NDVA Committee Meeting

STANDING COMMITTEE ON NATIONAL DEFENCE AND VETERANS AFFAIRS

COMITÉ PERMANENT DE LA DÉFENSE NATIONALE ET DES ANCIENS COMBATTANTS

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 5, 2000

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[English]

The Chairman (Mr. Pat O'Brien (London—Fanshawe, Lib.)): I'm prepared to start.

You will recall that as a committee we passed a motion earlier to allow the taping of some of our defence committee meetings for a documentary. Apparently there is some sort of order of the House, or some kind of a conflict in the rules for the televising of committees, meaning that it has to be gavel to gavel. Obviously we weren't aware of that as a committee, so that may preclude the taping by the people who were going to do that for the documentary today.

We offer our apologies for any inconvenience, but we will try to sort that out, because I know both sides of this table want to operate in the spirit of making government as accessible to the Canadian people as possible. Indeed, I had spoken to the minister before the meeting, and he was quite prepared and pleased to have the shooting done for a documentary as well.

• 1605

With that, we'll call to order the meeting of the Standing Committee on National Defence and Veterans Affairs and welcome our minister, the Honourable Art Eggleton, as well as Mr. Jim Judd and General Baril. Welcome to you, gentlemen.

Minister, thank you very much for being here today. We're pleased to have your opening statement on estimates, and then I suspect there will be some questions.

The Honourable Arthur C. Eggleton (Minister of National Defence): Thank you very much, Mr. Chairman and members of the committee. I'm happy to be here once again. I'm here until 5:30, I think. In addition to my presentation, I will be able to take a lot of your questions.

The focus of my presentation today is the report on plan and priorities, which is part III of the estimates for the current fiscal year. The report provides an overview of defence and Canadian Force priorities for the coming years.

Mr. Chairman, for the second year in a row, I'm very pleased to say the defence budget has been increased. The $2.3 billion increase over four years announced by the government in the 2000 budget by Minister Martin is a much needed and important addition. It will allow us to see through our quality of life initiatives and turn our attention to the long-term future of the Canadian Forces. This increase, I must say, is due in no small part to the efforts of your committee. The resolutions you've passed and the considerations you've made at this committee in support of additional funding for defence are very much appreciated.

The budget increase is essential if we are to keep the Canadian Forces combat-capable and relevant into the future. Last year saw a continuation of the very high operational tempo of our Canadian Forces personnel. In fact, the pace of last year was the highest experienced since the Korean War.

[Translation]

A greater percentage of Canadian troops have been deployed on operations abroad than at any time in recent memory.

[English]

Many of these missions were of course continuations of missions from previous years. Bosnia, Cyprus, the Middle East, Cambodia, Haiti, and Guatemala all benefited from Canadian Forces contributions. We also successfully completed our support in the mission for the Central African Republic.

The forces also undertook some new missions in the last year. The air campaign and the peace support operations in Kosovo, of course, are amongst the most notable. Then there was the humanitarian effort that followed the devastating earthquake in Turkey. There was the peace support mission in East Timor and the deployment of HMCS Regina to the Persian Gulf in support of UN sanctions against Iraq. These new missions have also contributed to this stretching of the Canadian Forces.

Of course, not all operations take place overseas. In 1999, the Canadian Forces were also extremely active in preparing for and conducting operations here in Canada. The largest of these was the preparation for what we called Operation Abacus, the CF response to any potential problems associated with the rollover into the year 2000, the so-called millennium bug problem. Fortunately, the transition went smoothly, but our personnel were ready, should the need have arisen. I can attest to this because I was there with them on New Year's Eve.

The Canadian Forces had one of their busiest years with search and rescue operations also. The forces conducted sovereignty patrols; they supported the RCMP in countering drug smuggling; and they identified, tracked, and intercepted vessels carrying illegal immigrants off the west coast of Canada.

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[Translation]

So as you can see, 1999 was a remarkably busy year for the Canadian Forces. Moreover, the need and requests for Canadian participation are expected to continue unabated.

[English]

Meanwhile, the Department of National Defence and the Canadian Forces continued to implement and consolidate institutional reform. More than three-quarters of the over 300 recommendations stemming from the numerous reports and inquiries into the military over the last few years have now, I am pleased to say, been fully implemented, and that has been verified by the Honourable John Fraser and his monitoring committee. Most of the remainder will be completed in the near future. These reforms are far-reaching and will make critical contributions to the future success of the Canadian Forces. But our efforts do not stop there.

On Monday I tabled in the House of Commons our first annual report on the quality of life of Canadian Forces members. This report updates the information provided last fall when General Baril and I appeared before your committee to describe the quality-of-life recommendations we had already implemented.

I am pleased to say that we have a good track record. We have successfully completed 35 of your recommendations and several other quality-of-life-related departmental initiatives.

Among the new measures, we've improved the long-term disability plan, and we've also turned our attention to health care services for members of the military. This is in addition to last year, when we increased pay and we put more money into fixing up the housing and numerous other initial quality-of-life measures.

Getting back to the health care services, last January General Baril and I announced a series of measures aimed at reforming the CF health care system. In fact we're overhauling the system to make sure that people don't fall through the cracks, that they are looked after. If they go over to a mission and become sick, we should look after them, and we will look after them. We're overhauling the whole health care system to ensure that we do that.

We're doing that in cooperation with the Department of Veterans Affairs so that there's a continuum for people in the forces, moving through, as they will, in retiring or leaving the forces and being looked after from there on by Veterans Affairs Canada.

One of the things we're now doing, for example, is providing a health card. Believe it or not, they didn't have one before, a health card for all regular full-time CF members. This card, with the universally recognized Blue Cross symbol, is going to make it easier for them to gain access to health care services operated in the civilian medical institutions. I was able to announce that just last week.

Another announcement I made last week was that as of April 1, trained nurses offer health advice on a new 1-800 health information line to forces members and their families anywhere in Canada. Such information is particularly important for those in locations where health services are not readily available. As you know, some of our people are in remote locations. This might prove to be a good example for the rest of the country.

I can assure you that quality of life for the Canadian Forces is and will remain a high priority with me. We've done a lot, but we have more to do. For example, we are actively working on a post living differential allowance. That's the cost-of-living recommendation you made. I think we're getting very close on that with the Treasury Board.

We're working on a family care assistance plan that will help in providing additional compassionate leave for people in the forces, as well as improving the maternity and parental benefits.

[Translation]

I am indeed proud of all that has been accomplished; we must continue to move forward.

[English]

Particularly, when considered against the backdrop of our operational tempo, these quality-of-life initiatives and the institutional reforms that I mentioned earlier demonstrate the degree of our commitment to prepare the Canadian Forces and the fine, dedicated men and women who work for them for the future.

But that is not to say that the process of change and renewal is complete. Defence must continue to reinvest in its people, to see through reforms, to make the investments needed to maintain the defence capability that Canada needs now and in the future. This will require continued adaptation and adjustment.

Much remains to be done. But we have a strong foundation, and it's getting stronger all the time. The main thrust of our defence policy and the principal defence roles remain valid: provide for the defence of Canada; maintain Canadian sovereignty; cooperate with our allies, particularly our ally in the United States in the defence of North America; and contribute to international peace and security, as we have done so well through many peacekeeping missions.

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However, the environment in which we operate is changing. As a result, the number and nature and the level of complexity of CF operations are much different. We have to adapt to this new reality. I believe the key resides in making the right choices, focusing our investments on the core capabilities needed for the future, maximizing efficiencies wherever possible, and reducing capabilities that are no longer required.

To that end, the report on plans and priorities sets the following priorities: modernizing Canada's force structure; nurturing National Defence's human resources; strengthening the capital equipment program and acquiring the resources we need to enhance our rapid response capabilities; reviewing National Defence's infrastructure; supporting Canada-U.S. relations; entrenching institutional reform and cultural change; enhancing communications, openness, and transparency; and modernizing management practices.

Let me now expand on a few of the priorities that I, as minister, intend to pursue actively. We must continue with strengthening quality of life, entrenching our institutional reforms, and focusing thinking and investment on the core capabilities that Canada needs for the future.

First, regarding quality of life, we all understand the need for a strong quality-of-life program. As I said a few moments ago, new announcements are forthcoming, hopefully in the very short term. But as I stated earlier this year, the completion of reform of the CF health care system and further investment in upgrading the housing of our members tops the list of quality-of-life initiatives. In fact, last year we put $40 million into fixing up our housing. This year we're going to put $50 million in, and we're going to continue through a five-year plan of $184 million to fix up our housing for Canadian Forces personnel.

Second, there's institutional reform. We must maintain our focus on strengthening National Defence's leadership, broadening the diversity of the CF, and continuing the reform of training and development. As military operations and peace support missions become more complex, the key lies in better operational training and an educational program that balances military learning with broad academic pursuits. We simply have to have a military that thinks the best.

Third is our modernization program. We must invest in core defence capabilities required for Canada now and in the future. We can't do everything; let's focus on what we can do, and do it well. Taking into account not only the new dollars, we must also consider developments in military technology and doctrine, as well as the new security environment. In that connection, your committee's study on the revolution in military affairs has undoubtedly made this clear.

Our decisions must reflect the changing security environment. The challenges we are now facing are quite different from what we were confronted with during the Cold War. The kinds of conflict we are more likely to be called upon to get involved with in the future, as was the case in Kosovo and East Timor, are intra-state and involve human security. These can occur virtually anywhere on the globe at any time, and they have been increasing in their numbers.

In such an environment, it is essential that the forces be configured in such a way that they can deploy quickly wherever they are needed. In support of this, our acquisition priorities, for example, include sealift and airlift capacity, getting the transportation we need when we need it to be able to move our troops, to be able to move our equipment in the quickest possible time so that we can get into a theatre of operation and help to save lives and ensure the human security of those people.

The Canadian Forces can only make a difference if they can be where they are required when they are required. They must also maintain their ability to operate with Canada's principal allies. The force structure we are working toward for the future will have these attributes. Our aim is to have Canadian Forces that are both militarily relevant to future challenges and interoperable with our allies.

Tied to that is the need to strengthen the capital equipment program. Years of resource constraints have resulted in insufficient funds being available to recapitalize our equipment inventory. Meanwhile, the cost to maintain this older equipment increases with each passing year.

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Today less than 19% of our budget is devoted to capital investment. A reasonable and sustained effort would see $2.5 billion per year invested in new capability to keep the Canadian Forces operationally relevant. To address this, part of the increase to the defence budget announced in the last budget will be dedicated to new capital spending, and incrementally over the next five years the department will work toward increasing the capital allocation from the current just under 19% to 23% of the defence budget.

The report on plans and priorities and the estimates identify the most significant projects that are in progress and under study that would serve to sustain our capabilities over the longer term, particularly in the areas of global deployability and interoperability with our principal allies.

Mr. Chairman, the Department of National Defence and the Canadian Forces continue to make a significant contribution to the lives of Canadians and a significant contribution to international peace and security.

[Translation]

In return, this government has made a clear commitment to ensure that the CF has the capacity it needs to operate effectively.

[English]

Our plans and priorities demonstrate that we have set the necessary short-term goals to achieve our longer-term strategic objectives. With clear goals defined and increased funding, National Defence will continue to meet and surpass the expectations of Canadians in the coming years. We are adapting to a changing world. We are moving forward, we are on the right track.

Thank you.

The Chairman: Thank you very much, Minister Eggleton.

Before we go to questions, I have a couple of points for my colleagues here.

As you know, we're just about finished with our study on procurement. Colleagues, you should have in your offices tomorrow the draft report on procurement, which will allow us to begin to go through that clause by clause at our meeting next Tuesday. It's fairly likely that I will be away from the meeting next Thursday in Washington and I think Mrs. Wayne will be as well. So the second meeting will likely be chaired by the vice-chair, Mr. Pratt. That's just to forewarn you. You should look for that procurement study tomorrow.

Minister, thank you. I know you were busy today and made a special effort to get here, and we appreciate that.

We know that the 5:30 timeline is a sharp one, and that the minister will come back if we need him. But several of us, including the minister, have to go to another important function at 5:30.

General Baril, I want to thank you for arranging the trip to Colorado Springs that all members were invited to. Some of us had the opportunity to take up that offer. So thank you for the arranging you did. General Macdonald and his staff there treated us very well. It was one of the most informative trips, brief but very busy, I've been involved with in almost twenty years in politics. So thank you very much.

We held a sort of town-hall meeting with CF forces and a number of concerns were raised, and questions were raised. Some have already been addressed through General Macdonald. Others we are researching. We have not forgotten; there will be a response in the near future to those concerns.

All right. Now I can go to questions. I will recall for colleagues that we're here primarily on estimates. That's really the focus of the meeting. For the question and answer, the first round is seven minutes total. So guide yourselves accordingly, and we will get as much work done as we can before 5:30.

We'll start with the Reform Party for seven minutes. Who's going to start? Mr. Hanger.

Mr. Art Hanger (Calgary Northeast, Canadian Alliance): It's Canadian Alliance now.

The Chairman: I'm sorry. That was an honest Freudian slip.

Mr. Art Hanger: There seem to be a lot of them lately.

The Chairman: I won't use the full title; I'll just say the Canadian Alliance. Mr. Hanger.

Mr. Art Hanger: Thank you, Mr. Chairman. I suppose I could overlook that Freudian slip this time.

I want to thank you, gentlemen, for appearing before our committee. It's always good to have those who cause things to happen in the department giving testimony as to what is going on, although I'm very disappointed in the fact that the gentlemen in front of us, the witnesses, only have an hour and a half to address the estimates.

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The Chairman: They will come back.

Mr. Art Hanger: I think it should be a matter of course, and I would certainly like to make that motion, if at all possible.

A voice: It's not a problem.

Mr. Art Hanger: Yes. Given the fact that the defence budget is the largest discretionary budget in the government, I think it would be very important to continue this discussion.

My first question, Minister, would be dealing with departmental accountability. I have before me a letter from the Information Commissioner. A request had been put to access information pertaining to internal audits and grants and contributions of the department since the year 1994, January 1. The response back was this:

I regret to advise you that the department conducted no reviews concerning the above and therefore holds no records such as requested.

I find it passing strange, to say the least, Mr. Minister, that there are only two federal departments in this position. Given the fact that your department has the largest discretionary budget in government, how can you justify this lack of accountability?

Mr. Arthur Eggleton: I don't know how you asked the question, but there is information available with respect to grants and contributions. We don't have a lot of what you would classify as grants. Most of them are classified as contributions. Most of them are at organizations like NATO or NORAD, part of our collective defence agreements. I don't see why you don't have them. I believe they are available.

Mr. Art Hanger: I'm referring to internal audit. I thought it would be customary for the department to carry at least one out over the course of the year, but maybe not. According to the Information Commissioner, none have been conducted over the last six years.

Mr. Jim Judd (Deputy Minister of National Defence): If I could respond, sir, as the minister said, the bulk of our grants and contributions in the department go essentially to two places. The largest portion are payments under the disaster financial assistance arrangements, and they're not internally audited because they are externally audited by Consulting and Audit Canada. These are the payments the federal government makes to provincial governments in response to natural disasters: the Winnipeg Red River flood, the Saguenay floods, the ice storm, and so on.

The second-largest category is the payments to NATO, the annual payments to NATO for a variety of programs. All of those contributions are, again, externally audited by an international group of audit experts who review all such moneys paid to NATO. The remaining amount of grants and contributions, as listed in our document, is very small. The auditing that is done over and above that tends to be on a continuous, electronic format.

In the case of the other grants and contributions that go to something called the Security and Defence Forum, they will all be under review over the course of this year because the program exists for five years and it's up for renewal or otherwise. As part of that, they will be reviewed.

Mr. Art Hanger: And those audits are accessible?

Mr. Jim Judd: I assume that both sets of audits for DFAA and NATO are accessible.

Mr. Art Hanger: And the internal ones in reference to the rest of the contributions?

Mr. Jim Judd: Yes.

Mr. Art Hanger: It would be a matter of applying for them, I gather?

Mr. Jim Judd: As I say, in the case of the Security and Defence Forum grants and contributions, the review is to take place later this year as part of the review of the overall program. They will then be accessible, of course.

Mr. Art Hanger: Thank you.

On page 33 of part III of the estimates, a total increase for capital expenditures in the budget is about $60 million. Departmental spending went up by $800 million. What new equipment do you hope to buy for this $60 million a year, given the consideration that the Clothe the Soldier program alone has reached somewhere in the neighbourhood of $160 million over budget? Also, noting that $60 million really doesn't go very far, wouldn't it be soaked up just addressing the shortfall in operating expenditures?

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Mr. Arthur Eggleton: Well, as you point out, the increase is not $60 million; it's some $894 million.

Mr. Art Hanger: On capital expenditures.

Mr. Arthur Eggleton: Well, we haven't determined what the split is to this point in time, in terms of the additional money we have. We received in the last fiscal year $350 million. A very substantial portion of that went towards capital, and there will be additional funds this year. How we split the new money we haven't determined yet.

Mr. Art Hanger: I'm just looking at the estimates on page 33, and they indicate that capital expenditures increased by just under $60 million—$55 million.

Mr. Arthur Eggleton: Page 33 of which volume of the estimates?

Mr. Art Hanger: Part III.

Mr. Arthur Eggleton: Well, this does not have all of the new money distributed into it. The main estimates were filed of course at the same time the budget was put together, and it wouldn't have distributed yet the new money we have.

The Chairman: Thank you, Mr. Hanger. We'll come back to you again.

[Translation]

Mr. Laurin, you have seven minutes, please.

Mr. René Laurin (Joliette, BQ): For my first question, Mr. Minister, I shall refer to the PMQ program. You said earlier that you had already invested $40 million in the housing stock. When you talk about the housing stock, do you refer to PMQs for soldiers?

[English]

Mr. Arthur Eggleton: Yes. We do have though a program also for the singles residence, but those moneys I've given you are for the PMQs.

[Translation]

Mr. René Laurin: Following the recommendations from our Committee, the Department has already agreed to an amount of $40 million for PMQs, but the total construction cost has been estimated to be $200 million. When do you intend to announce a new investment in PMQs as it is directly related to the quality of life? There is a shortfall of $160 million that we hope will be released soon. I do not find anything in the budget for that project.

[English]

Mr. Arthur Eggleton: The estimates cover the current fiscal year, but I indicated to you right here that when you take the past fiscal year, the current one, and the next three, we're looking at a $184 million investment. Then on top of that, we are still into studies as to in what other ways we are going to meet the housing needs of our people, which may involve new housing being built. It may involve some further investment. I expect it will involve further investment. That's the part of the program that's been announced to this point in time, but that's not the end of the story.

[Translation]

Mr. René Laurin: Yes, I understand, Mr. Minister. Certain needs have been expressed in regards to the training of military officers. It has been suggested that this training might be offered at the old CMR in Saint-Jean. What is the status of that program? Will you announce a decision soon? Is that project still a possibility? What exactly is the situation?

[English]

Mr. Arthur Eggleton: Yes, as I indicated in response to a question from your colleague in the House yesterday, we are nearing the final stages of decisions with respect to the implementation of the enhanced leadership model program and the facilities that will be used for the provision of that program. That program is part of the many reforms I've talked about today and in the past, to increase the education level and the development of officers in our system. So that program is now in the final stages of being developed and prepared.

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We have looked at the different facilities, and the facilities in Saint-Jean-sur-Richelieu hold considerable promise in terms of them being the location. We have two facilities to bear in mind here, two facilities that come under the ownership of the government through National Defence. One is what is called the Megaplex, which is our Canadian Forces base in Saint-Jean, and the other is the CMR, the Collège militaire royal, which as you know was closed a number of years ago but continues to provide facilities for us to conduct language training.

We are looking at those two sites very carefully as to how they may help in provision of this enhanced leadership model program, and also as to how we might continue the good work of the Conseil économique, which has been attempting to develop other economic development programs for the CMR site. So I'm hopeful that we'll have that matter wrapped up very soon.

[Translation]

Mr. René Laurin: My next question deals with the military workforce. When statistics are published on the military workforce, I always find it surprising that there are only 5,318 privates on a total military staff of 59,330. All the others have a rank. There are 20,000 corporals in our army, 6,000 sergeants, 944 lieutenant- colonels, and 270 colonels. Of course, there are not too many generals. There are a dozen of them. But all those people with rank, over 54,000 of them, have 5,318 privates under their authority.

Isn't there something illogical about that?

General Maurice Baril (Defence Chief of State, Department of National Defence): This is an interesting question because Canadian Forces are professional forces made of people who want to have a career in the army. According to our rules, after four years of service in the Regular Forces, a private gets a rank. So, if we did not recruit anybody, in four years from now, those 5,318 private would all have the rank of corporal or higher. There would not be one single private left in Canadian Forces.

Mr. René Laurin: Yes.

Gen Maurice Baril: According to our rules, a corporal is someone more specialized; he exercises authority only if it is given to him. He is not a chief. He might be a specialist. The leadership begins at the chief corporal level.

When we are talking about 28,000 corporals or private we do not refer to private or corporal positions as such but to those occupying those positions. A corporal has at least four years of service and the qualifications required to do his job. It doesn't mean that he is a chief.

Mr. René Laurin: It is only his position on the salary scale.

Gen Maurice Baril: Exactly. It has been so since 1966.

Mr. René Laurin: We might find ourselves, some day, with an army of officers.

Gen Maurice Baril: Like in Sweden where there is no non- commissioned officer. They only have officers and recruits because of their salary scales and the constitution of their country. Here in Canada it has been decided in 1966 that after four years of service a private would get the rank of corporal not for his leadership qualifications, but for his technical abilities. But all higher ranks are established according to technical as well as leadership qualifications.

Mr. René Laurin: Is this specific to the Canadian Forces?

Gen Maurice Baril: Absolutely not.

Mr. René Laurin: Is it the same process in other armies?

Gen Maurice Baril: Several countries have slightly different systems but all armies and particularly professional armies have a system which recognizes men and women soldiers after a number of years.

The Chairman: Thank you.

Thank you, Mr. Laurin.

[English]

We come now to Mr. Wood for seven minutes.

Mr. Bob Wood (Nipissing, Lib.): Thank you very much, Mr. Chairman.

Mr. Minister, I was reviewing your annual report on quality of life, which I congratulate you for acting on so quickly and decisively. I'm wondering if you could update the committee on our specific recommendation concerning the need for a cost-of-living allowance to be paid to CF personnel posted at different locations in Canada. I noticed you mentioned it briefly in your opening remarks. But in last week's annual report it states that a post living differential study was conducted last year, and it concluded that the cost-of-living differences in Canada were substantial and warranted compensation. I think every member of this committee who visited the bases across the country would agree with that statement.

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The annual report went on to say that regulatory changes and Treasury Board approval for a new benefit were being sought, and they were expected to be implemented on April 1 of this year. Since it is now April 5, could you give us the status of that proposal?

Mr. Arthur Eggleton: Don't be too sure it won't be implemented April 1. I hope it is. In fact, frequently when we announce pay increases, they're made retroactive to April 1, so it's quite possible that a number of these things could be made retroactive to then. That hasn't been determined at this time, but what has been determined is the kind of formula that would work, in terms of appropriately compensating people for these cost-of-living differentials in different parts of the country.

I know that your committee was very keen on that being addressed. It was one of the top items. We couldn't address it last year when we did the pay increases and the housing improvements because we had to determine what would be a workable formula. We've now done that. We now have the matter before the Treasury Board. I'm hopeful we will have a decision soon, and we'll be able to make an announcement soon.

Mr. Bob Wood: Great.

In the estimates on page 8, under the section “Modernizing Canada's Force Structure” there were two things that caught my attention. First was the pledge to complete the design of the future force structure of the army of tomorrow. Could you or General Baril explain what this vision is of the army of tomorrow?

Gen Maurice Baril: Can I ask the commander of the army—

Mr. Arthur Eggleton: We have the commander of the army here. He lives with us day in and day out.

General Baril and I can give you our version of it.

A voice: Bring Mr. Leach to the table.

Mr. Arthur Eggleton: General Leach.

The Chairman: Just for the record, would you state your name and title?

Lieutenant-General William Leach (Chief of Land Staff, Department of National Defence): I'm Lieutenant-General Bill Leach, chief of the land staff.

The army of tomorrow, in the simplest of terms, is taking a look at the vehicles that are now coming into service. You must keep in mind—I know you know this—that much of the army equipment dates from the mid-sixties and the early seventies.

We are receiving equipment this year, and have put into operation for the first time our new reconnaissance vehicle, the Coyote. We are now starting to receive, this calendar year, the first version of a new armoured personnel carrier called the LAV III, which is built in London by General Motors, and a new communication system called the tactical command, control, and communications system.

Those things are going to change the complexion of the army, in terms of how we're organized. They are going to change our doctrine. They may cause some structural changes. All of the technology in those new capabilities has to be knit together. We have to be interoperable with the maritime and air forces. We have to be interoperable with our allies.

I was in Bosnia and Kosovo last week. I saw some of this new kit in action. It's safe to say it's not only proving its worth there, but is causing people to want to hold us there, as we try to rationalize our situation in the Balkans.

The bottom line is that the army, you could say, is going from the 18th century to the 21st century, and we're probably skipping a lot in the middle. It's starting to arrive now.

Mr. Bob Wood: Thank you.

There was something else there that caught my eye. I would like a fuller explanation, if it's possible, on the third pledge, to “develop and implement plans to outsource Defence's combat support capability”. What exactly does that mean, particularly in relation to what the general just said, to our overseas deployments?

Gen Maurice Baril: This is in direct reference to reducing the demand on our troops overseas committed to operation. As was mentioned before this committee, the heaviest pressure is on the backs of our specialists—our logisticians, communicators, engineers, and so on.

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It's certainly our view that there is no point in stretching our people to do jobs that can be contracted out of the industry. So for the first time, we're going to do it in Bosnia. It is part of the rationalization of the Canadian Forces' commitment to the Balkans, where we are coming out of Kosovo and concentrating on Bosnia.

At the same time, to relieve the pressure on our combat support, we are going to go to the Canadian industry to have them do, for a price of course, what our troops used to do. We feel that the security situation will permit some contracting out, hopefully as much as we can. That will allow us to redirect resources to some other places in the world that the government might decide to send us. But that is the principle of it.

Mr. Bob Wood: I have just a quick question on the reserves. A lot of media reports lately have suggested that the defence department is developing a plan to disband or retask a number of militia and reserve units across Canada. We all know that in recent years—it has been my understanding—the Canadian Forces have had to rely more heavily on reservists, in order to maintain our numbers in overseas deployments.

Doesn't this strategy of eliminating those units fly in the face of the need to meet these challenges? Should we not be expanding the reserves, to increase the flexibility of the forces to respond to future situations?

Mr. Arthur Eggleton: We haven't made any decision about the reserves, particularly about the militia. The navy and the air force reserves are in fairly good shape, and they have forward-looking programs. The navy for one, of course, has achieved a great deal, in terms of its reserves manning the coastal defence vessels.

But the militia really has the same structure it had in the Second World War, and it needs to be upgraded and revitalized. I believe we can do that. We can revitalize it in a way that helps to serve those very kinds of needs you're talking about. There are various kinds of needs for the reserves, in terms of both combat capabilities and support capabilities.

We are currently looking at how we might do that. The Honourable John Fraser and his monitoring committee is very specifically looking at some thoughts and ideas they will suggest to me within about a month, to help implement the recommendations that were made by the special committee that reviewed the reserves, headed by the late former Chief Justice Brian Dickson. Those were adopted, by and large, by the government. So we're looking at being able to implement the reserve restructuring for the militia along those lines.

I can't tell you at this time that units are going to be eliminated. It is certainly my hope that many of the traditions and cap badges we're quite familiar with will still be with us, in one way or another, after any restructuring. But I think at the end of the day we'll come up with a militia restructuring that will make it an even more rewarding and satisfying experience for those people who become involved in the militia.

Mr. Bob Wood: Thank you very much.

The Chairman: Thank you, Mr. Wood.

I don't see Mr. Earle, so I'll call on Mrs. Wayne, please.

Mrs. Elsie Wayne (Saint John, PC): Mr. Earle had to leave. There was a death in his family out west and that's why he left.

The Chairman: I'm sorry to hear that.

Mrs. Elsie Wayne: He's flying out for the funeral.

The Chairman: Okay.

Mr. Arthur Eggleton: Let me guess.

Mrs. Elsie Wayne: Yes. He knows exactly what I'm going to ask and he's ready for it.

Mr. Arthur Eggleton: Does it go like this?

Mrs. Elsie Wayne: Before I ask that question I just want you to know, with regard to the reserves, I was made the only female honorary gunner in Canada with the 3rd Field Artillery, so you look out, Mr. Minister today. That's for sure. I brought my gun with me.

On page 10 of the report, the first procurement priority listed is the replacement of the Sea King helicopters. As you know, back in 1992 we were looking at the EH-101s. In 1993 the government said no to the EH-101s, but they were going to give us something else. We're still waiting for something else.

• 1650

What I'd like to know, Mr. Minister, is exactly how much your department's $11.2 billion in the year 2000-2001 budget is being earmarked for this project to replace the Sea Kings.

Mr. Arthur Eggleton: I can't tell you specifically how much at this point in time, but I can tell you that it is in there. We will be able to provide the funds necessary from the resources, and of course we have some new additional resources as well that will help out overall in the capital budget. We will provide the resources as they are needed to replace the Sea King helicopter, which is our number-one acquisition priority.

You mentioned the cancellation of the EH-101. Let me point out that many of the specifications for the maritime helicopter would not apply today. As I've indicated in my remarks, it is a changing world, a changing need, and we've updated them. We've updated the statement of requirements to what we require today, and it's different from what it was in those days. Back in those days we were just coming out of the Cold War, and there was still a lot of Cold War thinking. We are now in a new era.

What we are looking for is a multi-purpose helicopter to go on the back of our frigates, to be used in conjunction with those frigates in our maritime patrol. And at the end of the day, even when you're counting the penalty, I believe we're going to be saving between 25% and 30% of the cost of what it would have been to have bought the EH-101 at that time for the purposes intended then.

I think the cancellation was the right thing to do. I think that's going to be proven, in terms of both meeting the operational requirements we have and in the cost savings.

This file is moving; it's on the move. We need to replace the Sea King by 2005. It takes a few years. You can't go out to the local dealership and buy one of these things like you can a car. In fact, from the beginning to the end of the search and rescue helicopter process, it was about seven years.

We're going to do this one a lot faster. One of the things, as you know, in the procurement study you did was that we need to speed it up. One of our aims is to cut the procurement time by some 30% overall. In this case, our aim is to have that helicopter in place by 2005. Meanwhile, we're going to spend more money to make sure the Sea King helicopter is safe to fly, that we continue with upgrades and whatever is necessary so that it flies to that point in time. But we are on track toward that replacement at that point in time.

Mrs. Elsie Wayne: So you don't have at this point in time, Mr. Minister, the estimated per-unit cost of a replacement helicopter for the Sea King?

Mr. Arthur Eggleton: Remember, it goes to a competitive process; therefore, we presumably will have different per-unit prices coming in on that competitive process.

Mrs. Elsie Wayne: I'm sure you had in your office, the same as we've had in our office, the companies that are ready to go with a helicopter that they say.... Some of them were in my office about a month and a half ago, and I think they're about ready to give you one, as long as you have the money.

Mr. Arthur Eggleton: Give me one?

Mrs. Elsie Wayne: Yes, as long as you have the money.

Mr. Arthur Eggleton: The money.

Mrs. Elsie Wayne: Also, when it comes to the frigate, do the frigates not have to...? I believe the last frigates that were built could not accommodate the helicopter without having some sort of structural work done to them.

Mr. Arthur Eggleton: Each of the helicopters is different. They can all land on the back of the frigate, but in terms of the cable connections, the housing, and a number of other factors that relate to their weight and size, there would need to be modifications. Any new helicopter we have, regardless of which one, is going to require some modification to the frigate, and that will be all part of the bid price.

Mrs. Elsie Wayne: And of course, as you know, having the shipyard that built the frigates, we can hardly wait for you to buy the helicopters so we can bring in the frigates and put the people to work to fix the frigates to accommodate the helicopters. So I'll be waiting to see when that happens, Mr. Minister.

Thank you very much.

Mr. Arthur Eggleton: Thank you.

The Chairman: Thank you, Mrs. Wayne.

I think the minister knows that there's much anxiety on all sides of the table for that announcement, and I'm sure even he shares that. So we're hoping—

Mrs. Elsie Wayne: We were waiting for something to happen.

Mr. Arthur Eggleton: Mr. Chairman, let me point out that because there hasn't been an announcement, it doesn't mean the file wasn't moving along.

The Chairman: That's right.

• 1655

Mrs. Elsie Wayne: It just has to move along a little faster.

Mr. Arthur Eggleton: This whole process continues to move along, and at the appropriate time there will be an announcement.

The Chairman: All right.

Mr. Arthur Eggleton: That would be—those famous words—soon.

Mrs. Elsie Wayne: He wouldn't do that without having us there.

The Chairman: No.

Mrs. Elsie Wayne: We'd certainly be invited to that announcement, wouldn't we?

Mr. Arthur Eggleton: I think everybody would be interested in that.

The Chairman: Thank you very much, Mrs. Wayne.

Now the second round of five minutes is with the Canadian Alliance Party, with Mr. Hart.

Mr. Jim Hart (Okanagan—Coquihalla, Canadian Alliance): Thank you very much.

Thank you, Mr. Minister, General, and staff for attending today. I don't want to belabour the helicopter issue and what you just said, but that file has been moving along since 1981. Unfortunately, it's been moving backwards, and we're still waiting.

My issues that I want to raise with you today are in the area of combat capability. That is a concern of mine. In particular, the revolution of military affairs is going to require the department to invest heavily into technology to ensure that we're capable with our allies and to go up against our adversaries.

The Auditor General in 1998 said that the Canadian Armed Forces are currently behind the eight ball, that we're still trying to catch up with 1970s technology. I think General Leach also made mention of that.

There is an increase this year—I'll refer you to page 33 again—of the capital acquisition budget of $60 million. It appears to be an increase over 1999. You can correct me, but if you do the simple math from 1999 to 2000 and then 2000 to 2001, it appears to be about $60 million, unless this document is wrong.

Can you tell us exactly how the department is planning to cope with the RMA and the low capital acquisition budget you currently have?

Mr. Arthur Eggleton: I indicated this before quite clearly, and you know how this works. You should know when you ask the question that the new money we got in the budget is not distributed, so there are more funds that can go to capital. It's not a $60 million capital increase. It will be more than that.

I indicated very clearly that our aim over a five-year period was to go from just under 19% to 23% of our budget as capital, equipment, and re-equipment. So we intend to invest in doing that. We've been doing that for a number of years now. In recent times there's been the new submarine, the armoured personnel carriers, and state-of-the-art equipment. There are the new frigates, the new MCDVs, and we're into upgrade programs for the CF-18s and the Auroras. Every major piece of equipment is either being replaced or being upgraded, now or over the next few years, to ensure our troops do have the tools they need to do the job. That's our commitment.

Mr. Jim Hart: The revolution of military affairs is much more than that, Mr. Minister. I would still refer you to your document, page 33, item 5, capital expenditures. Unless the document is wrong, it appears to be approximately $60 million. That's what it appears to be from the budget 1999-2000 to 2000-2001.

So my question is how are we going to deal with the issue of the revolution of military affairs, RMA, with an increase of $60 million? Tell us about the RMA then.

Mr. Arthur Eggleton: The $60 million is clearly wrong. I've told you that. You know that these main estimates are published at the time the budget is being delivered. They do not take into consideration the additional amount of money, the $2.3 billion over four years, that was announced by the finance minister. I've told you that. This is only a portion of the increase that will go into capital expenditures.

Mr. Jim Hart: Okay, Mr. Minister.

Mr. Arthur Eggleton: I told you also previously, and I'll repeat it again, we are still working on the allocation of the new funds that we have. And the new funds are not just this year and last year; they're next year, the year after—they go on. They go into the A-base budget of the department. So they become a long-term, permanent part of—

Mr. Jim Hart: Mr. Minister, thank you very much, but you still haven't answered one part of my question regarding the revolution of military affairs. So let's move on to another area. I would like to talk to you—

Mr. Arthur Eggleton: I told you that all—

Mr. Jim Hart: Mr. Minister, I have a limited amount of time. Will you be quiet, please?

• 1700

Mr. Arthur Eggleton: No, I won't, because you're misleading people.

The Chairman: Order.

Excuse me, Mr. Hart. You put a question on the RMA, and the minister, I think, has done his best to answer it. If you want to rephrase it, I'll give you a chance to do that, and perhaps the minister can address it again.

Mr. Jim Hart: How much money is the Canadian Armed Forces allocating to the revolution in military affairs this year?

Mr. Arthur Eggleton: I told you, we have not worked that out. We received, in the budget, the new allocation of funds, the $2.3 billion over four years. We are still working on the allocation of those funds. We are going to invest in our people, invest in quality of life. We are going to invest in new equipment, which includes newer technologies that fit into this concept of the RMA.

So I told you, we haven't allocated it yet, but we intend to do that. You've heard what our goals are. You can see what our plans for the future are. That gives you a pretty good indication in terms of where we want to go in modernizing our forces.

The Chairman: Free question, Mr. Hart, because I took a bit of your time.

Mr. Jim Hart: Mr. Minister, I'm still concerned about combat capability, in particular the reserve force. It appears in the estimates that the budget for the reserves is actually being reduced. If we have a commitment towards the reserves and combat capability, how is it that the training for reserves is actually going down and not increasing?

Mr. Arthur Eggleton: Quite obviously, when we determine reserve restructuring we will have to provide the additional resources required to be able to carry out that restructuring so that the reserves can perform the functions we ask them to perform. That will happen following the restructuring.

Let me also say that combat capability overall is better today than it has been for a decade.

Mr. Jim Hart: In the reserve?

Mr. Arthur Eggleton: It's better in the Canadian Forces overall.

Mr. Jim Hart: I'm specifically asking about the reserve.

Mr. Arthur Eggleton: Well, in the reserve, I told you, we have a structure that goes back to World War II. It needs restructuring.

Mr. Jim Hart: Thank you.

Mr. Arthur Eggleton: Once we get that restructuring done we have to provide the resources to make sure they can do the job.

The Chairman: Thank you, Mr. Hart. I gave you a little bit of extra time because I'd had to intervene.

Mr. Jim Hart: Thanks.

[Translation]

The Chairman: Mr. Bertrand, please, five minutes.

Mr. Robert Bertrand (Pontiac—Gatineau—Labelle, Lib.): Thank you very much, Mr. Chairman. I also wish to welcome our guests this afternoon. Mr. Minister, we know that Canadian Forces have a recruitment program to increase the number of women and aboriginals. I would like to ask you if those programs have been successful up to now.

[English]

Mr. Arthur Eggleton: We've certainly increased our efforts. We are getting more in the door in terms of, first of all, women, but we're not getting as many as we would like to see. We don't have a quota system. I want to make this quite clear. We're not reducing any of our requirements, any of our qualifications. Everybody has to qualify in a similar fashion.

We do want to get more in the door. We want to be able to conduct training successfully so that we can get more actually passing basic training and, going beyond that, becoming full-fledged members of the Canadian Forces. We still have more work to do in that regard.

The same goes for our aboriginal program. We have designed a new program to help bridge the gap for aboriginals who want to become part of the Canadian Forces but who, again, are not coming through the system successfully to the same extent as other people do.

Again, they have to qualify just like anybody else. There's no quota, but we've set up a program to help encourage them, to help bridge the gap—the cultural gap, for example—so that we can get more of them in the door and then move them along from there, through the same kind of basic training, to qualify them.

I don't think we have the results we want to this point in time. We're still refining the mechanisms. But it is our intent to ensure that we increase the number of women in particularly the combat arms area. All of our combat arms positions are open to women except for submarines. That matter is under review.

Women now make up over 10% of our force. We are one of the largest in the NATO countries in terms of women in the forces. But we want to make sure we do not have barriers to women applying into any branch of the armed forces, save and except, at this point, the submarines, as I mentioned.

• 1705

We also do not have in our ranks aboriginals in the same numbers as they are in the working population or in the population as a whole. Again, we want to try to encourage them through outreach programs to give them the opportunity to successfully complete the course. But it has to be the same course, the same qualifications. At the end of the day, they have to be soldiers like everybody else, whether they're aboriginals, women, or from any other ethnocultural background.

We want to encourage them and help them to succeed so that we can get a Canadian force that better reflects the population we have in this country.

Mr. Robert Bertrand: One last question. Could you maybe expand on what is the role of Emergency Preparedness Canada?

Mr. Arthur Eggleton: This is a vital organization when it comes to dealing with emergencies in our country. We've experienced some major natural disasters in recent years—for instance, the ice storm in central Canada, the Saguenay floods in Quebec, and the Red River floods in Manitoba. Emergency Preparedness Canada is part of the structure of helping to coordinate the different levels of government and different agencies involved in helping to deal with these kinds of emergencies.

As well, to help prepare these entities we have a program where we provide funds to help prepare them at a local level to be able to meet these emergency needs. The first level of responders is the local level, and beyond that the province and then ourselves become engaged. We need to have appropriate coordination at all levels, and that's what Emergency Preparedness Canada helps us do.

[Translation]

The Chairman: Thank you, Mr. Bertrand.

Mr. Laurin, you have five minutes, please.

Mr. René Laurin: Mr. Minister, I am getting to the part dealing with the cost of peacekeeping operations and other related operations. We realize that in 1999-2000, the operations in Bosnia has cost $356 million. The cost of the Echo Operation in Kosovo was $397 million and that of the Kinetic Operation for peacekeeping in Kosovo was $429 million. This is a lot of money. This is almost $1 billion and recurrent costs for the same operations have been provided for next year.

If those operations are continuing and if there were other war or peacekeeping theatres in the world that are not provided for here, where would you find the money? What other budget could be allocated to that? I would like some explanation from you.

[English]

Mr. Arthur Eggleton: The costs we absorb in our basic budget for these particular missions are the costs of salaries and the normal maintenance of equipment and such.

Incremental costs, costs over and above those costs that we'd have to absorb anyway, whether they're in Bosnia or Gagetown or Val-Cartier or wherever, come from a separate fund we have for that purpose. When that fund is exhausted, we then apply to the Treasury for additional funds. In fact, in all of these cases we have received additional funding from the treasury for those incremental costs.

[Translation]

Mr. René Laurin: What is the name of that fund, Mr. Minister? You are saying that you have a special fund for that purpose. In what budget item can we find it? Is it this discretionary envelope of the Minister? Probably not.

[English]

Mr. Jim Judd: If I may, we have in the last number of years operated on the principle that once incremental costs for military operations, either domestically or internationally, will over the course of a year exceed about $125 million, we have gone back to the government to seek incremental funding to cover those costs. That was done in the case of the ice storm. It was done last year for Kosovo and East Timor and the year before for the ice storm and some of the Balkans operations.

• 1710

The $125 million figure is a notional figure that our colleagues in the Department of Finance and Treasury Board have agreed with in the past as the basis on which to make these kinds of decisions.

[Translation]

Mr. René Laurin: Is it the amount on page 85 of the French version of the budget, in the incremental costs column? Is it that amount that you will ask of the Treasury Board to complete the operations?

[English]

Mr. Jim Judd: The costs we would be talking about, sir, would include personnel costs; operations and maintenance costs; ammunition costs; expenditures on removal to and from a theatre—for example, moving troops from Edmonton last year to Kosovo; and the rotation of troops after a six-month tour and so on. The costs flow through all parts of the budget, really. All of our operations are costed to a very high degree of detail along those expenditures, and when the cumulative total of operations over the course of year exceeds $125 million, we go and talk to our colleagues who have the money.

[Translation]

Mr. René Laurin: Mr. Minister, given the importance of those costs, the Bloc Québécois and other opposition parties had asked in the past that a motion be moved in the House of Commons before the authorization of such expenditures.

We know that it could happen again. Are you ready to submit those decisions to the House in the future so that Parliament might give its approval to the sending of additional troops, the maintaining of troops or the extension of their presence as we know that this involves hundreds of millions in incremental costs?

[English]

Mr. Arthur Eggleton: The experience has certainly been, in this Parliament and in the previous Parliament, that there has been an extensive amount of consultation in terms of this committee, in terms of the foreign affairs committee in many other cases, and also in the House itself. Prior to the government making decisions it has entered into consultation, and I don't see any reason why we wouldn't continue to do that. But it is the government's responsibility to ultimately make the decision with respect to these matters, and that's what the government does, but it wants to get the advice first.

[Translation]

The Chairman: Thank you, Mr. Laurin.

[English]

Mr. O'Reilly, please, five minutes.

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): Thank you very much, Mr. Chairman.

Thank you very much for attending today, Mr. Minister. We appreciate getting a crack at the top people every now and then and getting some good answers.

There's one thing that stuck in my mind in your Strategy 2020. I'm reading in here that one of your goals is to implement a parliamentary outreach program to provide opportunities for parliamentarians to experience first-hand Canadian Forces exercises and operations. I didn't know if that was another boot camp, because I did boot camp in cadets and in reserves. I just wasn't sure if that's what you had in mind. Maybe you could explain.

Mr. Arthur Eggleton: Oh, I thought you wanted a ride in a CF-18.

Mr. John O'Reilly: Not particularly—only on the white-knuckle route.

In the quality-of-life report, which has been touched on, recommendation 41 was that posting allowances be replaced with the new non-taxable posting benefit that will adequately compensate all personnel, and the allowance should be uniform and not tied to rank. Does that include postings to the United States?

I knew they wouldn't be able to answer that one.

Mr. Arthur Eggleton: The post differential living allowance is intended for Canada.

• 1715

As you know, there are variations in the cost of living in different parts of the country. One of the most notable in that category has been for naval personnel or any military personnel that might be going from the naval base in Halifax to the naval base in Esquimalt in British Columbia. Housing costs, for one, are quite different.

When they are serving in another country, there is another formula, which I think is really the foreign affairs department formula.

Jim Judd used to be at the foreign affairs department. Maybe he could answer—

Mr. John O'Reilly: I was hoping Mr. Judd would have that answer, because there is a formula that, to my mind, is not very fair. If you're posted to the United States as a member of the Canadian Forces for a period of time, there is a big disadvantage tax-wise, and I just wondered if that had been addressed yet. Perhaps Mr. Judd—

The Chairman: If I might say something, we heard this as well in the town hall meeting I mentioned that we held at NORAD.

Mr. Jim Judd: I was just double-checking. My recollection, as the colonel confirmed, was that personnel posted outside of Canada—including the United States—are subject to the same benefits and allowances that are provided to members of the foreign service who are serving outside of Canada, so there's a degree of equivalency there.

I do recall hearing about your visit to Colorado Springs and the tax issue. I have asked for some clarification of what exactly the problem was, but at this juncture I haven't seen an answer to the question on the specific issue on taxes.

The Chairman: Mr. O'Reilly, two more minutes.

Mr. John O'Reilly: Going back to the recommendations being accepted in principle on the program to develop facilities for leasing by the housing agency of homes owned by military personnel, once again, you talked about the status of the program; we wanted an annual report on it. I'm not sure I agree with the item saying that “feasibility and acceptability are being examined”. Is there something missing, can you tell us, that wasn't in the report and that needs to be studied further as to why that program isn't fully developed? It'd be your item 37.

Mr. Arthur Eggleton: In the quality-of-life report...?

Mr. John O'Reilly: Yes. I don't want to ask you all the questions you can't answer. These are some of the things that were—

Mr. Arthur Eggleton: No, well, there are 84 recommendations here, so I will have to just familiarize myself with that again.

Mr. John O'Reilly: I went over the recommendations that.... When they said they were accepted and implemented, I didn't pay any more attention to them other than to do a brief follow-up. When they're accepted “in principle”, it means that they're still being studied. I just wondered at what stage that study is.

Mr. Jim Judd: I think the short answer, sir, is that we just had a workload problem with the folks who are doing all of this. They were working on these things in order of priority. In terms of housing issues, the principal focus has been on the cost-of-living allowance across Canada as the first and foremost issue to deal with in that regard.

The work is being pursued on virtually all of the recommendations that were accepted. It's just that the machine is a little overloaded sometimes.

Mr. Arthur Eggleton: Another aspect is that what we're also looking at is an enhanced status for the Canadian Forces Housing Authority, an enhanced status that might give it opportunities to go out into the market and do more than it's able to do now with the authority that it has in terms of leasing properties, selling and developing, borrowing money, and things like that.

It does have a special status now, but we're looking at enhancing it even beyond that. One of the thoughts was even a crown corporation so that it would have an opportunity to work faster, in a more flexible way, to ensure that we have the best possible housing for our troops. That is somewhat tied up in that whole exercise as well, as indeed some other aspects of the housing program are.

The Chairman: Thank you, Mr. O'Reilly.

Mrs. Wayne, five minutes.

Mrs. Elsie Wayne: Thank you very much.

• 1720

First, I just want to refer to the reserves. Mr. Minister, as you know, I have to say that I have back home the HMCS Brunswicker, which is a brand-new Brunswicker. We're just waiting to have that little submarine that we were supposed to get. It was supposed to be out there in the harbour so that we could train our young people. We haven't gotten that as of yet, but when we get one of those used ones you bought over there in London instead of building one in Saint John, maybe we'll use that.

The other thing I want to say is this, sir. I am a very strong supporter of the reserves—we also have our heritage armoury as well—because I think their training is the best training in the world. It really is. I think we should be increasing the numbers, not decreasing the numbers. I'm serious about this, I really am. I feel that way about all our armed forces as well.

I support you because they can't come up on the Hill with placards and march around like everybody else marches around when they want something. They rely on us in this committee here. I thank you very much for your comments. We are supportive of what you're attempting to do, but certainly there has to be more. Everybody in the House has to realize that the army, navy, air force, the reserves, and the militia all need our support.

When I asked you about Sea Kings, you talked about a timeline. You were saying that between now and 2005 we'd have our helicopters in replacement for the Sea Kings. Were you looking at perhaps an announcement in May or September? You know, is there just some little announcement coming?

The Chairman: There she goes fishing again.

Mr. Arthur Eggleton: My favourite month is the month called “soon”.

Mrs. Elsie Wayne: Soon. Okay.

There's another question I have for you. You know about the white paper policy of research and consultation with the U.S. national missile defence system. We had contributed roughly about $1 million a year to areas that are consistent with that white paper. As you are aware, the United States is pushing us to be very much involved with the NMD system. Should Canada elect to become involved in the next twelve months or so, could you just inform us whether or not DND has taken into account that the $1 million figure would have to increase? If so, by how much?

Mr. Arthur Eggleton: Well, first of all, they haven't asked anything of us formally at this point in time.

Mrs. Elsie Wayne: Oh, they haven't?

Mr. Arthur Eggleton: No, they haven't asked us to participate. They really wouldn't be in much of a position to ask us to participate, because they haven't made a decision to do this themselves. They haven't made any decision to deploy this. At the moment, it's tied up in testing that is still going on to perfect the technology. There's a further test that's happening late in June, and the President of the United States may be in a position to make a decision in the fall. But he may not. He may wait until after the election. As you know, they'll be into an election, full-blown, in the fall. So since they haven't made any decision yet, they haven't made any formal request to us in this regard.

Now, a number of their personnel.... Most recently, the Undersecretary of Defense made it quite clear in a speech in Calgary—in fact, I think he went to Calgary to make it quite clear—that they would like to have the support of Canada. That doesn't necessarily mean money, and that doesn't necessarily mean any of these missiles being on our soil. In fact, every indication at this point in time is that there wouldn't be. But we have not made a decision at this point in time. We are examining the matter. Your committee here has been examining the matter as well. It's a very important one, and I think we need to have some discussion of the issues that are involved in it. Of course you had Mr. Axworthy and me appear before you on this very subject recently.

Mrs. Elsie Wayne: I think there is a difference of opinion between you and the Minister of Foreign Affairs on this. But I will say that I was at a meeting in Brussels, and we were meeting with European Union and government officials. While we were there, the chairperson, Robert Sturdy, who is a member of Parliament in London, England, said they been approached in London about their radar site. The U.S. wants them to modernize that radar site so that they can use it. The United States needs to have that. Also, he said they're looking at Canada in order to be able to have a site whereby if one of these missiles were to come over in this area, we would be able to detect that missile here in Canada as well. So that's what they were looking at: London, England, and us.

Now, there's no question that in the European Union, the majority of the countries there are not in favour of this at all, and that's because of the treaty in place between Russia and the U.S. at the present time. But it's a serious situation with North Korea and China and all the rest.

• 1725

Mr. Arthur Eggleton: We are already in the missile detection system with respect to North America because we're involved with NORAD. That's part of NORAD's purpose. NORAD is dealing with the aerospace of the continent, so we're already involved in detection and we're entering into a joint space program that also further advances detection surveillance capabilities, whether or not we ever become involved in national missile defence. But obviously national missile defence is going to affect us if the United States decides to deploy these missiles.

I might add that I keep reading about Star Wars. This is not Star Wars. This is not talking about putting these kinds of missiles in space. They're ground-based missiles. They are non-nuclear. They are there as defensive weapons. People can have an opinion as to whether they could work or not, but let's make sure people understand what they are or are not. They're not a Star Wars project.

We will be affected by it if they deploy it, because obviously we share the North American aerospace. NORAD is an entity that is involved in the protection of that space, so obviously this would have some impact on NORAD, although we don't know what that impact would be at this point in time. But that all has to be part of our consideration.

Mr. Axworthy has quite correctly pointed out that we also have to look at the ABM Treaty. We have to look at non-proliferation issues. We also have to look at issues involving our Canada-United States relationship and our NORAD relationship, etc. Those are all key questions that are an important part of the government making a decision on this matter. I welcome your input and I welcome the input of the Canadian people on this matter.

The Chairman: Thank you, Mrs. Wayne.

We have time for Mr. Hanger again with the last five minutes. We have gone through two full rounds, which is what we normally are lucky to get through with a witness.

Mr. Art Hanger: Thank you, Mr. Chairman.

I'm going to go back to the estimates as noted on pages 33, 34, and 35. The differential that I see between 1999-2000 and 2000-01 is approximately $900 million. In other words, there is an increase of difference between those budget estimates. Since this document was printed after the budget was delivered, obviously there was some accounting for the $2.3 billion that was allotted for increases in spending on defence.

Note page 35, in reference to table 1. Clearly it accounts for over $700 million in additional spending, I would assume, since it has increased by that much. But there's just a slight increase in capital expenditures, which was vote 5.

As a departmental head or minister of the department, how on earth are you going to look after the revolution in military affairs, the upgrades in the Auroras, the CF-18s, and any other increases having to do with capital expenditure, with $60 million? I don't know how you're going to do that.

If I could get one, I would like an explanation on exactly where the money is going to go, sir, because I don't see it in the estimates here at all. It has been accounted for.

Mr. Arthur Eggleton: As I indicated earlier, not everything that gets into the budget gets into the estimates. It ultimately gets into supplementary estimates.

We haven't made a decision about the division of that additional money. It hasn't been divided up among these accounts, so it's not in a final form in the estimates. It's not in the final division of how the money is going to be spent. Okay?

Mr. Art Hanger: Mr. Chairman—

Mr. Arthur Eggleton: I've made that quite clear.

Part of the $894.5 million increase includes $400 million in increased funding for maintaining essential elements of the defence services programs. That has not been allocated among the various functions, for example. So it's not correct to say that it's only going to be $60 million.

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Also, let me point out that we're not going to do all of the modernizing and upgrading in one year, in any event. You know it takes several years to do all of these things.

Mr. Art Hanger: We sit here, sir, and are expected first to understand the estimates, and then to vote on them somewhere along the way. The explanations offered thus far are far from satisfactory in understanding these estimates, where the money is going to go, and just exactly what is going to happen in four or five years. The only vague reference to anything changing is to the total spending remaining stable at 19% of the total budget. That is not exactly a reflection of your comments.

Mr. Arthur Eggleton: Now look, I made it clear. These estimates were tabled in the House the day after the budget. They were obviously at the printer at the time, and obviously the decisions that are made in the budget are announced for the first time on budget day. We have not yet gone through the allocation of those moneys into different accounts for different purposes, whether they be capital expenditures or quality-of-life measures or whatever it is they're going to go into. I've told you generally where they're going. We're going to invest in our people. We're going to make sure they have the best quality of life, that they have the education and training they need, and that they have the tools or equipment they need to do the job.

Now, exactly how all of that divides up on this money, I can't tell you at this point in time. As soon as I can tell you, I will tell you. We'll give you briefings on it. We'll make sure you get the information you're looking for. But stop using the term “$60 million”. That is not what we're going to be spending this year in terms of capital expenditure. We will be reallocating this money that we got in the budget this year to those areas, including capital equipment.

The Chairman: You have time for one last, really brief question, Mr. Hanger.

Mr. Art Hanger: On November 24, sir, I submitted several questions for your response, and I haven't received any reply. Many of them actually relate to these budgetary items. I'm wondering if it is at all possible to obtain a copy of your reply.

Mr. Arthur Eggleton: Well, they're almost finished. You had over thirty of them. They're quite involved and detailed, as I would imagine. We will get you the answer just as quickly as we can. We're almost finished.

The Chairman: Thank you.

Thank you, Mr. Hanger.

Mr. Eggleton and Mr. Judd, General Baril, thank you very much for being here. We appreciate your help on this issue.

The meeting is adjourned.