National Defence Committee on Oct. 20th, 2016

[Cmdre Eric Lerhe]

Certainly with regard to NATO, for all those reasons, we've in fact promised forces to NATO and they know that in addition to the 2% of GDP, even if we spend less, we must devote 20% of our budget to capital. We're devoting 12%. That follows on to what we promised NATO. They know that our maritime patrol aircraft and our submarines fall off the map some time in the next 10 years. That is a failure to meet a NATO commitment.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thanks very much.

[The Chair, Liberal, Stephen Fuhr]

I'm going to move over to Mr. Spengemann. You have the floor for five minutes.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Thank you, Mr. Chair.

Commander Hansen and Commodore Lerhe, thank you both for your service to our nation, but equally important, thank you for your service through the policy world, which is very important especially at this juncture.

Commander Hansen, I want to take you back to portions of your testimony. With the Matthew Gillis study, you're saying the navy is simply too small for a country our size. He did some research and he said it's actually about half too small. Is that strictly for domestic defence purposes, or does that include the overseas roles that Commodore Lerhe has served in, in 2002-03?

[Ken Hansen]

No, it's for all of the purposes of the navy. We did first a global survey to get some general benchmarks. Then we compared the Canadian navy with other navies, NATO and non-NATO, that categorized themselves accordingly to what we at the time viewed ourselves, and we came up with these indices that showed a significant deficiency in personnel numbers, hull numbers, maintenance and engineering facilities, and so on.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

That's helpful. Thank you.

The second thing I want to point to is what the second-last paragraph in your written testimony talks about. You said, “the next major conflict is likely to be in either the far western Pacific Ocean or in the Arctic.” I wonder if you could clarify for the committee the comments on the Arctic.

I don't think we've heard from other witnesses the likelihood of a major conflict in the Arctic. In fact, we had testimony just at our last session that suggested, because of the current conditions in the Arctic, if somebody were to go up there in a naval setting to cause tension, that would be very difficult simply because of speeds and the ice, and their detection would be fairly easy and interdiction would also be easy, either airborne or maritime. I wonder if you could take the committee to your thinking on the possibility of a major conflict in the Arctic.

[Ken Hansen]

If something does develop in the Arctic, Canada's response is going to be primarily maritime. It's what we would call a maritime theatre of operations. That's because it's dominated by the water or ice, depending on the conditions, and the lack of logistical facilities to sustain and support operations. That means the navy and the Coast Guard must support whatever undertaking is under way by rangers, army expeditionary units, etc. The navy will play a huge supporting role in the far northern Arctic. Simply put, at the moment they have no capacity, and once the Arctic and offshore patrol ships are online, they will have very limited capacity.

A major conflict—if you talk to people who've done the kind of work I have at Canadian Forces College doing modelling and scenario testing—calls forth a demand primarily for enormous amounts of logistics, matériel, human support, movement, and return of people and goods back to the point of origin. The lines of communication from points of support to the High Arctic are further than they are across the Atlantic, and as far as from Victoria to Japan. So the demand—

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Commander, perhaps I could interrupt you there. What I was getting at was more in the context of theories of conflict. What would be the nature of a major conflict in the Arctic and what time horizon would you cast on that? What things would people fight over to the effect that it wouldn't be just a single vessel, but a major conflict in the Arctic?

[Ken Hansen]

The right of passage is one thing, the freedom of navigation. The Canadian government's position is that these are internal waters, and there are others who hold that they are international straits and they have the right to go through there at any time and at points of their choosing. That could provoke conflict.

Of course, the resource issue you've heard and know about. Then there's the sovereignty claim: Is it national territory or is it not? Wars have been fought over far less than this.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Thank you.

Commodore Lerhe, I wonder if I can take you back to your testimony about what you really described as a very significant erosion of our capacity to do overseas operations of the nature that we saw in 2002-03.

We had testimony at our last session from Vice-Admiral (Retired) Drew Robertson who said there are multiple capability gaps. What do we need to do to make sure that not only do we take our domestic security seriously but that we can continue to do the sort of work you describe? Maybe you could take us back to the 20% capital versus 12% and our commitments to NATO in a bit more detail.

[Cmdre Eric Lerhe]

Certainly. One of the great Canadian defence economists is Bill Tredennick and he theorized—and this, I would argue, should almost be the central work of this committee. In 1994, this committee had incredible influence on defence policy because it got into the finances, and was credible with its recommendations because they were based on strong financial work. But here's where we're at.

Tredennick says that when your percentage of defence budget reaches 12%, you are in “crisis”. You must get to 20% to maintain what you have. You must get to 25% of capital to buy new things, like humanitarian and disaster relief vessels. How do you get there?

I think two years ago, ex-chief of the defence staff Hillier proposed that we must go from 66,000 to 50,000 people. Guess what? By dropping your personnel by, let's say, 10%, you almost double the ability with which you equip your people with quality kit. It's that's simple. I just cringe when I hear defence policy setting the personnel level before it does the calculations of what effect this has on capital.

I'll return to Dave Perry. The number one policy problem in Canadian defence is under-availability of capital. I think I've said enough.

[The Chair, Liberal, Stephen Fuhr]

That's your time.

I'm going to move the floor over to Mr. Nater.

You have the floor.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Mr. Chair.

Thank you to both of our witnesses today. There's been some interesting testimony.

I want to start with you, Dr. Lerhe, and something you raised toward the end of your presentation. You raised the idea that any significant deployment should go to Parliament for debate, for approval, and with that should come the cost of the deployment, the funding source of that deployment. Would you mind elaborating a little bit on why you see parliamentary debate and approval as being essential to deployment?

[Cmdre Eric Lerhe]

I was very clear in saying “parliamentary debate”. I did not intend, or state, that Parliament approves.

Within every parliamentary-based system, foreign policy and the deployment of troops is the exclusive purview of the executive branch, but how can we send Canadians to potential danger areas if they do not at least see their Parliament has discussed it and endorsed it, that there's broad public support?

Clearly, Britain has recently gone one step beyond that. They passed approval. I think there are a great number of questions to be asked about that point.

The final issue is...and both parties here do not have a glorious reputation with regard to the funding of deployments. In 2007, the declared incremental costs were $1 billion, but the Conservatives only provided $270 million to the department, meaning that had to be eaten by the department. Now, $1 billion was not even correct. The PBO said it was $1.9 billion. Still, they only got about $270 million.

The Liberals, prior to that, had a significantly better rate. This fluctuates. The bottom line is, return to David Perry. When your $50 billion in capital demand for what you have...this is not new stuff, this is what you have, and you've only got $10 billion, you need to start plugging these leaks of money by signing on to deployments and not paying for them.

[John Nater, Conservative, Perth—Wellington, ON]

I would push you a little on the convention that's been developing in Canada on the concept of parliamentary debate and approval. We can probably talk about that another time, because I do want to go on to a few other topics.

I want to follow up on your comment using the example of the full task group you commanded in the early 2000s. You used the example today of the potential of sending perhaps two frigates, that it would take longer, and we would need additional capabilities from elsewhere.

Would you briefly walk us through the process to engage those additional capabilities, the timing that would take, the process that would take, and any of the additional costs it would take to engage those additional capabilities to send those two frigates?

[Cmdre Eric Lerhe]

Yes. There was a decision to sail post-9/11. Eight days later, four ships left with five helicopters, shortly followed by the MPA .

It was a matter of rapidity, and Ken has outlined it, getting all their maintenance up to 100% standard, supplying the spare parts, getting everybody new gas masks, and still they were able to get out the door in eight days.

You don't have a tanker. It now becomes an incredibly painful and extended process. Lend me a tanker, you declare to your NATO allies, who all reply they don't have enough tankers themselves. We beg on our hands and knees. We get a tanker for an intermittent period. They say we're going to a war zone. What about our rules of engagement? Foreign Affairs from both countries must be brought in. They go to meetings. This is going to eat up at least another week and potentially two or three, and you still haven't got the tanker there. It has to come maybe from Spain or Chile and meet with our task force wherever it's going.

Finally, you say to a nation they must lend us an anti-air warfare destroyer. And they look at you as if you were coming from another planet, because who would assign long-range missiles to Canada that it doesn't nationally control with its own rules of engagement?

I am sure somebody would get an anti-air warfare destroyer close to you to protect you if you needed it, but you can forget any real sense of control over it from a national point of view.

[John Nater, Conservative, Perth—Wellington, ON]

I want to carry on a little now about interoperability, the concept of shared defence of North America.

What types of interoperability would you recommend when we're looking at, whether it's the Arctic or maritime defence?

[Cmdre Eric Lerhe]

Canada in almost all areas has interoperability with the United States, which traditionally leads all coalitions. Anyway, it sets an extremely high bar because the Americans aren't going to cumber themselves with data links of a slow nature just because you couldn't afford a high-speed one. They will go to high speed, and Canada has traditionally always put its money where its mouth is and bought the best to remain interoperable with the Americans.

At the same time, Canada has also spent the money to maintain a certain number of backward links to NATO countries that necessarily did not go to the higher bar. So we're forward and backward interoperable. We really are one of the best in that function.

It must happen in all areas—land, sea, and air—because when it doesn't happen the results are appalling. Most famously, during the landings in Sicily in 1944, where the naval ships landing Canadian, American, and British troops saw an air raid coming in, there was inadequate processing of the information. Different headquarters had organized this, and the ships opened fire on 20 American air transports carrying American paratroopers and brought them down and killed them. These errors can still happen, ergo the high price we put on interoperability.

[The Chair, Liberal, Stephen Fuhr]

And that's your time.

I'm going to give the floor over to Mr. Rioux.

[Jean Rioux, Liberal, Saint-Jean, QC]

Thank you, Mr. Chair.

I'd like to thank our guests for their testimonies and for the very useful information they shared with us.

I will continue sort of along the same lines as my colleague Mr. Spengemann, who spoke about figures.

We know that the military needs reinvestment. I think everyone here agrees with that. Its budget is currently $18.6 billion, which is about 8% of the country's budget and 1% of our GDP. We know that NATO would like the NATO member countries to invest 2% of their GDP. Even Mr. Obama asked us for that last summer.

We know that what is desirable and what is feasible are two different things. I am used to be an economics teacher. It is often said that needs are unlimited, but that resources are limited. What might be thinkable and doable in the Canadian context?

Increases that can be decreed are thinkable. A little earlier, you spoke about a proportion of 20%. This percentage would mean that instead of a budget of $18.6 billion, it would increase to about $42 billion. I don't think Canada is capable of that.

With respect to what is doable, what projections would you give us?

[Cmdre Eric Lerhe]

I find Australia always provides a good comparison. Basically, $500 of Canadians' taxes per year goes to defence. In Australia it's about $1,000. It's our job to explain to Canadians why they must go from $500 to $1,000.

Australia, it is often claimed, must spend that money because they're far closer to the dangers of the Pacific. This is nonsense.

Not Darwin, but a town south of there—it escapes my mind—is 4,050 kilometres from Beijing. Vancouver, our biggest city close to there, is 4,500 kilometres from Beijing, a difference in distance from about here to Sudbury. The bottom line is we're a Pacific nation and all of the indications...our immigration is immensely Pacific bound. We are becoming a Pacific nation. Yet Australia is able to devote 2% of GDP and has a force that will soon involve 12 submarines; two supply ships; two HADR ships; three anti-air warfare destroyers, very much the modern equivalence of the destroyers that we just got rid of; and frigates. They are buying F-35s and they will probably be buying the VTOL, the vertical takeoff and landing version, for their amphibious carriers.

They have been able to explain to their people why they need to get to that 2% and it's not just based on proximity to the threat.

I think I'll be quiet there, but if you probe me on how you sell your people on more defence I can probably respond to that, too.

[Jean Rioux, Liberal, Saint-Jean, QC]

So you are maintaining your recommendation of investing at least 2% of our GDP, is that correct?

[Cmdre Eric Lerhe]

Yes.

[Jean Rioux, Liberal, Saint-Jean, QC]

That is clear. Thank you.

How much time do I have left, Mr. Chair?

[The Chair, Liberal, Stephen Fuhr]

You have about 60 seconds, but we've got time if you need to go a bit over.