Her Majesty’s Canadian Ship Summerside

DND photo HS 2011-H003-091

Her Majesty's Canadian Ship Summerside

The Report on Transformation 2011

by Martin Shadwick

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The report of the transformation team headed by Lieutenant-General Andrew Leslie, established in 2010 with “the explicit goal” to “identify areas where we could reduce overhead and improve efficiency and effectiveness [so as] to allow reinvestment from within for future operational capability despite constrained resources,” was released - most regrettably without its supporting annexes - in September 2011. The report, which quite correctly pointed out that defence spending cutbacks almost universally tend to focus upon the frontline while preserving headquarters staffs - thereby confirming that bureaucrats have more finely honed survival skills than warriors - offered up some disturbing findings and thought-provoking recommendations, but just as quickly found itself embroiled in controversy.

The team’s data analysis, which spanned the period from the end of FY 03/04 to the end of FY 09/10, “ revealed that considerable growth occurred outside of front-line, deployable, and operational units: the number of people employed in headquarters grew four times faster than the Regular Force did over the review period. The total number of civilian employees grew three times as fast as the Regular Force, and the number of civilians employed in the National Capital Region surged by 61 [per cent].” Simply put, “…we have too many headquarters, too much cumbersome process, too much overhead, too much tail. We are going to have to reallocate a significant number of people from within to meet the demands of the future, and we have to do all we can to protect and invest in the equipment, training and infrastructure needs of the front-line and deployable units.” The report consequently called for: (a) reducing the numbers of headquarters and staffs “by grouping like functions or accepting risk in the entire elimination of certain organizations;” (b) reallocating approximately 3500 regular force personnel into those areas identified for future growth or investing the funds elsewhere; (c) demobilizing the number of full-time reservists back to a “baseline of approximately 4,500”; (d) “reducing by up to 30 [per cent] over several years the $2.7 billion spent on contractors, consultants and private service providers and investing the funds in future capital programmes” as outlined in the Canada First Defence Strategy; and (e) “reinvesting approximately 3,500 civil servants into higher priority activities or investing the funds elsewhere.” Numbered among “future investment areas” were “new people and capabilities for the Arctic, an air expeditionary wing, the Canadian Rangers, investments in cyber defence, space, special operations forces, deployable all-source intelligence centres, human intelligence, counter IED, nuclear/biological/chemical defence, returning sailors to sea, returning reserve supervisors from full-time headquarters employment to part-time leadership roles on the armoury floors, and deployable support personnel.”

In total, the team generated some 43 recommendations, the most ambitious of which envisaged the creation of a Chief of Joint Force Support. This, argued the report, “has the highest potential to realize cost savings” through: (a) the “integration of policy, planning and management staffs within the command structure and concomitant reduction or wholesale elimination of redundant positions;” (b) greater coordination of “policy, procedures, standards and process resulting in the elimination of service overlaps and duplication;” and (c) the “regional optimization of Base and Wing support services, including supply chain management, material distribution, administration, transportation, infrastructure maintenance, and personnel services.” It also offered the “very laudable quality of extending upon the extremely potent operational focus that characterizes the success of the CANOSCOM model, which in turn reflects the positive and enduring impact of the 2005 Transformation on the CF organizational culture.” With considerable understatement, the report acknowledged that the creation of “a consolidated Force Support entity will not be easy,” adding that “…there has arguably not been a consolidation of such magnitude since the CF reorganizations of 1965-1968.”

Lieutenant-General Andrew Leslie

DND photo

Lieutenant-General Andrew Leslie

Andrew Leslie, newly retired, provided further insights into the transformation team’s report in 3 October 2011 testimony before the Standing Senate Committee on National Security and Defence. A blend of candour, diplomacy, and wit, his comments echoed some of the themes identified in previous testimony. In March 2009, for example, Lieutenant-General Leslie, then Chief of the Land Staff, told the Committee that “…the establishment of new headquarters and non-deployable units has forced the army to fill several hundred positions that required highly experienced soldiers with considerable military knowledge. This organizational change occurred at a time when our soldiers are particularly needed within field units, regiments, brigades, and training units. We absolutely cannot do without these people if we are to increase staffing levels within our operational units as quickly as possible.” Given serious shortages of officers and senior non-commissioned officers, particularly in the army, he suggested that, in the short-term, “… the Canadian Forces will have to either reduce their level of operational commitment or reduce the number of people working within static, non-deployable headquarters. One other option might be to reduce the number of headquarters within the Canadian Forces.”

Leslie utilized his 2011 appearance to reiterate some of his team’s key findings, including, since 2004, the 11 percent expansion (approximately 6500 people) of the regular force (about half of whom went to the army), the 23 percent expansion (6651 people) of the reserves (“… most of whom are full time reserves in headquarters and not part-time leaders on the armoury floor”), and the 33 percent expansion (7300 people) of the civilian component (“… most of whom went to headquarters and headquarters support roles”). This, he stressed, amounted to a 10 percent expansion of the “teeth,” and a 40 percent expansion of the “tail.” In addition, “… consultants, contractors and professional service contracts consume about $2.7 billion of your taxpayers’ money, with at least 5,000 people providing individual staff augmentees in the National Capital Region and other headquarters around the land.”

“After a lot of hard work and second-and third-order consequence analysis, the team believes we can find in the order of $1 billion in administrative efficiencies with which to either pay some of the budgetary reductions or allocations that may well be assigned to us by the Government of Canada…or to pay off the “tax” that may be sent our way to help reduce the deficit.” This process would entail a “fairly dramatic” reduction in the number of headquarters so as to free up military and civilian personnel for new priorities, shift 3500 regular force personnel from their existing positions -mainly in headquarters - back out to the field, demobilize about half (4500 people) of the full-time reservists, and re-invest “… about 3,500 civil servants from what they are doing now to the demands of the future or investing the funds elsewhere.” Also envisaged, over a period of approximately three years, was the reduction of about 30 percent in the $2.7 billion spent on professional services, consultants, and contractors. The transformation report also called for the creation of a joint force support command “… to try and realize efficiencies overall for the next three to four years of around 12 percent, refocusing the strategic level headquarters on strategic things and not necessarily running things out in the field.”

Leslie emphasized: “… [that] transformation is more than reduction. It is a vision for the future. It seeks to take what we are doing now, build on that which we want to keep, which is essentially the operational output - the frigates, the battle groups, the aircraft that deliver supplies or drop bombs, the helicopters - and reduce the overhead to free up the resources, both human resources and money, to invest in those things that we will need tomorrow, or even actually today… [We] cannot logically expect to go to the government and say, ‘Please sir, can we have some more?’ when we have such large numbers of people in headquarters as proven by the growth since 2004.” (Nor, one might add, would a bloated bureaucracy help to garner public support for a credible Canadian defence capability.) The numerical end state, Leslie believes, ideally would be approximately 70,000 regulars, 30,000 reservists (both full- and part-time) and approximately 25,000 or 26,000 public servants.

His testimony was, for the most part, well-received by the Committee, but senators voiced concerns with respect to the fate of the surplus full-time reservists, the call for reductions, without full analysis, in the civilian work force, and the report’s perceived criticism of the Hillier-era transformation. On the first point, Leslie stressed that substantial numbers of full-time reservists would remain, and anticipated that many would return to part-time status or seek to join the regular force. With regard to DND’s civilian work force, Leslie acknowledged that a separate “institutional alignment” process would address civilian numbers, but posited that his transformation team’s early research rendered the proposed reduction achievable. He acknowledged, however, that additional study could prompt adjustments in the proffered reduction number. On the third point, Leslie stated that the four operational headquarters established during the Hillier era “have been successful,” and that the Hillier “… transformation did not fail. It was actually very successful.” Nevertheless, future requirements and conditions required a modified approach. It was most unfortunate that the call for a joint force support command - a most ambitious undertaking and a key element of the transformation report - prompted virtually no discussion or debate during the meeting.

A CP140 Aurora

DND photo GD 2011-0887-09

A CP140 Aurora

The Report on Transformation 2011 has generated a wealth of invaluable and thought-provoking data for civilian and military decision-makers, and has advanced a plethora of intriguing ideas, concepts, and recommendations. But it has also, inevitably, stirred up considerable controversy and serious doubts about the prospects for large-scale, as opposed to selective, implementation. Indeed, as Leslie himself noted in Senate testimony, “I think the only person who agrees with all my recommendations is me.” For some, the report’s sheer temerity in seeking substantial military and civilian staffing reductions in the bureaucracy is cause enough for ridicule and pushback. Others, such as former Chief of the Defence Staff Rick Hillier, have argued that headquarters reductions of that magnitude would seriously damage, perhaps even “destroy,” Canada’s armed forces. Some have expressed doubts about the viability of specific recommendations, while still others support the basic thrust of the transformation report, but worry that a financially hard-pressed Ottawa will simply pocket the savings and not utilize the freed-up resources to invest in vitally needed skill-sets and equipment. This fear is magnified when the potential ramifications of other, government-wide, spending reviews -from which DND is most assuredly not immune - are factored into the equation.

Any temptation to dismiss the transformation report out of hand must be resisted. Not every idea or recommendation enumerated in the report will prove viable or as attractive upon closer inspection, but there is much of merit in the report - both in terms of specific recommendations, and in terms of the vital overarching principle that the ‘teeth’ must be protected while downsizing the ‘tail.’ It is salient to add that the voluminous research behind the report could be gainfully employed in support of follow-on studies. The efficacy, or otherwise, of alternative service delivery in a Canadian defence context demands further attention.

Finally, one remains troubled by the notion - evident at several junctures in the report, at one or more junctures in Leslie’s testimony, and in a wide range of other statements by serving and retired members of the Canadian Forces - that Canada’s comparatively solid economic performance in grim global economic times, the Harper government’s demonstrated generosity in funding defence revitalization, the greater sensitivity of Canadians to security and defence in the post-9/11 era, and the closer attachment of Canadians to their armed forces in the wake of noteworthy disaster relief operations at home and abroad, and, most importantly, in the wake of the professionalism and sacrifices associated with the mission in Afghanistan, will allow Canada’s armed forces to escape the type of Draconian cutbacks that have become the lot of many allied military establishments. These factors mitigate the risk, but they most assuredly do not eliminate the risk of significant reductions ‘at the sharp end.’ Even with the best will in the world, the Harper government may find it politically and financially impossible to invest the necessary funds to fully implement the Canada First Defence Strategy. Similarly, public respect and empathy for the Canadian Forces has reached most impressive levels - indeed, the Canadian Forces are part of the Canadian national psyche in a way that we have not seen in generations - but that is not an automatic guarantee of fiscal largesse if economic conditions deteriorate. Old, parsimonious habits with respect to defence spending do not disappear overnight. It is important to remember, as well, that while the Canadian Forces are enjoying reinvigorated linkages to the public, overall support for the combat phase of the Afghanistan mission remained tepid throughout. In such an environment, some Canadians - even those newly-appreciative of the labours of their armed forces - may seek to avoid future Afghanistan-style commitments by limiting the military capabilities and hardware necessary for such missions. This need not translate into a purely home defence and/or constabulary military, but it could pose challenges for those seeking a more robust, multi-purpose, and combat-capable defence establishment with global reach.

Major new shocks in the geo-strategic landscape would necessarily influence the Canadian decision-making environment, but it is equally clear that many of the older prompts for increased Canadian preparedness have disappeared. When, for example, the Trudeau government sought to diversify trade in the 1970s, European perceptions of a linkage between increased trade with Canada, and a demonstrated Canadian commitment to European security played a significant role in the Trudeau government’s decision to embark upon a thoroughgoing revitalization of the Canadian Forces. The trade diversification campaign accomplished relatively little, but it did help to bequeath a highly significant amount of new equipment - much of it still in service - to Canada’s armed forces. Today, the Harper government, to its credit, has embarked upon new trade diversification efforts in Europe and other regions. This time, however, the Europeans, many of whom have engineered very deep cuts in their own defence capabilities, have neither the motive nor the credibility to lecture Canada on increased defence spending. Indeed, it is supremely ironic that Canada has found it possible to sever two more of its diminishing security links with Europe: the Canadian component of the NATO AWACS operation, and the Canadian contribution to NATO’s Alliance Ground Surveillance (AGS) program. The Canada-Europe trade-defence dynamic of 1975 will not be repeated.

A flypast of seven CF-18 and one CC-150 Polaris tanker takes place over Parliament to mark the end of Operation MOBILE

DND photo IS2011-7552-01

A flypast of seven CF-18s and one CC-150 Polaris tanker takes place over Parliament to mark the end of Operation MOBILE

Martin Shadwick teaches Canadian defence policy at York University. He is a former editor of Canadian Defence Quarterly.