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.