Public Accounts Committee on Sept. 28th, 2009

[VAdm Denis Rouleau]

Firstly, as we said, we do not draft separate plans for each service.

When developing the department's acquisition or evaluation plans, we begin by determining what needs to be done to ensure compliance with government standards. Once that is established, we draft potential scenarios where the Canadian Forces could be required. Based on these scenarios, we define the capacity that we require. We establish whether we already have the capacity, or whether we need to develop it. It sometimes happens that we have the necessary equipment, but it needs to be replaced because of its age.

Our system allows us to identify the relevant capacity and the relevant services. It is not about giving more to the air force, the army or the navy; our job is to maintain our capacity in light of the age of our equipment. It is not a matter of favouring one service over another.

[Pascal-Pierre Paillé, Bloc, Louis-Hébert, QC]

To my mind, there is a lack of planning in your system. You say that your system does not enable you to invest in the different services individually. That must make long-term planning difficult. Do you not think that your system will lead to problems in the long term?

Let us take frigates by way of example. They take time to build. As you do not have separate long-term plans for each sector, do you not run the risk of having to play catch-up when a need arises, or of ordering equipment that will be obsolete by the time you receive it?

[Vam Denis Rouleau]

No, that would not be the case. To illustrate that our system works, let us take the example of frigates.

We know that our frigates will have to be replaced in a few years' time. That is why we currently have the frigate modernization program, a transition measure, in place. We do not focus simply on the navy, the air force or the army. Our planning system is, in fact, very sophisticated. We start by looking at the theory and then we develop different scenarios. We have asked ourselves what we will need to meet government requirements. We have asked ourselves what capacity we will need over the next 20 years. We have a detailed plan that addresses all our needs. It remains, however, that we favour a needs-based approach, rather than an individual sector-based approach.

[Pascal-Pierre Paillé, Bloc, Louis-Hébert, QC]

Very well.

Ms. Fraser, what is your reaction when you hear that planning is not based on individual branches of the Canadian Forces? What is your view on this? Does it concern you?

[Sheila Fraser]

This is not a question that we have specifically addressed, but, from what we can see, the department's long-term resource planning is fairly detailed and robust. We are satisfied with it. Obviously, the resource planning has to reflect operational planning.

Our armed forces are now unified; they are no longer separate entities. It is therefore unsurprising that planning is carried out at a global level, reflecting the resources required for all branches of the Canadian Forces.

[Pascal-Pierre Paillé, Bloc, Louis-Hébert, QC]

I have just one last question, given that I am running out of time.

Do you think that the Department of National Defence is trying to do too much? Is that diluting the quality of the department's work?

[Sheila Fraser]

I have not studied that question, so I would not presume to comment on it.

[The Chair, Liberal, Shawn Murphy]

Merci beaucoup, monsieur Paillé.

Mr. Weston, for five minutes.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you for your report and for being here.

It seems so normal for us, as Canadians, to see the Auditor General seated next to the Deputy Minister of Defence.

Here we have our guests from Mali. Having visited the Congo in Africa just a year ago where the military is in different pockets of the country, very much in control, let me ask this question. What specifically about the defence ministry makes it more difficult to audit, and what should we as Canadians perhaps be concerned about in days to come?

You have been given access to all this confidential information and we as Canadians are given comfort that our freedoms are protected, that the military will never get beyond a certain level of influence, but do you have any comments on that? Was it harder to do this audit of the defence department than other departments, or could it become so?

[Sheila Fraser]

No, I would say that this was not a particularly difficult audit to do, because we are continually at National Defence. We have a very good relationship with the department, and they are very open and cooperative with us. I don't know that it would be difficult to do this in any department, actually, because we do have a good relationship across the departments.

Defence is, of course, a major...I wouldn't say “client” for our services, but we do a lot of work in the department given the amount of funds that are spent there and its importance to Canadians. We continually have at least one or two performance audits every year as well as the financial audit, so we do spend a lot of time at National Defence.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Let me direct a question to you, Mr. Fonberg. From your side, would you say that Canadians are protected in ways that maybe other countries aren't, in that our military is subject to civilian authorities so that our Auditor General really does have the kind of access and oversight that we would want?

That's just a small question.

[Robert Fonberg]

Thank you for that question, Mr. Chairman.

I'm not quite sure how to answer the question. I would go back and start with the National Defence Act, which clearly leaves accountability for resources with the civilian side of the organization, delegated from the minister to me--all resources in the organization. This means at the end of the day that there is an important check and balance on what the military actually does. That is a critical point of control. From that, the chief's responsibilities and my own responsibilities are quite clear.

Then from the Auditor General's perspective, all of the cover from the perspective of Treasury Board policy in these areas and the transparency that is required and the nature of financial systems that are required gives her and her staff the access they need to be able to make sure we are doing what we say we're doing.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Weston.

We'll go back to you, Mr. Christopherson, for five minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

I have just one follow-up question, and it stems from page 8, paragraphs 5.21 and 5.22, on capability-based planning. I am quoting:

Capability-based planning is the process that National Defence has identified for determining future Canadian Forces' capability requirements. It involves the analysis of scenarios, based on government defence policy and the department’s assessment of the current and future security environments.

The last sentence reads: “It is an important process that provides strategic direction for resource planning.”

So first, can you explain that to me in language I can understand? I didn't get what that means.

I'm going to ask two questions and leave them with you, and you can answer at your leisure.

On paragraph 5.22, it says:

Although the department has identified the need for capability-based planning for many years, we found that this process was still being developed. At the time of our audit, the department advised us that it had completed the analysis of eight of the 18 scenarios that are to be used to identify the required capabilities. National Defence officials told us that these eight scenarios define the majority of the Canadian Forces' required capabilities.

I didn't understand all but a word of that, in terms of what we mean by “scenarios” and everything.

If you would comment on those two, I would appreciate it, thanks.

[Robert Fonberg]

Mr. Chairman, I thank you for that question, and then I'll turn back to the vice-admiral.

When I started in this job two years ago, I actually struggled with the notion of capability-based planning, and it came down a little bit to this, as we tried to explain to our minister and to cabinet why the notion of the Canada first defence strategy and a long-term commitment to funding was actually important.

The example that came to mind at that time was planning for a response to a SARS event, or some pandemic, for example, and it was not the kind of thing that when the pandemic actually hit you would go down the street and knock on the door of the 7-Eleven and buy the response you needed. You need a level 4 lab. You need a network of public health officers, federal on down. You need to understand people's responsibilities at airports. You need to understand the regulatory frameworks. Altogether that is a capability, a capability that allows you to respond to a pandemic, a capability that allows the military to respond to one of the six missions that are laid out in the Canada first defence strategy and that requires aviation assets to come to bear; army assets to come to bear, including the training; naval assets to come to bear. When you look, for example, at planning for the Olympics, had we not had all of those assets and known how to combine them, we would never have been able to plan the security piece or actually effect the security piece for the Olympics.

It comes back a little bit to the question earlier on planning by sector. We plan to a capability need based on our expectation of what the country will actually require in terms of defence and security going forward.

That's my short-winded explanation, Mr. Chairman, and I'll ask the vice-admiral to add some detail.

[VAdm Denis Rouleau]

In fact, we call it the capability development life cycle. We start by first of all defining what we call the FSE, the future security environment, as to what the world will look like between now and the next 20 years. That gives us the environment within which we're going to be asked to operate. From that environment, we come up with scenarios. Those scenarios are simply events for which the armed forces would be called upon to play a certain role.

A scenario could be what we're involved with in Afghanistan right now. One of the scenarios could be something domestic, something here. It could be something like a podium or the security during the Olympics. We started with 18 of them that were defined there. They were identified. We found that after developing the first eight, we were in fact covering just about all possible areas and events where the armed forces could be called to operate. That's the reason we have eight that are fully defined and fully developed right now, as opposed to 18.

From those scenarios, in order to basically satisfy the government's direction and the level of ambition that it wants, and what it expects from the armed forces, we draw up a capability. In order to do what they're asking us to do, we need a certain capability, whether it's a naval task group that you send overseas, whether it's a full brigade or a contingent of land forces you need, or whether it's a package of CF-18s or a package of transport aircraft that you need to do a specific mission. It defines the capability.

Once you have that capability, then we look at what we have. We look at what we have and also, very importantly, the life expectancy of what we have. We know that at some point in time each one of those will have to be replaced, as we do for the warships and any aircraft we have and for any equipment for the army. Once we have that, it defines when we have to start working on the replacement for those capabilities.

The tool we use is called the strategic capability roadmap and it defines very precisely, by time, when we need to start working to replace the frigates, the CF-18s, and each part of our equipment that we have for our capability. This basically defines it. What we have now on top of that is an investment plan. In fact, the investment plan is the fiscal envelope within which that capability development has to fit. We have no choice. We have to stay within that appropriation. Therefore, we tie in the capability with the fiscal room that we have and we sequence it and phase it so that we maintain the capability while remaining within our fiscal envelope.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Christopherson.

We're now going to move on to Mr. Young for five minutes.

[Terence Young, Conservative, Oakville, ON]

Thank you, Mr. Chairman.

I welcome everyone to our committee today.

Mr. Fonberg, I wanted to ask you a question. I was very interested in your report. You said in your report, “We are a very busy and mission-focused organization” and you're occupied with “operations in Afghanistan...RCMP-led security operations for the 2010 Vancouver Games and the upcoming G8 and now G20 meetings, as well as implementation of the Canada First Defence Strategy”. As we know, the Canada first defence strategy includes new critical sovereignty initiatives in Canada's Arctic.

So my question would be this: is it safe to assume this is the busiest time related to foreign and domestic missions since World War II?

[A voice]

Korea.

[Terence Young, Conservative, Oakville, ON]

Since Korea?

[Robert Fonberg]

Yes, since Korea.

[Terence Young, Conservative, Oakville, ON]

Okay, since Korea.

So I'd like to ask Madam Fraser a question. In your deliberations, is it fair to say that your report should be taken in this context?

[Sheila Fraser]

Absolutely. Yes.

[Terence Young, Conservative, Oakville, ON]

So did you evaluate the way the Department of Defence managed money and managed funds in that context? Or did you keep the same high standards and deliver the best report you could to help them improve their operations?