National Defence Committee on Feb. 16th, 2012

[The Chair, Conservative, James Bezan]

Good morning, everyone.

We're going to continue our study on readiness. It is the top of the hour, so we're going to get going.

We only have one witness today. We have Professor Philippe Lagassé, from the Graduate School of Public and International Affairs at the University of Ottawa.

Mr. Lagassé, I welcome you to the committee. If you can bring us your opening comments and keep them within ten minutes, we would appreciate that.

[Dr. Philippe Lagassé, Assistant Professor, Graduate School of Public and International Affairs, University of Ottawa]

Thank you, Mr. Chair.

I also want to thank the members of the committee and your clerk for inviting me to appear before you today.

You are currently studying the challenges Canadian Forces will face in the future. More specifically, you are looking into the Canadian Forces' operational capability and the obstacles that could complicate or even prevent deployment of armed forces and reduce their capacities during various missions.

I want to identify four issues that could potentially reduce the capabilities of the Canadian Forces. I will also discuss how the government could manage those issues in order to maintain a force that will be able to meet its obligations here, in Canada, on the North American continent, while at the same time taking on certain foreign missions as part of UN or NATO operations.

In brief, the four challenges are: the cost of staff and the Canadian Forces; the infrastructure and military bases; the structure of the operational command and the National Defence Headquarters; and, finally, the equipment budget and decreased capabilities of the Canadian Forces.

The 2008 Canada First defence strategy put forth a bold and ambitious plan to revitalize the Canadian Forces. CFDS sought to renew the CF's major fleets, as well as augment the military's capabilities in key areas such as Arctic patrol and air- and sealift. As well, the strategy sought to increase the size of the regular force to 70,000, while repairing and modernizing defence department and military infrastructure.

To fund these programs, the Conservative government pledged to maintain the defence funding increases introduced by the Liberal Party in 2005, invest additional dollars, and provide DND-CF with steady and predictable annual funding increases over the coming decades.

But however well intentioned, CFDS quickly proved unrealistic. The strategy was over-optimistic about the costs of replacing the CF's major fleets and maintaining a general purpose force able to undertake operations on land, at sea, in the air across Canada, within North America, and throughout the world.

Indeed, as a number of delayed procurements indicates, the strategy tended to underestimate the cost of new equipment, particularly when industry is asked to meet the specific needs of the Canadian military and defence-specific inflation is taken into account. It also ignored how increasing the size of the forces would put a strain on the defence budget and threaten the department's ability to provide for future capabilities.

Similarly, the strategy did not tackle the evident problems that had emerged with respect to the military's expanded command structure, nor did it acknowledge that the current constellation of bases, installations, and buildings represents an inefficient use of scarce resources.

Exacerbating these difficulties were a large increase in the number of civilian employees at DND, prohibitive service contracts, and sizable consultancy fees, which have helped push overall personnel costs to nearly 60% of the defence budget, 10% more than envisaged by CFDS. As all of you know, details of these various costs were carefully dissected in Lieutenant-General Andrew Leslie's report on transformation.

Taken together, these problems have meant that CFDS left Canada with an unsustainable set of defence programs and policies. Unless defence expenditures are markedly increased, which is an impalpable option for the foreseeable future, and serious efforts are made to make the department and armed forces more efficient, DND-CF will experience a gradual reduction in capabilities, be constrained when trying to operate effectively in new environments or when attempting to address new threats, and may be forced to make unpleasant choices about what it would like to do and what it can actually afford to do.

Permit me to elaborate a little here. Unless they are reduced, high personnel costs will likely siphon resources away from current operations and readiness, or from investments in future capabilities. The military's headquarters and infrastructural burdens will pose similar challenges as they continue to draw resources away from training, deployable units, and the capital equipment budget. As well, even if these challenges are surmounted, it is still unlikely that planned capital expenditures will be sufficient to recapitalize the CF's existing force structure.

Successive governments have sought to retain a general purpose military, one trained and equipped to field a flexible set of capabilities that can be adapted to various missions and operations. The advantages of maintaining this type of force are considerable, and the government's and CF's desire to continue pursuing this policy are completely understandable.

I am not in any way advocating that this approach be abandoned lightly or on a whim, yet as many of Canada's NATO allies have realized, most countries can no longer sensibly afford to field modern general purpose forces. They must either accept an increasingly less capable and less technologically advanced general purpose force or they must embrace what NATO's Secretary General has called “smart defence”.

So what do we mean by smart defence? Smart defence involves pooling resources and sharing capabilities among allies. It asks allies to develop various complementary niche capabilities that can work together as a single multinational force on operations overseas. At a time when NATO members are faced with austerity measures and rising defence costs, this pooling of resources and sharing of capabilities may be necessary to preserve the alliance's overall ability to undertake high-intensity operations in the coming decades.

Canada is no exception here. It too must choose between a gradual—and likely ad hoc—capability reduction or a planned move toward complementary niched forces as it enters a period of fiscal austerity. Now is the time, the ideal time, in fact, to make this choice. The process of replacing the military's major platforms has only just begun, meaning that there is still time to reconsider what equipment a honed CF would require.

At a minimum, of course, the CF must be able to protect Canadians and Canadian sovereignty and work alongside the United States to defend North America. Successfully completing these missions must be the highest defence policy priorities of the government, but beyond these domestic and continental missions, defence planners should have careful discussions about what expeditionary, land, naval, air, and special force capabilities the CF might focus on in the future. Unlike domestic and continental missions, expeditionary operations allow for a great deal of flexibility and selectivity. Canada is not expected to do everything and be everywhere.

Hence, as budgets tighten and trade-offs are considered, it is worthwhile to ask what capabilities the CF should focus on as part of a larger multilateral smart defence effort. As we look to the CF's future readiness, this is a discussion that should take place, whether or not Canada ultimately embraces the idea of smart defence.

In short, the Canadian government will face some significant challenges in national defence over the next few years. The Department of National Defence will have to absorb very high costs in terms of staff and reduce expenditures in terms of human resources. The government will also have to decrease its infrastructure spending. In addition to reducing the number of buildings, it is time to see whether the number of military bases can be reduced in order to enhance the efficiency of the Canadian Forces and free up resources. The same principle should be applied to the operational command. The current structure is not affordable and could be reformed.

Finally, the government should begin a study on the capabilities of the Canadian Forces in light of the budget cuts its NATO allies have made and use a cooperative approach in allied forces planning in the future. The government will also have to ask itself the following question. What kind of a role should Canadian Forces play abroad during a period of smart defence? Does Canada have the means or even the willingness required to maintain an armed force that is structured to participate in various types of missions? Or should we think about working with our allies to create a more specialized force? I think it's time to ask that question.

Thank you very much.

[The Chair, Conservative, James Bezan]

Thank you, Professor.

We're going to start off with our seven-minute round.

Mr. Christopherson, you have the floor.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

Thank you very much, Professor. I very much appreciate it, and it comes at the right time, because we've been dealing with a lot of the micro aspects of all of this and some of us are a little readier now, pardon the pun, to be looking at this from a macro view, 30,000 feet. I think that's what you've given us, that strategic discussion.

The first thing that crossed my mind when you were talking about smart defence and niche forces, especially as a result of the tour we've just completed, was it was really helpful. That was really good. I got a lot out of it, being fairly new to this file.

It was interesting to listen to, as they called themselves, the sharp end of our foreign and defence policy, the sharp end of the stick being the first division, and about what their understanding of readiness is in terms of expeditionary capabilities. From what I'm hearing, what it boils down to is whatever you guys want us to do, we'll do. Right now you want us to do everything, so we're ready to do everything, and it comes back to us in terms of what we want us to be ready for.

When you were talking about the niche forces, both in terms of effectiveness and cost-effectiveness, the nod test made a whole lot of sense. That made sense, but what struck me was everybody is in agreement that the primary focus of our defence is to protect our sovereignty, and that's pretty straightforward. When we get into the expeditionary capabilities it starts to get really complex, and the first thing that strikes me is that if we were going to reduce and be a niche and part of a whole, the first example of how well that worked, or the most recent one, would be Afghanistan, notwithstanding the politics around that and where we all are policy-wise. The reality is that the NATO partners weren't there in equal capacity, and that has caused a lot of strain within NATO. It has NATO looking at itself now and asking some fundamental questions. The Americans, of course, are constantly looking at their role within NATO.

Assuming we still maintain the sovereign ability to protect our own three coasts and our border to the extent that we believe appropriate, in terms of anything beyond that, it would require this cooperation. Yet the example we have right now is that cooperation looks good on paper, but as soon as the raw politics of everybody's domestic reality kicks in, some are there, some are not, some have caveats, some don't.

In that kind of a world, how would you achieve a level of certainty that when the Canadian government, the Canadian people, felt it was necessary to do something and we were a part of that.... What sort of guarantee would we have that those parts would all be there to move at the same time in the way they are supposed to, given that in the recent example of Afghanistan, the exact opposite happened?

Could we have some of your thoughts, Professor?

[Dr. Philippe Lagassé]

I fully acknowledge the problem you describe, namely, the problem of caveats as part of local NATO operations. This is one of the underlying reasons that maintaining a general-purpose force is always attractive, precisely because you never know who you can rely on for these types of operations.

Unfortunately, you have to look at this in light of the resources you have. It's tempting to say we're going to preserve a general-purpose force that can do everything it needs to do, but if that force's capability is gradually declining, you will necessarily become dependent on others at some point. So the idea that you could preserve some kind of independent deployable capacity is already problematic, at least in a Canadian context, and we see this happening across the board within NATO.

My basic answer to that problem is to have a more honest assessment of who you would work with and under what conditions. The government has the ability to negotiate memoranda of understanding and other agreements with key partners on how they might use their forces and in what context. I think we can safely assume that certain partners we've worked with in the past and depended on consistently would be the types of allies with whom we would negotiate these types of agreements.

Knowing the particularities of German or French domestic politics could lead us to shy away from negotiating sharing agreements with those allies. On the other hand, when we look to the United States, Great Britain, the Dutch, or the Danes, we see a certain continuity of deployment and willingness to share resources. Those might be allies with whom we can try to arrive at some arrangements. We see this consistently on the naval side, and we see it on the air side with the United States and other NATO allies. For instance, NATO has always cooperated on strategic airlifts.

The question then centres on the capabilities that Canada feels it could contribute alongside certain allies in order to pool resources. This could take many different shapes and is something we need to bear in mind. It doesn't necessarily have to be front-line forces. Canada can provide different types of capabilities with other allies filling other niches that may be more sensitive.

We see the United States moving in this direction in its latest defence strategy, along with Great Britain and France. We also see some of our other allies cutting into their planned defence procurements in the future. If all allies begin cutting capabilities and attempt to maintain some kind of general-purpose force, the ability of the alliance to operate without cooperating will be far more problematic. We need to have this discussion and see if certain allies are willing to commit in solid agreements to certain types of arrangements with Canada.

[David Christopherson, NDP, Hamilton Centre, ON]

Would your response be that if all the partners aren't there it could be problematic, but no more so than our inability to do all the general-purpose expeditionary things we feel we should?

[Dr. Philippe Lagassé]

Right. To be frank, the Canadian Forces deployed to Kandahar with a capacity that wasn't commensurate with what was required. When we requested greater assistance, it took many years for it to actually be provided.

Having agreements with others and being obliged to deploy with others can be a means of preventing that type of situation. You know other allies are committed to the operation. If you don't have them on board, then that should make you question whether or not you should even be deploying on this mission. If you can't get your allies to cooperate with you on these types of operations or to deploy to certain theatres, does Canada have the capacity to do that itself? You really need to ask yourselves that question.

[David Christopherson, NDP, Hamilton Centre, ON]

That was really good, thank you.

[The Chair, Conservative, James Bezan]

Your time has expired.

Mr. Strahl.

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Thank you very much, Mr. Chair. To the witness, thank you for your presentation.

We have a new shipbuilding procurement strategy. We have a need for new fighter aircraft. And there is a need for an army, as well. Often the people who react very strongly to a new procurement because they don't believe we should be spending those dollars on that equipment are the same people who say that we need to protect Canadian sovereignty at all costs. The two positions, to me, are kind of mutually exclusive. They say on the one hand that they don't want to put the money into, say, 65 new F-35s, but on the other hand, God forbid if the Americans had sovereignty over our airspace or if the U.S. Navy were patrolling our coast.

How do we reconcile those two if we're going into niche capabilities? Are you talking only about expeditionary forces? Would we maintain the ability to patrol our own land, sea, and air? Or are we talking about reducing our capacity such that we're relying on our allies to do that fundamental job?

[Dr. Philippe Lagassé]

I should be very clear that what I'm speaking of specifically is expeditionary capability. That therefore leaves you with a core capability to perform the functions the CF is required to do domestically, in cooperation with the United States, on the continent.

There is an important point to make here, though. What is it about military equipment that tends to really increase the cost and make it very prohibitive? It tends to be more about the specific weapons systems and technologies needed to maintain a certain level of war-fighting capability and interoperability with key allies.

Let's say you look at coastal defence requirements. If we look at our actual coastal defence requirements versus the types of equipment and capabilities we put on warships dedicated to expeditionary operations, the costs are really quite different. If you look at, for example, the Arctic offshore patrol vessel and what it will be equipped to do for domestic purposes, and contrast that with what we intend or hope to find on this single-service combatant, those are very different types of equipment with very different capabilities.

Of course, one will be far more expensive than the others simply because the types of capabilities you need, let's say, to be part of a carrier battle group in the Persian Gulf and to do your part and defend the fleet and so forth versus the types of capabilities you would need to patrol the Canadian coasts are very different. Similarly, when you look at the types of capabilities you would require of your air force to contribute to Canada's NORAD obligations versus its ability to interoperate in an offensive operation overseas alongside your allies, you could find some substantial cost savings there.

I'm not sure that they're as night and day as we make them out to be. There is a middle ground. You can buy equipment more specifically tailored to your domestic and continental requirements that ends up being less expensive than what might be required for an expeditionary focus.

If we accept that premise, the question then becomes where we find savings. Must we do everything in terms of expeditionary capabilities? Do we need to have a navy that has the capacity to operate as part of a carrier battle group engaged in offensive operations? Do we also, if we have that need, need an air force that can do the same? Do we also, on top of that, need an army that can do that? We may answer yes, because we want to maintain maximum flexibility. But then the question becomes whether we're willing to pay for it. When I look at the current budget projections, it doesn't appear that we are.

Overall, then, you end up cutting down on the number of forces you have and you reduce the overall capability to act. That is the concern we have.

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Last week we heard from Steven Staples of the Rideau Institute. He was advocating a budget cut of between 30% and 40%. What sorts of reductions would you advocate? Do you believe it's possible, with the cuts you would project, that the Canadian Forces could carry out the six core missions outlined in the CFDS simultaneously, as we've done in the last couple of years?

[Dr. Philippe Lagassé]

At the very outset, let me say that I'm not actually advocating any cuts—quite the opposite. I'm saying that assuming the budget stays at its current level, we still need to make these choices. That's the difficulty I see.

If we assume that we follow the CFDS funding formula, and that is not meeting defence-specific inflation.... Already right at the outset when CFDS was released, it became very clear quite quickly that it could not afford the equipment it hoped to buy. So the need to move towards niche capabilities is simply a function of the money that's being allocated already.

It's not that I'm advocating a cut in order to go towards niche capabilities, but what I'm saying is that when we look at the amount of money that's already planned for the DND CF over the next 20 years, some capability reduction will happen regardless of whether we go for niche or not, simply because we can't afford to recapitalize all the fleets under the current model.

So already those six missions, given the funding envelope that exists, don't seem to be sustainable. That's my concern.

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

We heard—and I hope I'm recalling this correctly—from the principal at Royal Military College, who indicated that, looking to the future, it's always a difficult thing for people who examine defence issues. But he indicated that he believed Canada still would have an army, navy, and air force and what would be required would be not to abandon expeditionary missions but to go where we know we can do the job with what we have. Is that how you see the future unfolding as well, that we are still going to participate in expeditionary missions with our allies but they might not be on the same scale as currently?

[Dr. Philippe Lagassé]

I would agree with Principal Sokolsky on that issue. There is no doubt in my mind that we will maintain some army, navy, and air force capability.

The question is whether each of the branches will have the same level of expeditionary capability it has now, and that's the policy choice we have before us. Do we accept an overall reduction in expeditionary capability across the board in order to afford the programs we have now, or on the contrary do we say that Canada's larger contribution will be in one of these three areas internationally alongside our allies and focus on that one—so either on a land force, a higher-end naval capability, or a higher-end air force capability—and invest the funds required to maintain that particular expeditionary capability at the highest level possible? That would be my take on the situation. Canada can contribute something very important to future allied operations, but in order to maintain its highest capability possible it should select one of those areas where it can specialize and do the most good.

[The Chair, Conservative, James Bezan]

Thank you.

Your time has expired.

Mr. McKay, it's your turn.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Thank you, Chair.

Thank you, Professor Lagassé, for a very thoughtful presentation. As Mr. Christopherson said, it's very helpful.

I take your general point, which is that you either choose now or choose later, but that one way or another you're going to have to choose between having a general ability or a more specialized ability; that's what it boils down to.

I suppose I could argue that this is actually happening through the back door--that over the last five or ten years those choices have been made and that we are not all things to all people at all times and don't have as much of a capability.

We are actually having a kind of mini-conversation around two of the procurements that are in the news these days, for the F-35s and the subs. If I listen to the Prime Minister and the ministers involved—always a dangerous proposition—the $9 billion figure on the F-35s is basically a hard figure, while the military is saying we have to have 65 airplanes. Those two things don't live in the same universe. The government's argument is that by the time we get to it, eventually the price will be down to where we can actually squeeze out 65 airplanes.

It seems to me that this is a kind of mini-conversation on your overall global view that the Canadian military is going to have to decide what it's capable of doing and why it's capable. The big thing that seems to drive this conversation is the stealth capacity. The Rideau folks made the point that we've never actually been at the pointy end of any attack: it's usually been done by others. We've followed up with other things. You can go back through several wars. It seems to me that this is in some respects a bit of a case study for the issues that you are raising.

Similarly with the submarines, the argument is that we need to have them because of the long coastline and all that sort of stuff, but the way the conversation seems to be working out is that if we're going to stay in the sub business, this is all we can essentially afford, and we're going to have to fix these things, regardless of fires and regardless of whether we prang them from time to time on some rock.

I'd be interested in seeing whether you could bring your thinking down from the $35,000 fee to those two specific issues, because in some respects they are case studies of the decisions that this government is going to have to make.

[Dr. Philippe Lagassé]

I think the F–35 is a good example here. It is clear that the air force requires a certain number of aircraft, and, as you say, the indications from the government currently are that there is a fixed figure for how much will be spent on the next-generation aircraft. I think we need to add a little bit more nuance to that conversation in the following way.

To date, the message that's been sent out is that come 2020, the CF–18s will no longer operate. That's not actually quite true. We could find ourselves in a situation where $9 billion buys you, let's say, 50 or 40 F–35s and therefore the government, in order to backfill the capability that it's no longer having, needs to maintain the CF–18s in service for an extended period of time. So we should not be under any illusions. The air force will have the number of aircraft it requires to do all sorts of missions. The question is, will they all be F–35s, or will the government be forced to maintain some CF–18s to do various other operations?

That's a short-term solution simply because the cost of maintaining those CF–18s over the long term is going to be extremely prohibitive. The idea, I think, in the air force's mind is that we can wait and wait until new funding finally comes in and then replace all those additional aircraft. So $9 billion may be the amount we're planning to spend on the F–35s within the next decade, but how many we actually buy over the next two or three decades in order to eventually replace all our aircraft is an open question.

It gets back to your point. I disagree slightly with the Rideau Institute, in that we've never been at the front end of bombardment campaigns—we had been in Libya, I think is a good example, and Kosovo is another—where if you choose to have that capability, if you believe it is important for Canada to have fighter aircraft capable of taking part in front-line operations alongside the United States, Great Britain, and France, then that is a capability that you want to maintain and to procure. That is ultimately a policy question. Is that a significant pillar of Canadian defence policy or not? Is that something that we absolutely believe the Canadian Forces need to be able to do?

There is no objective answer to that, really. It's a question of what priorities you see for the Canadian Forces in the future. That's exactly the kind of conversation I hope this government and others will have; namely, what can we afford and what do we actually want to be able to do? Because if you don't think that's an absolutely necessary role for the Canadian Forces in the next 50 years, then you might select another aircraft or a less capable aircraft.

[John McKay, Liberal, Scarborough—Guildwood, ON]

I slightly mischaracterized what the Rideau Institute was saying; namely, I think their point was first-in capability, and we haven't generally been first in, Libya being the example where we used missiles and stuff like that instead. I take your point.

[Dr. Philippe Lagassé]

That's the issue. Do you believe you need to be the first in or not, and are you willing to pay the money necessary to ensure that?

It's a similar issue with the subs. The underlying issue with the submarines is that you need to maintain a submarine capability in order to share in NATO's submarine intelligence. If you need to know what submarines are operating in your waters, then you need to have a submarine capability. Regardless of whether those submarines are operational on a regular basis, having them ensures that you know what other submarines are in your waters. That is the logic ultimately behind maintaining that capability, but again, I fear that the navy's point of view is simply as you say: they know that new funds for new boats are not going to arrive any time soon, so the hope and the aim is to maintain this capability until at some point new funding comes in. I'm sympathetic to that position.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Almost, in effect, we have backdoor decisions based on those issues.

[The Chair, Conservative, James Bezan]

You're actually out of time. I'll give you one very brief question.

[John McKay, Liberal, Scarborough—Guildwood, ON]

You're very generous, Chair. I thank you for that.

Just a quick one on cyberspace. If anything came out of our little tour, it's something that we don't.... What we're thinking about seems to be so low-level that either there's higher-level thinking going on and they are not telling us, or we're way behind the curve on this. That puts it in the context of the Chinese stealing Nortel's secrets for the last ten years, or that apparently the Chinese have penetrated Lockheed Martin and may have contributed to some of the delays in the development of the F–35.

I'm interested in your thoughts.

[Dr. Philippe Lagassé]

I think cyberspace is a perfect example of the type of pooling of capabilities and capacities referred to by smart defence. It actually goes beyond simply working with allies. It also involves the need to seriously consider, in the area of national defence and national security, public-private partnerships. Because this is not something a government is able to do on its own, and this is something no country will be able to do on its own. Therefore, this is definitely one area where a far greater multilateral approach to this is required, under the envelope of smart defence, by working with the United States, Great Britain, and other allies. But equally important is working with the private sector.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Norlock.