National Defence Committee on March 13th, 2012

[The Chair, Conservative, James Bezan]

Good morning, everyone.

We're going to start our committee meeting. This is meeting number 32 and pursuant to standing order 81(5) we're going to consider the supplementary estimates (C) for 2011-2012, votes 1c and 10c under National Defence. Also under standing order 81(4) we're going to consider the main estimates, 2012-13, votes 1, 5, 10, 15, 20, 25, and 30 under National Defence. These were both referred to the committee on February 28.

Joining us today we have the Honourable Peter MacKay, Minister of National Defence. We have the Honourable Julian Fantino, who is the associate minister of National Defence. They are joined from the Department of National Defence by, Vice-Admiral Bruce Donaldson, vice-chief of the defence staff; Matthew King, associate deputy minister of National Defence; Kevin Lindsey, assistant deputy minister and chief financial officer, finance and corporate services; and Dan Ross, assistant deputy minister of materiel.

We welcome all of you to committee.

Minister MacKay, I'll give you ten minutes for your opening comments.

[Peter MacKay, Conservative, Minister of National Defence]

Thank you very much, Mr. Chair and colleagues.

Good morning to all of you. It is always an honour for me to be here with you.

Particularly it's an honour to be here this morning with Associate Minister Fantino to discuss the supplementary estimates (C) for the year 2011-12, as well as the main estimates for 2012-13. I note for the record, Mr. Chair, this is my 24th appearance before committee since I was appointed to cabinet in 2006.

As you have already pointed out, we have a formidable team of representatives from the Department of National Defence: Mr. Matthew King, Vice-Admiral Bruce Donaldson, Mr. Kevin Lindsey, and last but not least Mr. Dan Ross. They are all here in support of this committee and the consideration of the estimates.

As was the case when I last appeared before this committee to discuss the supplementary estimates in December, we are here to answer your questions, and I thank you for the work that you do.

Mr. Chair, this has been a very busy year for the Department of National Defence and for the Canadian Forces. In the last 12 months we have successfully wrapped up the combat mission in Kandahar, transferring responsibility to our American and Afghan partners in the south.

We have established our training mission in Kabul, Herat, and Mazar-e-Sharif.

We've also participated actively in NATO's UN-sanctioned mission in Libya where Canadian airlift and frigates played a leadership role in operations. The exemplary work of Lieutenant-General Charlie Bouchard, as the campaign's overall commander, highlighted the value of Canada as we provided significant impact to these international events and efforts.

We have also been busy here at home. Over the course of just a few months we responded to requests for assistance in three separate floods and a number of forest fire evacuations. We responded to the crash of the Boeing 737 First Air Flight 6560 near Resolute. And of course, we also continued conducting our regular domestic operations—missions that keep Canadians safe—like search and rescue, sovereignty patrols in the Arctic, and surveillance as part of NORAD.

Mr. Chair, this is the kind of excellence Canadians expect from their armed forces, but such capabilities obviously come at a cost. Beginning in 2006, the Government of Canada has made the rebuilding of Canada's defence capability a cornerstone of our government's agenda. Since that time, the defence budget has grown an average of $1 billion per year. Acquisitions such as strategic airlift, land combat vehicles, and the comprehensive rebuilding of the Canadian naval fleets will contribute to a modern, effective Canadian Forces that are a source of immense pride for Canadians. I expect that you will have some questions on some ongoing procurements. I know that my colleague Minister Fantino will be pleased to take your questions.

The importance of such a force today in a turbulent world cannot be overstated, nor can the fact that the global economic situation has changed and remains fragile. But we also recognize our responsibility to carefully manage public funds, to contribute to the overall fiscal health of the entire government, and to be responsible to taxpayers.

As you know, Mr. Chair and colleagues, the global fiscal outlook has changed dramatically since 2008, when the federal government committed to returning to a balanced budget in the medium term. Like other Canadians who are tightening their belts in regard to spending in the face of the economic downturn, so too is the Department of National Defence.

Concurrently, the DND-Canadian Forces operating environment has also changed. As I mentioned, at National Defence we are returning to a lower operational tempo with the end of our combat operations in Afghanistan and the completion of the NATO mission in Libya. We are taking the opportunity to examine our structure and our processes, to integrate what we have learned in Afghanistan, and to streamline operations and make the Canadian Forces more efficient and more effective so that we get the greatest overall effort from Canada and the greatest benefits for Canadian taxpayers. This is the goal.

Mr. Chair, DND's commitment to responsible spending and sound fiscal management is manifested in those supplementary estimates (C). These identify approximately $215 million in new spending that was necessary to move forward on key initiatives. Let me refer briefly to those.

Referring to page 81 of the supplementary estimates, you will find details of the spending, which includes $151.9 million in support of the new training mission in Afghanistan, $27.3 million for the implementation of the LAV III upgrade, $14.5 million for the Arctic/offshore patrol ship project, and $4.7 million to enhance support for severely injured members of the Canadian Forces.

However, this new spending does not require any net increase in our overall funding this fiscal year. In fact, you will find, Mr. Chair, that the bottom line of page 81 identifies a net decrease of approximately $723,000 in our appropriations and spending authorities for the year 2011-12. We've been able to do this by sourcing the new spending requirement listed in supplementary estimates (C) from spending authorities already available within the defence appropriation. We have moved money with your authority.

Mr. Chair, turning now to the main estimates for the year 2012-13, our overall estimated budget requirement is $19.8 billion—just under $20 billion—which still exceeds the 2009-10 main estimates of $19.2 billion. These funds will be invested across the four pillars of the Canada First defence strategy—personnel, equipment, readiness, and infrastructure—in a measured way to ensure that DND and the Canadian Forces can carry out their important work both today and tomorrow.

The main estimates for the next year include the $333.6 million annual escalator. That is the 2% escalator on defence spending announced in the Canada First defence strategy and in our budget of 2008. It is for providing long-term and predictable funding, and I would suggest that it is one of the most important features of the Canada First defence strategy. This annual escalator clause is unprecedented in Canada's National Defence budget history.

Mr. Chair, page 245 of the main estimates also makes reference to $694.3 million in funding transfers to other departments and agencies in support of key government initiatives. I'll briefly outline them.

An amount of $305.7 million will constitute the Department of National Defence's contribution to the establishment of Shared Services Canada, an organization about which you can learn a great deal on page 312. This is essentially an effort across government departments to consolidate some of the services being provided internally, such as communications and computer services.

Mr. Chair, another $388.6 million supports the establishment of the Communications Security Establishment and Communication Security Establishment Internal Services Unit as a stand-alone agency. Again, more information can be found at page 250 concerning CSE and this new stand-alone entity.

These responsibilities continue to be carried out, albeit outside the direct National Defence budget.

You will also note the reallocation of $525 million from the Defence budget to support government efficiency exercises, as well as a number of changes that reflect the current planning context. For instance, a reduction of $121 million in requirements to support Canada's international security operations in Afghanistan. This is a direct result of the end of our combat mission in Kandahar.

We will also require $232 million less in 2012-2013 than we did in the last fiscal year for major capital equipment and infrastructure initiatives. This change will align our financial resources with the acquisition timelines for these projects.

Mr. Chair, in conclusion, when I appeared last year before this committee and before the Standing Committee on Government Operations and Estimates to discuss the 2011-12 main estimates, I spoke of the importance of balancing the needs of the Canadian Forces with the imperative of protecting Canada's fiscal health.

This imperative has not changed.

Careful budgetary management remains crucial at our department, especially following the coming to a close of the Canadian combat mission in Kandahar, including all of the readiness efforts and the sacrifice to sustain that effort.

Mr. Chair, we have lost 158 brave Canadian Forces members, and many others have paid an enormous price for the service to their country and to the international community. They are always in our thoughts and always in our planning with respect to the future well-being of those who have returned and the families who stand behind them.

Mr. Chair, our efforts have allowed us to successfully tackle our core missions for the benefit of all Canadians and within the fiscal envelope. But it is the human cost that we can never lose sight of. None of our efforts would have been possible without the exceptional dedication and skill of members of the defence team, both in and out of uniform, and I want in particular to pay tribute to their efforts today.

I thank you for your attention during these opening remarks.

Thank you to everyone.

I look forward to your questions.

[The Chair, Conservative, James Bezan]

Thank you, Minister. We appreciate those opening comments.

When we are dealing with the estimates and we have a minister at committee, the rule of our committee is that the first round is 10 minutes for each party.

Kicking us off is Mr. Christopherson.

You have the floor.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

Ministers, thank you very much for being here, and also those who are in attendance with you.

It's always important, whenever we're doing this, given that we have personnel overseas putting their lives at risk, to acknowledge the debt we all have and the respect that every one of us has for all our fellow citizens who don those uniforms, those in this room and those who are in theatre.

Our job, of course, as elected representatives of the people is to have the kind of debate and discussion that those who are putting their lives on the line would expect. But I think we all accept that none of the division that might exist between us in any way waters down the great respect and support that every member of Parliament has for all our armed forces personnel and their families and the civilians who support them. So I begin my remarks with that point of respect and acknowledgement.

Having said that, Minister, I can't help but begin the remarks today, given that the main estimates show that there are some cutbacks projected.... We know there are more coming, yet on the front page of the Ottawa Citizen we see a prime example of what looks like defence spending out of control.

Let me underscore, from the email of the department, my endorsement of this statement: The recognition ceremony held on Parliament Hill, on November 24, was a valuable opportunity to showcase nationally the Canadian Forces and their equipment....

No one denies or wants to deny our armed forces their victory lap, and their acknowledgement and their respect. This isn't about that. That was originally budgeted to be under $400,000. That price then jumped to $474,000, and now we're at $812,000, with an $850,000 potential cost.

The question has to be asked, Minister: at a time when it looks as though our armed forces are going to have to be dealing with cutbacks that may hurt the benefits of those who are in uniform, what possible justification can there be for such runaway spending?

The question needs to be put to you, Minister. Is this your responsibility? Is it your office that didn't keep tabs? Was it higher-ups who didn't keep tabs? Was it your bureaucracy? Obviously, somebody was not on top of this file and should have been. There needs to be some accountability, and that begins right now, Minister.

[Peter MacKay, Conservative, Central Nova, NS]

Thank you, Mr. Christopherson, for your opening comments and for your pledge to continue to support the men and women in uniform.

I also note that you cited the fact that we still have people deployed. That is, of course, the case. In particular, it's a volatile time in Afghanistan, with recent events and the almost 1,000 people we have there who are continuing in the training mission.

With respect to your question, on November 24 there was in fact a ceremony held here on Parliament Hill. The Prime Minister, Governor General, and other prominent members of the Canadian Forces including the Chief of the Defence Staff and Lieutenant-General Charlie Bouchard, who commanded the NATO-led operations, were here to bear witness to that ceremony, which as you noted was an important and an appropriate way to recognize the Canadian Forces' role in the international mission to protect the citizens of Libya.

With respect to the costs, the cost estimate that was prepared originally for the ceremony was $369,000, including incremental costs.

The flypast consisted of planned hours that were already budgeted. That is to say, these would be qualified as training hours, in which pilots who took part—that is, both the fighter aircraft and the transport aircraft that were flying that day—would be flying hours that would count as training hours for the pilots and crew members.

The flypast itself consisted of those planned hours that were already budgeted by the Royal Canadian Air Force. That money is accounted for in this budget year, and in fact these costs are not considered to be an incremental cost for the Department of National Defence. The estimated cost of the flypast itself was $443,000.

The Canadian Forces mission, as you referenced, is not over. So these hours are valuable, in addition to the fact that I would suggest to you that the coverage of the event was also a very useful exercise for recruitment and for putting emphasis on the important work that is done by those in the Royal Canadian Air Force. Thousands of Canadians—I don't have the number in front of me—would have borne witness to that flypast, that event. It was covered nationally, and of course it carried on later in the day, with Lieutenant-General Bouchard being given recognition in the Senate chamber here on Parliament Hill.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

I'm not sure I got as clear an answer as I was looking for. I will come back to that, but I have a little bit of a preamble prior to that, Minister. I have two questions. I'll ask this one, and then I'll have a follow-up.

Are you concerned at all that, given what's still going on in Libya and how the final chapter there is far from being written, possibly holding that flypast when we did was perhaps a bit like George Bush with his mission accomplished banner, in that we took our bow maybe a little too soon? It doesn't in any way detract from the performance of our armed forces, but the timing of it suggested that victory is at hand, and we could just celebrate. Yet, the circumstances would seem that we're quite a ways from that. Recognizing that we were acknowledging our role, I'm just pointing out the timing of it. Was that really the best timing in light of what we saw George Bush do with his mission accomplished banner, and how that has hung over his legacy to this day?

I want to come back. There's that, Minister, but also, I want to be a little clearer, because I'm still not sure. Your answer sounded like everything is fine, everything is normal, and nothing got out of control, but what I heard were approvals in the $300,000 to $400,000 range, and yet, a dollar figure at the end of the day that's over $800,000. It looks like it was out of control.

So, I come back to the main question. Who was responsible for the expenditures, and who is going to take responsibility for so much more money being spent than was originally estimated, given the fact that dollars in defence are very precious, particularly if you and your colleagues are looking at taking anything away from current uniformed members?

[The Chair, Conservative, James Bezan]

Minister, don't feel that you are obligated to comment on his preamble, since it wasn't necessarily relevant to the main estimates or the supplementary (C) estimates. As to the dollar amounts and that—

[Peter MacKay, Conservative, Central Nova, NS]

I disagree with your earlier characterization. The timing marked the end of Canada's participation with respect to the military mission over Libya and off the shore of Libya. We do, I would note, still have a ship in the region, and Canada's role was something worth celebrating, so we may part company on that fact.

With respect to the cost and budget, that is my responsibility. That's why I'm here. I'm here to answer questions with respect to that. Those costs were disclosed. That was the cost of the flypast, and we've been upfront and forthright about those costs.

[David Christopherson, NDP, Hamilton Centre, ON]

I'm still not clear how we went from $474,000 to over $800,000. How did we go from that number? You said that the flying was already planned, so that number would be there. It was on the shelf, it's a number that you can grab. I'm assuming that this would have been folded into your $474,000 original estimate.

The question still remains, Minister, how did we go from $474,000 to over $800,000? Yet, you say that spending wasn't out of control. It looks like it was.

[Peter MacKay, Conservative, Central Nova, NS]

It may look like that to you, but it was not out of control. The costs are there. The costs included all of the aircraft, all of the crew, and all of the fuel. All of that cost at the end of the day was the final amount.

[David Christopherson, NDP, Hamilton Centre, ON]

Minister, with great respect, $474,000 was the original estimate. Correct? You knew ahead of time how much the pilots, the aircraft, etc., were all going to cost. I'm assuming that would be built into the $474,000. The question remains, how did we go from $474,000 estimated to over $800,000 spent?

[Peter MacKay, Conservative, Central Nova, NS]

The estimated cost was clearly not correct.

If you'll allow me, sir, to answer your question—you've asked a question—I'll ask the vice-chief of defence staff to give you a thorough explanation. What we can do is give you an item-by-item cost if you would like, Mr. Christopherson. I'm certainly prepared to do that.

[David Christopherson, NDP, Hamilton Centre, ON]

No, I think you know that's not what I'm looking for, Minister. If the estimates are all that bad, then maybe it's not the final number that's the problem, but your estimate process. Somewhere, something is not lining up.

Yes, an answer, please.

[Peter MacKay, Conservative, Central Nova, NS]

Okay.

Thank you.

[Vice-Admiral Bruce Donaldson, Vice-Chief of the Defence Staff, Department of National Defence]

Thank you, Mr. Chair,

Sir, the estimate that was requested—and I believe you're referring to the article in the Ottawa Citizen today—was based on the incremental cost of doing this, understanding at the time that the overflight would be from within the yearly flying rate that had already been budgeted within the department, and within the temporary duty costs for those air crew involved that were going to be spent anyway in the types of training missions they were undertaking.

The estimate itself was a good estimate, but it did not include the cost of those aircraft, and it was understood not to include the cost of those aircraft. Subsequently, I believe, it was $812 million—

[Peter MacKay, Conservative, Central Nova, NS]

Eight.

[VAdm Bruce Donaldson]

—that the minister used because, when we were talking about the costs publicly, we wanted to make sure that it was inclusive of all of those costs. Does that clarify it for you?

[The Chair, Conservative, James Bezan]

Thank you. Time has expired.

Mr. Opitz, you have the floor.

[Ted Opitz, Conservative, Etobicoke Centre, ON]

Thank you, Mr. Chair.

Through you, thank you to everybody for coming today.

Ministers, I appreciate you being here. I know the hard work that both of you are doing on this file.

It's a delight to see Mr. Ross again. In my former role at the Canadian Forces College, I know he spent a significant amount of time teaching his craft to many of the officers at the college to give them a better understanding of ADM materiel.

I thank you for that, Mr. Ross, because I often listened to your lectures and learned a lot, and hopefully I retained a lot.

To the veteran in the room, at the back, welcome, sir, to this session of the committee. Thank you for being here.

Minister MacKay, I see that there's approximately $4.7 million in funding requested for enhancing support to severely injured members of the Canadian Forces in what's called the “legacy of care” program.

Sir, can you describe to the committee what exactly this program is and the services that are provided to the injured members of the CF?

[Peter MacKay, Conservative, Central Nova, NS]

I thank you, firstly, for your service. I know that you spent a good deal of your life in uniform and in service of Canada.

We have made significant investments, as you know, in recent years with respect to the legacy of care program. I would dare say that the Department of National Defence and that of Veterans Affairs Canada have never been more lashed up when it comes to both the delivery of the service and the important transition that occurs in a person's life when they make the decision to leave the Canadian Forces for any number of reasons. One of those reasons, sadly, can be as a result of injury suffered either in operations or in training, or simply the wear and tear that very much comes from the physical contributions that members of the Canadian Forces make.

We made the decision some years ago to improve both the amount and the delivery of services to the Canadian Forces members. We've made significant investments in treatment.

With respect to the delivery of those services, I would point to the joint personnel support units that are now found right across the country, most often located on Canadian Forces bases. Those are designed, as you know, to bring together all of the various services in one locale to present, I guess, what's tantamount to one-stop shopping—that is, where a veteran or a family member or a serving member can go to find the right program or the right service for them.

We've also intended to and we have increased mental health counselling and the number of mental health providers within the Canadian Forces. This is a very important change and addition, given those who are suffering post-traumatic stress and those who need that counselling.

That's in addition to the important work that our chaplains do. Our military chaplains have, in recent years in particular, taken on a significant role when it comes to assisting members of the Canadian Forces and their families.

We have also enhanced the programs that are designed to support those who have been severely or grievously injured as a result of their service.

These are some of the programs we have implemented during our time in office. I think it's fair to say, and I believe most Canadians would agree, that you can never do enough. You can never, in some cases, replace what has been lost as a result of military service. Yet we do our very best to deliver that each and every time to our veterans.

I commend those in particular who are at the delivery end, who are working daily in hospitals, in counselling sessions, in those joint personnel support units, and working with Veterans Canada to see that those services are there and are available when they're needed.

[Ted Opitz, Conservative, Etobicoke Centre, ON]

Thank you for that. I know, and I'm sure everybody agrees, that we can't do enough for our soldiers. I'm delighted that is constantly under review as well, because situations do change.

I would like to put on the record your comment about chaplains. Chaplains are really unsung heroes, who have done yeoman's work across the Canadian Forces in so many different fields outside of their own lane. I would like to put on the record that the military chaplains have certainly distinguished themselves in the service of Canada.

Sir, there's a request for a transfer to the RCMP and Natural Resources Canada for the chemical, biological, radiological, and nuclear research and technology initiative. Can you please explain the purpose of this initiative, sir? What threats to Canadian security and safety does this partnership particularly address?

[Peter MacKay, Conservative, Central Nova, NS]

We've made the decision, as we have on a number of occasions, to work closely with the RCMP, and with Public Safety generally. This is really aimed at sharing resources and sharing services in a way that is both effective and is responsible with taxpayers' dollars.

So many of the decisions that we take today—where the stakes are so high, where security is the central issue, where the protection of Canadians, their health and well-being, and their very lives—are what members of the Canadian Forces are tasked with daily. It's what they do in concert with other agencies, as we saw, for example—and you would be familiar with this operation—at the Winter Olympics in Vancouver.

It was a prime example of what the Chief of the Defence Staff calls here the “home game”, that is, what we're doing to protect Canadians, working closely with members of the RCMP, or in the case of Vancouver, the Vancouver Police Department. We also saw similar efforts in Toronto and in Muskoka around the G-8 and G-20 efforts, where Canadians very likely didn't see the effort because so often the work that was being done was in a support role. They were not front and centre, but I can assure you that there was a tremendous amount of cooperation, coordination, and security provided by the Canadian Forces during that very high-tempo period in Canadian history.

Just to reference your question, when it comes to the type of radiological equipment and response, if needed—and thankfully it has not been needed—this is where the CF and the RCMP share those resources, when needed, to respond to emergency situations or occasions where radiological leaks might occur. The same can be said of other emergency responses.

We've seen the Canadian Forces, for example, responding to things like floods, forest fires, and severe winter storms. People like Mr. Norlock, who served in police uniform, know that there is really a common cause and a common purpose when it comes to those who serve. It would include paramedics and medical personnel as well in responding to those emergencies when needed.

[Ted Opitz, Conservative, Etobicoke Centre, ON]

Agreed. That's a lot of inter-agency joint training.

I hope CBRN is never needed, but that kind of vigilance is hugely important.

As you know, we've been studying readiness. I'm going to direct this to either minister. As you both know, this committee is currently studying the overall readiness of the CF. I see here in the estimates that there are provisions for land and joint maritime and aerospace readiness.

Can either of you perhaps delve into what some of these provisions entail, first of all. Why is funding for readiness so important to your department? My last question is how has the Government of Canada improved the overall readiness of the CF over the past five years?

[Peter MacKay, Conservative, Central Nova, NS]

I'm going to give the associate minister an opportunity to speak to some of the specific investments that we've made in equipment for readiness.

Readiness, as you know, sir, as a former serving member, includes the training and the preparation. That includes investments in infrastructure, in bases where this training takes place. But the readiness I would describe as the critical piece. This allows Canadian Forces to deploy when needed, to respond, to be physically, emotionally, and mentally prepared to face the challenge, whether it be in a combat mission as we saw in Afghanistan, whether it be in a training posture where we currently find ourselves, whether it be in a different type of mission and a technically advanced mission as we saw over Libya and off the coast of Libya, or responding to humanitarian crises, as was the case in Haiti.

All of this involves many moving parts in terms of equipment, logistics, command and control, and in many cases, using highly technical equipment as was the case with UAVs and now, in some cases, satellite technology and human intelligence.

All of this requires investment, training, preparation, and results in the readiness that Canada needs in order to be able to rely on those men and women to perform incredible feats on behalf of our country. Perhaps to speak to some of the specific readiness, I would defer to Associate Minister Fantino.

[Julian Fantino, Conservative, Associate Minister of National Defence]

Thank you, Mr. Chair and members of the committee, for the opportunity to be here with you.

In my own experience over many years in law enforcement it's always a question of preparing for the worst and hoping for the best. That's what emergency services are geared toward. They equip and train to that level, and it's no less important for the Canadian military.

In that respect the quality of equipment is critical, not only to ensure optimum opportunity for our men and women to succeed in the very dangerous missions to which they are assigned, but also to do that in a safe environment so they can come home safe and sound at the end of their missions and duties. To that end, right now we have some 20 projects ongoing where various aspects of equipment are in the process of going through the system. They are all geared to ensure we do what we have said we will do in terms of the Canada First defence strategy. The wear and tear on equipment is obviously quite considerable.

That to me is a very important and critical aspect of our preparedness and readiness. It also ensures we do what we are supposed to do in providing our men and women the tools they need to do the job as safely as possible.