Senator Kenny delivered the keynote speakers address on Monday December 1, 2003 at a conference held at Queen’s University in Kingston, Ontario entitled “Defence Acquisition: Building Canada’s Future Military Forces”.
His remarks are as follows:
I would like to start off by thanking Dr. Douglas Bland
the Chair of the Defence Management Studies Program at the school of Policy Studies, Queens University, the Institute of Defence Resources Management at the Royal Military College of Canada
•the Canadian Defence Industries Associations
•and the Institute for Research in Public Policy
for inviting me to speak at such an important conference.
It is a distinct honour to address such a distinguished audience.
I have been impressed with the quality of the presentations and the discussions in the sessions I have attended today.
I understand it is a long standing army tradition to have the evening speaker before dinner.
In politics we do this to be in time to make the deadline for the National News.
But I gather the Army does it with politicians to provide for amusing discussion during dinner it gives them a chance to dissect the errors and omissions in the politicians remarks.
Personally, I like the idea of speaking before dinner because it gives me a chance to relax during the meal but I warn you I am going to be checking the tables for people who are giggling.
My main point this evening is that, as we confront our challenges,
we must focus on the obvious.
I am reminded of the story about Sherlock Holmes and Dr. Watson on a camping trip.
After a good meal and a bottle of wine, they lay down for the night and went to sleep.
Some hours later, Holmes awoke and nudged his faithful friend.
“Watson, look up at the sky and tell me what you see.”
Watson replied, “I see millions and millions of stars.”
“What does that tell you, Watson?”
Watson pondered for a minute.
“Astronomically, it tells me that there are millions of galaxies and potentially billions of planets.
Astrologically, I observe that Saturn is in Leo.
Horologically, I deduce that the time is approximately a quarter past three.
Theologically, I can see that God is all powerful and that we are small and insignificant.
Meteorologically, I suspect that we will have a beautiful day tomorrow.
What does it tell you Holmes?”
Holmes was silent for a minute, then spoke.
“Watson, you idiot, someone has stolen our tent!”
Like Sherlock Holmes, I hope we can dismiss obscure theories and deal with stark realities here tonight.
The fundamental reality we have to address is the Canadian forces are underfunded to the point that they are in danger of not functioning as an effective entity.
We all know this stems from lack of political will which is in turn the product of public indifference.
A conference on defence acquisitions has a hollow ring to it if we are going to continue staggering along with a budget of 12 Billion dollars a year using the 1994 White Paper as your Mission Statement.
Nobody doubts that the new government is going to undertake a foreign policy review and a defence review – preferably in that order – but perhaps simultaneously so this limits, somewhat, the advice we can provide the government on acquisitions not having a clear understanding of the Canadian forces future mandate.
Having said that, 12 billion dollars for the defence of a G-8 country
is ridiculous ----- embarrassing ----- disgraceful.
I think the first thing we must do, given our current situation is to quote the famous Holmes “Focus on the Obvious” and the obvious is that for Canada to have a credible foreign policy it must devote more resources to diplomacy ---foreign aid ---and defence.
The three are integrated, symbiotic parts of a modern Nation’s Foreign Policy and are fundamental elements in its national security.
The topic of our conference is Defence Acquisitions: Building Canada’s Future Military Forces and the stark reality we have to deal with tonight is the government simply isn’t spending enough money on defence.
Focusing on the obvious – Canada is spending about 1.2 per cent of its GDP on defence while the average NATO country is spending 2.7 per cent.
The median NATO expenditure for NATO countries was estimated at 1.9 per cent of their GDP.
Canada ranked 17th out of 18 NATO countries in defence spending as a portion of its GDP.
If Canada had spent 2.7 per cent of its GDP on defence in 2002-2003
the departmental defence budget would have been 31.2 billion dollars instead of 12.8 billion and would be 151 per cent higher.
If Canada had spent the NATO median of 1.9 per cent GDP on defence last year the department’s budget would have been 21.9 billion dollars and would be 77 per cent more than what it is currently spending.
As it happens, Norway spent the median or 1.9 per cent and the Czech Republic spent the average or 2.1 per cent of its GDP.
So if we split the difference and Canada spent somewhere between the average and the median we would be devoting 2 per cent of our GDP to defence or a total of 23.1 billion dollars – roughly 86 per cent more than we are spending now.
I don’t think it is an unreasonable goal for this government to be in the middle of the NATO pack in terms of its defence spending by the end of its next term in office.
This would mean an annual increase between now and 08-09 of 2.5 billion dollars a year to the baseline of the Canadian Forces budget.
By 2009 defence spending would be slightly over 24 billion dollars a year and interestingly enough it would only constitute 1.58 per cent of the projected gross domestic product for that year. - - -
(if you are prepared to believe the best economic researchers available to the Library of Parliament)
So who knows – in 10 minutes I have managed to hike Canada’s defence spending as a percentage of GDP from 1.2 percent to 1.58 percent which would leave us somewhere between the Netherlands and Denmark but still significantly below the average and the mean of the rest of the players.
However, if you have been listening carefully I have also added 2.5 billion bucks a year and got our budget up to 24 billion dollars over the next five years - and while that may not be respectable at least we may not have to sit at the children’s table for Christmas dinner.
I felt it was necessary to encourage you to think a little bit about the size of the pie that is Canada’s economy as a whole and the Canadian Forces slice of the pie --- in other words, the percentage that is likely to go to defence and finally, where we sit relative to our friends and allies - as you have gone about your discussions today on how to make capital acquisitions more coherent and efficient.
A rational process would first figure out the task or tasks that had to be accomplished and then focus on the most effective and efficient way to achieve these goals.
We on the other hand know that the system doesn’t work that way.
The Canadian Forces are going to be given an envelope of money.....
I can promise you right now..... too small and a list of tasks - I can also promise you right now..... too long and then D.N.D are going to be told to “get on with it.”
I think it is incumbent on us, the men and women in this room to ensure that the Canadian public understands just how much it costs to bring defence and security to this country because sooner or later the balloon is going to go up and Canadians are going to be demanding security and complaining that we never warned them.
Notwithstanding how the pending defence review goes we all know that the middle of the NATO pack on a percentage of GDP is a reasonable place for Canada to be.
And now I would like to turn to a few specific suggestions relating to acquisitions that I believe will have application no matter what the outcome of any defence review.
First, and I know it is not a capital acquisition, we need to invest in increased manpower.
Capital acquisitions are all going to take a number of years before they require substantial sums of money but we can bring on increased manpower almost immediately, particularly in the army where there is a significant shortage of combat troops and the principal infrastructure investments will be the enlargement of Gagetown and Borden.
There should be an increase in manpower over the next two years to bring the Canadian Forces up to 75,000 effective personnel.
I don’t intend to go into details on all of the subsequent points but obviously there would need to be an increase in trades training capability to avoid bottlenecks in the system.
In my view, more troops are going to be needed in any reconfiguration of the armed forces so we might as well get on with it now.
Secondly, even though the current government has decided against it the next government should move swiftly in the purchase of strategic airlift.
A minimum of 8 C-17's should be added to the Air Force’s fleet and I expect the cost will be just in excess of two billion dollars.
A sovereign state needs to have the capability to get its troops where they have to go but we don’t even have the ability to move our forces within Canada.
No doubt some of you will feel this is excess capacity but I believe it would be appropriate for us to lease commercially any excess capacity, especially as the demand for strategic lift is going to increase in the future as the Antonovs age and are not replaced.
The C-17's will provide us with commonality and interoperability with the Americans and I have no doubt that Canada could obtain favourable placement in the production line in order to receive these aircraft within the next 18-24 months.
Third, we need to replace the existing support ships of the Protector Class with four vessels which have a roll on-roll off capability and can lift the equipment of an army battle group to a theater of operations anywhere around the world.
These vessels should also provide refueling and command and control capabilities for navel task forces.
Fourth, the maritime Helicopter Project is a matter of priority.
I disagree with the “lowest priced compliant” selection process.
We must return to the concept of “best value” in order to ensure that the Canadian Forces are equipped appropriately and that we take advantage of what may be better than the minimal operational requirements with the potential for having lower lifecycle costs.
I believe that “best value” makes best sense and the new government should put past political mistakes behind them.
Fifth, we need to conduct a review of other air transport requirements. The C-130's should be removed from search and rescue duties and replaced by an aircraft similar in type to the Buffalo but updated to modern standards.
Between the purchase of the C-17's and new Buffalo type of mission specific, search and rescue aircraft we could retire up to 19 C-130's and use the remainder for tactical air to air refueling and tactical airlift within Canada.
Finally, the Canadian Forces should devote considerable attention to unmanned airborne vehicles – more commonly known as drones.
I note that drones currently in use in Afghanistan have had teething difficulties.
In fact, I am not sure they are necessarily the right unmanned airborne vehicles for the Canadian Forces but the logic of UAV’s is unassailable. They are clearly a key tool of the future and Canada needs to examine them and acquire appropriate types.
I would like to conclude by touching briefly on four concepts.
First, Canada’s militia needs a task and it should be that of Canadian Forces chemical, biological, radiological and nuclear experts (CBRN). This would give the militia a real job and a truly useful footprint within the communities.
Our Committees studies have demonstrated that First Responders truly need this sort of support and the military is the logical place for them to turn.
Second, I think it is time for us to rethink contracting out and alternative service delivery.
There may be places where the Canadian Forces are getting good value for work done by contractors but I think a thorough review needs to be done to determine whether the decision to contract out various services has been effective and whether the decisions made after the 1994 White Paper are still valid.
We need to decide if the task can be completed by members of the Canadian Forces at a similar cost but with the added flexibility of multi-tasking military personnel for secondary duties.
Third, its time to eliminate the “Buy Canadian Premium”.
I don’t think it is appropriate to use the Canadian Forces budget for regional economic development.
I think the CF should be free to purchase best value regardless of country or source of the product and ensure that these acquisitions are interoperable with our allies – particularly the United States.
If the Canadian Government wants to provide economic incentives to a region it should send them a cheque.
Lastly, I think we have an opportunity to provide for continuous shipbuilding in Canada.
Our Committee has examined the needs of both the navy and the coast guard.
It is clear that these two organizations have sufficient need to require the laying of a new keel every 8 months into the foreseeable future.
For this to be truly effective it would require a selection of a single yard, in addition to the repair facilities in Halifax.
A single yard working with the assurance that it would have a steady flow of orders would provide for a stable and skilled workforce and Canada’s shipbuilding needs for national security would then be met.
This would be in stark contrast to the existing five yards which lie idle for years at a time and a regional development policy which provides false hope to workers and requires regular re-training in a highly competitive world market.
There you have it folks, an amateurs overview of how much money the Canadian Forces will need over the next five years.
My best guesses about the equipment that will be required regardless of what the white paper on defence says. And a few thoughts on the things that I think need revisiting on how we buy and make the equipment necessary to defend Canada.
I have not touched on modernization which is already underway in the air force and the army transformation. Nor have I addressed other requirements such as the ISTAR and IM issues, which will have to be worked out as well.
I always like to end my remarks on an understatement and consequently I would like to quote from the Report of the Minister’s Panel on Administrative Efficiencies which said:
“Procurement in D.N.D. is universally viewed as being a slow, cumbersome process that does not fully respond to Defence’s needs.”
Amen.