Proceedings of the Standing Senate Committee on
National Security and Defence

Issue 6 - Evidence - Meeting of April 30, 2012


OTTAWA, Monday, April 30, 2012

The Standing Senate Committee on National Security and Defence met this day at 4 p.m. to examine and report on Canada's national security and defence policies, practices, circumstances and capabilities; and for the consideration of a draft budget.

Senator Pamela Wallin (Chair) in the chair.

[English]

The Chair: This afternoon we are pleased to welcome the Minister of National Defence, the Honourable Peter MacKay, and the Chief of the Defence Staff, General Walter Natynczyk. Joining our two witnesses are Vice-Admiral Bruce Donaldson, Vice-Chief of the Defence Staff; and Jill Sinclair, Assistant Deputy Minister on the policy side. Welcome and thank you for being here. Good to have you back, assistant deputy minister.

As you know, our committee is looking at the Canada-U.S. defence and security strategy and relationship. We have invited the minister and the general to take a look at that to tell us about the Combined Defence Plan, the Permanent Joint Board on Defence, and the bilateral defence relationship in general, including any implications for Canada of the U.S. Department of Defense budget measures and their new defence strategy. We have talked to a couple of American witnesses about that, so we need your perspective as well. We have also asked them to speak to us about the transformation process in the Canadian Forces at DND, in the light of the Leslie report and of the budget, and the Canada First Defence Strategy. This is what has guided our policy since 2008. We have a lot of ground to cover, and I think we will begin.

Minister, you have an opening statement. Please go ahead. Thank you, and welcome.

[Translation]

The Honourable Peter MacKay, P.C., M.P., Minister of National Defence: Thank you Madam Chair for your invitation. This is my 25th appearance before a parliamentary committee since I was appointed to the Cabinet in 2006. Madam Chair, I also want to thank you for the work you have done on this much important issue, the relationship with the United States and the work of the National Defence with our North American partner.

[English]

I would like to take the opportunity to address the topics you stated, Madam Chair, set out in your letter, including Canada-U.S. relations, an update on the DND Canadian Forces transformation, and a situation report on the first four years of the Canada First Defence Strategy. I am fortunate, and always pleased, to be joined by the Chief of the Defence Staff, our Vice-Chief of Defence Staff, and Jill Sinclair, who assists me ably, at the Department of National Defence, on all of these and other subjects.

Let me begin by speaking about the unique and enduring, robust and dynamic defence partnership that we enjoy with the United States. I would like to tell you about the depth and range of the relationship — the political policy, operational, nil-nil side of that relationship — in terms of our work in securing our continent, in fostering security in our hemisphere, and in working together to promote global security. First, a word on the political relationship.

Madam Chair, you know that I had the privilege of working directly with my U.S. counterparts. I was able to establish a strong working relationship with two extraordinary individuals, Secretary of Defense Bob Gates, who has since left the post, and current Secretary Leon Panetta, who were both directors of the CIA prior to taking their posts. Notwithstanding the scale and scope of the issues and the relationships these gentlemen have to manage, they have placed the defence relationship with Canada on a high plateau and on their department's agenda.

I welcomed both secretaries to Canada for bilateral discussions on four occasions. I recently hosted, in Ottawa, what I would deem a historic first — a trilateral relationship meeting between Mexico, the U.S. and us. In fact, I think I can safely say that the political engagement between Canada and the United States on defence issues has not been this strong in decades. In many ways this derives from the unique — and I do mean unique — military relationship that our forces enjoy at every level, from the Chief of the Defence Staff through to our science and technology, intelligence, logistics, and personnel. We have a very tight, integrated relationship with the U.S. I know we speak of it often, but I have to stress that the North American Aerospace Defense Command, or NORAD, is absolutely a critical component of that relationship. It remains sui generis in the world as a binational command structure, and I suspect we will come back to that subject.

[Translation]

We have over 50 years of successful cooperation in the defence of North America which is a key role identified for the Canadian Forces in the Canada First Defence Strategy. As NORAD engages increasingly in maritime domain awareness, we are working more and more closely together in ensuring that we have a common approach to securing the crucial maritime approaches to our countries.

[English]

We have another institution that underpins our defence relationship and demonstrates the dynamism and the flexibility in our work. Since its founding in 1940, the Permanent Joint Board on Defence, PJBD, has acted as a venue for political/military engagement across a large spectrum of defence issues. In the last few years, we have been working together to transform that board as an instrument for us to use in meeting broader security challenges, in other words, to provide a more modern mandate for this board, which has been in place for some time.

The PJBD is an organization that was built on change, and in recent years it has overseen a significant degree of post-9/11 transformation in the shared security architecture of North America, and that includes: the stand-up of Canada Command and its counterpart, the U.S. North Command; the creation of numerous civilian departments and agencies responsible for various aspects of domestic security; and their increasing collaboration with military stakeholders. I am talking about the emergence of the U.S. Homeland Security Department, which encompasses many of their security components, and, most recently, the development of a Canada/U.S. Combined Defence Plan, something in which I know the committee has taken a particular interest.

This plan does not, in any way, commit Canada, Canadian forces, or U.S. forces to any particular course of action. That is to say that it is solely in the decision-space of national governments to take sovereign decisions. It is a facilitator. It is very much to serve as a combined planning tool. I say, for emphasis, again: This is a plan. It captures and updates a number of pre-existing arrangements and agreements in light of the new security architectures and the authorities that have been in place since 2001, so post-9/11. It takes a comprehensive, up-to-date view of the North American security environment and provides a planning framework to help guide the Canadian and U.S. militaries in responding to any potential shared-security scenario, whether during peacetime, in response to a crisis, or even in a time of war.

These are just a few examples of the scope of arrangements that will help guide the continued and long-standing collaboration between the United States and Canada as we work to anticipate and respond to evolving security changes and challenges in the 21st century. These include the continued threat of globally networked terrorism; the rise of cyber and space-based threats — again, I know that subject matter is of great interest to committee members; and geopolitical shifts and changes, including new dynamics in Asia-Pacific, where the government, along with countries including the U.S, is increasing its focus.

Of course, there is the global economic downturn and the consequences for the resiliency of our societies, because economic security and national security are inextricably linked. I am not just referring to defence budgets. We know that economic pressures have many effects in many areas.

Canada and the United States are working together as partners to address these and other challenges, both at home and around the world. Over the coming years, closer partnerships with the United States in particular, as well as closer collaboration on security with other allies and partners, will enable Canada to deliver the greatest possible degree of security to our citizens with the resources that we have.

[Translation]

Of course, this type of collaboration will only produce the desired results if every partner, including Canada, makes the most of its targeted defence investments.

[English]

For this reason, despite the challenges imposed by our current fiscal situation, this government remains committed to pursuing the capability goals outlined in the 2008 Canada First Defence Strategy, a document I know that you have looked at in some detail. Senators will be aware that since our government took office in 2006, the defence budget has grown an average of $1 billion per year. As you will know, we are in just the fourth year of the comprehensive 20-year plan, but already we have delivered what I believe are fairly impressive achievements that exist across all four pillars of this strategy.

With respect to personnel, we have been successful in expanding both the regular and reserve force, reaching targets much earlier than forecast. I might come back to that in the course of questioning because this is an important issue of personnel strength.

Simultaneously, we have done this and improved the quality of care and support provided to our personnel and their families — the primary task and responsibility of any government — including introducing programs to care for the ill and injured, such as the Legacy of Care Program. I know this has been an area of personal passion and pursuit for Senator Dallaire.

On equipment, we have undertaken the most ambitious recapitalization program since the Korean conflict, delivering invaluable capabilities like the new strategic and tactical airlift, medium-lift helicopters, and armoured personnel carriers.

Spending on infrastructure has also gone up during this time frame. Over the past two years alone we have initiated close to 100 projects across the country to increase the quality and functionality of headquarters, training facilities and support centres for military personnel and their families. Within that investment, I would highlight the standing up of joint personnel care units across the country at bases and area support units. This is one of the hallmarks of the Canadian Forces' success in recent years in both addressing the personnel issues as well as infrastructure.

With respect to readiness, the final pillar of the Canada First Defence Strategy, our increased focus and support on training, maintenance and joint exercises, such as Operation NANOOK and others in Canada's Arctic, have helped strengthen the flexibility and deployability of our military in response to operational needs, including in the high North.

[Translation]

As a government, we are proud of these achievements and of our ongoing work with the leadership of the Canadian Forces and senior officials of the Department of National Defence.

[English]

These investments have been crucial to our military's ability to deliver success time and time again during the busiest period of operation in over a generation. This has been the highest tempo we have seen since Korea. It is what allowed our men and women in uniform to deliver emergency assistance to the people of Haiti following the earthquake in January 2010, even while simultaneously carrying out a full-scale combat mission in Afghanistan and providing security support to the Vancouver Olympics, and later the G8 and G20. It is also what allowed them to quickly and effectively respond to floods and forest fires in Manitoba, Quebec and Ontario in the summer of 2011, even while effecting the transition to a training mission in Afghanistan and also carrying out separate major operations in response to the crisis in Libya. You can see, and the record will clearly show, that there were numerous moving parts and missions taking place during this high tempo of operations.

While this impressive track record of operational success demonstrates the validity of the original capability concept of the Canada First Defence Strategy, it is nevertheless clear that in this era of fiscal restraint and the lessons we have learned through recent operations and through the implementation of this ambitious plan of recapitalization for the Canadian Forces, it will require us to scrutinize every aspect of our business, from the back office to the battlefield.

To this end, my officials have been pursuing a number of efforts to review our programs and our investments for a few years now, and to ensure that we prioritize and optimize our investments in capability, in effect changing the business of defence so as to free up headquarters and administrative resources for reinvestment into operational capabilities. This has been the battle cry of many for years: to lighten the load in the field and to redeploy from headquarters as necessary to ensure that we are providing optimum effect in the field and on operations.

In the next hour, you will also have the opportunity to directly hear from General Natynczyk, a man you are very familiar with, and his senior officer, Bruce Donaldson who is joining us here as well, and on the policy side, Jill Sinclair.

Before taking your questions, permit me to re-emphasize our government's commitment to support the men and women of the Canadian Forces and their families as they fulfill the important missions we ask of them, as well as focusing on rebuilding and building upon the most effective and efficient defence team possible with taxpayers' dollars.

Since 2006, we have seen the dramatic benefits of targeting and focusing our capability investments in the form of strengthened partnerships and operational success, a direction I would suggest is being mirrored by NATO, NORAD, and by all of our allies around the globe. Now, as we face new fiscal constraints, it is important that we continue with these efforts.

[Translation]

And, we must find new ways to focus our limited resources where they are needed most.

[English]

Thank you, and I look forward to your questions.

The Chair: Thank you very much for those comprehensive, broad comments. Before we begin the formal questioning I have a couple of small points.

At the trilateral meeting in March, were cyber and space on the agenda?

Mr. MacKay: They were not official agenda items, but given the size and the scope of the challenge in Mexico in particular, I have had occasion to speak with the Secretary of Defense Panetta as recently as a few weeks ago in Brussels at the NATO meeting. However, it was not an agenda item.

The Chair: Our witnesses from the U.S. — looking at the U.S. defence situation, without some kind of bipartisan deal — are headed for some pretty dramatic and mandatory cuts. Was that a focus amongst the three of you?

Mr. MacKay: We did touch on the subject of budgets in all three countries. I would not be overstating it to say that there is concern amongst all of our allies about decisions that are yet to be fully fleshed out in the United States. It was not an area in which we received a great deal of information, but it was touched upon, as well as the effects it will have on everyone.

The Chair: Thank you very much for those points of clarification. We will begin our formal questioning now.

[Translation]

Senator Dallaire: Minister, gentlemen, Madam.

[English]

The strategic position of the Canadian Forces into the future has been guided so far by the Canada First Defence Strategy, as you have articulated, and there is a strong emphasis on our nearest ally, the United States. We have had people training there. There have been exchanges and we have been in the field in Afghanistan, of course.

However, the Canada First Defence Strategy has taken some hits in the form of the budgetary impact that DND has had to handle and the administrative impact of a lot of money not being spent. Plus, there is a seemingly internal matrix in this town or the process of making decisions regarding capital acquisitions. Without a clear, overarching foreign policy position, do you not see that perhaps the Canada First Defence Strategy was a good tool to crank up the initial rebuilding, but that you are seeking something more in-depth to meet the global challenges in line with your colleague, as an example, who has established a new command in Africa and who is engaged massively in special forces and that sort of emphasis?

Mr. MacKay: The clear intention of the Canada First Defence Strategy was that it would be an ever-fresh document or a foundation upon which to build, and that has very much been the case. There have been changes, obviously, and, as you have seen throughout your career, the emergence of missions and pressures within the department that caused the strategy to shift and prioritize certain missions. That was certainly the case in Afghanistan. Within that mission and within those pressures, we took decisions on a priority basis, for example, for equipment, for greater use of ISR and eventually the use of aviation assets. The critical need for helicopters was one of the recommendations that came from a panel of experts, of which the chair was a member.

I take your commentary and your question to heart. Within the Department of National Defence, we are constantly looking at the mission sets. We do so in very close collaboration with the Department of Foreign Affairs, as you would expect, on the policy front, and prioritize.

With the United States of America, it is impossible to look at the defence of North America without working hand in glove, shoulder to shoulder, whatever analogy you would like to make. We are looking at continental security, I would suggest to you, in a more rigorous fashion, with the addition of maritime approaches now under the auspices and responsibility of NORAD. We touched just a moment ago on the greater inclusion of Mexico and what that means in terms of the broader North American security picture vis-à-vis human smuggling and contraband drugs coming into the North American continent from the south of the United States. For that reason, we have, as a government, prioritized our presence and upped our game, if you will, in the Americas. Hence, we have had a greater focus as part of our strategy on working closely with countries like Jamaica. Certainly Haiti has been a foreign policy priority, along with Afghanistan, in terms of our humanitarian aid.

As a final point, I would simply say that all of these capabilities within the Department of National Defence are constantly under review to coordinate with the need with the foreign policy objectives, and in close collaboration with, in particular, the United States of America.

Senator Dallaire: Mr. Minister, the number of conflicts around the world and also the threats that are out there call for developed countries, leading middle powers like us, to look at them and attempt to attenuate them before they reach our shores. In so doing, we question the extent to which the Canadian Forces should be engaged in stability operations and capacity building in a number of those nations, not necessarily having us up front in deploying but in fact assisting regional powers to deploy more effectively so that we are held more in reserve. With the Canada First Defence Strategy, one does not get that feeling of building out there, of engaging out there and of stabilizing things out there that would help our industry and all kinds of things. In fact, helping to rebuild capacity within the UN seems to be in the forefront. That is why I feel that we are doing a bunch of things, but there is no real global, overarching perspective that puts the Canada First Defence Strategy within the policy framework that the government might want to articulate.

Mr. MacKay: With the greatest respect, senator, I would suggest to you that much of what you speak of is found in the readiness component, in collaboration with the Department of Foreign Affairs, which really has the lead when it comes to the subject of where we would engage, both in a responsive and in a proactive way, which you have alluded to. There is no question that this document is emphasizing the rebuilding or the refurbishment of the Canadian Forces as an institution to make it that formidable, deployable, reactive department for which it is well known and to which, sir, I say with the greatest of respect, you contributed to during your time in uniform.

The Canadian Forces have a well-established reputation around the world. They are well respected, particularly in the area of training and in the area of deploying to countries that need our help perhaps before a conflict reaches a fever pitch, if I could describe it that way. That has been the case throughout our history, certainly in countries in Africa, in regions that were starting to come undone. The situation in Bosnia and Herzegovina is another example.

To your point, this cannot be done by any one department. It is very much a whole-of-government approach. We have had greater success, I would suggest, in recent years in collaboration with Public Safety and with CIDA, of course, in regard to humanitarian delivery, and with other departments that are helping to build capacity in countries in a non-military sense. Look at the work that Agriculture Canada has been able to do in a place like Afghanistan where, if they have economic alternatives, it will perhaps lessen pressures that lead to conflict.

It is very much a whole-of-government approach that NATO countries sometimes describe as the comprehensive approach. That is very much in keeping with Canada's tradition, and I would suggest that there are many countries, including during this recent mission in Afghanistan, that looked to Canada's leadership in our ability to bring that type of force to bear.

Senator Dallaire: We have acquired exceptional skills and knowledge and human experience in Afghanistan. The mission will be ebbing, and God knows what will be the follow-up. If we think we are going into a country for 10 to 12 years and we are going to sort it out, that has to be the most simplistic thought in existence. You need 40 to 60 years to help some nations stabilize. We are still in Cyprus, and that is still 50 years down the road.

However, when you look at that whole capability and then you look at a whole-of-government or comprehensive approach, as you are saying, the question is the extent to which the whole government has really learned the lessons and acquired the skills to be prepared for the next potential mass atrocity or engagement that this country will be involved with. There is certainly a feeling from the lessons learned that there is a big capability within DND. However, we do not necessarily see the initiative coming from all those other departments that were essential in the field, to give them the capacity that DND is doing for contingency planning and preparing for the next time so that we do not go in sequentially but go in totally. Do you not feel the responsibility to push departments to pick up the essential requirements of building that capacity, a real capacity, within the Canadian government?

Mr. MacKay: Senator, I very much agree with you — although I am biased in saying so — that the Department of National Defence has done a very good job at looking at the lessons learned in Afghanistan. They have had to do so out of necessity. Counter-insurgency, as you alluded to, is a complex and extremely challenging and dynamic mission in the best of circumstances. Put it in a country like Afghanistan, where you have tribal tensions and a history literally being in the crossroads of chaos for decades, and it adds to the necessity for having this whole-of-government, inclusive effort. It is more than whole-of-government because it is multinational. In addition to our country attempting to coordinate different departments to have effect, you have all of the NATO countries and then all of the other donor nations. I think we are over 60 now when it comes to Afghanistan.

Canada, in my view, has done an exceptionally good job in coordinating our efforts. We have a well-established reputation of working with other countries, both on the military front and in helping to coordinate the delivery of aid. Being a contributing coalition member is extremely important to keep the reputation that Canada has established over the years, just as training, I would suggest, has become an extremely important follow-on part of our mission. We have gone from the initial deployment to a full combat mission in Kandahar province, having taken part in the command structure of Regional Command South and now undertaking what I believe you are referencing as assisting in a more tangible way the Government of Afghanistan to take on both the security responsibility and also the broader responsibility of governance, of working within their own civil service. They have a long way to go, to say the least, but I am here to say that I am extremely proud of both of the significant roles that the Canadian Forces have played in security capacity-building and now in the training mission where we are imparting upon the Afghan army and police the skills that the Afghans will need.

There is a good news story there in terms of the numbers, the professionalism and the capabilities that those security forces have taken on. There have been spectacular attacks. There have been efforts by the Taliban to reassert themselves as a force in the country, but the Afghan security forces now are taking over the full responsibility for security in almost 50 per cent of the territory of the country with a calculated, strategic plan for those security forces to expand into 100 per cent of the country by the year 2014. We are pushing toward that goal, taking onboard the lessons learned, as you referred to them, and working within the multinational and multi-departmental effort that Canada has put into this mission.

Senator Dallaire: You have given me the fourth report on Afghanistan, but I was looking more for what we are doing at home.

Senator Lang: I want to say at the outset that I think most Canadians would be proud of what our forces have been able to accomplish over the last number of years in respect to the theatre that we are involved in regarding Afghanistan. If you look at Libya, we know the results that occurred there and our involvement. You mentioned Haiti, the floods and various other domestic situations that the forces have had to deal with. We can be very proud of the work that they do.

I want to go to a topic that has been in the news for some time, and that is the F-35s. I think we are losing sight of what Canada needs to do in the future here as far as peace and security is concerned, not only at home but also abroad. That is the question of our air force and what we will do.

The last headline that I read said "Spending Scandal." I would like to get some clarification for the record. Exactly what have we spent on the F-35s, our commitment to the F-35s, and looking ahead with our allies, where are we going with the F-35s? Also, there is the fact that our air force fleet is becoming obsolete. Perhaps you would like to comment.

Mr. MacKay: First, I wholeheartedly embrace your comments about how the Canadian Forces and our men and women have distinguished themselves over their careers. They are our most patriotic, committed and courageous citizens, in my view.

The Auditor General's report in particular has drawn a lot of attention to the acquisition, which is still some years away. We are not in a contract per se; we are in a memorandum of understanding with respect to the development of the next generation of fighter aircraft.

To answer your question directly regarding how much money we have spent on the acquisition of this aircraft, the answer is zero. We have not spent a red cent on this acquisition. There has been money put into the development of the aircraft that began in 1997, when we entered into this consortium with eight other nations. There has been money spent on that development, but as far as money paid on the barrel to purchase the aircraft, there has not been a dime spent.

On the need for the aircraft, again, I think you make a good point. The reason we have to make this acquisition to replace the CF-18s is the operational requirement that the Canadian Armed Forces, that the Royal Canadian Air Force, in particular, take on as part of their daily mandate, and that is to protect North America, to participate in international missions as we have seen in Libya, as you pointed out, and as we have seen in the past in Kosovo. In the past, we have benefited enormously from having capable fighter aircraft able to defend the largest land mass on the planet in terms of responsibility; the largest coastline on the planet, with our three coasts, with the opening of Arctic ice.

These men and women in uniform, in my humble opinion, are doing dangerous work. They are literally strapping a rocket to themselves when they go into the skies to defend North America. It is my considered opinion, based very much on the advice that I receive from people like the Chief of the Air Staff, André Deschamps, the Chief of the Defence Staff and others that we need to give our men and women in uniform in the air force, the pilots, the best possible equipment on the market. Those possibilities are very limited, particularly when it comes to the most up-to- date equipment.

Senator Lang: I know we are pressed for time, so I would like to move to one other area, namely, the question of cyberdefence. You mentioned that in your opening remarks and it is becoming more and more an area of concern across the world, not just for Canada and the United States. Perhaps you could comment on that as well.

Mr. MacKay: Cyberdefence is very much a challenge around the globe. Cyberattacks are occurring with alarming frequency.

Under the guidance of the Department of National Defence, we have the CSE, which is the Communications Security Establishment. This organization is tasked specifically with protecting the information flow within the Government of Canada and also working with the private sector as well to protect information. We are also the beneficiaries of working closely with our allies, the United States, the Five Eyes community, as it is called, to ensure the protection of information as well as working in the area of intelligence. We know, as recent examples of Libya and Afghanistan have told us, that intelligence is an extremely important part of the lexicon of defending our nation, particularly when it comes to the communication flow, the passage of information between our allies. It has become a subject matter of great focus and significant investment.

The Chair: Stateside, we have seen them move to create a cybercommand. Are you contemplating that?

Mr. MacKay: We have not made any decision in that regard as yet. We have, of course, heard the clarion cries from the United States about the importance of cybersecurity. I suspect that is true of many of our defence allies.

[Translation]

Senator Dawson: Thank you, Minister.

[English]

A lot of subjects can be brought up with a minister. You have to make a choice. Trust me, I have been known to be partisan, but this will not be a partisan choice. There was a press release earlier today by The Toronto Star that made reference to the suicide rate at National Defence. As you know, I have been involved with this issue for many years. The House of Commons passed a resolution a few months ago asking for a national policy on the prevention of suicide. The Senate passed the same resolution a few weeks ago.

This rise in suicide rates means that probably after 10 years as many people have died of suicide as have died in Afghanistan. There are alarming rates of growth. Even though suicide can be sometimes seen as a provincial responsibility because of the mental health side, clearly the Canadian government has a responsibility. It is a subject that no one likes to talk about. Some people have strong sensitivities on the subject. Few politicians stand up in a room and say, "Let us talk about suicide," but the reality is that we have to talk about it. It is an important subject that must be addressed. With this rise that has occurred and with the statistics over the last few years, I think it is important that, first, we talk about it and, second, assure ourselves that something is done about it. The House of Commons and Senate adopt a policy; I hope someone will be doing something.

I am asking the minister, the one in the cabinet, but not only the Minister of National Defence. These are alarming rates. National Defence has alarming rates, and there is also an alarming rate among natives. That is of federal jurisdiction. I am asking you, as Minister of National Defence, not only to address me on what is being done about the rise in suicides in National Defence but also to cooperate to ensure that something is done about developing a national policy for the prevention of suicide.

Mr. MacKay: I want to begin my thanking you for raising this issue here. At the Department of National Defence, we do actually talk about it in large groups. We talk about it with our soldiers. I would publicly commend the leadership of General Natynczyk. I have seen him, on many occasions, with both uniformed and non-uniformed members, talk, in particular, about the effects of post-traumatic stress and operational stress disorder. I know there are members of this committee for whom this has been an enormous cause and focus of attention and time, including yourself.

What I would say to you, first and foremost, is that we have taken a number of practical steps to help address what is an alarming problem everywhere, quite frankly. This is not limited, by any stretch, to members of the Canadian Forces. In fact, I think statistics will still tell you that the rate of suicide in the Canadian Forces is lower than the Canadian average.

There is no question that the effects of deployment and, particularly, exposure to combat have a debilitating effect on the mental health of Canadian Forces members. Having said that, I want to come back to what will we do about it, which is the critical piece.

We have set a goal of doubling the number of mental health professionals within the employ of the Department of National Defence. Keep in mind that these professionals are to be made available to not only regular force members but also to reservists as well, who deployed, in some cases as many as 25 to 30 per cent, on rotation to Afghanistan. Because our reservists are spread out across the country, in some cases not necessarily attached to a base, we have to make sure that these mental health professionals are more available to them. Increasing numbers is one thing. The Joint Personnel Support Units that I referenced earlier is another critical environment in which we can encourage soldiers and members of their family.

As an aside — General Natynczyk, I am sure, will speak to this — it is often a family member or a buddy who is most apt to recognize the symptoms and the need for help. An ethos or a stigma has been there in the past and has to be addressed, and that is, "Suck it up, soldier; get through this; do not talk about it." General Natynczyk and others have very much tried to break down that sentiment and do away with the stigma, encouraging people to take it out into the light and talk about it.

The Canadian Forces were recognized by the Canadian Mental Health Association two years ago for the work that was being done in that regard.

I want to give you a couple more examples of what we are attempting to do in putting in place a network of programs that help deal with operational stress and individuals who find themselves feeling at risk or injured — mentally injured — as a result of their service. A mental injury, I can assure you — and I think you will agree, senator — can be just as debilitating as a physical injury. In fact, in some cases, it can be more so because you cannot see it. These efforts to bring in to our employ more mental health professionals, to set up clinics, and to put mental health education programs in place to simply disseminate more information about the effects of mental health and the fact that there are programs and personnel available in the department to help, mean we are taking on some of that. Raising awareness of post-traumatic stress disorder and operational stress injuries was also encapsulated in some of the investments found in the Legacy of Care, which was a specific investment to help ill and injured Canadian Forces personnel and their families deal with these issues.

I am not suggesting, for a minute, that we have done it all, that there is not more that needs to be done. However, your work and the work of other members of this committee, in addition to what we are doing, will hopefully help address mental health issues, in particular mental health issues that can lead to suicide.

Senator Dawson: Thank you. As a minister, I hope you can bring it up with your colleagues because it does fall into the cracks where everyone thinks that it is someone else's problem. I appreciate your comments, and I encourage the general to continue speaking about it because that is part of the solution.

Mr. MacKay: Madam Chair, if I may, I know that this is a particular passion of General Natynczyk, and there may be something he wanted to add to my answer.

The Chair: Please go ahead.

General Walt Natynczyk, Chief of the Defence Staff, National Defence: One suicide is too many, and we have too many every year. We are a reflection of Canadian society. Even though we filter who comes into the Canadian Forces, we know that, using the gold standard of recruitment and all of the screening, we cannot identify people who are vulnerable to mental health issues when they walk in.

I will keep my piece short, but I would offer, with the minister's indulgence, that if you wish to have the surgeon general come before you, again, he has made a huge amount of progress over the last few years. He just briefed our general flag officers and senior chief warrant officers last week. Again, education is so key here. We have put a huge amount of effort into mental preparedness and mental resiliency, even before someone gets into combat, so that they understand what will happen to them when they are under stress. You are well aware of the Cyprus decompression. Again, it is about educating them, giving them the signs so that they know what they are going through, and then giving them all of the counselling that follows. We know that those soldiers, sailors, and airmen and women are harder on themselves than others because they all have their warrior persona. The difference is that we are battle buddies to help each other out, to look for the signs of weakness. It is education, training, and supporting the families because it is the families who identify the signs before most of the rest of us.

When the minister and I were in Edmonton at the Joint Personnel Support Unit, we had 30 folks with post- traumatic stress in front of us, and I asked how many self-identified and walked through the front door on their own. The answer? Zero. It was their girlfriend or boyfriend, their battle buddies, or their parents who said, "Get in there and get some help." The sooner we can get them to help, to professional assistance, the better. We are not good enough yet; we are working hard on this.

Senator Dawson: Thank you very much.

Mr. MacKay: There is a group of wounded warriors, about 25 in number, that I saw on the weekend in Toronto who are riding bicycles across Europe and visiting the battlefields of Europe in Belgium and France. All of them are suffering from post-traumatic stress, and they have the stated purpose of raising awareness about their affliction so that others will seek help as well. There are a number of groups, organizations, and support networks out there that are doing just what Senator Dawson has stated so correctly — helping to raise awareness and education, and addressing these issues head-on, in a public, full, under-the-microscope way.

The Chair: Thank you very much.

Senator Mitchell: Minister, thank you for being here. It is great to have you.

I will get right at it. When it comes to presenting figures on the F-35 to Parliament, who signs off on that report, the final figure, the determination? Would it be you, the Public Works Minister, or the Prime Minister? Who would sign off on $14.7 billion rather than $25 billion?

Mr. MacKay: Signing off would be done by the cabinet, essentially.

Senator Mitchell: Everyone in cabinet would have known?

Mr. MacKay: Everyone — the deputy minister, the Chief of the Defence Staff — brings forward information about a memorandum to cabinet, and it ultimately goes to cabinet.

Senator Mitchell: We are all very proud of DND, the Canadian Forces, and the men and women in uniform. One of the downsides to this whole issue is that some of the negative has washed over them. I would like to try to clarify and distinguish that.

When DND and the general and his staff presented a figure for a report to Parliament, was that figure $25 billion? Was it overruled politically and made $14.7 billion by cabinet, or were they saying that that was the figure?

Mr. MacKay: As you know, the figure of $14.7 billion does not include the cost associated with operating a fleet of fighter aircraft. The additional $9 billion to $10 billion — depending on the time frame that you are looking at — includes such things as fuel, salaries and the ongoing upkeep of these aircraft. It is what we are currently paying right now, essentially. It is investments that are going into the F-18s. Transfer that figure on top of the acquisition costs, which are the sticker price of the aircraft itself which we have said is $9 billion and then maintenance costs — onboard equipment, weapons, switching in and out, various component parts of the aircraft — and that is where you get those different figures. It is a difference of accounting that has been pointed out here. To my knowledge, there has never been the inclusion of operating costs in the acquisition of a major military procurement like the F-35. It becomes more complex because this is part of a consortium and the development of an aircraft that started in 1997 under a previous government.

Senator Mitchell: I think you are trying to draw the distinction between the actual cost of the planes and the life cycle maintenance and ongoing operating costs, et cetera. Why not just say $9 billion? If you are to go to $14.7 billion and include some of those additional life cycle costs, why not go right to $25 billion and in addition why not consider attrition on the 14 you will likely lose given averages in that regard? I do not get it. If you are not to include additional costs, why not just say $10 billion or $9 billion for acquisition?

Mr. MacKay: That is essentially what we have said. We are pointing out that this request by the Auditor General to now include these operating costs is not how military procurement has been done under our government or under the previous government. For example, for the last major procurement of military helicopters — the maritime helicopter contract which was plagued with a number of problems in the acquisition — we still have not taken delivery of them. That presentation to Parliament, factoring in various costs or the mode of estimates, did not include the operational cost of the aircraft because we are still flying Sea Kings.

Senator Mitchell: You are saying if you are going from $9 billion in acquisition to $14.7 billion the different there — the $5.7 billion — is not acquisition costs.

Mr. MacKay: It is maintenance costs.

Senator Mitchell: If you include those maintenance costs, why did you not include the additional $9 billion?

Mr. MacKay: Maintenance costs are different than the cost for salaries, fuel. The different costs associated with maintaining the current fleet when it comes to our personnel and fuel, et cetera, and enablers were never included.

Senator Mitchell: When it comes to the question of how much of this money will be spent in Canada to create jobs, can you give me an idea of what that would be?

Mr. MacKay: That would be a question more Industry Canada. That is outside the purview of National Defence, just as the ongoing efforts to now take this procurement project and present it to Parliament through this seven-step plan. We are going to increase accountability, increase the transparency and increase the opportunity for people to look at all of the various estimates that arrive at these figures. They are staggering figures because it is money spent over an incredibly long period of time.

However, I come back to the question that was asked earlier by Senator Lang: the need for the aircraft and the importance of having fighter aircraft to defend our sovereignty, to participate in international missions and, most importantly, to protect our pilots. The modern aircraft as we know today is an extremely technically proficient aircraft. Having that type of equipment is what enables these pilots to do this very difficult, very dangerous work in protecting Canadian airspace, participating with NORAD and NATO missions, as we saw over Libya.

Senator Mitchell: You said it is important we get the best equipment.

Mr. MacKay: I believe this.

Senator Mitchell: I do too, but how do you know it is the best because it is not even made yet? What do you do if it is not the best?

Mr. MacKay: These aircraft are flying now.

Senator Mitchell: They are not flying particularly well.

Mr. MacKay: They are a development aircraft that has been —

Senator Mitchell: We know that they are the most expensive. We do not know they are the best.

Mr. MacKay: We know they are the only ones available to us, quite frankly. As you would expect, I take a lot of advice from departmental officials who have either flown simulators or aircraft like this and who have examined the specifications. In terms of going forward, Public Works effectively has control over this future procurement which, as I mentioned earlier, has not spent money, has not signed a contract. Perhaps this is something that sometimes gets lost in the detail here, but there is no money missing on this file; not a dime.

Senator Mitchell: The whole question of procurement now, the ships, that process was supervised by Public Works with a good deal of success; no political involvement it seems. Now we see that the CCVs and the F-35s will be taken over. The concern that one would have is what the role of DND will be in this and what will that relationship be? Will we get that expertise or just flip over the other way?

Mr. MacKay: That is a concern that I have as well. We want to ensure that we are feeding into this process the specifications for the type of vehicles or aircraft or replacement ships, in the case of the new combat vessels. That will be the case. There will be a steady flow. Part of this seven-step plan that you are probably aware of outlines exactly how the various departments will come together with this secretariat. There will be deputy ministers from all of those departments, plus the additional oversight from an outside independent agent. These individuals, in the case of the F-35, are yet to be named. However, we have a fairness monitor that was very much part of the success of the national ship building procurement strategy.

I think having a set of outside eyes helps with the credibility and the verification of numbers. Taking this at its whole, we recognize that the Department of National Defence has to work closely with these departments because there are very separate roles applied. The role when it comes to Public Works is very much into the detail of working with, in this case, the government of the United States and Lockheed Martin to ensure that the contract has met certain criteria before it is signed. To that end we have frozen the funding envelope. Not only has the $9 billion acquisition cost not been spent, but it will not be spent until these seven steps have been met. That is the guarantee we have given to Canadians and to Parliament to ensure the oversight, transparency and credibility when it comes to this acquisition.

The Chair: Thank you, minister. We are almost out of time and I have two more senators who want to speak.

Senator Nolin: Minister, are you worried about the budget cuts in the U.S. and the effect of those cuts on our continental defence relationship?

Mr. MacKay: Let me put it this way: I do not have full fidelity on what the impact of the budget reductions in the U.S. are. We normally do not comment on the specifics, if I had them.

I am concerned and I have seen that the U.S. disproportionately carries the load for many other countries, particularly when it comes to our NATO partners. I know this is a preoccupation of yours. The subject of burden sharing is constantly bandied about in the hallways of NATO and Brussels. The United States has tried to send a signal to their NATO partners that we should not be worried. However, they are expecting greater partnership and participation in missions. They have been calling for that for some time. On many occasions I have witnessed Secretary Gates and Secretary Panetta clearly spell that out.

Senator Nolin: I remember more than two years ago you and Secretary Gates were shocked by the increase of the budget in Afghanistan. You specifically gave an order to the secretary-general in Brussels to streamline the operation of NATO. Are you happy with the results and seeing those major budget cuts in the U.S. and what happened in Chicago?

Mr. MacKay: Put it this way: There is clearly still work to be done at NATO itself as an organization. NATO reform is well under way, and there are some encouraging signs when it comes to the structure and the cost of the organization itself. It is not a perfect organism, by any means. However, like the UN, it is better than all the alternatives, I suppose. What differentiates NATO from the UN is that it does have the ability to operationalize and to actually back up some of these pronouncements.

NATO itself, as you just mentioned, will be meeting for the first time in North America in many years. Part of the subject matter there will be how NATO continues to play a relevant role in global security and how we continue to respond to out-of-area operations, as we have in Afghanistan, in a way that is more efficient and effective and that frankly shares the burden more evenly across NATO partners.

I will give you another example. Libya was not a full participation NATO mission. Only 9 of the 28 NATO countries participated there.

Senator Nolin: We had new partners.

Mr. MacKay: That is a very good point. New partners outside of the current configuration of NATO is something that Secretary Panetta and previous secretaries of defence from the U.S. have emphasized. Canada is one of those very reliable, robust defence partners that NATO looks to. This goes beyond just NATO. It pertains to our participation in the Americas, in Mexico and in our efforts in our own backyard to increase our security capabilities.

Senator Day: Minister, I would join my colleagues in complimenting you and your team on the leadership that you have shown on a good number of issues with respect to national defence over the past few years.

Mr. MacKay: Thank you, senator.

Senator Day: However, there are a few points that I might be able to delve into and I would like to give you an opportunity to expand upon, in particular your comments and your emphasis on the ambitious plan to recapitalize, which should lead us into acquisition policy.

I am aware and I think all my colleagues here are aware that in 2010 a strategic review took place as to expenditures within DND and other departments, but specifically DND in this instance. In 2011, a Deficit Reduction Action Plan took place. There are additional reductions planned in the budget that came out in 2012. There are three areas of reductions in spending. I am worried that much of the work that has been done in increasing the budget of National Defence may be in jeopardy here because roughly $2 billion will be taken off the base budget over a period of three years.

In addition to that, in the budget that came out, I will refer you to page 223:

In order to ensure that funding for major capital equipment procurements is available when it is needed, the Government is adjusting the National Defence funding profile to move $3.54 billion over seven years into the future period in which purchases will be made.

That is $3.5 dollars plus over $2 billion that will be cut right off the budget and then re-profiling $3.54 billion. Can you help us with respect to this re-profiling? What will that do to these acquisition announcements that have already been made? I will not talk about the F-35s. Let us talk about ships and that program.

Mr. MacKay: Thank you very much, Senator Day. I appreciate your enthusiasm for the recapitalization of the department because I think that is obviously one of the key enablers. They have to be able to get where they need to be. When they are there, they have to be protected. That remains very much the focus under the issues that pertain to procurement — getting this equipment in many cases into theatre, as was the situation in Afghanistan, when it is urgently needed. I can say unequivocally that the ability to get helicopters, Chinooks, Leopard 2 tanks, and M777 heavy artillery into theatre saved lives and prevented the loss of other lives. There is a critical and urgent component to recapitalizing.

The first point I would make is that we have seen an increase in the Department of National Defence's budget by over $1 billion in the last six years, consistently, every year. The budget has been on an upward trajectory, and that has caused growth across all of the pillars — personnel, equipment, infrastructure, readiness. On the infrastructure side, we have seen a lot of investment across the country in bases and places where they train.

On the equipment side, we have 14 major procurements under way, and much of the delivery of these major procurements, as I mentioned previously, was accelerated because of Afghanistan. We have seen the Globemaster, the C-130 Hercules, the Howitzer and medium- to heavy-lift helicopters, Chinooks, brand new ones, that will be coming into use in the very near future. We have seen procurement, as you referenced, in terms of the shipbuilding. That is over a long period of time. These are not off-the-shelf procurements, as you are aware. These are very high-tech ships that will be built right in Canada, and there will be tremendous industrial, regional benefits felt across Canada, not just on the coasts, because of these new ships. Then we have both the fighter aircraft and the fixed-wing search and rescue aircraft that, out of necessity, have to be replaced.

Some of the deferred payments that are a result of the late delivery of the maritime helicopters account for this money that had to be brought forward. The company in question here, Sikorsky, was not able to deliver those helicopters when it was supposed to. As you would know, Defence has the added burden of not being able to carry forward in its budget the same amount, the same percentage, of other departments because of the sheer size, 20-plus billion dollars of annual budget. The Department of Finance, with reason, has said, "You cannot carry forward the same 5 per cent and upwards of 5 per cent in other departments. You have to live within a certain budget." On major procurements, over many years, this is very difficult. Someone made the comment to me that it is like trying to land a jumbo jet on an aircraft carrier. You are trying to land a huge budget annually that sometimes projects out over many years in terms of the procurement.

In answer to your question, some of the adjustments that have been made in this budget will allow us to carry forward and account for some of these procurements, like the maritime helicopter program that has been lagging. On these other ones, F-35, no money spent, no contracts signed, no money missing. That is a process that will see tremendous and rigorous and comprehensive review before the budget is unfrozen.

Senator Day: Minister, we have learned that the close combat vehicle contract process just fell apart this weekend.

Mr. MacKay: I am glad you raised that one, because the system worked exactly as it should.

Senator Day: I am wondering if it fell apart because of a tightness in money and therefore you say we will just not have this go ahead now and we will put it off, or did it fall apart because of some procurement issues?

Mr. MacKay: There has been a pause now in this particular program. The process works such that companies bid and then a rigorous testing has to occur. When it comes to combat vehicles, there is a high demand of proficiency in a whole range of criteria, including the thickness of the hull and its ability to withstand blasts, accuracy of the guns, whether there is egress, that is, does the vehicle move when in parking mode and people's ability to exit the vehicle through hatches. All of this and more make up a rigorous testing process. What happened here is that none of the vehicles were found compliant.

With that being the case, the last thing we would want to do is politically interfere and say, "Ignore those criteria and move ahead with the procurement." This process worked exactly as it should, and it was overseen not by Defence, who could be accused of some bias or trying to say, "Just move it along because we need the vehicle," but it was overseen by the Department of Public Works, as it should be.

Senator Day: Is that not the same vehicle that is used for the same purpose by our allies and is it compliant, or did DND put special requirements in there?

Mr. MacKay: DND puts in place the standards they feel they need based on recent experience in Afghanistan, particularly on the protective side. The scourge of IEDs — I do not need to tell you as you follow these issues closely — has to be the primary concern, if not the driving factor: survivability inside a close combat vehicle when it comes into contact with explosives.

Senator Day: I would like to talk about the dollar aspect. I would like to follow up on the other, but we do not have time.

The Chair: Please, one brief question.

Senator Day: There is a major re-profiling of over $2 billion, $2.9 billion, because of lapsed expenditure. Can we assume that because of the tightening up of activity, you have $3.5 billion re-profiled away off into other years for capital equipment? There was a lapsing of $2.9 billion. That is a lot of equipment over time. Can we assume that things have been tightened up enough and that you have all the tools to allow for this lapsing to be reduced significantly? The lapsing is happening because the procurement process is much longer than we thought or, as in the close combat vehicle, it falls apart and we have to re-bid and therefore it did not happen as quickly as we had anticipated?

Mr. MacKay: Or, as I described, in the case of the maritime helicopter program, private-sector companies did not meet their obligations. That is why it is outside the purview of National Defence, but it is written into many of these contracts in the final analysis that there will be penalty provisions because it does force the Department of National Defence to essentially eat the cost of the delay and give the money back, as you suggest, re-profile the money, give it back to the department or have it lapse and then find it in next year's budget. It is a challenge. Our deputy minister and our chief financial officers are doing everything in their power to ensure that this does not occur in the future. We do have a little more leeway now. The percentage of carry-forward has been increased somewhat to 2.5 now.

Gen. Natynczyk: It went from 1 per cent to 2 per cent.

Senator Day: Operations and capital, or is that just in operations?

Mr. MacKay: That is the overall budget carry-forward. The difference between 2 per cent and 5 per cent in the Department of National Defence is enormous, based on the size of our budget.

Senator Day: If we can make recommendations that may help you in avoiding this lapsing, if you could move more money from operations to capital or capital to operations, when things change, are there any recommendations or suggestions you can make to us that we could help avoid this kind of thing?

Mr. MacKay: We are always open to recommendations. I know you have in the past done extensive studies on transformation, for example, with recommendations that come forward to the Defence Department, so we welcome your input on procurement, on the suggestion that we can re-profile capital. We are certainly open to your committee to come forward with recommendations.

The Chair: We will take you up on that. Thank you very much.

Senator Day: A hard rap with respect to procurement, quite frankly, and I think some of the suggestions of creating a separate entity for procurement that might possibly take some of the pressure off one department or the other is maybe the way you are thinking of going, when we see this special joint group that you are doing for the aircraft.

Mr. MacKay: Depoliticizing it has been one of the major by-products of that process, but as a final point, procurements are by their nature very complex. This is not simple when it comes to all of the calculations, the inclusion of, first and foremost, what is needed by the military, and bringing the Canadian component in, which we inevitably try to do through Industry Canada. All governments are mindful of the fact that you want to see benefits accrue in industry throughout the country. Add to that fact the specifications that have to be met to be technically proficient when it comes to aircraft.

We did not touch on submarines. Submarines are as complex as the space shuttle when it comes to all of the moving parts and the complexity of the components that make up a modern-day submarine.

Many governments of many political stripes have been challenged by procurement. The bottom line is this: I take it as an obligation, as Minister of Defence, as I think anyone in government would, to provide the best equipment to allow mission success, to protect our men and women who have the courage, the patriotism and the desire to serve, and put them in a place where they can succeed and come home from those missions safe to their family and their country.

The Chair: Thank you very much, Mr. Minister. We appreciate your time and your willingness to stay with us for a few extra minutes. CDS General Natynczyk will stay with us, along with Vice-Admiral Bruce Donaldson and ADM Sinclair.

We will continue our discussion on the Canada First Defence Strategy, the Canada-U.S. relationship, transformation, and many related topics.

We have a series of guests here today. I will go through the introductions as quickly as I can because most of the faces are familiar. Of course, General Walter Natynczyk, the Chief of the Defence Staff is with us, and we are pleased that you have continued to stay with us. Vice-Admiral Bruce Donaldson, Vice-Chief of the Defence Staff, and Jill Sinclair, Assistant Deputy Minister of Policy, are also here. Thank you for staying with us. We also have Major- General Jonathan Vance, Director of Staff, Strategic Joint Staff. Welcome. You are another familiar face at the committee.

I would also like to welcome Rear-Admiral Ron Lloyd, Chief of Force Development, and Chief Petty Officer 1st Class, Robert Cléroux, Canadian Forces Chief Warrant Officer.

Thank you and good to see you.

Gen. Natynczyk: I am pleased to have the opportunity to provide additional information in support of the minister's appearance. The team here are all those folks who provide me with all the great advice, and I want to highlight again Jill Sinclair, with her great policy support, and Canadian Forces Chief Petty Officer 1st Class Robert Cléroux, who travels wherever I do and gets a feel for what the soldiers, sailors, and airmen and women are thinking every day.

In his remarks, the minister gave you an update of the Canada First Defence Strategy.

[Translation]

Since July of that year, it has been a demanding period for the Canadian Forces. In support of our ongoing operations and training, our focus within the Canada First Defence Strategy has been upon securing the force of today, to enable the efforts of our men and women in harm's way.

We have also made strides in providing them the equipment they need to succeed in future missions around the world, and at home.

Finally, we have placed a news emphasis on caring for our ill and injured, and support to their families.

[English]

The Canada First Defence Strategy has been a constant guiding force in shaping our efforts to achieve these fundamental objectives. However, there have been other influences in the process, and I would like to discuss those today. In particular, I want to describe the operational situation and the fiscal picture, as I see them, and briefly discuss how we are responding to them. In recent years, the men and women of the Canadian Forces have successfully conducted numerous operations at home and abroad. As you heard here moments ago, over the past few years we have had a high level of operational tempo with the Vancouver Olympics, the humanitarian assistance in Haiti, the protection of civilians in Libya, and the Enduring Freedom Operation in Afghanistan.

On an ongoing basis, we continue to respond to the needs of Canadians during domestic disasters, floods, forest fires, and even hurricanes. Day to day, the men and women of the Canadian Forces stand ready to answer the call for air and maritime search and rescue. We have just completed, as we speak here today, a successful search and rescue 80 miles east of St. Anthony's. In order to maintain our territorial sovereignty, our people are patrolling the skies of Canada on a daily basis, and we assist both provincial and municipal governments.

Internationally, Canadians can be proud of the courageous service of our men and women who have served in combat in Kandahar. Last year, we closed our mission there and transitioned to NATO's training role, centred in Kabul.

We also maintain contingents in support of the UN in Africa, the Middle East, and Haiti, and our ship, HMCS Charlottetown is sailing in support of a coalition effort to counter terrorism.

However, with the close-out of our task force in Kandahar, Canada's international commitments are currently at the lowest they have been for many years.

Our priority remains to deliver on our enduring operational commitments, both here at home and abroad. Since we cannot predict the next operational challenge for the Canadian Forces, we need to institutionalize the lessons we have learned from past operations and become more efficient as a military, enhancing our agility to prepare for an uncertain tomorrow.

During this period, we are focusing our efforts to enable the readiness, sustainability and responsiveness of the Canadian Forces. In some cases, this involves replacing or modernizing capabilities that have served us so well in recent operations. In others, the challenge will be to develop, procure, and integrate new equipment and technologies to respond to evolving security threats. In all respects, these measures would have been taken even if Canada's economic situation had remained unchanged since 2008.

The changing fiscal climate, particularly the department's budgetary reductions announced recently, has added a significant degree of complexity to our task and has made the current situation more difficult to navigate. To deal with this, we are working to balance the changes necessary to make the Canadian Forces more efficient with the investments we need to continue to make to maintain a modern, agile, and ready combat-effective force. For example, we are reorganizing command and control structures and adopting better practices in the way we administer and manage the force. We are consolidating our recruiting centres across the country and better leveraging e-recruiting, a system that has been quite successful for us. We are transferring the functions of several of our Area Support Units to nearby bases to reduce infrastructure costs, and we are reducing some of our individual training programs. At the same time, we are bringing our personnel costs back into balance, partially by reducing the numbers of public servants, contractors and full-time reservists. We are divesting ourselves of older equipment, such as the ADATS system and the older Leopard 1 tanks. Throughout these changes, we are placing the priority on tactical and operational units, while reducing the number of Canadian Forces members assigned to the national headquarters by about 25 per cent.

The overall goal of these efficiencies is to allow the Canadian Forces to continue to operate within the limits of our funding while minimizing the impacts of a challenging budgetary environment on the four pillars of the Canada First Defence Strategy — personnel, infrastructure, readiness, and equipment.

The leadership of the Canadian Forces recognizes today's fiscal imperatives. We are committed to operating within our means. Our duty is to maximize the value of funding on defence. In this way, we will provide for the security of Canada and Canadians and will continue to contribute to international peace and security.

Madam chair, the last few years have been steadfastly positive for the Canadian Forces.

[Translation]

We have a highly motivated, world-class, professional, and disciplined force. Much of our equipment is modern and battle-proven. Our men and women in uniform work tirelessly both here at home, and abroad, on behalf of all Canadians. This dedication is repaid by the bond between Canadians and their military, and by the trust and confidence placed in the men and women of the Canadian Forces.

[English]

As Chief of the Defence Staff, my priorities remain the same. The first is to sustain the force of today, a force that has great experience in combat. The second is to build the force of tomorrow. The third is to take care of our people. When I say that, I include the wounded, the ill, the injured, the families of our fallen, and all of our families. We are making difficult decisions to ensure the Canadian Forces of tomorrow has the capabilities and the structure our men and women need to be successful and to ensure that the Government of Canada has an appropriate range of options with which to respond in the future security environment. Transformation is never easy, and we need to be mindful that the future is unpredictable. That said, I have confidence in the dedication and professionalism of our men and women, supported by their families. Their morale is good, and, while the uncertainty that has, until recently, surrounded the SR and the DRAP cuts has been difficult, they are adapting well to these changes that have been announced. The men and women of your Canadian Forces understand that the transition I have described is essential if our country is to maintain a military that can continue to deliver on the defence and security needs of Canadians.

Madam chair, I stand ready to answer any questions you may have.

The Chair: Thank you. Could you comment briefly on whether either the strategic review or the budgetary review, the DRAP process, has changed the direction of the transition or perhaps sped it up?

Gen. Natynczyk: I think that it has just renewed our energy towards the transition and transformation. My experience from the 1990s is that we had a tax across the entire Canadian Forces. What I wanted to make sure, in this effort, is that we safeguard our operational and tactical capability, those ships, squadrons, and battalions, and that the rest of us make the efficiencies to enable the operational output of our regular, reserve, cadet, and ranger organizations.

The Chair: It did not provoke some kind of, "We have to rethink this idea we had about where transformation would take us?"

Gen. Natynczyk: I started the transformation two years ago this month, bringing General Leslie into the office and saying, "I can see storm clouds on the horizon. I need you to work on some of this stuff so we are ready." We anticipated what might be occurring here and we are safeguarding that operational output.

The Chair: Thank you very much.

Senator Dallaire: If you do not mind, I will go through the questions rapidly because they are interconnected, and then you can decide how to respond to them.

First, why did vote 5 money stop being pushed to vote 1? What is the impact of losing about $500 million a year in that area because that money is simply not spent?

What sort of impact has the budget had on your capital program, meaning how many projects have been moved to the right, down-scoped, or cancelled. What would be the impact of those on your continued enhancements of the forces, let alone picking up the equipment that needs to be refurbished under O&M?

Under the NATO-itis that we seem to have these days, there are far more complex scenarios being played out by the UN which we have literally abandoned. I have met officers in the Congo, in South Sudan, in Uganda and the Americans. There are 45 or 50 officers engaged in the UN when there are 100,000 in those missions. It seems to me like there is enormous capability that we could be doing in building capacity in those nations, in those missions, helping reform the UN, but specifically, go down the route that AFRICOM is going and put more than a colonel there.

Gen. Natynczyk: Thank you for the questions. I will touch on the UN mission and then ask Vice-Admiral Donaldson to pile on to the "programmatics," which is his domain.

Over these years we have placed key officers, key leaders into UN missions where they can make a difference. We started the Congo in 1960; we started some of these operations in the Middle East in the 1950s. Over time we have found that putting people into the right jobs has had an exponential impact on those operations, in my view, whether it be the team of five in Haiti, eleven in Congo, folks in Sierra Leone or the United Nations military observers in Sudan. We still have people with UNSO, since 1953 with UNIFIL and key officers working there with the international community.

At the same time, I want to applaud the Assistant Deputy Minister of Policy, Ms. Sinclair, with the military training and capacity program. We are bringing these foreign officers to Canada to train and that continues on. We not speak enough about that. Similarly, we send officers down range. We are capacity building as we are in Sierra Leone. The question is at what level?

During this last year and a half to two years of operational tempo — especially in the winter and spring of 2010 with operational commitments and training for operations — we had 12,000 folks committed. Our tempo was pretty high. I remember when we looked at reducing our presence on the Golan Heights with Camp Maple Leaf. You remember the logistics battalion we had there. There was invisible tax across the force, so we did not have coherent units going down range to do the business. The question is where we have the most effect from having Canadians contributing to these missions to create capacity long-term. Now that our operational tempo has changed, clearly the Government of Canada has different options now than they did in 2010. That is beyond my remit to comment further on that.

Vice-Admiral Bruce Donaldson, Vice-Chief of the Defence Staff, National Defence: Our priority is to be successful in the recapitalization of the Canadian Forces.

In terms of the effect of the change in policy in terms of transferring vote 5 into vote 1, it has not been that big of an effect on the recapitalization. In terms of managing your money, it has given us less flexibility.

At the same time, with the advent of accrual budgeting and as we get more used to managing in an accrual environment, we are encouraging more of our vote 5 expenditure to be put into accrual because it is easier to shift the expenditure on an accrual basis when you are not dealing with a 365-year period of a bank account that then gets flushed. We are getting better at managing this as we go forward.

As we look at this, the key is — and as the CFO told you last time I was before the committee — there are a couple of things that we need to continue to work on. One is the process of procurement. It is cumbersome and not serving us as well as it could. We have a lot of process reform initiatives under way to try to speed up our capability to get program through the various departments to approval and then into actual contract and delivered into the force.

We need to look at the rule set under which we are managing the money in order to recapitalize. As I have said, we are looking at trying to put more of our vote 5 into accrual. We are also looking at carry-forwards and a number of different mechanisms.

The re-profiling that was mentioned earlier in the line of questioning was an example of making better use of the rule set in order to deliver the vote 5 money when we need it, in accordance with our ability to deliver programming.

The recapitalization program was pretty much left aside in the strategic review and in the deficit reduction action plan. The former dealt with our lowest 5 per cent performing and priority which was existing program. It was a $1 billion reduction in program as it existed. The recapitalization was not affected by that.

Deficit Reduction Action Plan was putting forward 5 and 10 per cent options for decreasing the operating budget by increasing efficiencies. Once again, the capital program was not affected. Downstream, with accumulative effects, we will have to be more innovative in managing the cost of ownership of equipment. We were talking about gas and salaries, these types of things. In a reduced financial envelope, there will be work that we will have to do to ensure that we can continue to get best value out of the money that we have in order to run a recapitalized Canadian Forces. In terms of the budgetary effects on the recapitalization program, it was more or less spared. I hope that answers your question.

Senator Dallaire: I do not know how you can say 500 million bucks a year not going to vote 1, that you can absorb that reasonably.

However, does this mean that your O&M budget has taken some awful hits and that means training, exercises, ammunition and keeping the professional veterans that you have at a tempo that they still want to serve and feel that they are being useful, or has O&M not been hit? If it has not, then it has to be personnel, and I do not think that is.

Gen. Natynczyk: We are ensuring that we are looking for efficiencies across the board so that those tactical and operational units can go to the field, go to sea, fly and maintain their operational capability, and look at how we train so that we are ensuring that it goes to the operational output as opposed to a lot of the logistics movements and those kinds of things.

Senator Lang: I would like to go back to your opening comments. You outlined four examples of what is taking place as far as the reorganization is concerned. You talk about reorganizing command and control, consolidating recruiting centres — that can be left to the side, I think — and you talked about transferring the functions of several of our Area Support Units to nearby bases.

Perhaps you could outline to us in a more definitive way exactly what you are doing in this area as far as what your plans are looking ahead.

Could you also update us in respect to the reserves? As you know, we did an in-depth report on the reserves and presented in the fall. How do the reserves tie into the reorganization here?

Gen. Natynczyk: We have small cadres of people who will remain in places like Chilliwack, Calgary, North Bay and Moncton who were proving support to the reserves in the area, for the most part. We are transferring those functions to the nearest base, again, to reduce the amount of overhead and personnel costs at each one of those locations and, at the same time, be as seamless as possible in terms of the support provided to all of the dependencies those folks have — for example, from Chilliwack, transferring the functions either to Esquimalt or to Edmonton, whatever makes best sense in terms of the dependency. That is what we are doing across the country to become more efficient. In that regard, my sense is that we are moving down the right path.

What we are trying to do in regard to the reserves is bring us back to where we were in 2006 when we were at a steady state in terms of both the full-time reservists and the part-time reservists. In 2006, before operations really kicked off into Kandahar, we had about 4,500 reservists on full time. Because of the operational tempo, especially when we had the concurrent operations with the Olympics and Afghanistan and then Haiti blew up in the middle of that, we had in the order of 11,000 full-time reservists. Then, again, operations were at the highest level since, I would way, the Korean War. Right now, we are down to in the order of 1,300 folks off-shore in operations. We are putting ourselves on a diet.

What is the right number of full-time reservists as opposed to part-time reservists in order to ensure that the priority goes to the training of those part-time reservists? The vice led a team and a study and we said the number is validated now to about 4,500. We are on a glide slope back to that so that we ensure that money is going towards not only the training of the part-timers but that we have full-timers on the floor contributing to the training of those part-time reservists.

Senator Lang: If I could go to another area, in view of the transformation that is going on, how will that affect what you do up in the Arctic on your annual exercises?

Gen. Natynczyk: The exercises in Operation NUNALIVUT and Operation NANOOK?

Senator Lang: Yes.

Gen. Natynczyk: From my point of view, the operational tempo we have in the North and the northern patrols should not be affected at all, not only on the three major operations but just the normal sovereignty of patrols, the ranger patrols, junior ranger programs. At this time, I do not see anything that would affect the tempo of the operations in the North.

The Chair: You mentioned in your opening statements that you would see reductions at HQ of about 25 per cent. Can you expand on that?

Gen. Natynczyk: We are looking to the Canadian Forces structure, army, navy, air force, and the director of staff, and looking at the operational headquarters as well. We are taking the hit at the strategic level in order to invest in the operational and tactical level. As we reduce the full-time reservists, we want to cascade down the regular force that are at the national level, again doing great work because of the operational tempo these past few years, and cascading down those regular force to fill in the slots vacated because we have reduced the number of full-time reservists, as we need to do with this new operational tempo, while at the same time achieve the efficiencies such that we can enable readiness of the force.

The Chair: Thank you for that clarification.

Senator Plett: General, I want to add my vote of appreciation to everything that the Canadian Forces is doing both abroad and domestically. I am from Manitoba, and we are so happy that we do not need you there this spring.

Vice-Admiral Donaldson: Spring is not over yet, senator.

Senator Plett: It will have to be a hard rain. Of course, grass fires are starting, so we might ask for your help in something along those regards. Thank you so much for what you have done.

I want to pull out a few comments that you made and then ask two questions. You say that Canada's international commitments are currently at the lowest that they have been in many years, but you further go on to stay that we cannot predict the next operational challenge for the Canadian Forces. You are trying to become more efficient as a military while some dollars are being cut, and all of these things bring challenges. My question is based around equipment. Again, you say much of our equipment is modern and battle proven. I am assuming some of that equipment is also battle worn. You are dealing with the Leopard 1 tanks and so on.

Considering Budget 2012, as the Minister of Defence and Senator Lang both rightfully said, we need to keep up our equipment, as we are with the F-35. Others are trying to politicize that and get into debates over that. In light of this, how can you ensure us that the Canadian Forces will continue to acquire the equipment and the machinery that we have done so well in the last years and, considering budget cuts, how will we be able to continue with that?

Gen. Natynczyk: Thank you for that question. In the acquisition process, the Canadian Forces provide military advice. We do not actually acquire equipment. All we do is provide our best experience, the best knowledge that we have in terms of the requirements for our men and women and what they require over the next 40 to 50 years. Again, the acquisition process, as the vice mentioned, as we had in our session with the minister, goes much beyond the Canadian forces and the Department of National Defence. It goes to all of government. All we can be is a strong a team player as we can be to provide the information to all of government to make the decisions on the equipment.

We have had great support from government. I lived through 2006 to 2008 as the vice and since 2008 as the chief, and I consider how far we have come on enhancing our light armoured vehicles, the LAVs, and not only in combat. I just visited the assembly line in Edmonton, Alberta recently, where we are taking all those LAVs that have been used hard and loved in combat, and they are going through a modernization program that is absolutely extraordinary, similarly to the tanks that we had down range or the artillery pieces we had down range. We are refurbishing this equipment to get it back to the troops to be ready for the next one.

The Hercules aircraft had done yeoman service in Afghanistan, came home and were decommissioned. They were replaced by a brand new C130J aircraft. They were purchased in the 1960s and are being replaced by aircraft that are brand new and so extraordinary, like the C17 Globemaster. I have visited both the East Coast and West Coast to see HMCS Calgary on the West Coast, HMCS Halifax on the East Coast going through the modernization. What we are seeing is a tremendous amount of effort to modernize the force. What we are hearing, unfortunately, is that those programs have a challenge, for whatever reason, whether the firms cannot provide the kinds of products that pass all the tests or we have process issues. The men and women who are in the units are seeing a lot of good equipment arrive.

Senator Plett: My next question is more general and is in regard to Afghanistan. We have seen, without a doubt, the level of commitment and the professional forces that we have in our men and women, from the privates all the way through to yourself. We can take such pride in our men and women in uniform.

Could you tell me what is the present day situation? What is the status in Afghanistan right now? How are we doing? Are we succeeding in the training that we are attempting to do? Could you give us a bit of a bird's eye view of that?

Gen. Natynczyk: I would say to you that our men and women are doing extraordinary work. I will say, as you might have heard me say before, man for man, woman for woman, we do not take a back seat to anyone.

The level of professionalism, training and discipline in our men and women, no matter where they go, is world class. We set the standard wherever we go. That is why our allies want more of Canada, want more of our men and women. The Afghans, as we saw both in Kandahar now and in Kabul, have such great respect for our men and women because, indeed, we respect them. I am not sure what it is, whether it be the education in this country or that we represent a multicultural mosaic, but we have a Canadian secret weapon and that is Canadians with a smile and friendly handshake. We build trust and confidence wherever we go. That is having a huge effect in Afghanistan, as we train the men and women of the Afghan security forces, both police and army.

Right now, the Canadian contingent under the command of Major-General Mike Day is doing extraordinary work here. The Afghan security forces, both police and army, have now passed through the 300,000 threshold, going to 320,000, going to the end state. Not only do we have numbers, but we have quality.

I cannot underline enough the quality of education. Tens of thousands of Afghan police, soldiers and airmen are going through an education program to give them the ability to read and to write. That is an extraordinary enabler such that they can call for fire if they need fire, call for assistance if they need it, or know how much they are being paid. We are seeing the enhancement of the professionalization of the force.

One thing that they have in spades is courage. They have a huge amount of courage. If you can enable that courage with knowledge, experience and education, they will be able to defend their country.

What we are seeing now is that they are leading in 40 per cent of all operations totally on their own. We are anticipating them moving that up quickly. In fact, I will ask General Vance to fill in some blanks.

Major-General Jonathan Vance, Director of Staff, Strategic Joint Staff, National Defence: The training mission, as the chief says, is proving extremely successful with the Afghan forces, basically doubling in strength since we have been in Afghanistan.

The aim is to effect complete transition in the post-2014 environment where Afghan forces are running all missions themselves with a modest security force assistance program in place that is provided by NATO, including the U.S. forces that will remain after 2014, which takes us out of the game of planning and running counter-insurgency operations and them assisting, with them doing their own final acts of the counter-insurgency effort with some security force assistance in place.

I would finish by saying that there is a lot of press right now about the drawdown of numbers. This is a quite natural end state to conflict. It can be used as a political weapon. The fact is that the surge recovery was forecasted when the president set the surge. He said, "I will surge, and then I am going to take the surge home, so make best use of it." General McChrystal and General Petraeus did, and General Allen after that. That surge will come home and quite logically hand over or transition 50 per cent of the country now.

North RC capital and RC west are in the hands of the Afghans; RC south and RC east are next. It is a big challenge. It does not mean that the troubles will be over, but are they manageable by Afghan forces on their own? The answer will be yes. That is the intent.

Gen. Natynczyk: Let me cap off that with the last spectacular attack in Kabul, it was the Afghan security forces who took control of that and sorted it really quickly and professionally; again, another indication of their professionalization.

Senator Manning: I certainly echo the comments of my colleagues here in saying that we are proud of the work our men and women in uniform do each and every day. Certainly, over the past couple of years we have been drawn much closer to our Canadian Forces.

In your opening remarks, you talked about an issue close to my heart, being from Newfoundland and Labrador, with regard to search and rescue. Many stories of great rescues have been made and they usually do not make the front page of the paper. It is the ones that we have problems with that seem to be in the headlines.

We have seen some in the not-too-distant past, in relation to the death of a 14-year-old boy in Labrador as an example. The level of confidence in search and rescue — and I understand the provincial jurisdiction versus the federal jurisdiction and so on — is an ongoing concern. The minister has spoken many times on it and has given some assurances that each and every rescue mission is looked at afterwards, investigated, and we try to learn from that.

I want to give you an opportunity today, if you would take a moment to do so, with regard to what you would say to the people of the country with regard to the level of confidence in that part of the department. I realize also, and some people may not, that the Coast Guard, which is under the Department of Fisheries and Oceans, plays a role in this, too. With respect to search and rescue itself, how do we restore some of the confidence that may have been lost in some of the cases, looking at the good work that the men and women do in this regard?

As I said before, I am not interested today in playing politics with it, as many are. I am interested in showing on a going-forward basis that we are looking at the positives and learning from them. I want to give you an opportunity to touch on that.

Gen. Natynczyk: I appreciate the question. With the example that you hold out in Labrador, my heart goes out to the family of Burton Winters.

This is a tough business. We have a huge country, with one of the most difficult climates and environments in the world.

Our men and women of the Canadian Forces are courageous to a fault. If there is a Canadian in need and we have the information that it is our responsibility to go and get him — just like we are doing right now, a 64 year-old on a fishing vessel who is on his way now to a St. Johns hospital — we will move heaven and earth to save folks.

Again, my heart goes out to the family of Sergeant Janick Gilbert, who passed away last year on October 27 trying to rescue two hunters who were hunting by Hall Beach in Nunavut. Again, they moved heaven and earth to get up there and went through extraordinary conditions to try to save their lives. Of the three jumpers who left that Hercules aircraft, Sergeant Gilbert died in the effort so that others may live, which is the motto of search and rescue.

The Canadian Forces play a part in the search and rescue architecture of this country. The minister is responsible overall to coordinate amongst all of the departments, but in terms of ground search and rescue, it is the municipalities and the provinces that are responsible. When it comes to maritime search and rescue, the Coast Guard is responsible. The Canadian Forces are responsible for air search and rescue.

Over all of the years that I have been as vice and chief, I have seen the common factors dealing with the successful SAR, like the one today. The first is prevention. People go out on our land or on sea and they are ready, whether it be with the right responder, whether it be with their equipment, whether notifying others that they are ready. The second — and this is so key — is accurate and timely information. We are the ones in receipt of that, but if we do not have accurate and timely information we cannot launch.

The third is weather — not only weather over the target area but the weather between where our assets are and the target area. A few weeks ago our folks launched out of Greenwood and saved that disabled sailboat off of Sable Island in the middle of a snowstorm; interesting characters aboard, but our folks launched in the middle of a snowstorm to bring them back.

The last one is an intangible; it is luck, being able to see someone through a hole in the clouds or through a storm. However, if these factors come together, our people, again, are courageous to a fault.

I tell you, from me right down to the most junior SAR tech sitting in the back of an aircraft, there is nothing more important than saving Canadians or our visitors anywhere. We save a lot of visitors in this country, folks who, unfortunately, fall into distress.

Thank you for that question.

Senator Mitchell: General, with respect to the North — and you were questioned about that earlier — do you have any plans to deploy equipment and personnel up there permanently to enhance and reinforce the presence up there?

Gen. Natynczyk: The plans are in Canada First Defence Strategy with regard to the Arctic Training Centre in Resolute, the berthing and fuelling centre in Nanisivik, the fact that we are enhancing the capability of Joint Task Force North in Yellowknife — and they have a detachment now in Iqaluit — our presence in Alert Bay, and the forward operating locations in Inuvik and Yellowknife and Rankin and Iqaluit. You will be aware, as well, that we stood up the new reserve unit, again a company of the Loyal Edmonton Regiment, in Yellowknife. Our footprint of enhancing the Rangers throughout the Arctic, Joint Task Force North, working under Canada Command and with the communities on where else we can put ranger patrols, and people who do extraordinary work for us are all key initiatives in the Canada First Defence Strategy.

Senator Mitchell: I am from Alberta. Family support centres are funded, I understand, on the basis of the number of regular force personnel in their area. Yet, in a place like Calgary, there is not a lot of regular force, but they do have to serve a great number of reserve force people who have deployed and come back and so on. There is a suggestion that the funding formula does not work for an area like Calgary. Are you aware of that problem?

Gen. Natynczyk: I was not aware of the problem in terms of the formula. We have just made some changes in terms of the Director of Military Family Services, and we have put them under the Director of Quality of Life, a really capable, extraordinary guy named Colonel Russ Man. I know that Calgary has a terrific Military Family Resource Centre. Again, we do part of the funding, and they also are very capable in terms of local fundraising, as are some of the other MFRCs in the country. I was not aware of the formula. I will have a look at that, and we can probably come back to you on that.

Senator Mitchell: Back to the question of procurement, there is a suggestion that there are clear Treasury Board guidelines and guidelines in your own department about full life cycle cost accounting. Clearly there is a difference of opinion about that with the minister. What do you tell your staff and your department about the interpretation of that Treasury Board guideline or your own guideline?

Gen. Natynczyk: You are well beyond my remit. I provide military advice. In terms of how the "programmatic" work, that is very much the departmental piece. The vice chief has a coordinating function, but, in terms of the authorities and accountabilities, it is well beyond the Canadian Forces.

Senator Mitchell: How are you doing with increasing the presence of women in the forces? I was very impressed when I went to Afghanistan, and I saw, in particular, just how women are integrated into the forces and how they are respected. I think you are making real progress. Do you focus on that? Is there an effort to recruit?

Gen. Natynczyk: Every time I focus on that, the women of the Canadian Forces tell me they are not happy that we are focusing on that because they do not want to be singled out. I am extraordinarily pleased with the way that the men and women of the Canadian Forces have risen to the challenge, in all the combat or humanitarian operations and the fact that I am able to see a company commander in Afghanistan, Major Eleanor Taylor, commanding a company of 150 infantryman in combat and doing an extraordinary job. I see a commander, Josée Kurtz, commanding HMCS Halifax, off the shores of Haiti, doing an extraordinary job. I visit the Snowbirds, get briefed by the commanding officer of the Snowbirds, and see that they are doing an extraordinary job. The one thing I have learned is that no one wants to get singled out, but the fact is that we set a benchmark that other nations kind of look to in terms of how we are moving forward as a reflection of Canadian society.

Senator Mitchell: The chair and I, and others, were in Wainwright this summer. The exercise was remarkable. We were briefed by a colonel about the live fire exercise. In the process of that, he outlined a number of the areas that the military are considering as threats and possible future threats in the world for our Canadian military. One of the points he mentioned — I think there were six or seven that he listed — was climate change, as beginning to have an impact on where you might have wars that arise because of climate change and the pressures that that will create. How big a presence does that have in your thinking?

Gen. Natynczyk: If you look to some parts of world with drought and famine, you see how that affects that region. The situation we have in Southeast Asia, with the number of disasters, the tsunamis, and so on, shows that the world is very unpredictable. Part and parcel of this is having a force that is ready and agile. Having equipment like the C-17 has changed us. To be able to move the equivalent of five Hercules loads in one lift means that we can actually go around the world and intervene in order to help. Indeed, climate change is having an effect, but, in most of the cases, it is a humanitarian situation.

Senator Day: General Natynczyk, I wonder if you could give us a briefing on the training of special forces and just what the policy is on that. Are they being properly trained and equipped, and is that unit growing?

Gen. Natynczyk: Senator, I can say to you that you have one of the best special force capabilities globally. Again, man for man, women for women, as I mentioned a few minutes ago, the most significant capability we have is the people. The ability to recruit men and women who already have, even before they walk in the door for special forces screening, a vast amount of experience, air, land, and sea, and the ability to walk in the front door with the confidence of that — many have had a number of tours, be it in Afghanistan or elsewhere — already raises the bar significantly. The level of training that we provide them is commensurate with our closest international partners. In terms of benchmarking, we are maintaining a very high bar with the rest of them, so there is trust and confidence in interoperability working with others. We also have equipment that, in my view, is world-class.

We have created the counterterrorism mission that we have, the supporting institutions of the Canadian Special Operations Regiment, and the helicopter unit, 427 squadron, and the nuclear, biological, and chemical capability. We provide it as a package. Many of our allies who have a similar size of military to Canada's look to that as a model.

We also have a training institution that ensures that we regenerate the kinds of experience we need for tomorrow. A lot of this stuff beyond what I have mentioned is classified, but I think Canadians would be impressed to know that they have that level of capability.

Senator Day: Because it is a small group within the forces, do the personnel that serve there have the same opportunities for advancement, or do they tend to serve for a short while — a few years — in there and then move out so that they can have the same career development as other members of the armed forces?

Gen. Natynczyk: It really made a huge transformational leap, in 2005, creating the Canadian Special Forces Command.

We are now at a level of maturity where we are seeing succession planning of leadership, the cross-pollination of taking people who have served in special forces, putting them back into conventional forces and bringing them back in again. This is having a beneficial impact across the force, air, land and sea. We are reaching a level of maturity to look at special forces as another service like army, navy, air force, which is healthy for the force.

Senator Day: I have two other short questions. There are 27,000 reservists that you have been trying to protect in terms of numbers, but you also indicated that full-time reservists would be over time and, as best you can handle it, reduced. Does that reduce the 27,000 or will you maintain that figure?

Gen. Natynczyk: We are maintaining the 27,000. One of our challenges is the number of reservists who want to join the regular force. Of the 4,500 that I am taking into the regular force this year, almost half of them are component transfers. However, we are also seeing a lot of component transfers from the regular force to the reserve. We are maintaining the 27,000 and trying to ensure they are fully trained to effective strength in the 27,000. In the regular force with the 68,000 we are trying to maintain and in fact, increase the trained effective strength.

Senator Day: Admiral, you were doing a primary reserve employment capacity study. Has that been finished and is that available for us to see?

Vice-Admiral Donaldson: It is complete. It has been circulated. I have the results. I am not sure it is ready for release. We will have to ensure that we can do that, but I will ask and as soon as we can I would be happy to.

Senator Day: Can you make it available to our clerk for circulation?

Vice-Admiral Donaldson: I would be happy to. I do not think it has been translated yet, which is one of the things that may slow it down.

Senator Day: As well, could you provide to the clerk an explanation of the difference between cash accounting and accrual accounting and how it impacts on this re-profiling that you explained earlier? It is a very technical question, but if you could give us an example, provide that example and circulate it so we understand it.

Vice-Admiral Donaldson: I would certainly be happy to make that available in all 12 volumes, senator. It is a complicated issue, but we will try to distill it.

The Chair: Send us the executive summary.

Vice-Admiral Donaldson: We will send it to everyone in government so they understand it, too.

Senator Nolin: Last week, Lieutenant-General Beare mentioned — we were talking about the 1,300 and I was trying to understand — rebuilding that number. Can you provide us with — not today in your testimony but in writing — the makeup of that 1,300?

Gen. Natynczyk: Mission by mission.

Senator Nolin: Please.

Gen. Natynczyk: Absolutely.

Senator Nolin: My final question is on cyberdefence. The minister alluded to that. It is becoming important. It was part of the NATO strategic concept. What is in the mill in terms of thinking? The minister talked about the sensitivity of that type of security. Where is your thinking — the CF thinking — on that?

Gen. Natynczyk: I think cyber is a hugely important, emerging threat that I do not think we spend enough time on. The Canadian Forces, the Department of National Defence, we do not have the lead in government. Public Safety does. We have a responsibility for our own Canadian Forces and departmental defensive networks. With our Canadian Forces Information Operations Group, or CFIOG, and the Canadian Forces Network Operations Centre, we have capable men and women who do this business and we are putting investments into that to enhance those capabilities to defend the Canadian Forces and the Department of National Defence. At the same time, we are working with Public Safety and supporting them and supporting foreign affairs. Foreign Affairs is linking with a lot of other countries. Everyone, especially in terms of the Five Eyes community — the U.S., U.K., Australia, Canada and New Zealand — is sharing best practices because of the sensitivity of this business. We are very much in a supporting role, other than defending ourselves and the Canadian Forces in the current construct.

Jill Sinclair, Assistant Deputy Minister (Policy), National Defence: I think you have captured it. It is an area that requires absolute connection between government departments and also between and amongst allies to ensure we have comprehensive cover. One thing I would add is that NATO has taken this on as a mission task. We have the NATO Centre of Excellence in Tallinn, Estonia, where NATO allies are trying to think how you protect the NATO systems themselves and how we help make allies more robust in terms of dealing with cyber threats.

Senator Nolin: Maybe we should study that more.

The Chair: It is on our list.

Senator Nolin: You have a long list.

Gen. Natynczyk: We have appointed a director general of cyber, who is Brigadier-General Greg Loos, former commander of the CFIOG, so he has a great depth in this kind of business. We established this — as we did with the Director General Space last year — in order to lead what is appropriate in terms of structure. I know the comment was made before in terms of a cybercommand down south. We have asked the general to scope out what is appropriate from a Canadian Forces standpoint, given the mission sets that the Government of Canada has assigned to us.

Senator Nolin: In terms of the link with our partners internally, so we have to do that. Thank you.

The Chair: Thanks. I would like to take advantage of our other witnesses here today to ask a brief question of Rear- Admiral Lloyd, Chief of Force Development. What do you do in order to develop the capabilities of what the force will need to have relevant, operationally responsive and tactically decisive. We have the rhetoric here. What is your toughest job right now?

Rear-Admiral Ron Lloyd, Chief of Force Development, National Defence: Thank you for the question. The toughest job right now is quite clearly that we need to understand the future security environment in terms of where it is. We expect that the Canadian Forces will be deployed on behalf of Canadians over the next decade or two. In terms of understanding that environment, we then take a look at the six missions that are articulated in the Canada First Defence Strategy, having an understanding of what capabilities will be required to be successful in those operations.

Then what we aim to do is take a look at the fiscal framework in which we are working and then we marry those two in order to provide senior leadership, decision quality information in terms of understanding what the best defence, DND/ CF team would look like moving forward. That is essentially the job that I am responsible for to the chief. Also as he indicated in terms of DG Space and DG Cyber, developing that capability, understanding where we are today and where we need to go. Both of those officers work for me in terms of understanding future force development.

The Chair: Do you work through scenarios to figure out what the configurations would be and what you would need?

Rear-Admiral Lloyd: In terms of each of those missions we have just finished a round of analysis. My team is led by Colonel Sam Michaud and Colonel Mike Rouleau — working hand in glove with the army, navy, air force, and special operating forces — have completed an analysis of about 3,500 hours where we take a look at individual missions, courses of action that we might undertake as a country to understand the strengths and weaknesses of various force packages. Understanding those weaknesses, I think we are able to understand risks and once you have put together a force package you need to understand the strategic risk. Is it policy compliant, in terms of affordability?

Then you have the operational risks in terms of force employment, force readiness challenges in terms of understanding what would be the best value for money, as the chief articulated. At the end of the day that is what it is all about: understanding trade space and decision space in order to ensure that the forces we posture — not in the next five years, but in terms of readiness tomorrow — to ensure the men and women have the capabilities required to be successful to the end of this decade and the beginning of the next.

The Chair: I want to put the same question to ADM Sinclair. What is your biggest policy nut to crack?

Ms. Sinclair: I think coherence, because in the environment that the admiral and the chief have described, with the complexity of the world and the uncertainty of the international environment, it is all about making sure that we have coherence as a whole of defence team, a whole of government team. I think there was a question about that before. We are learning the lessons of operations in complex situations like Afghanistan. There is also making sure we are coherent with our friends and allies too, because it is the seams and the gaps that will bite you. I think that is my biggest challenge.

The Chair: To the chief warrant officer, I know you deal with a lot of human personnel issues on this, too. What is out there for you?

Chief Petty Officer 1rst Class Robert Cléroux, Canadian Forces Chief Warrant Officer, National Defence: I am the principal non-commissioned adviser to the Canadian Forces through the Chief of the Defence Staff, and my primary responsibility is to advise the CDS on all manner of issues and concerns relating to welfare and morale and development and deployment of our non-commissioned members. As the CDS said in his opening remarks, I do believe that morale is very good out there, but our troops are worried. The cuts with strategic review and deficit reduction action plan have them worried about what cuts are coming next. My primary concern is communicating with our men and women, managing the expectations and trying to find out how morale is doing throughout the forces.

The Chair: But your sense is that it is good despite this uncertainty?

CPO1 Cléroux: Morale is good. People want to deploy. They are keen on all the operations we are in. I just hope that if there are further cuts coming, that they are announced quickly and we can deal with them.

The Chair: Major-General Vance, if you would not mind, the big strategic issues, one or two things on your plate.

Maj.-Gen. Vance: As the director of the joint staff, we are the CDS's principal operations staff to support him as he commands and controls the Canadian Forces. Unlike other armed forces, our chief of defence is also the commander in chief in terms of operations. He is our CENTCOM, our AFRICOM, all our "coms," so he gets that support. In those other constructs, the head of AFRICOM reports directly to the president, for example. Our chief reports to the head of our government directly. We support him.

Madam chair, we look at a zero to three-year horizon and provide advice to the CDS and support decision making once government has identified something for the Canadian Forces to do. We to try to put the best possible packages together, costed. We try to understand the operational effects and the likely end states and exit strategies. We provide this to the CDS. He adds his considerable experience to it, and then that gets briefed up and decisions are made.

I would refer to what Jill Sinclair said. It is a complex world, and therefore we are trying to put together the moving parts in a complex world so that it is coherent, is the best possible outcome, not only for the safety and protection and operational effectiveness of our troops but also for mission success. All of that is a challenge. Today, you need only open the newspaper to see that Middle East, we are paying attention. We are concerned where there is conflict and tension in the world that may or may not involve Canadians, but we watch it closely. Ms. Sinclair watches it closely. Ultimately, what keeps me up at night is making certain that if the CDS says, as a result of a prime ministerial pull, we go, to make sure we have everything in place so we are there. That is what we do.

The Chair: I want to thank you all, General Natynczyk and your team. Those of us in this room today are the safest Canadians on the planet because we have the brain trust here. We are pleased. We do appreciate your time and your insight. A large part of this is for people to understand what you all do, all these moving parts and how they work together. I appreciate you taking the time and the frankness of the discussion today.

We will take a brief adjournment and come back with committee business.

(The committee continued in camera.)

(The committee resumed in public.)

The Chair: Could I have a motion of approval for this budget?

Senator Manning: So moved.

The Chair: And seconded?

Senator Dallaire: Seconded.

The Chair: Thank you very much. I will table this in the chamber ASAP, like maybe tomorrow.

Josée Thérien, Clerk of the Committee: It has to go before the Internal Economy Committee first.

The Chair: Thank you, ladies and gentlemen. That is it. We will adjourn and then have a steering committee meeting.

(The committee adjourned.)