Government Operations Committee on April 26th, 2010

[VAdm Denis Rouleau]

I could not give you the specifics, but I can tell you that for Haiti we had an airplane on the ground in Port-au-Prince the morning after the incident.

[Rod Bruinooge, Conservative, Winnipeg South, MB]

Mr. Chair, I have another line of questioning, if I have some time.

Could you give us, as a committee, some understanding as to how Canada's fiscal level of support for its military, both now and in the previous two decades, compares with other countries in NATO? Could you give us some benchmarks as to how we compare? Are we funding our military at levels equal to.... The Dutch example of a smaller population with a small land mass comes to mind. On a ratio of GDP.... I don't know if you have that specifically, but could you give us some appreciation of where we are and perhaps where we should be?

[William F. Pentney]

I think where we are is 1.2% of GDP. And in terms of comparators, I believe the Americans, on their baseline, are over 4%. I'm not sure that anyone in the world compares to them, at least in terms of reported figures, although I think there are some doubts that what some countries are reporting actually represents the full extent of their military expenditures.

It's difficult to measure comparison by comparison in terms of baselines, partly because of the incremental funding--to reference a question I answered earlier--in terms of the total fiscal commitment that Canadians are making in support of their military, whether at home or abroad.

I can say that many countries are looking at making difficult trade-offs right now in terms of the level of investment in their military that they can afford. You've seen it in white papers in France, and you're seeing a debate in the U.K. right now. There continue to be debates, even with the truly amazing amount of money the Americans are pouring into defence, about whether they're getting the results they need and whether they've got enough.

So a number of countries are facing difficult choices about what their level of appetite and ambition is, on the one side, versus their emerging fiscal realities on the other, and there are many NATO countries that are like that.

It's also fair to say that within NATO there are a number of relatively new entrants to NATO that don't have the fiscal capability of Canada or other countries but are also stepping up to the plate, whether through allocations of troops on the ground in Afghanistan or investments in equipment, where they can afford it.

Canada, it's fair to say, right now is engaged in a pretty substantial recapitalization of the Canadian Forces. As I indicated in my opening remarks, the baseline funding for defence has gone from $12 billion to $13 billion up to a baseline now of, give or take, $21 billion. So there's been a quite substantial reset in the baseline and in the escalator built in over time. So it's a significant investment in defence.

If you'd like, we can come back to you with the specifics in terms of the comparators. We don't have them here with us today.

[The Vice-Chair, Conservative, Chris Warkentin]

Thank you very much.

We're going to move over to Mr. Harris for our final round of questioning.

[Jack Harris, NDP, St. John's East, NL]

Thank you, Chair.

Thank you for joining us today.

I suppose if we're starting to compare ourselves to the Americans, it's no comparison, since they spend, I understand, more than everybody else in the world combined for their own superpower or strategic reasons. I don't think we hope to, or would want to, try to compete with that on a per capita basis or otherwise.

I want to get down to some specifics here. You were asked some questions about the reserves, and I know the reserves are very important, not only for support in Afghanistan in terms of 20% of our capabilities there, but they're also important to our capacity. I'm just looking here at a sheet on the navy and naval reserves indicating that for active personnel it's 10,900, and reserve personnel are 4,100, so obviously the reserves are a very important part of the overall commitment. But I keep hearing, and it's anecdotal, from one part of the country to the other--and various members of Parliament have mentioned it to me--that the reserve budgets are being cut or the training allowance is being cut, people are being laid off, or even just the training budget is being cut.

I understand you're trying to avoid affecting operations, but can you tell us what these adjustments actually have consisted of in the last year? “Adjustment” is a nice fancy word probably for reductions in expenditures. Can you tell us what the reductions were from the beginning of the year, what the allocation was for the year, and what was adjusted downwards over the year? Can you give us those numbers?

[William F. Pentney]

Mr. Chair, we'll come back to you with the specific numbers. There were certainly adjustments that were made during the year. We'll make adjustments this year again towards priorities.

[Jack Harris, NDP, St. John's East, NL]

I'd like to know what they were. If you could provide that it would be great.

[William F. Pentney]

Yes, absolutely.

[Jack Harris, NDP, St. John's East, NL]

I have another question.

We've been contacted by someone from Petawawa telling us a story, an anecdotal story but with specifics, and I wonder if it represents problems elsewhere within your finances. This is on the civilian side. Buses are used to transport troops to various events, and my understanding is that there's an overtime freeze for civilian personnel, and in this particular case the Canadian Forces will contract out a bus for $400 or $500 if there happens to be a bus requirement for an hour before a shift starts, rather than paying an hour of overtime to a regular permanent employee, which might cost $30 or $40.

That seems to me to be obviously inefficient, potentially wasteful, but the rationale seems to be that they're not permitted to transfer money from an operation and maintenance budget, where the contracting is, to a salary and wages budget, where the overtime freeze is.

Have you come across that as a problem? Has it been brought to your attention? Is it a regular problem? Is that kind of inflexibility inherent in your budgeting process, or would that be an anomaly?

[Kevin Lindsey]

Mr. Chair, there is no institutional barrier to transferring money from the operating budget to the salary budget. DND is a very large and decentralized organization. Commanders at the base level have the discretion to manage their budget that way, but they are not obliged to. They have the flexibility within the overall financial management framework to move money back and forth.

[Jack Harris, NDP, St. John's East, NL]

But wouldn't you agree that if it's a discretionary matter, that's an inappropriate use of discretion or failure to use discretion to save the public money in something as simple as that? We're talking perhaps ten times the cost to deliver the same services with existing staff. Would you not agree that discretion should be exercised appropriately in those circumstances?

[Kevin Lindsey]

I would say that we would always want someone to choose the lowest-cost course of action.

[Jack Harris, NDP, St. John's East, NL]

Another issue having to do with personnel.... I see Ms. Binnington is here, and maybe she can help us with this one.

We've also heard that as part of the personnel policies, if you have term employees and if they are in continuous employment for three years or more, either they automatically become or they're required to become permanent staff. We've heard the department's practice is to wait until the very end of the third year and lay them off and find somebody else, or do I don't know what.

Can you tell us how common that is within the forces? I think this is on the civilian side. Do you have any numbers in terms of the number of term employees you have? And are you forced to do this for some reason, to lay people off because you can't hire them permanently? What's the problem here? Because it seems to be rather arbitrary that someone is doing a job, and because this deadline comes up all of a sudden they're gone.

[Cynthia Binnington, Assistant Deputy Minister, Human Resources - Civilian, Department of National Defence]

Thank you. I'd be pleased to speak to that particular issue.

Use of term employees within a large organization like ours is an important part of our flexibility in terms of managing our workforce. As you know, we've had very significant operational pressures and we've had a very large number of our military personnel deployed and moved into other activities, particularly during this period of high operations.

On the periods of time for term employees, it is very much Treasury Board policy, as the employer. It's the Government of Canada policy, which we respect and oversee and try to ensure it's well communicated to our managers. When there are pressures, people are asked to take a look at the risks associated with managing their overall long-term costs.

We've certainly instructed people and have recently provided some clarification around ensuring that we not only respect the policy, but the spirit of the policy, and watch how terms are used and align our business planning and our human resources, our people management planning. So we work very hard at trying to ensure that kind of thing doesn't happen, that we keep and respect the policies of the board and collective agreements.

[Jack Harris, NDP, St. John's East, NL]

Of course, one other important part would be to respect the needs of an employee in this circumstance. Are the employees who might be laid off because of this Treasury Board policy available for rehire, or are you required to hire somebody else? Or if there's still a need for that work to be done and there's no full-time position created for that, can you go back to the person who was laid off because of that policy and say you'd like to rehire them as a term employee in three months' time or whatever? Can you explain that for us?

[Cynthia Binnington]

There are very specific conditions around the continuation of work and the nature of the work. It's difficult. I don't know of any particular case you're dealing with at this point--

[Jack Harris, NDP, St. John's East, NL]

I'm not speaking of an individual case, but just in terms of overall policy.

[Cynthia Binnington]

Overall policy--that person would be available for additional work in the future, yes, whether or not it was the same work in that specific position. They're generally not used for the continuation; it's not a continuation of work issue. If it's a continuation of work issue and the manager deems it goes beyond the three years, that person would be eligible under the policy to be rolled over as an indeterminate employee.

[The Vice-Chair, Conservative, Chris Warkentin]

Thank you, madam, gentlemen. We thank you for your testimony this afternoon.

We thank you for your service to your country and your efforts to provide our armed forces, of which we're all very proud, with everything they need. So we do thank you and we thank our forces for their service and commitment to our country.

We'll now suspend for a short time and go in camera for committee business.

Thank you.

[Proceedings continue in camera]