by Tom MacGregor

Legion Magazine is pleased to present a four-part series that takes a close-up look at today’s Canadian Armed Forces. We begin with an overview on how the Department of National Defence is attempting to cut costs while maintaining a combat-ready force.

Reflecting on a career that began more than 30 years ago, Brigadier-General Jean-Michel Comtois notes, “I don’t think young people today going into the military have the same expectations as they did when I first joined. When I was first getting in, things didn’t change.”

But life at Canada’s Department of National Defence is indeed changing. It’s changing rapidly, visibly–and awkwardly. Under the key phrase of renewal, the department is into its fourth year of a thorough examination of itself and the way it does everything from preparing for war to removing snow on a runway.

The biggest change of all, and certainly most difficult, will be changing the culture of a working force used to discipline and routine into one that is far more innovative and budget-conscious. “Change is never easy. There is a lot of stress for those who have to worry about a mortgage and their family,” says Comtois, who in August was named the director-general of Management Renewal Services. Reporting to Vice-Admiral Gary Garnett, the vice-chief of defence staff, Comtois is responsible for providing management advice, guidance and expertise to managers at all levels within the department.

The root of all change at the department and in the Canadian Forces is that there is far less money to go around. “It used to be when you suddenly had less money, it meant you didn’t do as much,” says Comtois. “That is no longer an option.”

The renewal process has seen an abundance of buyouts, early retirements, contracting to the private sector and continuing blurring of lines between civilian employees and those in uniform.

John Moore, a principal in the management consulting firm of PricewaterhouseCoopers, has been one of the consultants working with DND on these issues. In an article in the magazine Vanguard, Moore writes that DND faces distinct challenges in making the culture change required to operate this mandate. There is, first of all, a mix of military and civilian personnel who operate in different systems for pay, performance appraisal and promotion. An atmosphere of uncertainty about the future has been created which along with the reduction of resources has affected morale and stretched staff. As well, both the department and the Forces are under tremendous scrutiny from the media, Parliament, auditors and industry which often calls into question their credibility and professionalism. Finally there is the fatigue and frustration caused by all these challenges.

Last year The Royal Canadian Legion called for “a period of reclamation and restoration” in a position paper sent to then-Defence minister Doug Young (Editorial, March/April 1997). “No longer can the Armed Forces be subject to continuous and failed reorganizations, downsizing and management renewal…. The slate must be cleaned, errors corrected and the Armed Forces projected into the next century as a revitalized and capable fighting, military force.” The paper also recommended that National Defence staff be physically separated from those in uniform.

“The forced reduction program and drive to cut the Armed Forces to its lowest level since the postwar period have further undermined the cohesiveness of the operational units. The minister must act now to restore public confidence in the Canadian Forces and to enhance the structure and capability of the Forces itself,” the paper concludes.

“The Canadian Forces have been re-engineered and reorganized almost to death,” says Gordon Beech, the Legion’s Dominion Command spokesman on national defence issues. “Between 1992 and 1995 there were too many overlapping, unconnected initiatives. Air Command, National Defence Headquarters and others all had their own projects. Most of these programs were politically driven. Politics in itself is not a rational process.”

Comtois would probably agree. “We tend to develop mazes around the way we do things. Everything must have its own route. If something didn’t make the right turn, it all came back to you. Instead of going around (the maze) we have decided to go directly through it.”

The current renewal program is firmly grounded in the 1994 white paper on defence. The paper was written when the newly elected Liberal government was vowing to fix the mess in the federal government’s financial books. The Cold War was over, the Liberals had campaigned on halting the purchase of the costly EH-101 helicopters and the incidents in Somalia had soured public support for the Canadian Forces. If the federal government was going to find somewhere to cut, DND was an obvious target.

The white paper was the result of several reports assembled in fairly quick order dealing with Defence, Foreign Affairs and International Trade. Further views were sought through discussions Prime Minister Jean Chrétien and others had with Canada’s allies on both a bilateral basis and at meetings of the North Atlantic Treaty Organization. Through this process Canada’s defence objectives were defined as three traditional roles–protecting Canada, co-operating with the United States in the defence of North America, and participating in peacekeeping and other multilateral operations elsewhere in the world. The challenge thrown out to the Department of National Defence was to “evolve in a way that is consistent with today’s strategic and fiscal realities.”

The paper said the military should maintain core capabilities to protect the country’s territory and approaches, and to further national objectives. Perceiving no direct military threat to Canada, the paper called for the Canadian Forces to reduce its resources in North America while maintaining its obligations to NATO, the United Nations and the North American Aerospace Defence Command. “To achieve these goals the regular and reserve forces will both be reduced and refocused, the command and control system will be reorganized, and affordable equipment will be purchased so our troops have the means to carry out their missions,” the paper states. “Taken together, these measures will have substantial implications for the department and the Forces, their members and employees, as well as for local communities and the private sector across Canada.”

In all, it was a sweeping mandate for change and reduction. It envisioned a DND that in 1987 was spending more than $12 billion and expecting to spend more than $15 billion in 1997—98 into one that would decrease spending each year till it reached a $10-billion target in 1997-98. So far the annual estimates tabled in Parliament by the president of the Treasury Board show DND is living up to those targets. Though the final estimates are not in yet, DND is expecting to spend $9.2 billion in 1998—99–a decrease of 23 per cent in four years.

As for personnel in 1994, DND had 74,900 regular force members, 29,400 reservists and a civilian staff of 36,600. It was a total staff of 136,800 people. According to the 1997—98 estimates, Canada has a regular force of 64,996, a reserve force of between 26,700 and 32,400 and a civilian staff of 23,255. Even if the Forces reach the maximum level for reserves, that is a total of 120,651–a reduction of more than 16,000 people.

The white paper also called for reducing the resources and personnel committed to headquarters functions by one third. At the time of the paper the army had its headquarters in St. Jean, Que., the navy was in Halifax and the air force in Winnipeg. All three commands have since come under one roof at National Defence Headquarters in Ottawa. The senior ranks have been reduced from 93 generals and 330 colonels to 68 generals and 253 colonels. Base closures, which are always a political problem, have stopped. The 23 bases that were operating when the white paper was released remain operating with no further closures planned.

Overseeing this wave of change is the Defence Management Committee, made up of General Maurice Baril, the chief of defence staff, Garnett, Deputy Minister James Judd, and representatives of all commands. Reporting to it is the management renewal services staff and its alternative delivery services team.

In order to get through the maze, the management renewal services team has developed a number of projects that have taken on various titles. The object is to create a series of MEOs–most efficient organizations. Under such words as re-engineering–a word which cannot be found in the Concise Oxford Dictionary–and a slew of acronyms like MEOs, renewal is devoted to rethinking the way Defence does things with an intention of saving money while maintaining and properly equipping a combat-ready military. “We’re all paying for this,” says Comtois. “It’s about getting more value for your taxes.”

Every function performed by National Defence is on the table and the whole renewal process begins with examining a function to decide whether it is a core activity. Fighting a battle is a core activity. Snow removal on a Canadian base is not.

Core activities are those that are essential to the achievement of the defence mission. These are the combat requirements and the essential combat support needs. Combat duties are those that require a member of the Forces to commit an act of violence against an adversary in time of war or during a national or international military operation involving armed assistance. Combat-related duties are those that require a person to work in support of, and in close proximity to, a person performing military essential duties. The conditions and risks of the battlefield dictate that combat support people could well be required to fight or be subject to the dangers of combat. These functions will continue to be performed by members of the Canadian Forces.

Apart from these activities, a fighting force requires a range of integral support services that must also remain in the hands of uniformed personnel. This includes strategic direction; training individual and collective military skills; logistics support critical to the operation and sustainment of the fighting force; early warning surveillance and mobility; and military policing, legal and chaplaincy services that are related to discipline and morale.

A number of other activities are considered to be in the public interest and will continue to be performed by members of the Forces. These would include activities legally dictated to be performed by the department; activities for which the minister of National Defence is responsible to cabinet; high-level policy development; national-level resource management, strategic finance and human resource management; and those activities, which if turned over to the private sector, would have privacy, security or conflict-of-interest considerations.

As well, a number of non-core functions will remain in DND hands to provide adequate retention of skills and the rotation and development of people’s careers. For instance, while it could be reasonable to contract out vehicle maintenance at a base, it is still necessary to have skilled mechanics who can deal with vehicle problems on a peacekeeping operation. As well, the management skills required of officers cannot all be developed through combat-training positions.

Those activities that fall outside the core areas are examined for possible savings through alternative service delivery. Possibilities include civilianization or contracting out to the private sector. Civilianization–a word that is in the dictionary–is the assigning of duties once done by military personnel to the civilian staff.

The Alternative Service Delivery Program at DND commenced in July 1995. It flows from general trends in government endorsed by Treasury Board and is based on similar programs in the Australian Defence Force and the United Kingdom Ministry of Defence. Those programs have demonstrated savings of at least 30 per cent for the delivery of support services. The trend has been adopted by other government departments such as Veterans Affairs Canada that has recently experimented with having the Last Post Fund handle funeral and burial regulations on its behalf.

The alternative delivery program attempts to identify jobs currently done in-house that could be transferred to Canadian industry. Such activities as food services, base maintenance, ship repair, aircraft maintenance and provision of information technology services have all been examined. In 1997, 18 initiatives were under way to test support services that were performed by over 4,500 positions. There are also many little initiatives taken on at unit level. Overall the department is hoping for a savings of $200 million by 1999 out of a budget for non-combat activities of around $3 billion.

Alternative service delivery is based on a philosophy of fair and open competition. To be awarded a contract, a supplier must be able to offer better value for money than can be achieved by the department using its own resources. However the program also encourages in-house bids by those already performing the work. Only those currently charged with delivering the services are permitted to bid on an in-house basis. Accepted arrangements will have the same length of term as was offered to the private sector through a tender.

One recent review was of F Wing at Goose Bay in Labrador. Though there was much debate in the House of Commons and in the media, a private sector firm won the competition in December 1997 to supply support services.

“Our employees did bid on supplying Goose Bay,” says Kathryn Howard, director of alternative service delivery. Those already doing the job put forth a proposal to keep supplying the base as Defence employees. However the bid couldn’t match the private sector proposal. The end result is expected to be a savings of $20 million annually out of budget which in 1995-96 was $105 million. Of the 344 affected employees, 160 took jobs with the contractor. “Of those who took jobs the average is making about 90 per cent of their previous salary,” notes Howard. “People matter. We’re seeing that the private sector is willing to take our people and that they are making good employees.”

Those employees were given salary top-ups so their salary level would remain the same as it had been for one year. Another 60 employees accepted transfers to other federal government departments. The remaining employees accepted early retirement or a departure incentive package.

Options under the alternative service delivery program include commercialization–by creating an agency that would operate on business-like principles; contracting out where the department transfers the operation of, but not the responsibility for, a function; employee takeovers where the employees resign from the civil service before being engaged on contract to perform similar duties; partnering with other organizations; or privatization. “It’s all a matter of which tool you take out of your toolbox,” says Howard. “We have to ask ourselves, if the service can be found in the Yellow Pages, do we need to be the ones doing it?”

Recently, the Alternative Service Delivery Program decided to examine six more bases for possible savings. These are Canadian Forces Bases Borden near Barrie, Ont., Gagetown, N.B., Gander, Nfld., Montreal, Shilo, Man. and Suffield, Alta. The detachment at Wainwright, Alta., will also be examined. The sites were chosen because they do not have a primary role in military operations. Howard says, it is clear where the line will be drawn about what can be considered for alternative service and what will not. “But none of the things we’re looking at have to deal with combat capability. No one is touching that,” says Howard. “You don’t cut the sharp end of the stick.”

Howard says the money saved through renewal activities will be spent on capital purchases and combat functions. Presumably, the air force will get helicopters, the navy will get submarines and the army will get helmets. These are all things that the Legion, while skeptical about NDHQ’s management, have constantly called for in convention resolutions.

The renewal program in the army, air force and navy will be the subject of the next three parts of this series on the Canadian Forces today. Certainly signs of re-equipping have been seen lately. The helicopter deal is thought to be imminent, the submarine deal has gone through (Four Of A Kind, September/October) and the army has embarked on an ambitious plan to clothe the soldier (Army Gets New Outfitting, March/April 1997). With three very distinct cultures in the three branches, it remains to be seen how they respond to the change in the department that ties them all together.

The consultant Moore argues that a back-to-basics approach in the military is capable of having a positive effect on morale. “DND’s core values are closely aligned with the desirable features of a renewed culture. In general, staff display unparalleled ethics, teamwork, professionalism, loyalty to the organization and continuous improvement. These values are part of the Forces proud history and will continue to be the highly desirable cultural characteristics of any military organization,” he writes. “We believe DND’s core values are too strong and pervasive to ignore, they form an ideal leverage point for positioning change.”

Certainly the renewal program will be felt by everyone in the Forces. It is occurring at a time when everyone in the military is being asked to re-examine their ethical and social behavior in the light of intense media scrutiny on sexual harassment (Baril’s Statement On Harassment, page 40). Questions remain about whether these changes will enhance the ability of the servicemen and servicewomen to carry out their tasks. The affect on morale must also be considered, especially in light of Defence Minister Art Eggleton’s stated intention to improve the quality of life within the Canadian Forces with the appointment of an ombudsman this spring and other measures. Most of all, how will a proud history mix with a change in culture?

“When you start to change, people resist it,” says Comtois. “(Change) keeps you relevant. It keeps up your defences.”