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CGAI Conference Puts Procurement Debate on War Footing

By James Careless

 

The challenges posed by COVID-19, supply chain issues, and Russia’s invasion of Ukraine were front and centre during the Canadian Global Affairs Institute’s (CGAI) annual defence procurement conference entitled, ‘Putting Canadian Defence Procurement on a War Footing’. It was held online and in person at Ottawa’s Westin TwentyTwo on October 25, 2022.

The slow speed of Canadian defence procurement was underlined by Stefanie Beck, Canada’s Associate Deputy Minister of Defence. “I consider myself part of the McDonald’s generation,” she quipped. “You go in, you buy it, you get it right away.”

Unfortunately, the complexities and safeguards associated with multi-billion dollar government purchases make this kind of speed impossible, but there are improvements that could be made to defence procurements, Beck noted. For one thing, to better manage procurements whose life cycles can extend as long as 40 years, “we really need a long term plan,” she said. For another, assured funding to pay for these procurements needs to be put in place from the beginning. “From a bureaucracy perspective, what we really like is having multi-year funding that gives us certainty,” said Beck.

As for the best ways for industry to glean which projects/programs the federal government wants to focus on, and is willing to spend tax dollars for? Just pay attention to the government’s public statements, Beck replied. “Policy and programming is developed in government in a fairly straightforward manner,” she said. “I know it doesn’t seem like that, but it actually is. So the Speech from the Throne is boring but read it — I shouldn’t say that because I helped write it one year. The Budget, obviously; the Fall Economic Statement — keep an eye on all of those.”

READ: OP NANOOK – JENS STOLTENBERG VISITS CANADA, NORAD MODERNIZATION & OP NANOOK NUNALIVUT/NUNAKPUT

So is the Canadian government ready to put procurement on a war footing? According to Troy Crosby, Assistant Deputy Minister (ADM) Materiel with the Department of National Defence (DND), the answer is no. “We’re not going to move the entire defence procurement (process), I don’t think, to a ‘war footing’,” he said. “If we attempt that, we’ll overwhelm ourselves and we’ll overwhelm you.”

This being said, DND is giving priority to the war in Ukraine and assisting Ukrainian forces in repelling Russian invaders through Canadian materiel and training support. “Through input from the Ukraine, we’ve learned what they need from us,” said Crosby. On the home front, “the people in our organizations are absolutely seized with the need to deliver for the Canadian Armed Forces,” he said. “Many of them came from uniform and many of them have got friends and colleagues and family in uniform. There is no group that I would rather be dependent on than the people who are moving the program forward as best they can.”

The impact of modernizing NORAD (aka NORAD Mod) on the Canadian defence procurement process was also discussed during the CGAI procurement conference. On June 20, 2022 DND Minister Anita Anand committed to Canada spending $4.9 billion over six years to update the Canadian-U.S. far north defence system.

When it comes to spending Canada’s $4.9 billion NORAD Mod budget, “upgrading the four forward operating locations for us is a big priority,” said Dr. Martin Tomkin, DND’s senior advisor to the ADM Infrastructure on NORAD Modernization. “There’s also a number of other priorities that we have such as over-the-horizon radar … (and) supporting the Future Fighter program at the bases so when these aircraft are delivered you have sufficient infrastructure there.” Canadian NORAD facilities also need to be modernised to support this country’s Strategic Tanker Transport Capability (STTC) aircraft — two Airbus A330-200s are currently being acquired, with the STTC fleet projected to grow to six over time — including runway extensions.

Asked if the multi-billion spending commitments of Canada’s Strong, Secure, Engaged (SSE) multi-year defence policy will undercut the commitment and capability to fund NORAD Mod, DND ADM Finance and Chief Financial Officer Cheri Crosby told attendees that “SSE will fade out when NORAD Mod comes in.” In other words, SSE funding expenditures will hit their peak levels in 2027-2028, then start to fall as expenditures for NORAD Mod start to build up.

Granted, unplanned expenses such as providing materiel to Ukraine will complicate Canada’s defence procurement process, along with money-devouring problems such as inflation and supply chain issues. ““It is a challenge to make sure that we have the capacity to deliver,” said Crosby. “But from a financial point of view we aren’t yet at the stage of managing SSE and NORAD Mod as one big bucket of money. We are keeping them separate.”

Unfortunately, the CGAI conference made clear that actually putting Canada’s defence procurement on a war footing is not possible under current federal funding, procurement processes, and personnel levels. Should such a necessity actually arise, changes as big as those driven by famed Canadian ‘Minister of Everything’ C.D. Howe during World War II would need to be made.


 

James Careless is CDR’s Ottawa Bureau Chief

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