Thank you very much for being here to help us understand your challenges.
I did note in your remarks here that somehow the section around challenges got deleted from the notes, but clearly there are many, and I'm referring to the “Evaluation of Naval Forces” document of December 2013.
Their key findings are these: number 4 is challenges in “readiness”; number 5 is “a reduction in forces capability”; number 6 is “strained Navy resources and...issues”, etc.; key finding number 8 is that the “Navy will be obliged to do less with less”; number 10 is that the readiness direction was changed to address that it wasn't being met with respect to “the required materiel state of ships”; and number 13 is that “Despite the efficiency improvements, there remains a funding gap in maintenance...”. For number 16, I'll get to that one later.
It's a pretty huge challenge that the RCN is facing.
I'm curious. What does it mean when it says that the navy will have to “do less with less”? Can you explain what's being dropped?
We know there have been budget cuts, but there have also been significant planned clawbacks. Those actually account for $3.5 billion over the last four years alone of capital underspend. That's 23% of the capital budget that has been deliberately clawed back. To what degree is that contributing to this set of challenges?
Lastly, in terms of mitigating these problems created by the premature retirement of four of the ships, the gap that you've been talking about—and you've been talking about capacity or training—I will note that in key finding number 16, “the percentage of personnel trained at optimal course capacity was [only] 54 percent,” whereas the target is 90%. Clearly, there is a huge fall-down in training, so that's hardly going to be what is going to address the gap. Could you explain how these gaps will actually be filled when training is so far below its target?