The Defence Budget [superthread]

[Colin Parkinson]

Time to arm the Snowbirds to defend our cities  8)

 

[Old Sweat]

And in the anything is possible department, this piece from Postmedia hints that the cuts to the Defence Budget may be restored. It is reproduced under the Fair Dealing provision of the Copyright Act.

Den Tandt: Canadian military may get its $3.1-billion back
http://o.canada.com/news/politics-and-the-nation/den-tandt-canadian-military-may-get-its-3-1-billion-back

Things may be about to change in the Canadian military, with the possibility of  billions of dollars in the balance.

Even as the Harper Conservatives have deployed CF-18 fighter jets to Eastern Europe, and now to Kuwait to join the air war against Islamic State, the Canadian Forces have seen their funding slashed. But that may be about to change, as the government considers adding back part or all of the $3.1-billion removed from the military’s piggy bank in last February’s budget.

Friday, it was reported here that Prime Minister Stephen Harper personally intervened recently to settle a dispute between Treasury Board, led by Tony Clement, and the Defence Department, led by Rob Nicholson, over a pending $800-million sole-sourced purchase of next-generation Sea Sparrow naval missiles from U.S.-based Raytheon Co.

Concerns that the acquisition under the U.S. government’s Foreign Military Sales program would tilt the scales in favour of the Raytheon-Lockheed-Martin group in a burgeoning trans-Atlantic competition for up to $18-billion in sub-contracts on DND’s new Canadian Surface Combatant fleet, were overruled. As were, apparently, any worries about the optics of making another large military purchase, a la F-35, without opening the process up to competing bids.


The move came after a letter to the prime minister in which Nicholson, Public Works Minister Diane Finlay and Industry Minister James Moore argued, contrary to officials at Treasury Board, that this was a policy matter and not a contract within the latter’s purview.

The settlement approved by the PM stipulates that the purchase of a missile system for the new naval vessels will indeed be subject to an open competition. Marcel Poulin, a press secretary for Finlay, Tweeted Friday that “it is inaccurate to suggest that the potential upgrade of the Evolved Sea Sparrow Missile… would have any impact on the procurement of the Canadian Surface Combatant.” Poulin wrote. In a subsequent Tweet, he added: “The missile system on the CSC will be subject to full, fair and open competition.”

The difficulty is that, given the defence department’s long history of skewing its requirements to favour a single preferred supplier, and its long relationship with the Lockheed-Martin-Raytheon group, and the latter’s centrality in U.S. defence planning for the foreseeable future, few in Ottawa will believe this – especially since the frigate missile upgrade itself could have been put up for competition, and now will not be.

Logic would suggest that, following a nearly $1-billion outlay on a new “smart missile” system from Raytheon for the old frigates, it may make fiscal and operational sense for the Navy to stick with this system in its new warships, to be built by the Irving shipyard in Halifax, rather than switch mid-stream to a different system, for example such as that produced by European-based MBDA.

Next up, defence industry insiders anticipate, will be a purchase of an additional Boeing C-17 Globemaster long-haul transport for the Royal Canadian Air Force, adding to the four already in service, also under the U.S. government’s Foreign Military Sales program. That acquisition, expected later this fall, will be justified by the necessity of the new missions in Ukraine, Eastern Europe and Iraq.

Meantime, DND officials are in the process of drafting a memorandum to cabinet, which insiders expect will meet a favourable response, for the return of the entire $3.1-billion tranche that was taken away, or technically deferred to future years, in the late Jim Flaherty’s final budget last February. It is expected the Sea Sparrow upgrade, as well as the new C-17, will be paid for out of this fund.

The government would appear to have fiscal room for such a move: The federal deficit in the year ended March 31 was just $5.2-billion, the PM disclosed earlier this month, about a third of what had been projected in the budget.

Simmering in the near distance is a looming clash of interests pitting Ottawa’s traditional strategic anchor and biggest trading partner, the United States, against our new free-trading BFF, the European Union. At issue are multiple billions of dollars’ worth in defence procurement – primarily related to the replacement of the fighter jets and frigates.

Companies such as French ship-builder DCNS, which builds the FREMM multi-role warship, and aircraft makers Dassault, Saab, and the consortium of Alenia, Airbus and BAE, are keen to compete on these contracts. In the case of the ships, the lion’s share of the cost is in the sub-contracting of a design, and the ships’ systems, including weapons systems. It is understood that the French, Germans and others are quietly lobbying to at least be allowed to bid on some of the work. French president Francois Hollande is to visit Canada in early November.

Weighing against that is Canada’s long-standing reliance on the United States for continental defence, and the allure of interoperability with a next-generation U.S. defence network — which includes the F-35 and Raytheon’s proprietary land, sea and airborne Co-operative Engagement Capability — that is expected to offer participants unprecedented situational awareness around the globe.

- mod edit to add link -

 

[Colin Parkinson]

2 more C-17's would be a very good idea and they are a great way to earn brownie points on the world stage without high risk.

 

[Spencer100]

How many of the C-17 "white" tails are available?  The C-17 is shutting down next year.  I read the Ozzies would like two also.

 

[ringo]

Additional C-17 great news, should by more than 1 however.

 

[Colin Parkinson]

They will keep the line open if they are getting orders

 

[MarkOttawa]

"Twill be a close-run thing--April 2014:

Boeing shutting down C-17 military transport production early
http://www.thenewstribune.com/2014/04/07/3137516/boeing-shutting-down-c-17-military.html

Mark
Ottawa

 

[Kirkhill]

Going out of business sale! Opportunity of a lifetime! Only 10 left!

Counter proposal:

2 BUSD of inventory?  I'll take a couple of those off your hands.  How much of a discount for cash?

http://www.flightglobal.com/news/articles/algeria-could-miss-out-on-c-17-boeing-cautions-403843/

Boeing, however, is shutting down C-17 production in June 2015, leaving only 10 unsold “white tails” available from which Algeria could make a purchase.

“I’m hoping Algeria can get through their process. I would like to have Algeria as a C-17 customer. I’m just concerned that their process will not allow them to move quick enough,” says Paul Oliver, Boeing’s vice-president for business development in the Middle East and Africa, speaking at the Africa Aerospace and Defence show.

Several other countries are lining up to claim the white tails, although no deals have been signed yet.

“We’re seeing a lot of our existing customers who now realise the line is going away, so they’re coming in and buying them up,” Oliver says.

In July, Boeing Defense, Space & Security chief executive Chris Chadwick said he expected to see deals close within the next six months.

Oliver says he “thinks” new orders will be placed for the white-tail C-17s soon.

“We’ve got aircraft available, but that number… [is] decreasing rapidly,” he says.

 

[a_majoor]

Given the deteriorating global situation (Ukraine, ISIS, Ebola, South China Sea, etc.), virtually any political party in power will be forced to look at the state of the Armed Forces and determine if *we* can actually do all the things demanded of us (and despite our "Can Do" attitude and amazing ability to pull things out of the hat, there really are limits to what can be achieved).

Sadly, I suspect the real "answer" from our political class may be to simply limit Canadian engagement in the world until our aspirations match the amount of resources we are willing to put on the table. The long term effects will be quite incalculable, in the form of lost diplomatic influence, lost sales to the world market, declining "soft power" influence through cultural and other avenues and other effects.

And of course, *we* will still end up paying for defense anyway, either as we discover once again we do not live in a fireproof house far removed from conflict and pick up tools in a hurry, or "pay" someone else to do the job for us.

 

[MarkOttawa]

Thucydides--at The Gods of the Copybook Headings blog, always interesting:

…
Among the relatively large nations of human history [only quite recently in terms of population] Canada is almost unique in one respect: We don’t strictly speaking need a military. There has not been a direct existential threat to Canada in more than a century. The only nation capable of invading is the one nation that would never try.  Our security has been underwritten by either Britain or the United States for over two centuries. Tomorrow we could dispense with the whole of the Canadian Forces and, leaving aside the communities in which our few military bases are located, I doubt anyone would notice.

…Just ask the Americans to protect our borders, including the Arctic, and deal with the loss of sovereignty and national dignity. That’s a course, which I suspect, most on the Canadian Left would want to pursue if they thought it politically practical. [I'm not so sure if the course were formal; our left is anti-American to its bowels.] It isn’t practical because it would offend ordinary Canadians perceptions of Canada as a serious country. Like it or not serious countries need a military. Even if it is increasingly seen as a token force…

Canada without a military is not unlike that feckless heir. A country that would live off the efforts of other nations too honourable and responsible. Nations that understand the need for a common defence of the free world. Instead we would be a nation free to morally preen over the decisions of the Great Powers, without the necessity of having to be blamed for the consequences. The security bum of the Western world. That’s a vision which, unfortunately, appeals to many on the Left. As a matter of self-respect Canada needs a military commensurate with its wealth and good fortune in the world. In the life of nations honour is just as important as guns and butter.
http://godscopybook.blogs.com/gpb/2014/10/macho-man.html

Mark
Ottawa

 

[Edward Campbell]

According to and article in the Globe and Mail, DND is not the only agency that cannot manage to spend its money each year.

While the RCMP's Chief Commissioner was telling parliamentarians that he doesn't have enough money,the Globe says that: "the latest year-end figures published last week in the Public Accounts shows the RCMP underspent its approved budget [$3.1-billion] by $158.7-million." The article goes on to say that: "The Public Accounts show other security agencies also underspent their approved budgets. The Canada Border Services Agency spent $194.2-million less than its approved budget of $2.2-billion; the Canadian Security Intelligence Service came in at $18.2-million below its approved budget of $534.8-million and the Communications Security Establishment spent $25.1-million less than its approved budget of $468.8-million."

 

[Kirkhill]

Dept   Budget Lapsed Lapsed
DND   19908 2300           12%
RCMP    3100 159           5%
CBSA    2200 194           9%
CSIS     535 18           3%
CSE     469 25           5%

Does this indicate problems at Treasury Board (intentional or otherwise)? A failure of the system at large? Or simply a failure of the individual departments to fully understand the approval cycle?  Would another document solve the problem or would fewer Project Managers with longer tenures be a contributor to the solution?

Or, is it a bad thing that people are given more money than they can use?

Me personally, I don't mind having a bit of change left in my jeans after all the bills are paid.

But there again I get to carry that money over from year to year. 

I believe the Brits have started to experiment with that.

 

[McG]

Does this indicate problems at Treasury Board (intentional or otherwise)? A failure of the system at large? Or simply a failure of the individual departments to fully understand the approval cycle? 

All of the above maybe.

Sometimes the problem lies outside DND and the CAF, like when delivery on a new fleet of major equipment becomes held-up as a result of the product failing acceptance testing.

Would another document solve the problem ...

No.

... would fewer Project Managers with longer tenures be a contributor to the solution?

Maybe, but we do have some PMs and PDs who are too long on a given file and become too emotionally invested in the developed product as opposed to the required capability

 

[McG]

We have concluded in this thread that Canadians don't punish governments for underfunding the military and it is the prerogative of governments to sacrifice defence for other agendas.  But, it does seem fair, when a government is sacrificing defence requirements, to ask that government to be public about its cuts as opposed to presenting itself of as the champion of defence I vestment.

If the Tories really loved the military so much, it wouldn’t be systematically underfunded
Michael Den Tandt
National Post
13 Nov 2014

Question: For how much longer can the federal Conservatives shamble along with a national defence and procurement posture that is disjointed, underfunded, poorly understood, chronically secretive and increasingly, obviously unequal to the challenges at hand?

This week at the G20 in Brisbane, Australia, Prime Minister Stephen Harper will wax combative about the growing list of strategic and security brushfires faced by the global club of pluralistic democracies, of which Canada purports to be an important member.

Chances are good that, when Harper speaks, his peers will pay some attention. Agree with him or disagree, there is no misunderstanding the PM’s positions vis-à-vis the theocracy in Iran, or Hamas, or Israelis’ right to live in peace and security, or the so-called Islamic State in Iraq and Syria, or Russian President Vladimir Putin’s aggressions in Ukraine.

Those afflicted with Harper Derangement Syndrome, which many days seems to include most of my Twitter feed, have persuaded themselves that this foreign policy is demonstrably un-Canadian and harmful to the country’s international reputation. I see little evidence abroad to support this view.

During a decade in Afghanistan Canada earned a reputation as a serious country with a serious military, willing and able to fight when necessary and build when possible. The Royal Canadian Air Force’s involvement in the campaign against Islamic State in Iraq and al-Sham (ISIS), though comprised of just six aging CF-18s, is an attempt to sustain that reputation

But how much longer can this hold, when the military’s budget is dwindling – defence spending is projected to fall below $19-billion this year, down from a high of $23-billion 2011 — and procurement is being arranged, to all appearances, on the back of a napkin? To call the current defence rebuild a shambles understates matters. Unless there are dramatic changes soon, it’s fair to ask whether Canada will even be able to field a capable military in a few years’ time.

Supposedly chastened after years of controversy over procurement, the government unveiled a new, “streamlined” approach to the file last February. The Defence department in June published its first new Defence Acquisition Guide. One cannot read this summary without coming away thunderstruck by the magnitude of the rust-out. The report may as well be stamped, “Everything here broken – and stay broken.”

For reasons that defy logic and the Conservatives’ own repeated promises, the F-35 Lightning II sole-source program is still twitching, requiring only a jolt of electricity from cabinet’s operations committee to set it staggering once again onto the political stage. The latest is a leaked Pentagon slide, entitled Canadian Aircraft Options Current Status, indicating a plan for Canada to buy four of the planes imminently. “Congressional notification letter being staffed through the F-35 Joint Program Office,” reads the Oct. 27 slide, citing timing of mid-November.

For the RCAF to own and operate just four F-35s would be akin to its owning and operating four Maseratis, and about as practical. The maintenance and training costs would be ruinous. Therefore more planes would be sure to follow; therefore this must be construed as yet another signal that, say what its civilian bosses might, DND simply will not accept any option other than its beloved F-35. But for political reasons, the Harper government cannot be seen to move forward with anything but a competition. The result will almost certainly be a furtherance of the status quo, which is paralysis.

Meantime, the Coast Guard’s three-season polar icebreaker – just one, mind you – is delayed. The Royal Canadian Navy’s joint supply ships are delayed; its Arctic Offshore Patrol vessels are too expensive for their allotted budget, according to the Parliamentary Budget Office; a purchase of new fixed-wing search and rescue craft, originally rolled out a decade ago, has receded into myth, like the Roman gods; and the biggest-ticket item of all, the $26-billion Canadian Surface Combatant shipbuilding program, is seized with uncertainty over whether shipboard systems contracts worth an estimated $16-billion will be put up for competition, or sole-sourced to DND’s favoured U.S. supplier, Lockheed-Martin.

Perhaps the biggest scandal of all, amid the near-constant drumbeat of Tory posturing about the “brave men and women in uniform,” is that services for veterans have been slashed, and not restored. Nine offices that served veterans specifically have been closed. Government spin maintains the level of service has actually increased; anyone who has ever lived through a downsizing will be skeptical, to say the least. Distinct offices for veterans are gone; these were staffed by people who had specific expertise useful in helping veterans, which is not readily available at a Service Canada booth.

The record shows, in sum, that the Harper Conservatives’ peans to the military are piffle, and have been for some time. During the post-Cold War era in the 1990s the former Liberal government got away with worse, because global threats then were less obvious. It is unclear how the Tories can perpetuate that sad-sack tradition now, while continuing to cast themselves as the soldier’s best friend.

 

[Monsoon]

Here's the other way of looking at it: prior to the recession, this gov't instituted an automatic escalator in defence funding of 2% per year. Since the recession, this gov't has been announcing the reductions in defence spending required to reach a zero-deficit position against this escalated baseline.If they had really wanted to kneecap us, they would just announced a one-time cut to the escalator. Instead, what they've done has allowed them to announce a reduction (to keep the fiscal hawks happy) while leaving any successor gov'ts to announce further cuts if they want to cut into defence spending.

 

[McG]

The “funding escalator” disappeared five years ago. Over the last half decade, funding has slid to lows unseen since the period between the World Wars. 

http://army.ca/forums/threads/82898/post-1313325.html#msg1313325

 

[MilEME09]

Well in politics usually the government will listen to the people, and in a recent web poll on CTV, National Defense came in tied for 2nd for where any surplus money would be spent.

If you held the federal pursestrings, how would you spend any surplus cash?

Job creation, 892 (18 %)
National defence, 879 (18 %)
Save for a rainy day, 672 (14 %)
Social services, 804 (16 %)
Tax breaks, 1250 (25 %)
Other, 454 (9 %)

 

[Monsoon]

The “funding escalator” disappeared five years ago.

No it did not. While much of the future money allocated in escalation has not been attributed in the in-year budgets, the baseline has continued to be escalated. For instance, the $2.7B cut for 2015 translates into a defence budget of $18.9B against $20B in 2013. The cut announced in dollar terms is against an escalated baseline.

Over the last half decade, funding has slid to lows unseen since the period between the World Wars. 
http://army.ca/forums/threads/82898/post-1313325.html#msg1313325

Percent-of-GDP defence spending is one approach to broader policymaking, but it's not how the bullets and beans get bought. I promise you the $18.9B we're spending next year is still more than the $9.8B we got in 1998. The fact that this gov't isn't advertising that is a indication of their interest in restoring funding to the escalated baseline. Put another way, the government currently spends 8.7% of the total federal budget on defence, as opposed to 6.7% in '98 - an increase of 23%.

 

[MilEME09]

Percent-of-GDP defence spending is one approach to broader policymaking, but it's not how the bullets and beans get bought. I promise you the $18.9B we're spending next year is still more than the $9.8B we got in 1998. The fact that this gov't isn't advertising that is a indication of their interest in restoring funding to the escalated baseline. Put another way, the government currently spends 8.7% of the total federal budget on defence, as opposed to 6.7% in '98 - an increase of 23%.

I would prefer we spend smarter and more efficiently, throwing money at DND won't solve our problems, management (Ie. NDHQ) needs to be cleaned up and stream lined. We could get a lot more done with the budget we already have, however the majority of it is lost now before it can be used by the department.

 

[TCM621]

I would prefer we spend smarter and more efficiently, throwing money at DND won't solve our problems, management (Ie. NDHQ) needs to be cleaned up and stream lined. We could get a lot more done with the budget we already have, however the majority of it is lost now before it can be used by the department.

If they divorced the cost of capital upgrades from our budget, we would be fine. The problem is we have tens of billions of dollars worth of major purchases that need to be bought now. 5-10 ships, a couple of plane fleets, a couple vehicle fleets, etc.

If those were part of another budget, we could spend the rest pretty easy,  starting with career courses and exercises.