspects of that dynamic, such as civilians inserting themselves into the chain of command and having an influence upon decisions that commanding officers and those in the chain of command have to make when they are dealing with putting our men and women in uniform in harm's way, whether that is more dysfunctional than in the past, about where it should be, setting aside whatever the financial constraints have to be, or whether it has perhaps improved, in your judgment. Then I would love to ask a question on the reserves, if our chair permits.

Lt.-Gen. Leslie: Currently there are just over 29,000 public servants who work for the Department of National Defence. Of that, somewhere around 65 per cent work for military officers. Therefore, it is not civilians, it is not public servants growing the public service within DND; it is generals. I, as the army commander, asked to have more public servant growth in absolute numbers than just about anyone else. That was because, with the intensity of the war and soldiers being drawn away, quite rightly, to go overseas and fight the good fight, and not having time to rethink the basic organization structure of the army, though we made a lot of changes, they filled a gap.

Now, of course, with the intensity levels much lower and more experience in bringing reserves fully integrated into the various structures, you can ask the hard questions: Is this as efficient and effective as you want it to be?

In many cases the growth of public servants inside DND has been directly attributable to a military officer, a general, saying, "I want more of this." The great thing was we had the money. The budgets were increasing every year, dramatically. Now, of course, the other slope is starting.

The oversight and regulatory procedures that kicked into place as a result of the Financial Administration Act have been quite intense. There is a degree of scrutiny, a degree of checking, double-checking and challenging that is unprecedented. It is people responding to what they have been told to do. I honestly believe that no one in DND — or there better not be — actually sits in their office and says, "I am going to slow down this program just because I can and I'm having a bad day." It just does not happen.

Being a senior civil servant or a general in DND is not for the faint of heart, and none of them are shy or retiring. Trust me on that one.

Senator Segal: Although some may be retired.

Lt-Gen. Leslie: In terms civilians inserting themselves into the chain of command, no; the chain of command is owned by the Chief of the Defence Staff. He is a thoroughly professional officer and he knows his business cold. He is a senior military adviser to the Prime Minister and the Government of Canada. There is no way he would tolerate or accept any non-qualified, command-certified officer or senior NCO trying to give orders under life or death conditions to soldiers.

The flip side is that the financial accountability mechanisms, procedures and networking across town are becoming more and more a civilian activity in part. First of all, the authorities actually flow through the DM. There is the chain of command and then you have the lines of accountability through the DM. He is, by law, the one responsible. It is not the CDS anymore. In days gone by, it was. For the expenditure of monies, the deputy minister has personal accountability.

That in turn drives a set of behaviours, which is the way our governments and our civil service are established.

Can it be frustrating? Absolutely. Can it be at times aggravating and cause incredible delays as people review and process check and do all of this? Yes, it can. The good news is that when there is a crisis, DND and the CF responds better and faster than just about any other organization in Canada and always delivers. The tragedy is that we cannot always operate in a state of crisis.

The Chair: We have been talking about reserves and we have less than five minutes left. I know Senator Lang wanted a follow-up. If there were questions about reserves we might put them all and let General Leslie answer.

Senator Segal: My only question on reserves is as follows: My understanding of your recommendation is that it is not aimed at reducing the total amount of air, sea and land reserves, but rather ensuring that the full-time reserve is folks who are part-time officers and have taken full-time contracts because they have been invited to do so to assist our forces in the field or elsewhere, and because the war is over, it is only appropriate that that number of full-time reservists be reduced.

The Chair: We did touch on that earlier.

Senator Nolin: I want to understand if you have looked in detail at those 4,500 full-time reservists? Do you want them to go back to half-time? Is it feasible? Are you sure of that? You will take someone who is getting full pay and you are going to send him or her back to a regiment to do it part-time and find another job?

Lt.-Gen. Leslie: There is no intent anywhere in the report to reduce one reserve battalion or regiment, one reserve ship or one reserve flight crew. There is every intent to treat them exactly as we are recommending the regular force people be treated. You identify areas of future growth and where their overhead has occurred. For the 9,000 to 10,000 reserves we currently have, you cut that number in half and give those 4,500 reservists a choice: You can go back to part-time service or transfer to the regular force or seek other career options.

If you do not do so, then you have to find the equivalent of 4,500 full-time reserves worth of funding. If it does not come out of people, be it civil servants, regular force or reserves, then from necessity it comes out of spare bits for equipment, out of capital, or out of infrastructure.

[Translation]

Senator Dallaire: I congratulate you on your study and your courageous position on the review of the command and control structure.

[English]

Hopefully your hybrid proposal in concentrating the operations and support is workable. It is complex but workable, as is the complexity of the whole structure.

However, I have still a very serious problem. I know you were not able to get into the details of the executive side of the house. The more you have on the executive side, the more people have got to feed it and of course more demand of headquarters or staffing on the tail end.

The general officers have been limited in numbers and were chopped arbitrarily in the 1990s. Apart from some deployed officers, we have seen very little increase there. However, the executive side of the civilian side — ADMs, DGs, EX-3s, EX-4s and EX-5s — has significantly increased. Does that hold water in that 3,500 that you are talking about? Are there significant reductions there, or are we talking about marginal changes on the civilian side?

Lt.-Gen. Leslie: The recommendation is that a modest number of generals' positions be eliminated, mainly by amalgamation of a significant number of the subordinate-level headquarters and a commensurate level of reductions of senior civil servants. Although the math shows that if you include colonels and generals there has been a 3 per cent growth in senior military officers, if you extract the colonels from that you will find it is quite significant for generals since 2004. I am sorry to sound so reasonable here, but I have to be to defend the sanctity of the numbers. The 25 per cent growth in senior civil servants includes a variety of science and technology specialists who get paid the same as ADMs and are considered part of the EX group by Treasury Board. If you look at the hardcore ADM numbers, the growth has been no greater than amongst the generals and colonels. It is when you include the equivalent pay structure for the science types and other specialists that the number starts to jump up dramatically.

Senator Lang: It is probably appropriate that this is the last question. You talked earlier about the history of transformation and that there have been some constants throughout that were not necessarily put into place while these transformations since the 1960s took place.

On page 6 of your report you mention putting incentives in place so that there is a political will within the bureaucracy to make the changes that are necessary. If this report were to go into effect, it would affect a lot of people and affect how they do their business, or if they do their business.

I would like you to describe what incentives would be put into place to help move this big ship along. There are 144,000 people who work in this huge department. How will you move the ship in this direction?

Lt.-Gen. Leslie: In the last couple of months in the job, Secretary Gates sent out a missive to his combatant commanders in which he articulated a vision that had to do with helping defray the cost of the American debt. The numbers were staggering. He was asking his deployed commanders to contribute in the order of well over a hundred billion dollars, and they are getting on with that.

A percentage of that savings, which varied by service, could be retained by, for example, the Chief of Staff of the U.S. Army; he or she had to identify it to the secretary, but he or she could keep it and reinvest it where he or she saw fit within his or her structure. That is a simple idea, but its simplicity is arguably brilliant. There are other friends and allies doing that as well.

What does this transformation report do? It takes a look at that which we were told to anticipate in terms of reduction, about a billion dollars, and it identified areas that required a bit more work to refine to get it done and the things we had to do in terms of positioning people for the future. The teams then went out and identified where those people had to come from, with the priority on reducing overhead and investing in the teeth. As well, it dug deeper than budget reductions. It identified more so that we could reposition ourselves for the next five or ten years. This is a very good time to do it because we have just come off an intense sanguinary combat mission. We still have troops in harm's way, but we have a bit of space. Our air force is busy in their good work in Libya and around the world. The navy is about to enter into a major capital acquisition program with the frigates. We have to create capital space, a reserve if you would, because almost every large complicated naval program, like every large complicated army and air force program, never works out the way people originally thought; so you have to build flexibility into that.

The Chair: Thank you very much. I know we have kept you past the time you had allotted and that you have to leave. This has been helpful for us. We have all read the document but we thank you for your personal perspective. Hearing the general say that sometimes things go on that even the general does not understand or is not aware of in the department reminds us that we all feel that way sometimes. Thank you, General Leslie, for your years of service, and good luck in your new civilian life.

We will continue with the topic we have been dealing with off and on over the last year: studying the state and future of the Canada's Reserve Forces. Today we welcome former Minister of Defence, the Honourable David Pratt, who published a survey on this topic in March under the auspices of the Canadian Defence and Foreign Affairs Institute, CDFAI. It includes recent thinking, editorial commentary, as well as references to books and reports on the subject. The focus is the army militia, not the air force or the navy reserves. We should make that clear. We are pleased to welcome David Pratt. The report, Canada's Citizen Soldiers: A Discussion Paper, was released in March 2011.

Mr. Pratt, thank you for being with us today and for your work. I gather you have some opening comments.

David Pratt, Member of the Advisory Council, Canadian Defence and Foreign Affairs Institute: In fact, I do, senator. It is an honour to be in front of the committee today to speak to you about Canada's army reserves. I wish the committee well in its deliberations, and I hope my comments help you in your work on this important subject.

Before I begin, I should note that I currently serve as senior vice president for GCI Group, a public affairs and communications company. As you can appreciate, the views and comments that I am about to express are my own and do not represent the views of the company that I work for.

Early last year, I was asked to do a paper, which I titled Canada's Citizen Soldiers: A Discussion Paper, by the CDFAI. When I began the process of writing this paper, I had no special knowledge of the reserves other than what I picked up in my work on the House of Commons National Defence Committee and briefly as minister. The whole intent was to direct a fresh pair of eyes to the subject, so I would be loath to suggest that this is the definitive work on the matter.

Let me get into my comments by saying that many Western governments, Canada included, are facing a period of restraint as they struggle to recover from the recession against a backdrop of large deficits and debt. Defence spending is squeezed and military transformation exercises seem to be as much about restructuring as they are about dealing with austerity measures. Our closest allies, the Americans, the British and the Australians, are facing similar challenges. The 2010-11 federal budget has undercut defence spending projections outlined in the Canada First Defence Strategy, and Canada regrettably continues to lag far behind our NATO allies in defence expenditure as a percentage of GDP. At 1.3 per cent of GDP, significant new investments would be required to get us to the recommended NATO target level of 2 per cent. Both the Martin and Harper governments, however, deserve credit, in my view, for increasing our defence spending.

The Canadian Forces has been through much in the last decade. Not since the Korean War have Canadian troops seen so much combat. By all accounts, our men and women in uniform, regular and reserve force, have acquitted themselves extremely well. There have been many lessons learned, and it is likely there will be significant adjustments in everything from doctrine in battlefield tactics to equipment and personnel support programs. As the Canadian government has brought our combat troops home from Afghanistan and replaced them with trainers, the time is right to reflect upon what we as a country want our military to be able to do in the years ahead.

If we are serious about the reserve force and if we are truly thankful for the contributions they have made, we will ensure that in a period of fiscal restraint their needs and issues are not shoved aside. One of the principal areas of focus of the paper that I wrote has been the issue of mobilization and the established roles of the reserve force. A review of the history of the army reserve, that is the militia, which is contained in the paper, helps to illustrate both the organizational culture of the reserve and the role mobilization played in the past.

The 1994 white paper outlined a graduated four-stage national mobilization framework, which stated that while a major global war is highly unlikely at this time, it remains prudent to have ready no-cost plans for total national mobilization. Importantly, it added that this fourth step should touch upon all aspects of Canadian society and only come into effect with a proclamation by the Governor-in-Council of a war emergency under the Emergencies Act. My paper supports the view that if such a no-cost plan were to be drafted, it should be done by the Government of Canada rather than by the Canadian Forces. It also takes the position that given the strategic environment and the nature of modern warfare, planning for a large reserve army, as part of a program of national mobilization, is a quixotic exercise that creates unrealistic expectations about what the reserves are and ought to be.

A survey of the strategic environment suggests the types of threats that Canada might be facing in the future. While it is enormously difficult to predict what may be around the next corner, the prospect of any conflict involving massive conventional war is, at best, unlikely. This view is supported by our own Canadian policy documents of recent years, the U.S. Quadrennial Defense Review, the British Strategic Defence and Security Review and NATO's Strategic Concept. Taking into account where we have been and what we are likely to encounter in the years ahead, it seems evident that a reappraisal of the roles of the reserve force is required. My paper suggests that a range of tasks associated with domestic operations be adopted as a designated role replacing mobilization. Attention should also be devoted to involving the reserves in relatively new areas, such as cyber defence, as one portion of the government's overall cyber-security strategy.

Like the regular forces, the reserves have seen some improvements over the last 10 years. However, there are still problems. Immediate action must be taken to fix the pay system. Although recruiting seems to have improved, many still find it slow and inefficient.

More attention must also be paid to medical care for reservists. As well, training and equipment issues are still a source of irritation. Better administrative support for reserve units would address many problems that are a source of continuing frustration. Working to ensure the reserve force reflects the changing face of Canada and that the CF establish a stronger presence on university and community college campuses should also be among DND's priorities. Finally, the government would be strongly advised to take action on the issues of civilian job protection for reservists and support for employers of reservists. Those who serve their country as part-time soldiers, and those who employ them, should not be financially penalized for service that benefits all Canadians.

The objective of my paper was to provide those interested in the subject with a status report on the army reserve and to address some of the larger issues facing the institution. As mentioned earlier, it is by no means an exhaustive study, and it makes no such claim. Further examination and analysis of Canada's reserve force is required. However, ideally, such an examination should be part of a larger defence white paper, possibly in conjunction with an overall review of diplomacy, defence and development assistance. With the Afghanistan mission slowly winding down, there is a need to recalibrate our foreign and defence policy to reflect the changes that have occurred in the strategic environment a decade after 9/11.

Our principal allies recognize the value of such reviews and undertake them on a regular basis. The Americans conduct a defence review every four years, the British every five. In Canada, Conservative and Liberal governments alike tend to take a more lackadaisical approach to defence and foreign policy. However, such reviews are important from a public policy standpoint. They stimulate public debate, help explain and define our foreign policy objectives and help determine the type of military we will need in the future.

In the absence of a major review of foreign and defence policy, the next best option relating to the reserves would be a stand-alone study of the reserve force. This could be accomplished either through a special commission similar to the Special Commission on the Restructuring of the Reserves, through the Defence Committee of the House of Commons, through a special joint committee of the House and Senate, or through a definitive report by the Senate itself.

In the latter two cases, parliamentarians would bring a special legitimacy to the process that cannot be replicated by a policy paper such as the one that I have done. The House of Commons Defence Committee's October 1998 study Moving Forward: A Strategic Plan for Quality of Life Improvements in the Canadian Forces could serve as a template for the study of the reserves. The committee hearings, which were held at CF bases across Canada, allowed serving members of the forces to voice their grievances outside of the chain of command. The hearings resulted in 89 recommendations dealing with pay, family support, housing and care of the injured. Virtually all of the recommendations were implemented by DND and the Canadian Forces. Either a special commission or a parliamentary committee would be a good starting point from which to launch a process of reform.

Let me conclude by saying that the army reserve has developed over a long period and will continue to evolve. As an institution, it has matured to the point where it has proven itself to be an essential part of the Canadian army. It sounds trite to say that the regular force needs the reserve force and vice versa, but that, in my view, is the truth. Both components of the CF are indispensable to the pursuit of Canada's national and strategic interests. The reserve force also needs to be understood as a core component of the CF, one essential to the safety and security of Canadians. Under sometimes adverse and austere conditions, the reserves have steadily built their reputation and have garnered the respect of many in the regular force and the public at large. In his book, Canada's Army: Waging War and Keeping the Peace, Jack Granatstein makes what he calls "an extended argument for military professionalism." This paper supports that view completely. The challenge for the reserve force is threefold: First, it needs relevant and updated roles. The pipe-dream of mass mobilization must be put aside. Second, it needs more training and professionalism to allow it to better integrate with the regular army. Third, it requires the resources to execute the missions that we assign it. Finally, it is time to put to rest the idea that Canada has two armies consisting of forces-in-being and forces-in- waiting. Our military leadership must also work to ease the tensions that flow from two very different organizational cultures.

Canada must have one army consisting of a regular and a reserve force. These soldiers must know their roles, be well-trained and well-equipped and be respectful of each other's contributions to the profession of arms. That, in my view, is the army we need to defend Canada's interests now and in the future.

The Chair: Thank you very much. For the purposes of our wider audience, we have three classes of reservists: Class A, which is part-time in Canada, paid at 85 per cent of regular force pay; Class B, full-time in Canada, paid at 85 per cent of regular force; and Class C, full-time deployed, meaning, for example, the people who would go to Afghanistan, paid at regular force rates.

To set the stage, General Leslie and I think you, Mr. Pratt, have laid out this notion of a kind of two-division military, with a division for expeditionary deployment — the regular force — and a division for reserves, although they would overlap. Is it fair to say that that is your view?

Mr. Pratt: I think it needs more study, but, on the face of it, I think there is a lot to commend it. In some respects, that is what we are already operating with, although we do not describe it as a two-division system. The whole concept of a division is, for many soldiers, an antiquated concept. The basic combat-unit for the U.S. has been, for some time, the brigade. Canada is working on that basis as well. I think what is important is the whole idea of giving the reserves an important domestic role to carry forward into the future, so that they know precisely what their mandate is, rather than holding out this prospect of mass mobilization as something that could occur in the future.

The Chair: That is a good setting of the stage.

Senator Dallaire: Thank you very much for doing your study and bringing it to the fore. It is a very good paper, and quite comprehensive.

As you mentioned, it is interesting that the COTC program had a lot of people on campuses.

[Translation]

Even Jean Lesage took the course in the artillery, as did Jean-Paul L'Allier, though he was in the armour.

[English]

We are now seeing the next training mission going on in Afghanistan. We saw that the regular force could not function without at least 20 per cent of reservists, which taxed significantly the leadership structures of the reserves. When we consider that we probably get, at any one time, one out of six reservists who might volunteer to go, trying to sustain that is most difficult.

This training mission will call upon more reservists, because apparently the regular forces will put more emphasis on reservists filling those jobs versus regular force people. I am concerned that the reserves who are now coming back, with lots of veterans, the 4,500 who have been on Class B are coming back into Class A, and we already see significant cuts in O and M, ammunition, pay not so much, but ability to do training even before all the other massive cuts.

How do you think they will keep this veteran force in the armoury floor sustained if there is nothing more tangible for them to train to and supported to train to?

Mr. Pratt: That is an excellent question, senator. Some comments that were made to me in the course of the report by retired Major-General Clive Addy bear on that subject directly, because he was of the view that we will lose a lot of people. Once they have been to Kandahar, how will you keep them down on the farm? It will be difficult, to say the least. They have seen the sharpest end of Canada's military involvement and the high pressure, the high stress of all of that, and the challenge will not be there when they come home. Maintaining an esprit de corps under those circumstances could be difficult.

It would be incumbent upon the CF to ensure that those people are not lost because they form part of the corporate knowledge of the army at this point.

We have right now more experienced — as I am sure you are aware — reservists than we have had since Korea. Those reservists who were in Korea, many of them were veterans of the Second World War. We have a resource in terms of combat experience that I do not think we would want to lose. I think the CF must make special effort to try to ensure that we keep them involved in one way or another, ideally as Class As, with the declining number of Class Bs that we are likely to face in the future.

Senator Dallaire: If they do not have a policy framework to what level to maintain the reservists for the roles that might come to them, it would be difficult to put more resources to keep the reserves at that higher level of effectiveness for their possible deployment with the regular force in missions. As an example, Sierra Leone, the whole mission is done by reservists.

Without that policy framework, do you not agree that the reservists will quite likely end up being a target of significant cuts because it is really all O and M, including their pay?

Mr. Pratt: One of the other issues that I bumped into in the course of doing this study was that when reservists were serving with the regular force and had the benefits of the regular force pay system, they got used to being paid on a regular basis. When they have to go back into a Class A situation, with a pay system that still needs a lot of work, the frustrations will increase significantly. There is some need for restructuring in terms of budgets and training to ensure that there is some protection there for the reserve units and individual reservists so they can have some predictability around their conditions of service.

Senator Dallaire: Even with General Leslie's transformation, where he has picked up on your two-division concept —

Mr. Pratt: It is not mine; it is actually his. That is important to mention, because in the course of my research on this I had some good long conversations with General Leslie.

Senator Dallaire: Whatever, chicken and egg, but you are on it. In that, you are talking about seamless structure. We see it very much in the air force, but many of them are former regulars and technical staff and so on. Similarly or reasonably in the navy, but in the army we do not see this. If we divide the divisions, you have three brigades and really they are not divisions but task forces and task organized, depending on the requirements. You have the regular brigades or capabilities, reserve brigades, now the regulars and reserves are under the same area headquarters. In Quebec, you have one regular brigade, two reserve brigades and so on.

If you separate that, are you creating a separate command and control, that is to say you will want the reserve under the reserve command only now and not under the area concept?

Mr. Pratt: What is critical for that model to work is for an extensive amount of what I would describe as cross- fertilization of the regular force into the reserves and the reserves into the regulars, so that you begin to build what I suppose used to be called the total force concept. There would have to be a significant amount of integration.

The last thing you would want to do, I think, is to try and create two separate chains of command with two very separate organizational cultures. Canada is not big enough to effectively have two armies, like the U.S., in terms of U.S. army and the Marine Corps. You would have to be sensitive to those issues. Obviously, you would still have the chain of command. You would still have one army — two components, but one army.

Senator Lang: I want to go back to the differentiation between the types of reservists. You have your Class A reservists, which is the employed part time; you have Class B, employed full time; and then of course you have the Class C reservists, who are deployed overseas if we have a theatre outside the country.

It was mentioned earlier with the other witness here, in respect to the categorization of these reservists, perhaps we should be looking at either you are a regular member of the force or you are a reservist in the sense that you are a part- time soldier on the weekends, if you so wish to do that.

I would like to hear your comments on that because it seems to me we are somewhat fooling ourselves with respect to the numbers of regular soldiers and members of the navy and air force, when we look at a regular force of roughly 68,000 and then we have full-time reservists of 10,000. We are up to almost 80,000, and then, along with that, we have 25,000 reservists across the country doing other things.

I would like to hear your comments in respect of that differentiation, so it is clear and defined and you are either a member of the regular force or you are a reservist, and the reservist means that you are working out in the field, in the country.

Mr. Pratt: The issue of numbers has been certainly a bone of contention over the last number of years, last 10 years, in terms of people looking at the numbers and the classifications and what constitutes a full-time regular force member versus a part-time reserve force member. If you go back even to one of the reports in 2002, they lamented the fact that getting the numbers was kind of a difficult exercise in terms of who was serving where. That is one of the reasons for the creation of Class A, B, and C. There is some wisdom to that but, having said that, if you have a Class B reservist who has been serving in a full-time position over a protracted period, as General Leslie mentioned, it makes sense to either offer that person a full-time position in the regular force or have them move on, or go back to Class A service, or move on to something else.

I would not claim to have any hard and fast opinions on how that classification system should work. It does explain to a large degree precisely what the reservists are doing at any particular time. If they are in Class C service, obviously they are out of the country on deployment, and that creates its own issues. Class B is a whole different scenario in terms of their terms of service.

I would not say I have any hard and fast rules, but one of the things DND has to try and do over the coming years is make sure that its numbers are accurate because I think there have been issues. Jack English, in his paper, talks about the numbers issue as well. If you are going to formulate good public policy, you have to have an understanding as to precisely what the numbers are. The explanation I got for some of my numbers, for instance, when I requested them through the Library of Parliament, they went to DND to request those numbers, there was an admission at that point that a lot of the numbers based on how the databases were managed were inaccurate and needed work.

There are a lot of aspects around the reserves issue, for example administration issues, that need attention. I think the statistical compilations of who is where would be one of them.

Senator Dallaire: It is either part time or full time. Some Class A part-time reservists do over 100 days a year. At 100 days a year or plus, even though it is supposed to be part time, that gets to be close to full-time employment.

Senator Lang: I want to go back to our previous witness and the report that he has brought forward. Obviously, it is of some discussion not only here but also in many quarters. I would like to hear your comments, since it does affect the reserves, which is obviously an area of concern for you; as well as the overall structure of the Department of National Defence, in view of your previous experience and previous position as minister of defence. Do you degree with General Leslie's report?

Mr. Pratt: In general terms, what I know of the report, based on what I have seen in the newspaper, yes, I agree with the thrust of his report. Yes, I also would agree with his comments in relation to the establishment of the various commands. They were established for a reason, which was to ensure that Canadian forces serving abroad had good support on the home front in terms of the operational commands. I think those objectives were really important, certainly at the time.

I also agree with General Leslie's comments that the time has come to look carefully at those command structures, the headquarters, and to rationalize them because we are in a completely different strategic scenario right now in terms of winding down in Afghanistan. What was appropriate for Afghanistan may not be appropriate going forward in the next number of years.

Special circumstances require special organizational structures. I think the intent and the effect of General Hillier's changes were important and effective, but I think we have to move on from there.

Senator Segal: I want to lay out, if I can, Mr. Pratt, two propositions, and I would love your comment on them. Before I do that, let me express my thanks, as a citizen, for the courage you showed when you chaired the House of Commons Committee on National Defence during the time of the pre-Martin Liberal administration, which had a particular view of armed forces in size and growth and scope. You took a contrary view, which would have been an act of some courage on your part. I want to express my thanks for that courage at that time.

In many army reserve units across the country now, here is what you would hear; I am sure you heard some of this as you did your report. The folks have come back from Afghanistan. They took our best. The local army reserve officer has to approve someone who applies to go to Afghanistan. The number of people who wanted to go to Afghanistan outnumbered the number of people who were sent. Everyone wanted to be part of that effort, to their credit. They would be sent and get special training beyond their normative existing training. They had other competencies. They went and served one, two, three rotations. They now come back and the plan is that we cannot afford those people on a full-time basis. They are the best possible people to provide real training for other reservists across the country so they can be ready and prepare and benefit from their learning. Their fear is that these people will be lost, that they cannot go back on a part-time proposition. They will drift off, perhaps to the private sector or to other organizations, and will not stay in their reserve organization. In the meantime, the government, as was the case before the end of the last fiscal year, cut back what are called the parade or training days, which says to the commanding officer of the local reserve unit, "Those are the ways I pull people in to train them. If those days are cut back because of the end of the fiscal year, then my capacity to do my job and maintain the level of preparedness is deeply problematic." That is one reality out there.

The other reality is that, as everyone around this table will know — and you, in your report, made some passing reference to this — the cost of preparing a reservist and having a reservist in reserve with the basic core skills, physical capacity and other abilities, which the specialized, multi-week training would precede moving into theatre, is efficient and way lower than the cost of maintaining a full-time member of the regular forces. As such, if you have a country with a multi-faceted foreign policy and humanitarian commitments able to quickly deploy to a place like Haiti, for example, in the event of a natural disaster, but you do not have that skill set and that back-up capacity, then, in the end, you will not be able to deploy. The responsibility to protect is meaningless without the ability to deploy. That argues for a reserve force across the country of 50,000, backing up a regular force of 100,000, so that we can discharge our duties as a country based on the foreign policy commitments present, future and past governments have made.

I would be interested in your comment on both those references.

Mr. Pratt: First, let me thank you for your kind comments about my tenure at the Defence Committee, senator. It is much appreciated.

I did not make any mention of numbers in my report for a very good reason. That is, I am sure you have all heard the expression about politics being the art of the possible. We are in a situation now, in terms of cutting our fiscal situation, where it is likely we will be encountering cuts rather than more money for the defence department. Personally, I regret that. I think that the Canadian Forces are an absolutely critical instrument of our foreign policy, have been in the past and will continue to be in the future. Would I like to see more money for the forces, absolutely. Is it likely in the near term — that is, within the next few years — probably not. The Canadian forces will have to work with the resources that they have.

The figure that kept coming up as relatively reasonable for me — it has been mentioned in reserve documents in the past, and it goes back to 1996 — was a level of 30,000 reservists for Canada. The Canada First Defence Strategy, from my standpoint, was a little disappointing because they set 2028 as the timeline at which we would reach 30,000 reservists. I think that is glacial in terms of progress on the reserve issue. I would like to see our regular forces increase as well in terms of the number of people we have. I made reference to the 1.3 per cent of GDP that we are currently spending. The Martin government did raise the amount of money for DND. The Harper government, to their credit, has also provided more money for DND, which I think is critical because you do not know what is around the next corner.

Having said all that, as I mentioned earlier, we have to focus on what is doable and what is likely over the next number of years. To conclude, I think one of the critical things in that bigger picture scenario is this whole business of a foreign and defence policy review, which I would very much like to see because I think it is important that Canadians debate this subject, as they did back in 1994. The Martin government, in terms of its international policy statement, laid out some of the strategic scenarios and provided a review of defence diplomacy and development assistance, but without the benefit of parliamentary hearings. I think parliamentary hearings would have been extremely important to give that process legitimacy. In the absence of that, we are sort of ad hocking not just our foreign policy but our defence policy as well. We desperately, I think, need more clarity of thought as a nation around some of these issues.

The Chair: I will not take the time to read into the record, but I think there have been a fair number of statements recently on what our foreign policy is. It has been pretty clear, including Mr. Baird at the UN.

Senator Lang: You indicated, for the reservists, 20,000 or 25,000. My understanding is that as of 2010 — and those are the last statistics we could get — the number of reservists is almost 36,000.

The Chair: That does seem to be the number currently around.

Senator Lang: It is substantially more.

The Chair: The question is what their status is inside those three categories.

Mr. Pratt: You have to ask as well whether that includes the naval reserve, the air reserve and the various others.

Senator Lang: I am assuming it does.

Senator Dallaire: They have the numbers, but they are not paid. The funding to pay all those people to the level they should be for the training —

The Chair: That is a separate issue. We are talking about just the numbers here.

Senator Nolin: Mr. Pratt, I would like to explore with you the idea of this program of job protection and employer support based on the recent proposal of the C.D. Howe Institute.

Can you give the committee a bit more of an in-depth understanding of those proposals? We have been struggling with it for many years, reported and recommended that, so what are those magic solutions?

Mr. Pratt: The best thing for me to do, senator, would be to quote from my report on page 73 where it talks about the C.D. Howe's scheme:

Under the Institute's scheme, more support would be extended to smaller firms that are less able to easily absorb employee losses. Compensation would be based on an employee's tax return and the size of the firm. Thus, a firm with more than 100 employees would be entitled to 40% of the employee's annual salary. Those between 20 to 99 employees could claim 50% and those with 10 to 19 could claim 60%. Small companies with 5 to 9 employees would be entitled to 70% and even smaller businesses of 1 to 5 employees would be entitled to 80% with an annual ceiling set at the yearly maximum pensionable earnings of $47,200. A special hardship exemption could also be claimed."

I think that summarizes it fairly clearly. Obviously, a number of countries have put in place more generous employee assistance.

Senator Nolin: Job protection is also a critical element. Over and above those incentives, you want to ensure that someone keeps his job if he wants to enrol.

Mr. Pratt: Absolutely. If they are a Class A reservist, it is important.

Senator Nolin: Have you explored those possibilities of job protection? Those are more incentives for employers, but what about the employee's protection? The employee wants to ensure that his or her job is there for him or her.

Mr. Pratt: Absolutely, and I think that is critical in terms of expressing to the reservists and expressing to employers, actually, that the reservists' service to the country is of great import, and we want to ensure that their jobs are protected.

Senator Nolin: Have you thought of what would be the legislative approach to that? We have, of course, provincial authorities or federal jurisdiction. Have you put your mind to that, or have you left it to the lawyers?

Mr. Pratt: I think the lawyers over at the Department of Justice might have some interesting things to say about that. The experience that we have been through over the last number of years is such that employers would be more sympathetic now than ever to that type of job protection legislation. If the Senate deemed it appropriate, contact could be made with the Canadian Chamber of Commerce, for instance, and other employer institutions.

The Chair: We have taken testimony on this, and we did talk to the employers. I think it would be fair to say that, in the end, the majority opinion was leave it alone. You want people to step up and do this, and the more you start to impose rules, the more complicated and difficult it becomes. It becomes a disincentive to have reservists in your organization.

Mr. Pratt: That is an issue, but I do not think you can divorce the two in terms of employer support from the standpoint of the compensation aspect of providing funding for employers. I think that is a big part of the equation.

Senator Day: In relation to employer support, you and, I think, all those watching, are familiar with the Canadian Forces Liaison Council and the good work they do not only advocating for legislation but also, in the interim, trying to raise awareness amongst employers. Many employers have signed up on a voluntary basis to ensure that when reservists serve, they do not have a reduction in their income. They are doing some good work, and, hopefully, that will continue.

I would like to you clarify, Mr. Pratt, some of your conclusions. One of them is that we need to define a specific role for the reservists. I am at page 7 of your summary where you discuss a defined role, and then that they have to be able to integrate with the regular army.

I question whether those two points are consistent in that there may be roles for the reservists as a national guard, and that has been talked about in the past. They will not be trained to the same extent as a regular force for deployment or for mobilization in that sense, but they have a very important role in national security.

Have you done some thinking about the roles being somewhat different?

Mr. Pratt: The comment that I got from a number of people was to stay away from the National Guard and army reserve comparison because the two are very different in terms of their roles in the U.S. I cannot tell you that I have a great degree of familiarity that way with the National Guard in the U.S.

I would say that the integration aspect of the reserves with the regular force is important from the standpoint of augmentation. We simply do not have a big enough army to be able to do everything that we want with the regular force. That is the same with armies around the world.

The integration component is such that it boils down to whether or not you send formed units over to support the regular force, or whether you support the regular force with individual augmentees. I think we found in Afghanistan that if you have small subunits, for instance, platoons and so forth, they end up being on what are called "security duties" in terms of command posts and the lesser type of soldiering, if I could put it that way. In their eyes, they would rather be, in some respects, individual augmentees that are in units that are going outside the wire on a regular basis. That is a better way to integrate the reservists in the type of scenario that we found in Afghanistan.

This two-division model in terms of focusing the reserves on domestic security, natural disasters et cetera, is a good one, provided you have, as I mentioned earlier, a significant amount of cross-fertilization. If you are able to do that, then, first of all, you also help with the cultural issues — the "we-them" cultural issues between the reserves and regular force — but you also put them in a position where, if necessary, they are able to get into a training regime that will gear them up for a place like Afghanistan. As I say, we do not know what is around the next corner. It can be very unpredictable. I think that is one of the ways to ensure that level of integration takes place.

Senator Day: I am glad you mentioned the cultural aspect and the importance of being sensitive to that, but I think that the six-month training we have now before deployment seems to help a lot in breaking that down.

During one of the visits I had to Afghanistan, I found reservists in roles that were not secondary in the sense that there was a road being built, there was a lot of community development going on, and the reservists actually brought skills that the regular forces people did not have in that particular instance and they were recognized for that.

Mr. Pratt: Absolutely. They have been involved in things over the course of the last number of years in terms of PSYOPs, psychological operations, and CIMIC, civil-military cooperation, which have been really important. I think it really depends on the reservists you speak to as well because I am sure you can appreciate there is no monolithic reservist view on these issues. Everybody has a different experience that they come back with and it forms their views in different ways. Some of the people that I found speaking to on the cultural issues said, "The fact I was from a reserve regiment was given away by my headdress over there. Once people saw that, they did not treat you like a real soldier."

Senator Day: That is a cultural problem.

Mr. Pratt: Yes. Others would say, "When I got into a situation as an individual augmentee working with regular force soldiers, it took a little while but they accepted me perfectly, and at the end of the day there were no issues." There is a real mix.

The Chair: We are running out of time here. I know you referenced this earlier, but you did a bit of a survey of where the allies were on the issue. Are there things they are doing or issues they are looking at that would be instructive or helpful to this discussion?

Mr. Pratt: I guess I would suggest, Madam Chair, that probably one of the biggest issues facing the country from a policy standpoint as it relates to the reserves is this whole question of the mobilization role. I alluded to it earlier, but I think that total mobilization of a World War II type going forward in the future is so unlikely in the extreme that, from a policy standpoint, we have to take that off the table completely. Yes, there could be a need for a significant expansion, but you have some in the reserves community that talk about a two-corps army reserve, which I think is a pipedream. I think our policies have to be rooted in reality.

From the standpoint of the British review, the U.S. Quadrennial Defense Review and NATO's Strategic Concept, no one is talking about mass mobilization. They are talking about things like terrorism, failed states, massive natural disasters or man-made disasters in terms of responses. They are not talking about a large-scale conventional war that would affect Canada or NATO.

The Chair: Did that affect their view or yours in terms of the numbers in this debate about having a larger standing force and a larger reserve force?

Mr. Pratt: That is not to argue against reserves. That would not be my position. Canada needs reserves. Every regular standing army needs reserves. It is a question of what you can afford and what is appropriate in terms of your own strategic context.

Senator Dallaire: The Australians, the British and the Americans have recently finished some fundamental studies that are just now being published that are worthy of us to look at, but not one of them has recommended reducing their reserves. On the contrary, they say more tasking and more use thereof.

Of course, if you want individual augmentation versus subunits, the level to bring subunits to an operational capability is a much higher cost than bringing individuals. That debate has not been brought to DND yet because they are having difficulty paying for individual augmentations.

The question I have relates to something you have read about and we see throughout a number of other documents, which says that the reserve has been and remains a core institution not only of the military but of Canadian society as a whole. It is the footprint in our communities.

I keep reading that, but I have not seen it in any formal document. We have armouries across the country in massive need of infrastructure repairs and so on. Is that a task that we have given to the reserves to implement within our communities? Is that a task that policy has established, or is it something that we have just taken from history?

Mr. Pratt: It is partially historical and partially ingrained in policy as well. I believe it was in 2002 when Minister McCallum was in the chair as defence minister that the formal roles of the reserves was established as mobilization, augmentation and footprint in the community.

I think the footprint in the community is critically important from the standpoint of diversity. What we have seen over the course of the last number of years has been the fact that the regular force has not reflected Canadian society as well as the reserves have. The reserves really help to ensure that the army is reflective of the population as a whole. To the extent that we can encourage that, I think that is a really positive thing.

If I could just clarify one point with respect to the numbers issue —

The Chair: Yes. 26,000, and that does not count rangers or the other forces, air reserve or naval reserve, which is why you get to the other number.

Mr. Pratt: It is on page 10 of the report in terms of the 35,000 figure. My understanding was that the 30,000 figure related to the army reserve.

The Chair: Did you have a supplementary on this, Senator Lang?

Senator Lang: I wanted to make one point following on Senator Dallaire's question. What I have read here as far as reserves in Australia are concerned, and I take it from the report that the witness brought forward, it states that the reserve forces in Australia are down 25 per cent compared to 10 years ago.

Senator Dallaire: That is what they have been able to afford.

Senator Lang: I wanted to clarify that for the record.

The Chair: We are out of time and we thank you for yours today, Mr. Pratt, and for the work you have done on this and helping us focus in on what this committee will be recommending. Thank you very much.

Mr. Pratt: Thank you, Madam Chair.

The Chair: We will take a short break and go in camera. We have business to discuss, so we will take a minute or two while we do that. Thank you.

(The committee continued in camera.)


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