DPR – An Uncertain Future

Every decade or so, the government excites the defence and security community with the announcement of a defence review. Those interested become active with the hope that the government will finally balance policy, capability and funding. Such expectations are rarely met. The government prepares a good defence policy statement but, before those plans become substance, an economic adjustment voids the document. And yet the defence community continues to be hopeful, expecting that this time the government will resolve “capability gaps” with adequate funding.

The Canadian government has an uncanny propensity for conducting defence reviews prior to economic crises. The 1971 White Paper preceded the Nixon era 1973-1975 recession. The 1987 White Paper was published prior to the 1989 S&L crisis and subsequent USA 1990-91 recession. The 1994 defence review preceded the 1995 Mexican peso crisis, which compelled Finance Minister Paul Martin to eliminate Canada’s deficit more rapidly. The 2006 policy statement on defence was followed by the 2008 Great Recession. The last 50-years of history with Canadian defence reviews warn that the 2016 defence review is likely to be derailed by a significant economic event shortly after its publication.
 

Another unpleasant reality that needs be grasped when contemplating a defence review in 2016, is the perilously low state of combat readiness of the Canadian Armed Forces.

After 50-years of inadequate funding, the Canadian Forces can no longer down-size, hollow-out or retire capabilities and still have a viable navy, army and air force.

Faced with a restoration bill of tens of billions dollars this government has to decide which service or services are not to be equipped for general purpose combat capabilities. The governments of the 1960s and ‘70s put the Canadian Forces on a long downward trend of declining budgets that reduced defence spending from 2% of GDP to 1%. For the last five decades, DND has managed valiantly to sustain core capabilities across the three services, but study after study (whether internal to the department or external) all come to the same deduction – three combat capable services cannot be sustained on the current perennial diet afforded by allocating approximately 1% GDP to the defence of the country and its international obligations to global security.

The Royal Canadian Navy (RCN) needs ships, and lots of them, from combatants to support ships. Other than strategic and tactical airlift, the Royal Canadian Air Force (RCAF) needs to replace the majority of its fixed and rotary wing fleets. And, after two decades of demanding operations in hostile environments and rough terraine, the Canadian Army (CA) needs some major equipment restoration projects.

In short, the bills have come due and the government needs to significantly increase defence allocations for a prolonged period to restore its armed forces, or significantly redefine the defence and combat capabilities it wants at its disposal.

History and reality provide the catalyst and are the major determinates of the upcoming 2016 Defence Review. The Canadian Forces have depleted combat capability and readiness, and the finances to address decades of neglect do not appear to be forthcoming.
 

Hence, a new approach is required. Rather than raise expectations and dash them with subsequent economic reality, consider reversing the defence review process – put financial projections before policy aspirations.

DND should be provided with realistic financial projections from the Department of Finance. Pre-approved funding scenarios would effectively rein in acquisition aspirations and avoid nugatory planning.

For a very long time, successive governments have been “saying” how much they value the forces, but actions to the contrary suggest that they don’t value a combat-capable military. Where does the truth lie?

Now is the time to present a force structure and capability that future allocations would support and generate. The Minister of National Defence (MND) and the Chief of the Defence Staff (CDS) have various councils at their disposable to provide applicable direction. And operational research directorates have 50 years of records that provide great detail on what the Canadian Forces has historically provided, and what is most likely needed in the foreseeable future. Once the government has articulated what they are willing to spend, and how MND and the CDS envision future military commitments, the force generators (not the policy writers) can then take the lead.

Based on my military and civilian-political staff experience I advocate a defence- and force generator-led review.

Similar to the development of annual Level 1 Business Plans, each of the three service commanders would be notionally given a portion of the defence budget for sea, land and air force generation, operations, training and sustainment. The VCDS office would receive an allocation for defence capabilities, joint operations, Special Forces, etc. MND/CDS offices would retain a financial reserve. The three service commanders and VCDS would optimize their capability mandates with modified (if appropriate) force structures. They would negotiate with other Level 1s (ADM) and notionally contract functions they assess as essential for achieving their capabilities.
 

Within a short time, the redundant and less than essential functions would be clearly identified by the five with notional allocations. In this manner MND/CDS would quickly learn what is not valued and could decide whether the unfunded are worthy of continuance, elimination or transfer elsewhere in the government (much like the recent move of military pension administration.) The expenditures on non-defence objectives would likewise be identified.

The end product of a capability-priced force structure would be presented to Cabinet, along with a list of recommendations for what could be eliminated or transferred to other departments.

Given that there is insufficient political will and resources in the foreseeable future to restore the Canadian Forces to general combat capability, the 2016 Defence Review needs a new approach for an uncertain economic future – start with a funding profile generated by the Department of Finance.

Rather than a stand-alone defence paper, this economic-led review could then provide the substance for DND’s 2017/18 Report on Plans and Priorities and would provide a solid base from which Parliament could articulate government priorities.

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Colonel (Ret’d) HJ Marsh was Senior Policy Advisor to MND O’Connor; Senior Military Analyst to the Canadian Defence Association; Commandant Royal Military College; Director Land Force Developments and Land Requirements; and Liaison officer to the Joint Senate-Parliament Committee on Defence. His military and civilian career spanned the last four defence white papers: 1965 to 2007.