Operating context and key risks - DRR 2016-17

Operating context

The global security environment in which DND and the CAF operated in Fiscal Year (FY) 2016-17 continued to be complex, with ongoing shifts in global power, demographics, and technology making it ever more fluid and unpredictable.

Prominent geopolitical trends included the increasing resort to violence associated with inter- and intra-state conflicts, global terrorism and the growing influence of non-state actors. Fragile states and ungoverned spaces also continued to act as regional flashpoints, incubators for extremist groups, havens for organized crime and sources of – or destinations for – refugees. In some regions of the world, climate change continued to aggravate existing vulnerabilities and act as a threat multiplier by compounding resource scarcity.

From a regional perspective, ongoing conflict and humanitarian crises in Syria and Iraq as well as civil war in Yemen demonstrated the persistence of such security challenges in the Middle East. Several parts of Africa faced similar upheaval linked to failed or failing states, poor governance, ethnic rivalries or sectarian divides, as exemplified by chronic instability in Libya. In Asia, tensions relating to longstanding maritime and territorial disputes endured alongside a regional arms race and a resilient Taliban insurgency in Afghanistan. Meanwhile, Latin America was also challenged by political instability, as well as transnational threats such as organized crime, natural disasters and environmental degradation. The European security landscape continued to be marred by conflict in Ukraine, faced increasing pressure from refugee and migration flows and suffered deadly terrorist attacks including those in the United Kingdom (UK), Germany, Belgium and France. Indeed, various acts of terrorism – ranging also from Indonesia to Turkey to Nigeria and primarily perpetrated by Daesh, al-Qaeda or their affiliates – underscored the worldwide reach and capabilities of such violent extremist groups.

Competition among major powers proved to be another notable feature of the international system, set against a backdrop that included Russia’s ongoing assertiveness and China’s economic rise. At the same time, the continued risk of the proliferation of weapons of all types – including weapons of mass destruction – remained a significant concern, as illustrated by North Korea’s ongoing nuclear and missile tests. The use of chemical weapons in Syria against civilians also prompted attention and concern from the international community.

The cyber and space domains continued to pose security and defence challenges, as well as opportunities. Increasingly sophisticated cyber tools that can be used for a wide range of crimes (e.g., espionage, theft, sabotage), and obtained with relatively minor risk or financial investment, are becoming more attractive as a method to attack governments and businesses. In addition, a growing number of states have continued to develop space capabilities for military purposes, and some states have reportedly been developing a range of counter-space or anti-satellite weapons that threaten collective access to and use of space. The use of ambiguous and deniable hybrid methods in the “grey zone” beneath the threshold of armed conflict – including in the form of cyber and disinformation campaigns – was evident as well.

National Defence in FY 2016-17 confronted an uncertain, volatile and dangerous international security environment, comprised of conventional as well as non-traditional threats and challenges. This increasingly multi-polar and multi-dimensional global operating context underlined the increasing difficulty of clearly differentiating national security challenges from defence ones, and distinguishing domestic from international threats.

In Canada, natural disasters and the impacts of a changing climate affected Defence work. Wildfires in Alberta and an ice storm in New Brunswick led to provincial requests for assistance from the CAF. In addition, climate change and technological developments have been making the Arctic more accessible. As in previous years, state and non-state actors alike continued to demonstrate a growing level of interest in the Arctic, with implications for search and rescue efforts as well as for the monitoring of this vast and harsh region.

Key risks

As articulated in the section on operating context, DND and the CAF are influenced by a wide range of external and internal factors, both domestic and international, that have an impact on how we carry out our mandate. These factors present both risks and opportunities, which are taken into account as we deliver on our roles and responsibilities.

Key risks are identified by aggregating risk information from internal and external sources, and considering it in the context of our mandate. Our key risks are articulated in Defence Plan 2016-2019 as follows:

  • Defence readiness;
  • Defence Team capacity;
  • Strategic resilience;
  • Capability delivery;
  • Integrated information management / information technology;
  • Financial controls and reporting of inventory and assets; and
  • Security.

A number of controls are in place to respond to these risks. Response strategy initiatives covered in this report are outlined in the table below. We will continue to monitor emerging issues, developments and trends to anticipate and mitigate the risks associated with them. In doing so, we will remain prepared to respond and provide the Government of Canada with advice and options underpinned by ready forces and capabilities.

Key risks

Risks Mitigating strategy and effectiveness Link to department's Programs

Link to mandate letter commitments or to government-wide and departmental priorities

Defence Readiness

There is a risk that DND will not have sufficient force elements of appropriate readiness to respond to concurrent missions or sequential missions before reconstitution is complete. This includes missions that are planned in advance, as well as responses to unexpected events, which by their nature are unpredictable in time, number, location and effect.

  • Defence Renewal initiatives to improve readiness.
  • Align Force Posture and Readiness (FP&R) resource expenditures with mandated missions and improve maintenance execution.
  • Full synchronization of the FP&R Directive with other corporate processes is expected to occur following a wide scale effort to capture costs associated with maintaining high level readiness.
  • FP&R cost capturing against Program Alignment Architecture (PAA) was initiated in early 2016 but suspended while the Defence Policy Review and the PAA is being replaced with a new Departmental Results Framework.

3.0

5.0

Ensuring CAF Posture and Readiness

Work with the Minister of Foreign Affairs to renew Canada’s commitment to United Nations peace operations.

Maintain Canada’s strong commitments to the North American Aerospace Defence Command (NORAD) and to the North Atlantic Treaty Organization (NATO).

Improve generation and readiness sustainment of joint forces.

The Joint Managed Readiness Program (JMRP) is in the third year of a five year development process. It is comprised of a detailed schedule of joint exercises implemented by a Joint Training Advisory Group (JTAG) and CAF planning staffs. The associated CAF Joint Task List was reviewed comprehensively and revised this year. The next bound for the JMRP is to advance from an exercise schedule to an effects-based plan.

CAF manages an adaptive but predictable system of collective, joint training objectives that addresses:

  • Cyclical surges in exercise funding requirements to address national and international readiness demands;
  • Evolving defence policy;
  • Prioritization of equipment support demands;
  • Prioritization of support personnel manning;
  • Introduction and integration of capabilities;
  • Flexiblity to leverage or redistribute training resources to maximize joint readiness effects; and
  • Design, validation and optimization of contingency planning.
3.0

Ensuring CAF Posture and Readiness

Work with the Minister of Foreign Affairs to renew Canada’s commitment to United Nations peace operations.

Maintain Canada’s strong commitments to the North American Aerospace Defence Command (NORAD) and to the North Atlantic Treaty Organization (NATO).

Defence Team Capacity

There is a risk that National Defence will not have the right number of personnel with the right competency, at the right place, and at the right time, which may affect its capability to fulfill current or future Government of Canada and National Defence expectations.

Significant work was undertaken on DND and the CAF Human Resources Strategy to better understand the integrated Defence workforce (Regular force, Reserve force and civilian) and requirements. This included:

  • An environmental scan;
  • Attrition patterns; and
  • In-depth analysis of key classifications.

4.0

5.0

6.0

Strengthening the Defence Team

Work with senior leaders of the CAF to establish and maintain a workplace free from harassment and discrimination.

Work with the Minister of Veterans Affairs and Associate Minister of National Defence to reduce complexity, overhaul service delivery and strengthen partnerships between National Defence and Veterans Affairs.

Work with the Minister of Veterans Affairs and Associate Minister of National Defence to develop a suicide prevention strategy for Canadian Armed Forces personnel and veterans.
Blue Print 2020 outcomes are in Defence Renewal commitments. Senior leadership responds to these outcomes on a regular basis through Defence Renewal reporting, monthly communiqués to staff, employee ambassadors and quarterly reviews at its internal governance committee (i.e. Branch Executive Committee).

4.0

6.0

Hiring priorities were aligned to MND’s mandate letter and 19 critical hiring needs such as procurement, Phoenix support, Sexual Misconduct Response Centre, Project Approval Process Renewal, total health management and Harassment and Discrimination Free Workplace were established.

We hired 1,224 students for work terms, exceeding the 1,000 student hiring target by 22 percent. In addition, 141 students were hired after graduation, missing the target to hire 200.

4.0

In 2015, the CDS ordered a holistic review of the Joint Personnel Support Unit (JPSU) organization which highlighted areas that were working well, and areas that needed improvement to enhance support to our ill and injured personnel.

This evidence-based, in-depth review conducted in FY 2016-17, laid the foundation for the improved restructure/renewal of the JPSU organization. It also provided a way forward to enhance care, support and service delivery for our ill and injured personnel.

4.0

Strategic Resilience

There is a risk that unexpected events may change the strategic picture such that it requires significant changes to the strategic level of resource planning and result in disruption to National Defence’s business operations.

Defence Renewal is the exercise that is providing considerable benefit to the Defence Team. Through Defence Renewal there is improved control of infrastructure and IM/IT support costs, and mission-ready equipment is increasingly available as a result of improved maintenance practices and routines. While some initiatives have proven to have challenges with respect to the timing and effort involved, most others are meeting expectations.

2.0

4.0

5.0

6.0

Ensuring Defence Resource Stewardship and Affordability

Support the Minister of Public Safety and Emergency Preparedness in a review of existing measures to protect Canadians and our critical infrastructure from cyber-threats.

Conduct an open and transparent review process to create a new defence strategy for Canada, replacing the now-outdated Canada First Defence Strategy.

Capability Delivery

There is a risk that policy and the resultant complexity of development, program approval and procurement processes will prevent National Defence from meeting its investment targets in critical physical assets (equipment, physical and information infrastructure and real property) in a timely, sustainable and affordable manner to enable CAF operations. This risk is about failing to close gaps, or preventing gaps in capabilities that could lead to future mission failure.

The implementation of Part I of the Project Approval Process Renewal (PAPR) for Ministerial Submissions, was approved on 20 February 2017. This renewal is meant to generate efficiencies because when the cost estimate for implementation is within 20% of the cost estimate approved at the definition phase, the implementation can go forward and does not need to be re-approved by the Minister. 6.0

Ensuring Defence Resource Stewardship and Affordability

Conduct an open and transparent review process to create a new defence strategy for Canada, replacing the now-outdated Canada First Defence Strategy.

Ensure that the Canadian Armed Forces have the equipment they need.

Worked with central agencies to develop a new funding model related to the management of Capital. This new model is to be implemented in the near future. 6.0
There was an in-depth review of the capabilities required to support the CAF mandate. The projects identified in the new defence policy were rigorously costed and fully funded. Worth noting is that the costing methodologies were reviewed and endorsed by multiple third parties. 4.0
DND has worked with Public Services and Procurement Canada (PSPC), Innovation, Science and Economic Development Canada (ISEDC), Global Affairs, Canadian Coast Guard, and the Central Agencies to implement the Defence Procurement Strategy (DPS) initiatives. This includes the DPS governance structure, the DPS Secretariat (part of PSPC), and a framework for the application of value propositions. 4.0

Integrated Information Management / Information Technology

There is a risk to National Defence if it does not take advantage of emerging technology to further an integrated IM/IT infrastructure that can provide a flexible and agile information environment conducive to efficient interoperable joint CAF operations and executive decision making, while achieving value for money and demonstrating sound stewardship. Failure to do so could also imperil the Command and Control (C2) of CAF operations at home and abroad, as well as the effective management of the defence enterprise.

The Chief Information Officer (CIO) governance framework that supports the CIO model is approved and in operation, and efforts continue on the implementation of the model and the supporting levers. This includes the necessary means to operate a federated approach to governance while maintaining a central functional authority for the CIO overall defence IM/IT activities. 4.0

Ensuring Sustainable Operational Excellence

Strengthening the Defence Team

Ensuring Defence Resource Stewardship and Affordability

Support the Minister of Public Safety and Emergency Preparedness in a review of existing measures to protect Canadians and our critical infrastructure from cyber-threats.

Conduct an open and transparent review process to create a new defence strategy for Canada, replacing the now-outdated Canada First Defence Strategy.

National Defence continues to actively enhance its relationship with Shared Services Canada (SSC) and operational success. This includes regular engagement at all levels, from the working level in base/stations across DND and the CAF, and up to, and including, the DM and MND. Comprehensive lists of tactical and strategic issues are maintained and prioritized for resolution. Challenges continue to exist, but has leadership attention at all levels.

4.0

5.0

6.0

Defence continues to develop and implement robust Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR), cyber and information security capabilities.

Defence is focusing on the capabilities deemed important by the C4ISR community and in doing so is evolving towards a more integrated network whereby products and services can be more easily shared between deployed and garrison units. The focus on interoperability enhances C4ISR capabilities and fosters efficiency through coordinated efforts and standardization. The interoperability effort is internally focused and also looks externally at information exchange with our allies. Specifically, Defence Command and Control Allied Interoperability continues to improve existing and establish new communication capabilities with our Five Eyes partners (Australia, New Zealand, Canada, UK and US). Last year we enhanced our secure voice connectivity by establishing Canadian Defence Red Switch Network connectivity with the secure Voice over Internet Protocol solutions in use by the US, Australia and the UK.

1.0

4.0

The target infrastructure for the long term enterprise Business Intelligence solution was developed and the interim infrastructure was installed. A data management strategy to support the enterprise Business Intelligence capability was drafted.

4.0

6.0

Financial Controls and Reporting of Inventory and Assets

There is a risk that without the proper financial processes and controls in place, the financial reporting of inventory and capital assets in the Public Accounts of Canada and the Departmental Financial Statements may not accurately reflect the true value of the department’s asset holdings, which may result in a loss of confidence in the department.

Defence continues to make significant progress towards achieving ongoing monitoring status of internal controls over financial management in order to mitigate risks to programs, operations and resource management. While originally not anticipated to reach ongoing monitoring until 2018-19 as a result of the implementation of several modernization projects impacting the automation of the control mechanisms, National Defence has implemented a series of compensating controls to mitigate high-risk activities.

4.0

6.0

Ensuring Defence Resource Stewardship and Affordability

Ensure that the Canadian Armed Forces have the equipment they need.

Conduct an open and transparent review process to create a new defence strategy for Canada, replacing the now-outdated Canada First Defence Strategy.

Defence continues to implement the Materiel Acquisition and Support Transformation Campaign Plan. This includes Defence Renewal Strategic Initiatives which improve materiel visibility and oversight. In addition, Defence Renewal Initiatives reduce excess inventory and enable the reduction of "overbuy" expenditures through improved stock accuracy, increased data clarity and integrity and the use of analytics tools and applications to plan and procure the right quantities of materiel.

4.0

6.0

Security

There is a risk that some elements of the Defence Security Program are insufficient to assure the protection of all assets and the continuity of critical services in support of readiness, capacity and operational capability.

Implementation of the Departmental Security Plan (DSP) is enhancing our ability to manage critical security risks through the holistic risk-perspective the DSP provides. This increased awareness enables informed decision-making resulting in improved protection of DND and CAF information, assets and effectiveness in operations. Since its launch, the Department has initiated 92 percent of identified action plans intended to improve the department’s risk posture over the short, medium, and long term. 4.0 Ensuring Sustainable Operational Excellence
The Chief Information Officer continues to complete risk treatment plans that mitigate the IT Security risks identified in the DSP. 4.0
Identification of the operational framework for the conduct of cyber operations is ongoing. Delivery of new approved capabilities and sustainment of existing capabilities is ongoing. 5.0

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