by Ray Dick

Canada’s decision to provide military support to the war on terrorism was announced by the prime minister less than a month after the horrific events of Sept. 11. On the same day as the announcement–Oct. 7–General Raymond Henault, the Chief of Defence Staff, issued a warning order to several Canadian Forces units to ensure their readiness. Within days, Canada’s contribution to the international coalition took the form of 2,000 military personnel, an elite commando unit, six ships, six transport and patrol aircraft and 40-year-old Sea King helicopters.

The government, including the prime minister, Defence Minister Art Eggleton and the CDS have all trumpeted the view that Canada will be able to pull its weight in what is surely going to be an ongoing battle to uproot terrorism.

Defence critics and military analysts, however, say the real test for the Canadian Forces contingent will come during the next few months and beyond when Canadian troops are due for rotation. Indeed, our ability to pull our weight internationally will depend on how well the forces can provide the trained personnel, expertise and relevant equipment to conduct effective operations within the coalition.

Our forces personnel are clearly up to the challenge, but their job will be difficult owing to a decade of shrinking budgets that have left the Canadian military with fewer personnel and outdated–and even rusty–equipment (The Chickens Have Come Home To Roost, May/June 2001). It is a situation that has driven the military brass to the wall to find new and more innovative ways to recruit personnel and to procure much-needed equipment for the armed forces. And although the terrorist events of Sept. 11 have prompted the government to kick in an extra $250 million initially to protect the homeland and wage war on terrorism, little of that cash initially made its way to military coffers.

“Only about $1 million of that new money to counter terrorism went to the Canadian Forces,” says Lou Cuppens, a retired lieutenant-general who is chairman of the Dominion Command National Defence Committee. Most of the funding went to other departments and agencies, such as the RCMP and other security services. On the procurement side, however, Cuppens does have faith in the military’s new program of capabilities-based planning which is designed to get the best value in procuring new military equipment with shrinking defence dollars. An example would be buying equipment, such as a frigate, that can be used in many roles rather than a piece of equipment that can be used for one specific purpose.

But Cuppens, along with other military analysts and political critics, agree the military needs an immediate infusion of cash followed by yearly raises in its budget of about $1 billion a year for the next several years just to maintain a reasonable capability to meet its expected commitments. The current defence budget is about $10 billion.

The analysts and critics also agree that at the top of the military procurement list is a replacement for the aging Sea King helicopters that are now off to war again. The choppers are capable, but they are also accident prone and subject to high hours of maintenance just to keep their old airframes in flying condition.

The government has started replacing the similarly ancient and high maintenance Labrador search and rescue helicopters–two of the new Cormorants have been delivered to Canadian Forces Base Comox on the West Coast–but replacements for the Sea Kings are not expected to begin until 2005. “We need an additional $1 billion for the next several years just to stabilize the military,” says Progressive Conservative Defence Critic Elsie Wayne. The Sea Kings, which her party had arranged to be replaced years ago only to have the contracts cancelled by an incoming Liberal government, need to be replaced now and there should be an ongoing program with domestic industry to replace ships and other equipment so that everything doesn’t wear out or rust out at the same time.

The military was suffering now after being “caught in the middle of a political fight,” says Wayne, and she would “fight tooth and nail” to get the government to bring in a new budget that would give the military personnel the “tools they need to do their job.”

The message was similar from Canadian Alliance Defence Critic Rob Anders. He says the Canadian Forces need more manpower now as well as new and updated equipment. “Our allies in North Atlantic Treaty Organization and Norad are now being brunt and brutal” in saying the Canadians cannot do their job in joint operations with their outdated equipment. He would like to see the budget doubled, a constant production line for shipbuilding that would keep such skills in Canada and a government procurement policy that would give more clout to parliamentary committees in the military procurement process, such as is done in the United States.

The rules in Canada are governed by the amount of the procurement: Below $5 million the approval is by bureaucrats, up to $30 million by the minister, over $30 million by the Treasury Board, and major Crown projects, usually about $100 million, are approved by cabinet. From there, the procurement request is turned over to personnel such as Virginia Poter, director of the material acquisition and support program at National Defence, who can be responsible she says for everything “from pencils to planes.”

But the parliamentary committee, in this case the Standing Committee on National Defence and Veterans Affairs, SCONDVA, “has little to say” in the procurement process, says Anders.

Professor Douglas Bland, military analyst and chairman of defence management studies at Queen’s University in Kingston, Ont., says generally the procurement system at National Defence is adequate in looking after public money. Delays in procuring equipment, such as new helicopters and rusted out equipment, were not so much due to political meddling as to just not having adequate funding. “The military needs $1 billion more annually just to stay still,” he says. Government policy was to spend 23 per cent of the budget on recapitalization, renewing capital programs. Such spending now was at 16 per cent, or seven per cent below the government’s own target.

“Lack of funds is the main problem,” he says, adding that he did not see much change coming in the procurement process as a result of the September terrorist attacks. “There could be some reshuffling of the capital programs, moving some procurements from the bottom of the heap to the top–maybe.”

While the national defence committee may have little to say in the day-to-day procurement problems for the military, the committee members did undertake an extensive study of the overall problems the Defence Department deals with in managing at any given time about 20 major crown projects, about 80 other approved capital projects and spending billions of dollars every year. After hearings with various officials involved in defence procurement, industry representatives and interested members of the public, the committee came up with a long list of recommendations to aid the Canadian Forces in getting the equipment it needs in a timely manner. One of those recommendations is that all major crown projects valued at more than $100 million proposed by National Defence be brought before SCONDVA for public scrutiny.

A prime example the committee listed of why the procurement process must be reformed is the replacement of the Sea King helicopter–“an operational need first identified almost 25 years ago.” No contract had yet been let to fill that deficiency and “the government should address this outstanding priority immediately.”

One of the committee’s main recommendations was that the government provide a stable and predictable defence budget. Noting that National Defence has been hit hard in recent years by the government’s efforts to control spending and cut costs through downsizing, reorganizing and re-engineering, the committee said the overall defence budget fell by 33 per cent between 1990 and 1998, the largest reduction of any NATO nation. In testimony before the committee, Bland said the budgeting process over the last several years has been to provide a fixed amount of money and ask the defence minister to go out and see what he can get for that. What suffered in such a process was capital procurement. “Capital procurement in Canada is not part of a strategy, not part of a policy, but a residue,” he says. “It’s what’s left over after you spend on personnel and after you spend on operations.”

The committee said the budget has been defining the Canadian Forces equipment priorities, rather than the other way around, resulting in a “design-to-cost” strategy. “Inevitably insufficient funds remain to maintain existing equipment, let alone upgrade or replace what has become obsolete and unreliable.” That situation jeopardizes military capability. Another problem was that non-defence national objectives–such as industrial and regional benefits, environmental concerns, international treaties, official languages, small business and the like– adds costs for DND, both in terms of finances and time. While not doubting the importance of non-defence national objectives, the committee asked the government to recognize that the cost of defence is often inflated to accommodate other issues.

The committee also recommends defence should coordinate its procurement with allies, giving the Canadian military important ties with the friendly forces and allowing it to acquire technology it would otherwise not be able to afford. One example is the joint strike fighter aircraft being developed by the Americans. At the same time, National Defence should evaluate and justify its decisions to resort to alternative service delivery instead of developing its own projects or using in-house services. The problems of contracting for civilian service was brought home more than a year ago when the military had to board on the high seas and forcibly bring to Canadian port the GTS Katie, a cargo ship loaded with Canadian military equipment that was taken hostage over a bill payment dispute.

Another recommendation stresses the importance of long-term planning, and a suggestion that National Defence consider how it can make procurement of equipment a more regular and “rolling” process rather than the “bulimic” experience it now is.

“The provision of a combat capable military force is a continuous process,” the Shipbuilding Association of Canada said in testimony before the committee. “The irregular nature of major crown procurement has a negative effect on the industrial base. These boom and bust cycles inevitably lead to a loss of manpower, technical expertise and wasted government investment when projects complete. This negative result can be partially offset by the involvement of industry in the lifetime maintenance, technical upgrades and management of the platforms.”

The importance of continuity of supply was stressed in later hearings by the committee during testimony by retired lieutenant-general Charles Belzile, chairman of the Conference of Defence Associations. The army’s fleet of trucks was in bad shape and many had been taken off the roads because of rusted wheel rims. They were badly in need of refurbishing, or replacement of the whole fleet.

“One of the problems we often have is that because of procurement systems, we don’t seem to be able to do things as civilian companies do,” he told the committee. “If I’m Smith Trucks, for instance, with a fleet of 200 trucks, I can buy 20 a year. So every 10 years I have a completely recycled fleet. We can’t do that in the military for some reason…. Most of us would like to see a program where you have constant buying of major equipment…. Eventually your whole fleet is turned over.”

Belzile went on to say that “unfortunately, the procurement system as presently set up simply doesn’t permit it, whether it’s caused by duration of the life of a given government or purely by bureaucracy. I think it’s probably a bit of both.”

Military analyst Martin Shadwick of York University in Toronto, former editor of Defence Quarterly, says it will be interesting to see what additional money and new equipment will be made available to the military in the aftermath of terrorist attacks in the U.S. and the continuing war on international terrorism. There was no doubt the roadblock is financial to an adequately manned and equipped Canadian military, and he sees the current slow down in the economy as an opportunity for the government to jump-start the civilian industry by building ships, planes, trucks and other hardware, both civilian and military.

“The highest single priority for the military was replacement of the Sea Kings,” said Shadwick, a process that started some 25 years ago and is expected to take until at least 2005 for the first helicopters to be delivered. The Progressive Conservative government of Brian Mulroney had taken action and a contract had been let to replace the choppers. That was cancelled at considerable cost when the Liberal government came to power and began a search for a cheaper replacement. It appears now the government will be buying a slightly different model of the helicopter they had previously cancelled. “It seems like a tortured process to acquire major crown projects,” says Shadwick. “It should not take the country that long to do this.”

Besides the choppers, the military among other things needs replacement of the aging Hercules transport aircraft, new Jeeps for the army and new destroyers and transport ships in the navy. Although the navy was in probably the best shape of the three arms of the service with its new and modern frigates, the destroyers are old and some of its ships are tied up in dock because of lack of crew. “Procurement in Canada seems to be on a boom and bust cycle,” adds Shadwick. “First there is a spending spree, then nothing at all. Sometimes the military is better off in equipment than in personnel.” He also suggested continuity, an ongoing replacement cycle, is needed in production, especially in shipbuilding. “The Dutch have that policy, and their shipyards never go to zero employment.”

Shadwick says that what it all boils down to is there is room for improvement in the procurement process, which is more complicated than it should be. The need for more personnel and for more and better equipment is obvious, and, as Shadwick says, it will be interesting to see whether the demands from the war on international terrorism will provide the impetus for a better equipped Canadian military.