Thank you.
I'm going to ask about two different things. One of them is how the defence budget cuts and the delays in capital replacement are affecting your responsibilities. The other is to find out more about the issue of readiness for a potential disaster, particularly on the Pacific coast. I'm a Vancouverite and I'm always interested in the risks and the preparedness for that.
With the first question, I'm sure you're aware of the Conference of Defence Associations Institute's recent report from last week. It's highly critical of our situation with respect to budget cuts and national defence. Capital spending has dropped to 13% of budget where normal was always 20%. Their analysis suggests that the funding is, on an inflation-adjusted basis, down to 2007 levels, so it's far below what was promised in the defence strategy. In fact some $32 billion is being pulled out of the defence strategy from the promised trajectory. I just want to put on record their quote here:
The reality is that we are entering a period of continued decline, diminished CAF capabilities and capacities, less training and lower output, with consequently reduced influence on the world stage and weakened contribution—
—and this is the part that is specifically relevant to our discussion—
to our own security, domestic and international.
How do you deal with these budget reductions, some of which are transparent and you can plan for, but some of which are backdoor cuts like lapsing and freezes and so on? What's the process for taking an unplanned budget reduction that might affect supplies, training, or maintenance and making sure that you can focus it where you are the most effective, and cut out things that are not as necessary? What's your process?