Transforming National Defence Administration Transforming National Defence Administration Edited by Douglas L. Bland School of Policy Studies, Queen's University Kingston, Ontario, Canada 2005 Library and Archives Canada Cataloguing in Publication Transforming national defence administration / edited by Douglas L. Bland. (Claxton papers ; 6) Includes bibliographical references. ISBN 1-55339-117-9 1. Canada—Military policy. 2. National security—Canada. I. Bland, Douglas L. II. Queen’s University (Kingston, Ont.). School of Policy Studies III. Series. UA600.T72 2005 355.6'0971 C2005-904777-1 © Copyright 2005 The Claxton Papers The Queen’s University Defence Management Studies Program (DMSP), established with the support of the Canadian Department of National Defence (DND), is intended to engage the interest and support of scholars, members of the Canadian Armed Forces, public servants, and participants in the defence industry in the examination and teaching of the management of national defence policy and the Canadian Armed Forces. The program has been carefully designed to focus on the devel- opment of theories, concepts, and skills required to manage and make decisions within the Canadian defence establishment. The Chair of the Defence Management Studies Program is located within the School of Policy Studies and is built on Queen’s University’s strengths in the fields of public policy and administration, strategic stud- ies, management, and law. Among other aspects, the DMSP offers an integrated package of teaching, research, and conferences, all of which are designed to build expertise in the field and to contribute to wider debates within the defence community. An important part of this initia- tive is to build strong links to DND, the Canadian Armed Forces, indus- try, other universities, and non-governmental organizations, in Canada and in other countries. This series of studies, reports, and opinions on defence management in Canada is named for Brooke Claxton, Minister of National Defence from 1946 to 1954. Brooke Claxton was the first post-Second World War defence minister and was largely responsible for founding the structure, procedures, and strategies that built Canada’s modern armed forces. As defence minister, Claxton unified the separate service ministries into the Department of National Defence; revamped the National Defence Act; established the office of Chairman, Chiefs of Staff Committee, the first step toward a single Chief of Defence Staff; organized the Defence Research Board; and led defence policy through the great defence rebuilding program vi Douglas L. Bland of the 1950s, the Korean War, the formation of NATO, and the deploy- ment of forces overseas in peacetime. Claxton was unique in Canadian defence politics: he was active, inventive, competent, and wise. A NATIONAL-LEVEL TRANSFORMATION Canada’s future defence policy and military capabilities were de- fined in the spring of 2005 by the appointment of General Rick Hillier as Chief of the Defence Staff and the government’s promise of a significant, multi-year funding allocation to national defence. Both of these deci- sions signal an intention to radically transform and rebuild the Canadian Forces – objectives confirmed in the 2005 Defence Policy Statement. Reaching these goals, however, is not assured and greatly dependant on how national policy and the transformation of the Canadian Forces are administered, not only within the Department of National Defence, but also in other government departments and in the central agencies which are responsible for significant programs related to national defence. Bring- ing policy intentions and administrative outcomes together, therefore, is the next great challenge for the Minister of National Defence. The present structure for defence administration was built mainly during the 1970s to manage cold war policies and commitments. In 2003, then Minister of National Defence, John McCallum, commissioned a re- port entitled Achieving Administrative Efficiency which concluded that despite incremental changes over many years and the best efforts of of- ficers and officials, the Canadian Forces, the Department of National Defence, and, by implication, other government departments and the central agencies: are not well positioned, from a management perspective, to meet the strategic- level challenges [they are] facing. The Committee believes that without fundamental transformation of the national-level management framework and practices of the Department of National Defence and the Canadian Forces, the CF will not be able to transform itself rapidly enough to adapt 1 to Canada’s changing security environment. If any new defence policy is to succeed, the government must re- view not only military structure, command arrangements, and doctrine, but also every major aspect of the defence organizations, processes, and Transforming National Defence Administration vii methods as the essential first step to transforming of the Canadian Forces. The aim should be nothing less then to build, from the ground up if nec- essary, a modern, proficient, government-wide system of defence admin- istration appropriate to the demands facing the Canadian Forces and responsive to the needs of the government and Parliament. The purpose of this Claxton Paper is to illustrate the deep difficul- ties in the present system of defence administration, and to suggest prin- ciples, ideas and approaches aimed at the restructuring and realignment of defence administration in support of the transformation of the Cana- dian Forces and defence policy generally. Chief among these suggestions is the notion that the purpose of defence administration is to create, equip, and sustain the combat capabilities of the Canadian Forces efficiently and economically with the resources provided by governments. A trans- formation of defence administration must reform organizations, person- nel establishments, and other resources and direct them towards this primary purpose. Skilled combatants – well trained and experienced people – are the precious and most expensive element of any operational capability. A transformed system of defence administration would build the most effi- cient way to regulate and supervise all aspects of recruitment, training, and retention of skilled combatants so as to develop as strong a combat- capable force as possible from the total strength of the Canadian Forces. The degrees to which national resources allocated to defence policy create useful combat capabilities is the true measure of administrative efficiency in DND and the Canadian Forces. The reallocation of resources and effort from low to high priority missions to enhance combat-capabilities for national defence is the putative defining feature of the new policies of defence transformation. A transformed system of defence administration would be designed, therefore, to efficiently and effectively reallocate de- fence resources and people from the low to the high priority missions in a continuous effort to keep the sharp end of the Canadian Forces more combat capable, relevant, and responsive to Canada’s defence needs. Canada’s national defence is the principal responsibility not only of the Canadian Forces and the Department of National Defence, but of gov- ernment as a whole. But in many cases defence policy and the needs of the Canadian Forces clash with other departments’ policies, interests, and procedures, thereby delaying defence planning and adding costs to or even upsetting the production of combat capabilities. A complete defence viii Douglas L. Bland review would seek to identify the full scope of defence administration across the government and to recommend ways to realign and reform authority, responsibilities, and procedures for defence administration to increase the pace of defence transformation and the rebuilding of de- fence capabilities. National Defence Headquarters is constructed on concepts first in- troduced in 1972. Changes in organization and administrative procedures since that time have been mostly incremental and conditioned by the di- rection that the basic structure of National Defence Headquarters could not be reordered. A review of defence administration should clarify the structural and procedural needs for the central administration of defence policy and eliminate burdensome government-wide demands on the Ca- nadian Forces and the Department of National Defence. The review should also recommend ways to place authority for all aspects of defence ad- ministration as close as possible to the Chief of the Defence Staff and the Deputy Minister of National Defence, who, together, are ultimately ac- countable for the efficient implementation of defence policy. Changing the government’s policy intentions into credible outcomes cannot be accomplished if administrative organizations and methods are unsuited to the task. A national-level review of the administrative frame- work for national defence should aim to bring forward fundamental rec- ommendations to streamline and modernize defence administration in Canada to ensure that the transformation of defence policy and the Cana- dian Forces proceeds quickly, efficiently, and economically. The govern- ment has committed billions of dollars for Canada’s national defence. It would be shameful and perhaps dangerous to national security if “the machinery of government” wasted, through poor administration, these dollars and this unique opportunity to build a responsive, relevant, and modern armed force for Canada. This monograph follows issues and difficulties raised in the 2003 Claxton Paper, “Canada without Armed Forces?”, which presented the spectre of a cascading collapse of Canada’s military capabilities in five to 2 ten years. That paper showed, beyond question, that years of operational over-commitment and under-investment in national defence had taken the Canadian Forces to a perilous point of no-return, where many essen- tial capabilities would fail before they could be rescued. What then is the state of play some eighteen months later? Transforming National Defence Administration ix Claxton 6, “Transforming National Defence Administration”, begins by setting out a conceptual framework for the transformation of defence administration in Canada. It is not an essay suggesting more cuts or ways of “doing more with less.” But rather a modest suggestion to overturn entirely the way national defence is administered. The point of the dis- cussion is not to describe how to make failed efforts more efficient, but to stimulate others to answer the question: “If we had to transform and re- build the Canadian Forces in five years, how would we do it – present administrative policies be damned?” The paper describes from recent empirical evidence, mostly derived from National Defence Headquarters sources, several pressing difficul- ties largely unsolvable by present policies and procedures. Dr. Christopher Ankersen tackles the central question of capabilities – how are they de- fined, developed, and used. He makes the clear case for looking at mili- tary capabilities as “systems of systems” and then joins this description to the idea that capabilities are inseparably defined by capacity. It may seem obvious – though some past defence policy decisions would throw such an assertion into doubt – that capabilities without some capacity or mass provide a mere token that cannot be sustained in even limited en- gagements. Defence planning and the strictures of national procurement policies often overlook this fundamental relationship and allow mere to- kens to parade as viable capabilities. The intricacies of defence budgets, for all their importance, are sel- dom reviewed beyond their bare bottom line. However, Howard Marsh – a self-confessed “factoid” – looks more deeply into recent defence budg- ets to find “spending trends” and discovers some startling anomalies. He reviews with the reader issues of distribution, costs-to-capabilities, a budg- eting process that tends towards inefficiency, and the “rank creep” within NDHQ which satisfies some officials and officers but produces no ob- servable increase in basic output. Defence transformation will require not just new money, but new ways to allocate it to serve the fundamental purposes of national defence. Marsh carefully lays out the major pillars for such a system. Many citizens, including members of the Senate Committee on Na- tional Security and Defence, were more than a little surprised to hear senior officers and officials declare that the government’s offer to recruit 8,000 new members for the Canadian Forces could not be achieved in x Douglas L. Bland less than five years. Christopher Ankersen examines this difficulty and other “personnel” questions, and concludes that, given current policies, officers and officials may well be right and that other more serious im- pediments to increasing the effective strength of the Canadian Forces are sitting in the background. These impediments must be removed, but first leaders must acknowledge that the system is broken and then develop a long-term personnel strategy to match the vision of a new, transformed Canadian Forces. Finally, Brian MacDonald examines how Canadians might go about “closing the gap” between policy intentions and policy outcomes. In par- ticular, he addresses the question of how one might rapidly ‘recapitalize’ the defence portfolio so as to rescue the Canadian Forces from the struc- tural disarmament that now seems inevitable. “Accrual accounting” is not a term that easily slides from everyone’s lips; however, MacDonald provides a clear explanation of how this technical process might provide, over time, a way towards building future capabilities within present budg- etary expectations. He then carries these concepts into other critical problem areas of procurement, Canadian Forces base operations, and defence ca- pabilities planning. Despite important changes in organization, capability plans and fu- ture budget promises, along with the ascent of a new cohort of leaders within the Canadian Forces, the downward spiral of Canadian Forces ca- pabilities continues. Neither vision nor hope can substitute for dollars spent and political will carried forward. Defence dollars and the strong will of the Minister of National Defence, the Chief of the Defence Staff, and the Deputy Minister of the Department of National Defence will not suffice either, for they do not and cannot control the government-wide processes that produce defence outcomes. This fact of national defence administration takes us back to the conclusions of John McCallum’s effi- ciency study – “without fundamental transformation of the national-level management framework and practices of the Department of National Defence and the Canadian Forces, the CF will not be able to transform itself rapidly enough to adapt to Canada’s changing security environment.” This Claxton Paper addresses major failings in the policy process today and asks implicitly: “If we were to halt the fall of defence capabili- ties and transform the Canadian Forces in the next five years, then what impediments would we have to knock aside?” The question remains to be answered even in this era of hopeful visions and strong wills.