Mr. Chair, members of the committee, thank you for the invitation today to speak about naval readiness.
In my opening remarks, which I'll try to keep quite short, I'll make some fairly broad comments about the navy writ large and DND, and then I'd be happy to focus on any areas you want to in the questions and answers.
I think the Canadian navy has turned a corner, in many respects. It's coming out of one of the lowest periods of fleet availability and some of the dimmest prospects it's had for fleet recapitalization in post-war history. It's now in a situation today where it effectively has its fleet back and is starting down the road to recapitalization.
Last November HMCS Toronto, the last frigate to enter the Halifax class modernization frigate life extension program, completed that upgrade on schedule. With that, the RCN is now back to a normal frigate readiness cycle with significantly enhanced warships.
Similarly, in the last two years, the Victoria class submarines reached the level of operational availability that was originally envisioned.
With both our frigate and submarine fleets, Canada has effectively regained a reasonable level of operational capability, albeit with no ability to sustain surface operations independently until the interim auxiliary oiler replenishment ship comes online.
Further, the innovative generating-forward concept that the RCN is using I think is effectively giving Canada and the Canadian government more foreign policy options with the same 12 ships in the fleet than it had before.
On the personnel front, the navy is still dealing with some deficiencies in the number of trained personnel, particularly related to skilled technical positions. As these problems were in part caused by limited availability, because we had effectively a very limited fleet, it should now be easier to rectify this with a much greater return to useable ships at sea.
In sum, I'd say that our navy is presently in pretty good shape if you're looking in terms of present fleet readiness, but there are significant points of concern with the navy as it relates to its future and future readiness in the context of the current naval procurement program and the prospects for future fleet recapitalization.
In my opinion, both the current government and the previous one together deserve significant praise for setting up and then continuing what is now being called the national shipbuilding strategy, which brought Canada's naval and defence and industrial policies into much closer alignment than they had been previously.
However, I do agree with the assessment of the first status report on that effort, which was published last spring. It recognized the need to do several things related to that file: increase government shipbuilding capacity and expertise; improve project budgeting; better measure progress and results; and in particular, improve communications on the file.
All of these aspects of the national shipbuilding strategy need improvement, and I think they have for some time, but even today, despite that announcement last spring, it's not really evident what has actually changed to try to implement any of those changes that were discussed and that are, I think, much needed.
The shipbuilding file is of critical defence and industrial importance. It's a multi-decade program of work, worth at least $40 billion just in the acquisition stage alone, and well over $100 billion overall, depending on what time horizon you want to pick and what you want to include.
Despite this, in my opinion it's being managed as a group of individual projects and it's being resourced with what seems to be a penny-wise, pound-foolish approach that's treating this file just like any other matter of routine public administration. However, having said that, I'd be happy to elaborate on any of the things I think need to be improved.
I would disagree with the notion that the shipbuilding file, or even the Canadian surface combatant project in particular, is a disaster. But given the inability or unwillingness on the part of the Government of Canada to effectively communicate about this file, I can understand why many are viewing this issue that way. I would suggest that if the communications are not improved, no one should be surprised if the national shipbuilding strategy is perceived to be a failure irrespective of whatever it actually achieves.
One issue that needs to be handled better, in particular, is the costs. This has been acknowledged. While the sum total of the shipbuilding project represents an enormous sum of money cumulatively, it's known to be insufficient. Similarly, if you look beyond the programs that are part of the national shipbuilding strategy alone, even within just the naval remit particularly, there are insufficient funds available to acquire the capabilities needed to deliver on existing defence policy and maintain the same basic type of navy that we have today.
Key among these shortfalls is sufficient funding to retain a capable fleet of submarines into the future. So one of the most needed outcomes of the defence policy review for the navy as well as the armed forces, writ large, in my opinion, is clear direction from the government about what it expects them to be able to do and the resources needed to achieve it. That's true for both the navy as well as the Canadian Armed Forces more broadly.
As this government prepares the federal budget, which we are all hearing is coming quite soon, I think it must give consideration to increasing in particular the capital funding that is available for the Department of National Defence. The navy especially, but DND more broadly, in the future will simply not be able to keep doing the same types of things it does now without an increase to its funding for capital equipment.
Canada made a commitment to the NATO alliance to spend 20% of its defence budget on new equipment and research and development, but for the last several years has spent only about 13%. Additional capital spending of roughly $1.5 billion per year would more or less close this gap and increase the overall share of GDP that Canada spends on defence.
Phasing in an increase of about $1.5 billion in additional capital funding incrementally over a few years, and matching it with a concerted effort to improve the defence procurement process so that money could actually be spent, would allow Canada to meet one of its NATO spending targets, have it come closer to meeting another NATO target, and keep the same broad level of military capability it has now.
Without this kind of injection of funding, the defence policy review will result in a contraction of the Canadian military, irrespective of whatever the defence policy actually says.
Thank you.