Mr. Chair, members of the standing committee, thank you very much for having me here today. It's kind of nice not to be in the committee of the whole, although I kind of miss that too. We had such a bonding experience for all of us during those four hours.
I appreciate the opportunity for me to present on the main estimates for national defence for the fiscal year 2018–19. I'm very pleased to appear before you in the company of my deputy minister, Jody Thomas; Shelly Bruce, the acting chief of the Communications Security Establishment; Rear-Admiral Darren Hawco, who is the acting vice chief of the defence staff; and senior members of my defence team who you see here today.
In just over a week, we will celebrate the anniversary of the launch of our new defence policy, “Strong, Secure, Engaged”, SSE. The policy was not only a road map for the next 20 years, but it was a commitment to do defence differently, a commitment to move toward a mindset of investing in our armed forces. Through SSE, we have committed to increasing the annual defence spending to $32 billion over the next 10 years, an increase of over 70%.
In one year's time, we have accomplished quite a bit and we are very proud of that and very proud of the team that has accomplished this.
Today I will detail some of the most significant accomplishments in line with our main estimates. In SSE, we said that care for Canadian Armed Forces personnel would be our primary focus. We said we would offer enhanced tax relief for Canadian Armed Forces members on deployed international operations. We have done that. We said we would launch a suicide prevention strategy with Veterans Affairs. We did that. We promised to integrate gender-based analysis plus into our activities, and that has happened. We announced $6 million in new annual funding for the military family resource centres, and that has been delivered. We said we would appoint a diversity champion and implement a new charter for the sexual misconduct response centre. This also has been done. We said we would further modernize the military justice system. We have tabled Bill , which introduces a declaration of victims' rights and will make the overall system more efficient.
On innovation, we promised to introduce the IDEaS program to seek out the best defence and security ideas across the country. That has been done.
On procurement, we said we would give the military what it needs to do the important work. That is well under way. We said we would explore an interim fighter capability now. We are examining the acquisition of 18 Australian F-18s. We said we would also launch an open competition for the future fighter, and that has been done. We also have a new fleet of 16 Airbus C-295s for search and rescue. The first one is scheduled to be delivered at the end of 2019. For the navy, we are acquiring a fleet of five to six Arctic patrol ships, the first of which is expected next year. We are hiring more people into the materiel group to help deliver on these and other procurement projects.
In many ways, the successful implementation of our policy so far is due to the way we manage our cash flow and support a flexible funding model. In last year's main and supplementary estimates, we requested $20.97 billion. For the second year in a row, we will have no lapsed funding. This has not been done at DND since the early 2000s. Instead, we will be carrying over $677 million. This is done for a very good reason: the department cannot reduce this further without taking the chance of overspending its appropriation at the end of the year.
A small, unplanned change in forecast may make such a difference. For example, a one-cent fluctuation in the U.S. exchange rate costs us approximately $16 million. All of this reflects better forecasting for capital investments and other improved financial management practices. In addition to reducing the discrepancies between forecasted and actual spending, the department only requests funding it knows it can spend. For instance, we planned to bring in $6 billion last year for capital investments, but ended up requesting just $4 billion. Here's why: about 30% of the funds were unspent because we were able to cut costs through better contracts and unused risk mitigation strategy, which is a good thing.
For example, in some cases we put aside funding to pay for intellectual property, but this expense did not materialize over the first year of the projects, and 27% of the unspent funds were the result of our own internal processes and the additional time required to analyze options for some of the projects. We will continue to review our project management process to find greater efficiencies.
Another 42% of the unspent money is related to delays in delivering goods and services by industry. Simply put, we will not pay for non-performance. We take this extremely seriously. This is why we are introducing new initiatives to increase our collaboration with industry and help reduce such delays.
Other changes to our financial management have also helped us to get to where we are today. Our shift to the accrual basis of accounting enables better, longer-term planning of defence capabilities over the next 20-year period. Because our funding model is flexible, we are not forced to spend money before it is the right time to do so. This strategy to request funds only when they are needed offers greater transparency to parliamentarians and to Canadians.
Also in the vein of openness and transparency is our plan to release our first defence investment plan publicly. This will be done very shortly. This publication will ensure that Canadians and the defence industry can see where we will be making capital investments so they can engage with us accordingly. In fact, I look forward to speaking about the plan with industry professionals tomorrow at CANSEC.
So far, I have focused on the work that we are doing to support the women and men of the Canadian Armed Forces, but I would be remiss if I did not take a moment to reflect upon what they have accomplished this past year.
At home, we have performed life-saving evacuations of Canadians at risk from wildfires and offered critical assistance to flood relief efforts in Ontario, New Brunswick, and British Columbia.
Abroad, about 1,900 personnel are currently deployed on 18 active international operations, including in Latvia, Iraq, and Ukraine. As you know, we will deploy an air task force to Mali as part of our commitment to peace support operations.
So, Mr. Chair, all of this brings us to the funds we are requesting under these main estimates. We have achieved tremendous momentum through good work in the last year. The task at hand is to build upon that momentum, continue supporting our forces, and serve Canadians. For that, we are requesting $20.38 billion. That is $1.7 billion more than last year, or a 9.2% increase.
Within this, $1 billion is for operating expenses, $658 million is for capital expenditures, $12 million is for grants and contributions, and $9.2 million is for statutory allocations.
The difference between the $20.38 billion in the main estimates and the $21 billion that appears for the fiscal year in SSE will be covered by requests made through the supplementary estimates process. Those costs relate mostly to operations and capital projects.
We recognize how complex the defence budget is, so our CFO and I will be happy to walk you through any of the budgeting in detail so that we can provide further clarity.
Let me assure you that we remain on track to implement our defence policy over the next 20 years.
I am also requesting $624.9 million for the Communications Security Establishment. That is roughly $28.9 million more than in last year's main estimates. These funds will help maintain the security of our IT systems while ensuring that the sensitive information Canadians entrust to government is protected.
Mr. Chair, before I close, I would like to take a moment to thank all the parliamentarians for the tremendous work that all of you have done, and on that note, I'll be happy to take any of your questions.
I'll pass that over to the officials to talk about exactly what we have in terms of the costs so far.
The projects are actually going quite well. I met with the Australian ambassador just yesterday. I talked about where we're at and thanked them for the work they've done.
First of all, we're progressing very well. We have five companies that are part of the process for replacing the permanent fleet, a replacement of up to 88 aircraft. When it comes to the interim as well, this is not just about purchasing the interim fleet, but how we can make that system even better. We're making sure the right investments are going into place.
I'll give you one example of this. This is a very important point, one that will help to answer your question.
For example, we had a system in place where they had proper helmets that actually modernized the system, but didn't come with the weapons systems. Now we're going to be able to have those weapons systems to make the capability of the F-18 even greater. For example, the AIM-9X missile will drastically improve things. It was great that the investment was made on the advanced helmet, but this is now going to allow us to put even greater systems on, to make the current system far more effective.
With the projects, if you look at the upgrade of our armoured vehicles, this now allows us to go to the full complement of upgrading our LAV 6. Our LAV 6 were being upgraded before, but not to the full quantity that we needed. By now getting to the full complement that the army had requested, it allows far greater flexibility for our leadership for what's needed in Canada, but also for further deployments, for example, the battle group we have currently in Latvia and our contributions we're making towards that.
On the fixed-wing search and rescue, this is one capability, in talking to some of the SAR techs in Comox, where we're going to have the centre of excellence, the training centre there, that is going to modernize how we do search and rescue. We're literally bringing the technology into this. Rather than just looking from binos, we're looking at how we can identify, from people to ships to aircraft, with sensors and being able to fine-tune, and getting the SAR techs, the people who are going to do the equipment....
As much as we're looking at the investment, this is the capability we were talking about in SSE. We didn't want to have just a laundry list of things that we're buying: what capabilities are we improving?
As you know, search and rescue is done across Canada, and this capability, in my opinion, is literally going to revolutionize search and rescue in Canada.
Mr. Minister, ladies and gentlemen, it is a great pleasure and honour to meet you today.
First of all, Minister, I think this is the first time I have had the chance to have an exchange with you. I'm very pleased for that.
As a Canadian, I want to thank you for what you have done for our country when you served in our army. You served well; you defended yourself well. You defended our country and the values of our country very well. Thank you so much, Lieutenant-Colonel, for what you have done.
When the government was elected two and a half years ago, we saw a major change in rhetoric, in words. A lot of emphasis was placed on those who have brought great honour to Canada in the last half-century. They are the peacekeepers, the people who go to serve with the blue helmets.
We have heard a lot about it, but the reality has sometimes been different.
Under our government, generally speaking, some 300 peacekeepers were deployed each year. Now there are barely 46 of them, and, a short time ago, there were no more than 22.
Mr. Minister, why so much rhetoric about peacekeepers, while in reality, there are fewer today than there were three years ago?
I want to thank you very much for your kind words.
To begin, and all of you know, it's very important, I think for all of us—and I appreciate how we all have viewpoints when it comes to defence—that we turn to our people who serve. All parliamentarians are looking at their best interest, but through different viewpoints. That, I sincerely appreciate.
When it comes to the peacekeeping or peace operation, whatever we want to call it, this is not about the numbers anymore. As an example, this is about understanding what contributions we can make that can have a substantial impact. What we have now announced, and what we're willing to do, is making sure that what we provide is going to enhance the various operations.
For example, with the Democratic Republic of Congo, we've been there for 18 years. At the end of the day, we do not want to just look at the numbers of people. Whether we send one person or 600, it's what contribution are they going to make, and are they going to be able to have that impact. I also want to make sure we take the time to make sure that whatever contribution we're going to make, it's going to have that impact. With that result, even if it takes a little longer, the impact might be greater.
We have taken that time. We know, for example, the contributions we're going to make in Mali for that one smart pledge will have an impact. When we decide where we're going to send the quick reaction force, we'll make certain it's going to have a direct impact. The numbers may fluctuate, but we're trying to do peacekeeping differently.
We have to look at the challenges that the UN has had to face. I'll give you an example. Troop-contributing nations have not come well trained. We're trying to address this with the potential capacity building that we will also do. This is about making sure, in a very complex environment—not just the realities on the ground, but also in a complex system within the United Nations—that any contributions we make will have an impact.
There is a NATO piece, and there's a much wider piece, as well.
NATO is not strictly about the defence ministers. There are also foreign ministers meetings, which lead up to all of us doing our work together. Every two years, we have a leaders' summit, and the leaders' summit is coming up in July. Global Affairs does have the lead when it comes to this.
However, this is where we do work very closely together. One example that was demonstrated extremely well was 's leadership with the United States, hosting foreign affairs ministers in Vancouver, when it comes to North Korea. We took a very strong stand on making sure we're going to support the sanctions and keep the pressure in place. More importantly, we stressed very clearly that this is a diplomatic thing to resolve. Through that work, we can be proud to say that Canada has contributed to some of the work that is being done currently, that you hear about in the news.
We are absolutely committed to making sure that we have the right rules, regulations, and treaties in place, and that they're also enforced, when it comes to nuclear weapons. We can't, obviously, have a repeat. There are no winners when it comes to a nuclear weapon, whether it's a small or big nuclear weapon. At the end of the day, a nuclear weapon is catastrophic for all of us.
I'll begin, and then I'll ask Admiral Hawco to continue.
The Department of National Defence, the Canadian Armed Forces, and Veterans Affairs Canada are working very closely together to ensure that from enrolment to post-retirement—because of injury or illness or at the end of a long career—the individual soldier, sailor, or air person, and his or her family are taken care of and have access to services and support. That transition from military to civilian life can be traumatic for some people because they have been in uniform and surrounded by the Canadian Armed Forces since the age of 17.
In one initiative, the suicide prevention strategy, we're working jointly with Veterans Affairs Canada, the Department of National Defence, and the Canadian Armed Forces to ensure that no matter where you are in your career, there's a continuation of mental health care.
The next initiative we've been working on is what we're calling “convergence”, which is not bringing the two departments together physically but ensuring seamless access to service, pensions, support, and medical care from the eyes of the veteran. It doesn't mean combining everything into one. It means you have been injured on duty or not on duty. You need access to veterans' services. You fill out one form. You have one client experience. In the background we make sure that everything is taken care of.
One of the things we hear most is that the veteran experience is confusing, complicating, and frustrating. Convergence between the two departments is hopefully a client service experience for the veterans where they don't care where the money or support is coming from; they're just getting it. We hope to be able to talk about that more in the near future.
I'll ask Admiral Hawco to talk about “the journey”, as the CDS calls it, which is the experience of somebody who enrolls in the armed forces.
I guess it's not a surprise, particularly for this table, that the “Strong, Secure, Engaged” focus on people from the and the is animating, informing, and shaping our approach.
The deputy referred to “the journey”. That's a broader expression of those transition points that the deputy spoke to in the context of someone who is moving toward retirement. Think about postings. Think about someone who is ill but they're going to return to work, because that's the objective. You talk about the career courses, and all those areas have policy points, so investment of a policy division and increasing the capability there, understanding that we have about 37 primary care clinics across the CAF, 31 of which have dedicated mental health practitioners.
As we move the ill and injured, we recognize they need to have dedicated and specific focused care. That's the establishment of joint personnel support units, that concept of providing dedicated oversight with a proper career case management number so you can get personalized care, awareness of individuals, and the specifics of the files. It's recognizing the $198 million over the course of the government's investment in total health and wellness.
When we think of this as long-standing tracking or suicide prevention, and understanding the factors and the causalities that lead to people making desperate choices at times, we have for many years now been tracking suicide rates and understanding and featuring that in our approach to mental health.
Of course, we have also seen an increase in the number of mental health positions, approximately 455 across those 37 clinics, within 31 that have dedicated mental health professionals.
It's also important that in our civilian system 4,000 mental health care providers have registered to provide care to military members in their own practices. That's a great enabler for an individual to get timely access and a variety of access, because sometimes geography doesn't naturally lend itself or make it easy for a person to access care, because of a posting to a recruiting centre in a town that's not immediately proximate to a major base, as an example.
One of my colleagues, Mr. Gerretsen, brought up something that's near and dear to me—military families. I am one, myself, as the mother of two serving members. I had the great pleasure of visiting 12 bases and wings over the past year and talking to a lot of military family members.
One thing that struck me is the supports for families after service. I know that we recently announced increased funding to MFRCs through “Strong, Secure, Engaged” of an additional $6 million, but we also announced last year that going forward, all 32 MFRCs across Canada will now have access to veteran families who are medically released. From now on, veteran families can continue to go to their local MFRCs, an initiative of $147 million over the next six years, with additional funding of $15 million going forward to support veteran families to continue to use these services.
As a military family member, as you said, the transition can sometimes be traumatic for the member, but it can also be traumatic for the families who have always known that support centre of the MFRC.
Could you elaborate on the importance of supporting families in the Canadian Armed Forces? I know “Strong, Secure, Engaged” was the first time we've seen military families showcased and recognized so prominently. Could you talk a little bit about that?
What we're trying to do is take a more programmed approach, as opposed to a bunch of stovepipe projects where we start one, we finish one, what do we do...? It's why we're in discussion with Seaspan, the Vancouver shipyard, about what's in the art of the possible.
When we talk about some blocks of the ship, this is a rather large ship. We've acquired a mature design, the German Berlin-class design. Basically, the entire forward part of the ship is untouched for the design that we acquired; therefore, it's very mature. We are in negotiations now and hope to announce soon the ability to move out and actually advance that work. It's a substantial part of the ship.
The kinds of blocks we're talking about combined would be much greater than the ships that are being built today out there. To be able to actually move that work around to make sure that we load-level the work in the shipyard.... For any production facility, that is always one of the big points for success, actually: to try to make sure you maintain that workforce and they continue to be employed. That is what we have under way, sir.
In this particular circumstance, as you indicate, we've had other fleets of C-130 aircraft, the ECHO series, that we retired in recent years that had been built in the 1960s. What is very fortunate in this case is that we have been co-operating with our Australian colleagues for decades on understanding the fatigue life and how what we call the legacy Hornet, the CF-18, operates, where it takes fatigue, and how it operates at high altitude and at low altitude. We have literally taken new aircraft and tested them to destruction. We literally set up test beds and did that, so we had absolute understanding of how that aircraft operates. It was done as a combined test effort. A lot of the data was done here in Canada, in Montreal.
As a result, our knowledge of the structures is world-leading. In fact, the U.S. military sends aircraft to Mirabel to be repaired, as a result of our knowledge. As a result of it, the Australians gave us access to all the data of each of the aircraft. We know exactly what shape they're in.
We have actually expanded that further and we have discrete inspection points where we actually put the aircraft through a very detailed maintenance process, strip it down and look at it. Our experience with our own aircraft has been that there is less fatigue than expected, but nevertheless we've been doing that. They have followed a similar process. As we look at these aircraft from a structural perspective, we're very confident that what we have will be safe for anybody who flies in them. For us, that is job one.
That is part of my role, to ensure that the director of technical air worthiness works for me for all the aircraft, and also that it is capable of the mission and combat-capable. There are things we will do to the aircraft for configuration purposes—for example, in ejection seats and those sorts of things—just so that we're not supporting two different variants.
These 18 aircraft, plus a number of spares, will roll in and become part of our fleet. At some point they'll probably be indistinguishable from our existing aircraft. They will go through periodic updates to ensure that they continue to be safe and operationally capable.
You realize we're moving on to the next fleet, but this is a combat aircraft that needs to be combat-capable at all times, so we have some other initiatives we are looking at—weapon sensors, communications—not just for these aircraft but for all of them. We appreciate that the last of these could be operating to 2032 and must continue to be combat-capable.
Okay. I'll let the clerk manage that.
COMMUNICATIONS SECURITY ESTABLISHMENT
Vote 1—Program Expenditures..........$587,881,292
(Vote 1 agreed to: yeas 5; nays 4)
DEPARTMENT OF NATIONAL DEFENCE
Vote 1—Operating expenditures..........$15,237,553,800
Vote 5—Capital expenditures..........$3,761,023,833
Vote 10—Grants and contributions..........$176,719,317
(Votes 1, 5, and 10 agreed to: yeas 5; nays 4)
MILITARY GRIEVANCES EXTERNAL REVIEW COMMITTEE
Vote 1—Program expenditures..........$6,150,062
(Vote 1 agreed to: yeas 5; nays 4)
MILITARY POLICE COMPLAINTS COMMISSION
Vote 1—Program expenditures.........$4,288,506
(Vote 1 agreed to: yeas 5; nays 4)
OFFICE OF THE COMMUNICATIONS SECURITY ESTABLISHMENT COMMISSIONER
Vote 1—Program expenditures..........$1,954,662
(Vote 1 agreed to: yeas 5; nays 4)
The Chair: Shall I report the votes on the main estimates 2018-19, less the amounts voted in the interim estimates, to the House?
Some hon. members: Agreed.
Mr. James Bezan: On division.
The Chair: Thank you all very much for coming today. I thank you for your service to your country, and I guess we'll see you again.
The meeting is adjourned.