Towards a new Defence Policy for Canada

May 3, 2017 

Thank you, Mr. Battista and the whole CDA Institute team, for hosting today’s event. It’s a pleasure being here with you today. 

I understand the CDAI had a productive exchange with the Chief of Defence Staff, General Jonathan Vance, in February about a range of issues facing the Canadian Armed Forces. 

I’m here today to outline where we’re really starting from with Canada’s new defence policy. The Government will be releasing that policy very soon, and the depth of the challenge has come into more stark relief through the course of our analysis. 

This analysis consisted of a thorough public consultation. Canadians provided over 20,000 submissions online. Parliamentarians held over 50 town hall discussions.  107 subject area experts participated in roundtables across the country, from Vancouver to Yellowknife, Edmonton to Toronto, in Halifax, Ottawa and Montreal. 

I’m going to be very frank, because I believe it’s important to be clear about the hole we are starting in. I’ll say up front that successive governments contributed to the current state of affairs. 

This audience is keenly aware of the extent of the challenges facing our military as a result of under-investment. 

And yet, the state of affairs is, in some ways, worse than realized by most observers. 

I know that you understand that we cannot build the Canadian Armed Forces this nation needs through a series of short-term decisions. 

I know you understand that a military is not strengthened by cobbling together pieces from one budget to the next. 

By succumbing continually to the pressures of the urgent at the expense of the strategic. 

By hoping that 20 years down the line, all of the disjointed ups and downs will somehow result in the military we need. 

That is why, in launching a Defence Policy Review, we set out to take the long-term view – to deliver a credible, realistic and funded strategy for our military. 

Let me state outright and up front that the Canadian Armed Forces deliver what governments ask of them every time. They perform superbly regardless of the resource constraints they face. 

All Canadians can be proud of the fact that our women and men in uniform answer the call of duty whenever and wherever it sounds. 

In recent years alone, they have deployed to Iraq to contribute to global efforts to fight DAESH. 

They deployed to Nepal in just 48 hours, after a tragic earthquake struck the tiny nation, and… 

They deployed with NATO to bolster alliance resolve and deterrence against aggressive Russian actions in Ukraine. 

…at home, they have helped residents of Winnipeg and Fort McMurray overcome massive floods and devastating forest fires. 

The Canadian Armed Forces is an inspiring institution that makes me proud every day. Responsive, professional and dedicated, they are counted amongst the best militaries in the world. 

But militaries cannot perform well forever without proper support. 

Governments have a responsibility to uphold their end of the bargain…To care for their militaries, resource them properly, and fund them in a responsible way that meets their needs. 

Since being elected a year and a half ago, we have worked hard to address the complex challenges that the Defence Team has faced in recent years. 

Doing this properly has been a very large task. 

We have spent a lot of time and attention assessing what’s working, what isn’t, and why. 

We engaged with defence and security experts in Canada and abroad to increase our understanding of modern security threats. 

We met with allies and partners to better understand the best defence role for Canada, and… 

We listened to Canadians about their aspirations for the Forces and our country. 

At every stage, the take-away has been clear:  Governments have not delivered predictable, sustainable, long-term funding for the Canadian Armed Forces. 

It has not been a straight line. Let me take a moment to retrace some twists and turns. 

In 2004-05, Prime Minister Paul Martin’s government implemented annual budget increases of around $1.5 billion in successive years. 

After that, the budget grew incrementally, predominantly to cover the cost of the combat mission in Afghanistan until it ended in 2010-11. 

Two deficit reduction programs followed, Strategic Review and the Deficit Reduction Action Plan. By the time these were fully implemented in 2015, each reduced the annual defence budget by $1 billion dollars, for a total of about $2 billion per year.    

The defence escalator, which was implemented to protect the DND budget from defence inflation, was increased from 1.5% to 2% in 2011. And beginning this fiscal year, it increased from 2% to 3%. Yet even that will not be sufficient to meet our future requirements. 

Years of ups and downs have contributed to unpredictability for those responsible for supporting, maintaining and sustaining the Forces and planning for its future.  The reductions have left the organization hollow in a number of areas.

Fighter jets and ships are prime examples of the unfortunate link between inadequate investment and capability gaps. 

Canadians were told a few years ago that the government would buy 65 new jets to replace our aging fleet of CF-18s. But for the missions we ask the Royal Canadian Air Force to undertake, and for our alliance commitments, 65 jets would simply not be enough. 

If we want to fully meet our commitments to NATO and NORAD simultaneously – and we do – then 65 jets would not be a full fleet. It would only be a fleet for risk managing our requirements, not meeting them. 

Furthermore, the $9 billion in funding that was earmarked for the jet replacements by the previous government is nowhere near enough to even cover the 65 jets they proposed. 

For the Navy’s new surface combatants, the previous government ended up saying they would buy up to 15. As has been well reported, the budget identified was dramatically insufficient and unrealistic. 

The Royal Canadian Navy deserves a clear, realistic and fully funded commitment. 

Canada’s naval capabilities are at a 40-year low. 

The number of operational ships in Canada’s fleet has dropped by five in the last two years alone. Ships have been retired without replacement because any plans for investments simply came too late. 

Without a single destroyer in its fleet, Canada will rely on the United States and NATO for Area Air Defence until  the introduction of our new Surface Combatants. 

Without a single supply ship, Canada is reliant on the capabilities of allies and partners for its replenishment needs, as well. 

These examples alone would be troubling enough, but there is much more to grapple with. 

The previous government’s budget cutting means $2 billion dollars less in the defence budget this year. This has exacerbated an already challenging situation. 

Closing recruitment offices made it harder to attract new recruits. 

Cutting the number of procurement officers made it difficult to buy, maintain and sustain all the tools and equipment we actually could afford for our military. 

We are now in the troubling position where status quo spending on defence will not even maintain a status quo of capabilities. 

Current funding has us digging ourselves into a hole…A hole that gets deeper every year. As a percentage of our GDP, we are spending less on defence today than we were in 2005. 

There is a list of major capital projects that are entirely unfunded. These aren’t ‘nice to haves’, these aren’t frills. These are projects that must be completed to allow our military to just keep doing what it’s doing. Investments that need to be made into the Forces key equipment and capabilities….And no funding has been allocated for them. 

Our Air Force will need funding for mid-life upgrades to its Cormorant search and rescue helicopters. We are talking about a critical need to invest in a fleet of aircraft that our Air Force uses on operations every day to help Canadians in distress. 

And they will also need sufficient funds to extend the life of the Griffons. These are highly reliable helicopters that have served our Air Force faithfully on missions at home and abroad for over 20 years. 

These helicopters are used to transport troops and materials, as they have on humanitarian missions and on operations in Afghanistan, and now in Iraq. And they can fit right inside the C-17 Globemaster, so they’re easily transportable, and give the Forces flexibility and agility in responding to crises around the world. 

But if we don’t fund their life extension project, we need to phase them out because helicopters with obsolete instrumentation can’t fly in North American airspace.

And yet…no money was allocated to keep them running in the years to come. 

With the Army, we discovered that no funding had been allocated to allow soldiers to keep doing some of their most important work. 

Without support from our allies, Canadian soldiers deployed overseas would be exposed to threats emanating from aircraft, missiles and long-range artillery.  Therefore, investments in Ground Based Air and Munitions Defence systems are required to guarantee the safety of our deployed troops. 

Yet no money was earmarked to provide this protection to our soldiers in the past.  

There are several other examples of projects that the Army needs the government to fund in order to ensure it can continue to assist Canadians during natural disasters, and to meet international commitments.

Its fleet of Heavy Support Equipment such as forklifts, dozers, loaders, and excavators, needs to be replaced so that our soldiers can build camps, protective works as well as roads and shelters.  

The list of activities that our soldiers undertake with this equipment is long. Yet here, too, no investments were planned. 

Furthermore, the Army’s fleet of Logistic Support Vehicles, such as trailers and medium-size trucks, used to transport supplies and essential equipment, has been significantly degraded over time and must be replaced.  These capabilities are essential to sustain our soldiers at home and abroad. 

Again – no investment planned. 

But the resourcing problems that we have found the most troubling, are the ones that have directly affected our service members. 

In over 25 years as a Reservist, I saw firsthand the ways that Canada’s government have failed to properly equip our Reserve force. 

Not only is there not enough equipment, but the training to use what equipment they have is lacking, as well. 

Our Reserve units are tremendously resourceful, and they perform extremely well, despite having been under-funded for so long. But that does not excuse the failure to properly resource our Reserves. 

They deserve gratitude from the Governments that deployed them away from their families and into harm’s way. 

Instead, when they take off the uniform, they get pension cheques delivered late. 

They have to run an obstacle course when they retire from the military, and they get short-changed in more ways than any Government would want to admit. 

So, these are some of the problems to be solved. Before it can build anything new, Canada’s new defence policy must first get us out of the hole that we’re starting in. 

Part of the solution will lie in financial rigour. 

Some of the decisions by previous governments about funding for major capital investments were based on overly optimistic assumptions about how far they could stretch the dollars in their defence budget to purchase military equipment. 

But it is difficult for Canadians to hold the Government to account, because so few people understand the financial framework to begin with. 

Defence budgets lack sufficient transparency and openness. 

The capital budgets themselves have not been informed by full-life costing, and defence funding was unpredictable, so long-term planning has been extremely challenging. 

That is why we promised a comprehensive review of Canada’s defence policy in 2015. 

It is why we sought the input of Parliamentarians from all parties, and why we sought input during a series of expert roundtables, including the Industry roundtable last July. 

It is why we consulted Canadians across the country through our online portal and Town Hall discussions. 

We also held roundtable discussions to hear from Indigenous community members and academics and others with expertise on gender-related issues. 

We wanted a thorough understanding of how every facet of our defence policy would impact our own people and Canada more generally. 

We will act on the evidence gathered throughout of defence policy review process. 

The process made clear the need to focus on emerging domains, like space and cyber. 

The need to remain a trusted and capable ally and a respected voice on the international stage – to protect Canadians and their interests. 

Most of all, we need to take better care of our Canadian Armed Forces personnel and their families. And we need to level with Canadians about what that really costs. 

This Canadian defence policy will be the most rigorously costed one ever produced. 

It has been developed with support from global costing experts from Deloitte, one of Canada’s top professional services firms, who also participated in Defence reviews among our Five Eyes partners. 

But then we went a step further. We asked five other major accounting firms in Canada to review the methodology we used. 

This will be a fair and accurate assessment of challenges, and a sound plan for how to address them. 

Roméo Dallaire once said that we need “an unambiguous statement of what is expected of the Armed Forces. How the Forces will be structured. What resources will be available to them, and how the government will guarantee that it will be sustained in the future”. 

Canada’s new defence policy will be that plan. 

It will be a plan to get out of the hole we are starting in, and it will be a plan to build an even stronger military. 

It will be a plan to allocate realistic funding to those “bread and butter” projects that will keep our military running efficiently and effectively for years to come. 

Most of all, it will be a plan to care for the women and men who put on the uniform. 

I look forward to doing right – now and for the long term - by those who defend Canada, our people, and our way of life. 

Thank you.