Section III - Details on Transfer Payment Programs of $5 Million or More - DPR - 2014-15

Table of Contents

• Contributions in support of the Capital Assistance Program
• Contributions in Support of the Military Training and Cooperation Program
• NATO Military Budget (NATO Programs)
• NATO Security Investment Program (NATO Programs)

Contributions in support of the Capital Assistance Program

Name of Transfer Payment Program: Contributions in support of the Capital Assistance Program (CAP)
[Voted payments]

Start date: 1983-84

End date: Ongoing

Fiscal Year for terms and conditions: 2011-12

Strategic Outcome: Resources are delivered to meet Government Defence Expectations

Link to department’s Program Alignment Architecture: Program: Real Property Lifecycle (4.3)

Description: The Department of National Defence (DND) uses the Capital Assistance Program to optimize its infrastructure by seeking cost-effective solutions with eligible recipients who have the mandate and capacity to operate and maintain the infrastructure and who may also benefit from joint use opportunities. Contributions are made to:

• upgrade infrastructure (e.g. roads, sidewalks, and sewers in residential quarters; water treatment plants and water distribution systems that serve operational and non-operational requirements) after it has been transferred from DND to the eligible recipient;
• expand and/or upgrade existing local infrastructure to better support DND requirements (e.g. water treatment plants, water distribution systems, airport runway extensions, roads); and/or
• construct new local infrastructure, such as:
  • community-oriented facilities for shared-use by the Base/Wing and local authorities (e.g. arenas, gymnasiums, swimming pools, community centers);
  • infrastructure to support non-operational requirements such as for residential accommodation (e.g. roads, sidewalks, sewers); and
  • infrastructure to support operational requirements (e.g. new access to the Base/Wing).

Results achieved: Key results for the 8 projects in the project development during Fiscal Year (FY) 2014-15 include, the launch of the design work to build a highway/intersection for the base entrance to Canadian Force Base (CFB) ValCartier. The design is due for completion in FY 2015-16. A number of contribution agreements were signed, including: a contribution agreement with the City of Quinte West, Ontario for the design and construction of a roadway and intersection to a new base entrance for CFB Trenton. The project was completed in the summer of 2014; a contribution agreement with the City of Kingston, Ontario for a transfer and upgrade of a water booster station from CFB Kingston to the City; a contribution agreement with the Comox Valley Regional District, British Columbia, for the design of the Quadra Sewage line to accommodate CFB Comox Her Majesty’s Canadian Ship (HMCS) Quadra sewage requirements; contribution agreement was signed with the City of Winnipeg for the design to realign roadways to provide new access to Hangar Line road and secure CFB Winnipeg, Manitoba.

These projects met one or more of the following expected results:

Immediate expected result:

• collaborations with local authorities to upgrade/expand/construct and own and operate public infrastructure and services that DND requires;

Intermediate expected result:

• reduced DND non-core infrastructure;
• cost-effective development and maintenance of infrastructure, which involves one of the following:
  • reduced operating/capital costs;
  • or cost avoidance;
  • or minimized DND liability; and
• improved/new/maintained infrastructure for use by DND members and their families; and,

Final expected results:

• the optimization of DND infrastructure to support the evolving force structure; and
• enhanced quality of life in the Canadian Armed Forces.

Comment(s) on Variance(s): The variance is due to several projects awaiting approval by recipients.

Audits completed or planned: None

Evaluation completed or planned: The next evaluation for the period of FY 2014-15 to 2018-19 commenced in the fall of 2018 and will address the relevance and performance (effectiveness, efficiency and economy) of the contribution program.

Engagement of applicants and recipients: Applicants (Bases/Wings and L1s) get involved very early in the process to identify projects and potential recipients (primarily municipalities, provinces and territories). They play a key role in initially approaching recipients and obtaining their buy-in for the projects. To facilitate and encourage recipients to engage early in the process, a two-step contribution agreement is now in place. This new process allows DND to transfer funds at the design stage via a first contribution agreement. Once the design and any other aspects (e.g. asset transfer, service agreements, etc.) are agreed upon, a second contribution agreement can be signed with the recipient and the project can be implemented.

* PAA structure changed in FY 2014-15
Sources: Assistant Deputy Minister (Finance)/Chief Financial Officer Group and Assistant Deputy Minister (Infrastructure and Environment) Group

Contributions in Support of the Military Training and Cooperation Program

Name of Transfer Payment Program: Contributions in Support of the Military Training and Cooperation Program (MTCP) [Voted Payments]

Start date: 1992-93

End date: Ongoing

Fiscal Year for terms and conditions: 2010-11

Strategic Outcome: Defence Operations will Improve Peace, Stability and Security Wherever Deployed.

Link to department’s Program Alignment Architecture: Program: Ongoing Centralized Operations and Operational Enablement (1.3)

Description: The MTCP builds the military capacity of member countries through language training, and professional development courses including command and staff instruction, and peace support operations training.

Results achieved: The MTCP continues to support and promote Canadian interests and values through the provision of military training cooperation with developing, non-NATO countries. Training 730 foreign officers from 58 active member countries, MTCP successfully supported the Department of National Defence’s (DND) defence diplomacy agenda for the Fiscal Year (FY) 2014–15. This number only takes sponsored students into account. The hundreds of unsponsored “students” who attend one-day conferences/symposiums at the end of some courses (publics’ affairs, ethics, etc.) are not taken into account. The Program was successful in enhancing the ability of appropriate persons to communicate in English and/or French, improving understanding of democratic control over the armed forces, enhancing the ability for appropriate persons to function as efficient staff officers within a strategic/operational environment, and in developing capacity of member countries to undertake peace support operations. It also demonstrated cost-effectiveness in enhancing peace support operations interoperability among Canada’s partners to lessen the operational burden on Canada. Finally, MTCP demonstrated relevance to DND and the Government of Canada, to other nations and to participants by expanding and reinforcing Canadian bilateral defence relations, promoting Canadian democratic principles, the rule of law, international stability and the protection of human rights in the international arena, achieving influence in areas of strategic interest to Canada and by contributing to international peace and security. MTCP remains committed to further developing language, professional development and staff training, and peace support operations training activities both in and outside of Canada.

Comment(s) on Variance(s): As part of the budget reduction implementation effort, the Director of Military Training and Cooperation (DMTC) has transformed its program policy and delivery processes. The change, initiated in FY 2012-13, is a move away from individual training in Canada-based schools to the building of the capacity of schools themselves within member countries. This is a marked shift which requires a three year commitment on the part of MTCP and the recipient member countries to sustain the training effort until ownership of the capacity is successfully transferred. For FY 2014-15, the variance is due to reductions at the Canadian Forces Language School (CFLS) (fewer students, termination of Class B Reservist contracts, decrease of course expenses), the cancellation of two UN Staff Officer Courses (UNSOC) in Kenya, as well as the cancellation of a Canadian Defence Academy (CDA) Peace Support Operations (PSO) Course.

Audits completed or planned: None.

Evaluation completed or planned: The next planned evaluation will be in FY 2018-19 and will address the relevance and performance (effectiveness, efficiency and economy) of the contribution program.

Engagement of applicants and recipients: Every fiscal year, the DMTC sends to Canadian Defence Attachés (CDA) approved country profiles for the upcoming fiscal year. These profiles outline the training and courses MTCP intends to make available for each respective country. DMTC issues these profiles as preliminary planning guidance, but they are subject to change. The invitation to participate in a particular course is confirmed by the receipt of a course-loading message 3 months in advance of training. All necessary information covering pre-requisites, selection process and arrival requirements are provided at this time.

At the completion of an MTCP sponsored course, a questionnaire is distributed to foreign students by the training institutions. Their feedback is captured in the MTCP Annual Assessment, a crucial tool in measuring the success of MTCP at meeting its objectives, as well as in the reallocation of training resources to improve overall effectiveness. Feedback on the performance of candidates and the impact of the program on the recipient countries is also collected through questionnaires completed by CDAs as well as by instructors and directing staff assigned to MTCP courses.

* PAA structure changed in FY 2014-15
Sources: Assistant Deputy Minister (Finance)/Chief Financial Officer Group and Assistant Deputy Minister (Policy) Group

NATO Military Budget (NATO Programs)

Name of Transfer Payment Program: NATO Military Budget (NATO Programs) [Voted Payments]

Start date: 1949

End date: Ongoing

Fiscal Year for terms and conditions: 2010-11

Strategic Outcome: Defence Operations will Improve Peace, Stability and Security Wherever Deployed.

Link to department’s Program Alignment Architecture: Program: Ongoing Centralized Operations and Operational Enablement (1.3)

Description: To contribute the Canadian share of the NATO Military Budget - a common-funded program to finance the operating and maintenance costs of the NATO military structure and activities, including deployed operations and missions.

Results Achieved: Canada’s financial contributions to NATO continued to ensure Canadian security and provided leverage and influence within the multi-national body. These contributions also provided access to military capabilities, which Canada itself, does not possess.

The contributions further served to help protect and strengthen the freedom and security of all NATO Members by political and military means in accordance with the North Atlantic Treaty and the principles of the United Nations Charter.

The benefits of Canada’s investment in NATO included access to strategic information, intelligence, capabilities, interoperability with allied forces and an equal voice in high-level decisions affecting Euro-Atlantic security and stability.

Comment(s) on Variance(s): The $13.085M variance in the NATO Military Budget is in large part due to the payment recovery from Host nations and a more favorable foreign exchange rate.

Audits completed or planned: At the end of the year, the annual financial statements were presented for verification by the International Board of Auditors for NATO (IBAN), which is an independent entity reporting directly to the North Atlantic Council (NAC). The IBAN is composed of government officials from national audit institutions in member countries. The IBAN conducts financial audits on all accounts commonly-funded by NATO members. Designated committees in NATO, where Canada is well represented, analyzed all the IBAN reports and made recommendations to the relevant NATO entities to comply with IBAN findings.

Evaluation completed or planned: An evaluation of Defence’s NATO Contribution Program was completed in FY 2011-12 by Assistant Deputy Minister (Review Services).

Engagement of applicants and recipients: This program has only one recipient, thus the engagement process was managed directly through the ongoing relationship.

* PAA structure changed in FY 2014-15
Source: Assistant Deputy Minister (Finance)/Chief Financial Officer Group

NATO Security Investment Program (NATO Programs)

Name of Transfer Payment Program: NATO Security Investment Program (NATO Programs) [Voted Payments]

Start date: 1949

End date: Ongoing

Fiscal Year for terms and conditions: 2010-11

Strategic Outcome: Defence Operations will Improve Peace, Stability and Security Wherever Deployed.

Link to department’s Program Alignment Architecture: Program: Ongoing Centralized Operations and Operational Enablement (1.3)

Description: To contribute the Canadian share of the NATO Security Investment Programme (NSIP) – a common funded program that finances the capital costs for the provision of communications and information systems, installations and facilities such as radar, military headquarters, airfields, fuel pipelines and storage, harbours and navigational aids needed to support the NATO military structure and activities, including deployed operations and missions.

Results Achieved: NSIP continued to fund projects that meet NATO’s essential purpose, which is to safeguard the freedom and security of all its members by political and military means in accordance with the North Atlantic Treaty and the principles of the United Nations Charter.

The benefits of Canada’s investment in NATO include access to strategic information, intelligence, capabilities, interoperability with allied forces and an equal voice in high-level decisions affecting Euro-Atlantic security and stability. It also includes a potential return on some of Canada’s eligible infrastructure projects in support of NATO operations.

Comment(s) on Variance(s): The NSIP variance of $11.792M is due to low activity levels in the program implementation rate by Host nations responsible for delivering various projects.

Audits completed or planned: At the end of the year, the annual financial statements were presented for verification by the International Board of Auditors for NATO (IBAN), which is an independent entity reporting directly to the North Atlantic Council (NAC). The IBAN is composed of government officials from national audit institutions in member countries. The IBAN conducts financial audits on all accounts commonly-funded by NATO members. Designated committees in NATO, where Canada is well represented, analyzed all the IBAN reports and made recommendations to the relevant NATO entities to comply with IBAN findings.

Evaluation completed or planned: An evaluation of Defence’s NATO Contribution Program was completed in FY 2011-12 by Assistant Deputy Minister (Review Services).

Engagement of applicants and recipients: This program has only one recipient, thus the engagement process was managed directly through the ongoing relationship.

* PAA structure changed in FY 2014-15
Source: Assistant Deputy Minister (Finance)/Chief Financial Officer Group