Cutbacks to expertise hurting procurement, leaving money unspent: analysts

by Denis Calnan (feat. David Perry and Jean-Christophe Boucher)

The Hill Times
May 25, 2015

Defence analysts say the Canadian military has gone from not having enough funding to not having enough personnel with the right expertise to keep up with the government’s demand to update the Canadian Forces’ equipment.

“Historically, one of the base problems at National Defence [was that it] didn’t have enough money to actually buy military equipment. Since 2006/2007, they’ve had a different problem, which is that they actually can’t spend the money that they do have,” said David Perry, the senior analyst with the Canadian Defence and Foreign Affairs Institute. He is also the author of “Putting the ‘Armed’ back into the Canadian Armed Forces: Improving Defence Procurement in Canada,” a report published by the Macdonald-Laurier Institute in January.

“At the end of the year they keep turning back about a quarter of the money they’ve been given—consistently about a billion dollars a year. And my understanding is that the amount for the last fiscal year that’s going to be turned back, unspent capital funds, is going to be the most that it ever has under-spent. That’s a pretty different dynamic and one that’s a very different set of problems for National Defence,” said Mr. Perry, noting it is the first time in the history of the military that it hands money back to the government.

The problem, said Mr. Perry and other industry watchers, is that the military lost many skilled workers in cutbacks in previous decades. Those cutbacks also meant that the military was not investing in equipment, which has resulted in a backlog. Those two shortfalls leave it unable to spend the money productively.

Now the military is in a position where the expertise to do the required work is no longer available and it needs to start the long process of rebuilding that expertise.

While the money is now available, the military is forced to give the money back to the government because it’s unable to properly spend it.

“If you don’t know what it’s going to be spent on than you’re not going to spend it,” said Jean-Christophe Boucher, an assistant professor in political science at MacEwan University in Edmonton and a research fellow at the Canadian Defence and Foreign Affairs Institute.

“The money is there, but they don’t have a contract. Nor do they have a proper procurement project to spend it on,” said Prof. Boucher.

“During the 1990s, there wasn’t a lot of major acquisitions going on because there was limited funding. And then beginning in 2005, under Paul Martin’s government, which initiated this reinvestment in National Defence, it provided a bunch of money specifically to buy capital programs. And then the Harper government’s built on top of that,” said Mr. Perry.

Now, “there’s been a really huge increase in the work load,” he said.

“The systems and the structures and the people and the human resources to actually implement all that haven’t kept pace. So we cut a lot of capacity out of the procurement system,” said Mr. Perry.

  That is a view shared by Ken Hansen, an adjunct professor in graduate studies in the department of political science at Dalhousie University and a resident research fellow with the Centre for Foreign Policy Studies. He retired from the Navy in 2009 in the rank of commander after a 32-year career. He is also involved in contributing to reports for the Parliamentary Budget Office.

Prof. Hansen said that because of the long timeframe needed for a commitment by the government on defence procurement, there needs to be a cross-partisan committee dedicated to being informed on the file so that when there is a change of government, uninformed political decisions are not made.

The NDP critic for Public Works and Government Services, Pat Martin (Winnipeg Centre), is upset about the whole F-35 fiasco and the procurement process around the fighter jets.

“You don’t even build a sundeck without getting three quotes so it’s wildly irresponsible and borderline stupid to replace our aging fighter jets based on a sole-source contract,” he wrote in an email.

“The F-35 is the wrong plane for Canada’s needs, never mind the fact it is insanely expensive. Single engine, can’t fly over water, can’t take off or land on any of our northern airstrips, stealth abilities unnecessary for our purposes,” he wrote.

Prof. Hansen said the Parliamentary committees will need to stop being used as a political tool to stay in power.

It starts at the top. This is a strategic issue and the government has to have clear policy. So we need a very comprehensive white paper review. The government has to come clean and tell the people in the country that this is the kind of military we are going to have and these are the kinds of situations that we’re going to need equipment for. Because designing a military and saying, ‘Oh it’s good for everything, anytime,’ is completely unrealistic,” said Prof. Hansen.

“Canada’s a wealthy country, but even the United States can’t afford that,” he said.