feat. David Perry

Standing Committee on National Defence
February 07, 2017

AUDIO: ParlVu

Mr. Chair, Members of the Committee, thank you for the invitation to speak to you today about naval readiness.

In my opening remarks, I will make some fairly broad comments about the Royal Canadian Navy (RCN) and Department of National Defence and be happy to focus on any areas you wish in the question and answer session. 

Canada’s navy has turned a corner in many respects, from one of the lowest periods of fleet availability and some of the dimmest prospects for fleet recapitalization in post-war history, to a situation today where it effectively has its fleet back and is starting down the road to recapitalization. 

Last November, HMCS Toronto, the last frigate to enter the Halifax Class Modernization/Frigate Life Extension program completed that upgrade on schedule.  With that, the RCN is back to a normal frigate readiness cycle with significantly enhanced warships.  Similarly, in the last two years, the Victoria class submarines reached the level of operational availability originally envisioned.  With both our frigate and submarine fleets, Canada has regained a reasonable level of operational capability, albeit with no ability to sustain surface operations independently until the Interim-Auxiliary Oiler Replenishment ship comes online.  Further, the innovative ‘generating forward’ concept the RCN is now employing with the frigates, of having them conduct abroad the same type of work-up training they used to conduct closer to home, means the RCN is able to provide the government with more foreign policy options overseas with the same 12 ships than it did before.  

On the personnel front, the navy is still dealing with some deficiencies in the number of trained personnel, particularly with skilled technical positions.  But as these problems were in part caused by highly limited available sea time it should now be easier to rectify them with the much greater fleet availability.

In sum, our navy is presently in pretty good shape.  The points of concern with the navy relate to its future in the context of the current naval procurement program and the prospects for future fleet recapitalization. 

The current government and the previous one deserves significant praise for setting up and then continuing what is now the National Shipbuilding Strategy which brought Canada’s naval and industrial polices into much closer alignment.  However, I agree with the assessment of the first status report on that effort published last spring which recognized the need to increase government shipbuilding capacity and expertise, improve project budgeting, better measure progress and results and improve communications on the file.  All of these aspects of the National Shipbuilding Strategy need improvement, but despite their announcement last May, it is unclear what is different today. The shipbuilding file is of critical defence and industrial importance, a multi-decade program of work worth at least $40 billion in the acquisition stage alone and well more than $100 billion overall.  But despite this, it is being managed as a group of individual projects and resourced with what seems to be a penny wise, pound foolish approach that treats this file like just another matter of public administration in many respects.  However, having outlined a number of areas where I think improvements are needed, I would disagree with the notion that the shipbuilding file, or the Canadian Surface Combatant project in particular, is a disaster.  But given the inability or unwillingness on the part of the Government of Canada to communicate effectively about shipbuilding, I can understand why many are viewing the file that way.  If communications are not improved, no one should be surprised if the National Shipbuilding Strategy is perceived to be a failure, irrespective of what it is actually achieving.

One issue that needs to be handled better in particular, are costs.  While the sum total of the shipbuilding project budgets represent an enormous sum of money, it is acknowledged to be insufficient.  Similarly, looking out beyond the programs that are part of the National Shipbuilding Strategy, there are insufficient funds available to acquire the naval capabilities needed to deliver on existing defence policy and maintain the same type of navy we have today.  Key amongst these shortfalls is sufficient funding to retain a capable fleet of submarines.  One of the most needed outcomes of the Defence Policy Review for the navy is clear direction from the government about what it expects from our maritime forces and the resources needed to achieve it.  This same situation applies to the rest of the Canadian Armed Forces.

As the government prepares the federal budget, it must give consideration to increasing the Capital funding available to DND.  The RCN especially, but DND as a whole, will simply not be able to keep doing the same types of things it does now in the future, without an increase to its funding for Capital equipment.  Canada has made a commitment to the NATO alliance to spend 20 percent of its defence budget on new equipment and research and development, but for the last two years has only spent 13 percent.  Additional Capital spending of roughly $1.5 billion a year would close this gap, and increase the overall share of GDP Canada spends on defence in the process.  Phasing in an increase of approximately $1.5 billion in additional Capital funds incrementally over a few years and matching it with a concerted effort to improve the defence procurement process so that money could actually be spent, would allow Canada to meet one of its NATO spending targets, come closer to meeting another, and keep the same broad level of military capability it has now.  Without such an injection of funding, the Defence Policy Review will result in a contraction of the Canadian military, irrespective of what the defence policy actually says.

Thank you.

David Perry, Senior Anlayst and Fellow, Canadian Global Affairs Institute.