FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Friday, October 5, 2001

• 1309

[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I would like to call this meeting to order and welcome everyone here this afternoon.

As you know, pursuant to Standing Orders 83.1 and 108(2), the finance committee is considering issues related to national security.

Minister, as a way of introduction, I must tell you this committee has been meeting in the past three weeks, and there is no question about the fact that national security has risen in national importance. Therefore, not only committee members, but I think Canadians in general, will welcome your comments.

You may begin.

Hon. Art Eggleton (Minister of National Defence and Minister responsible for Emergency Preparedness Canada (EPC)): Thank you very much, Mr. Chairman, members of the committee. Thank you for giving me this opportunity to talk about that very issue of security. Of course, since you're the finance committee, I'll talk about it in the context of defence budgeting.

The Department of National Defence and the Canadian Forces continue to face significant pressures and new challenges in striving to sustain Canada's defence commitments and military operations. Our military operations are more complex and demanding than ever before. The tragic events of September 11 have certainly brought these challenges into a sharper focus, and they have reinforced the need to consider current capabilities in terms of not just current needs, but future requirements.

• 1310

Let me start by responding to those who, by relying on international comparisons, say the government is neglecting its investment in defence. Much has been made of international comparisons to measure defence expenditure. These include gross annual expenditures, annual expenditures as a proportion of gross domestic product, and the size of military establishments. Well, Mr. Chairman, based on our expenditures, Canada ranks seventh out of the nineteen NATO countries in terms of expenditure of defence money. If you look at it as a percentage of gross domestic product, GDP, we're down near the end of that scale, at 1.2%. But I think the first statistic gives a more accurate picture of the reality.

The highest percentage in terms of GDP in a NATO country is Turkey's, at 6%, yet Canada, at 1.2%, spends the same amount of money. If you look at what I think is more important, and that's not inputs, but outputs, productivity, or what you get for taxpayers' dollars, Canada takes second place to no one. So, Mr. Chairman, we are meeting our obligations in terms of providing funds for a country that is doing a great deal to meet its NATO obligations.

As I have also said many times, the government has been actively pursuing the modernization and upgrade of key military equipment, as set out in the 1994 defence policy white paper.

[Translation]

We are ensuring that the Canadian Forces remain able to protect Canada, to defend North America in cooperation with the United States and to contribute to international peace and security.

[English]

Our CF-18s and our Aurora patrol aircraft, as well as our Hercules transports, are being upgraded. The first two of our search and rescue helicopters just arrived in Canada yesterday. The navy is in the process of receiving new Victoria-class submarines. Our new LAV III armoured personnel carriers and our Coyote reconnaissance vehicles have been used in operations in the Balkans, Ethiopia, and Eritrea, and they have become the envy of our allies.

Modernization is just one of the challenges we are facing. The many demands that we face have been recognized by government. Over the last three years, an additional investment in defence of some $3 billion has been made. Money has been carefully allocated so that the Department of National Defence and the Canadian Forces remain able to fulfil our commitments. I've provided some appendices with some statistical data on them, and appendix A, the first of them, outlines the sources of additional funding.

At this point, I'd like to talk in more detail about how we've allocated this funding, and that also brings in appendix B. In the last two fiscal years, $772 million in incremental funding has been allocated for unforeseen operational requirements. In each instance, the government recognized the strain such requirements placed on the department's budget, and it provided the necessary funding to offset these extraordinary costs.

To prepare for the year 2000 challenge, more that 2,500 Canadian Forces personnel were deployed across the country. Another 25,000 regular and reserve force personnel were available to respond if needed.

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Members of the Canadian Forces also responded to the crisis in Kosovo, where our CF-18 pilots led over 50% of the combat sorties in which they participated. We also supplied troops to the follow-up NATO Kosovo force to help increase stability across the region, and we've been able to maintain our commitment in Bosnia, where some 1,500 Canadian Forces' members have been operating as an integral part of NATO's stabilization force. In the past two years, the forces have clearly responded effectively and professionally.

Whenever and wherever the forces have been called upon by the government, the government has covered the additional costs, as I've just outlined and as are in appendix B. At the same time—turning to appendix C—we have also been careful to identify opportunities to reduce future spending requirements through strategically timed expenditures. We have allocated $600 million in investment opportunities to alleviate the pressure of future requirements. What this means is that we have used money allocated by the government on a one-time basis to reduce pressures in future years. As an example, let me talk specifically about light armoured vehicles, the LAV IIIs, and also about submarines. These are two concrete examples of how we have used this investment fund.

With a $21-million investment in the light armoured vehicle project, we were able to approach General Motors to advance production of those vehicles. This meant quicker delivery of the vehicles, and again reduced budget pressures on the program. Similarly, we were able to invest $123 million in the Victoria-class submarine program, comprised of an advance purchase of spare parts valued at $51 million and the buyout of the lease on the first submarine at a cost of $72 million. That relieves $12 million a year in funding pressures for a period of six years.

Other areas of investment, such as personnel, modernizing and improving equipment, exploiting technology, and enhancing our research and development program, are also outlined in appendix C.

In appendix D, you'll find a list of funding allocated this year and last for what is called program integrity. Here the focus has been in such key areas as personnel, procurement, operations and maintenance, capital equipment, and capital infrastructure. The overall investment of $950 million over two years allows us to maintain the integrity of a variety of defence services.

[Translation]

Finally, thanks to the Government's investment, we have been able to make significant improvements in the quality of life of our members.

[English]

Attention to the quality of life of our men and women in service cannot be secondary to other priorities. If we are to continue asking members of the Canadian forces to leave their families for extended periods of time and to risk their lives in the process, we have an obligation to care for them, an obligation to ensure that they're compensated appropriately and are provided with opportunities for career development, for education.

This is an important issue for me personally, Mr. Chairman, and it's also a priority for the government, which has allocated approximately $700 million out of that $3 billion toward housing and pay under the quality of life program. With this funding we have been able to improve accommodations for members of our military and their families. We have increased their pay and we have increased their benefits. Today, through what we call Rx 2000, we are proceeding with major reforms to the military health care system. Details on some of these investments can be found in appendix E.

The challenge for Defence has always been to strike the appropriate balance amongst competing priorities. Some of these priorities are: first, ensuring that our military members are treated fairly and are well supported with pay, medical support, and housing and family support, as I've just outlined; second, optimizing the military force structure and investing in defence capabilities that Canada needs for the future, particularly equipment and technology; third, ensuring the effective use of the reserve forces and providing them with the kind of support and the kinds of tools they need to do their job; and fourth, modernizing the department's management practices to maximize value for money from taxpayers' defence investments.

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But a balanced approach to priorities does not simply revolve around additional funding from the government. At the same time, it must come from creating additional efficiencies in our organization. For example, we must rationalize our infrastructure and surplus equipment so that we can reinvest our money in core needs to support the operational mandate. We must allocate available funding in the most efficient and effective way, so as to maximize Canada's return on its defence investment. And we must work even more effectively with our allies, particularly the United States, by strengthening the kind of cooperation, the kind of interoperability, that is exemplified by such organizations as NORAD.

When it comes to personnel and capital, one of the challenges we face is the long lead time to fully develop these capabilities. Fully trained and competent personnel are not developed overnight. Equipment acquisition and delivery, as well as introduction of that equipment into operational service, takes time—and I think it takes too much time, but we're trying to reduce that as well. For these reasons, one-time allocations do not contribute directly and significantly to delivering capability in personnel and capital. Permanent funding phased in over the planning horizon is required to achieve that end. In this regard, the defence budget, which stood at $9.4 billion in 1998-99, now stands at $11.4 billion in 2001-02. This does not account for in-year allocations of funds for such purposes as investment opportunities and special operations that I outlined earlier, such as Y2K.

One thing is clear, Mr. Chairman. The government will continue to ensure that Defence receives the resources required to play a meaningful role in the campaign against terrorism. Indeed the Department of National Defence and the Canadian Forces have already shown that they are ready and able to respond.

[Translation]

I would like the Committee to know that the Canadian Forces responded quickly and effectively to the events of September 11th—both in terms of providing assistance and enhancing our security.

[English]

Within hours of learning that flights were being diverted into Canada, Canadian Forces Airbus and Hercules aircraft were in the air, ferrying thousands of cots, blankets, and personnel across the country to help cope with the influx of some 33,000 stranded passengers and crew. CF equipment and personnel—such as our DART team—were put on standby, ready to deliver humanitarian assistance should that request have come from the United States. The Office of Critical Infrastructure Protection and Emergency Preparedness—which I want to talk about more in a minute, Mr. Chairman—worked closely with the provincial emergency measures organizations and the private sector. They assisted in coordinating the supports and resources necessary to help local authorities accommodate the air travellers who were stranded in Canada.

Through NORAD, the Canadian Forces have also worked closely with the United States to increase our continental security in the immediate aftermath of the attacks of September 11. For our part, we put additional CF-18s at the disposal of NORAD—as I've indicated on many occasions—to deal with the increased threat from airborne terrorism.

Another key area in which we have increased our service comes in terms of intelligence gathering and analysis.

Overall, these examples demonstrate the excellent work of the Department of National Defence and the Canadian Forces, and they show we are ready and able to respond when called upon.

While the United States is still identifying the role that Canada and NATO allies can play, the Canadian Forces, as the Ambassador of the United States to Canada said the other day, will be up at the plate when called upon.

In the coming weeks, it is clear that we have to assess in detail what is required in terms of activities and capabilities—first, what Canada is capable of contributing; and second, what additional resources may be required to do the job. A comprehensive and broad approach is required to fully restore Canada's sense of security. As I've said before, success will be assured by means other than just military operations, and certainly other than just conventional military operations.

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We already have a number of resources at our disposition in this campaign against terrorism. The creation of the Office of Critical Infrastructure Protection and Emergency Preparedness—or OCIPEP, as the acronym comes out—was announced by the Prime Minister in February of this year in order to better prepare Canada to respond to the challenges posed by asymmetric threats. Encompassing the function of the former Emergency Preparedness Canada, OCIPEP will provide national leadership on the issue of critical infrastructure protection. It will do so in collaboration with federal and provincial departments and agencies, and in partnership with the private sector. Its mission is to promote the safety and economic security of Canadians by enhancing the capacity of individuals, communities, businesses, and governments, to effectively manage risks to their physical and cybernetic environments.

Currently, OCIPEP has a budget of $24 million. This includes the former Emergency Preparedness Canada baseline funding of $14 million, and an additional $10 million that the department provided to fund start-up operations earlier this year. The full funding required to support a national framework will be sought later this year.

Let me also mention the Communications Security Establishment, the CSE, which forms part of the intelligence and security infrastructure of the government. Their specific mandate is to provide specialized security advice and support to government in accordance with emerging requirements. At present, the CSE budget is $107 million. In addition, the department has allocated $24 million over two years in funding to support essential information technology upgrades. We have to keep pace with the ever changing world of technology.

[Translation]

Let me say, by way of conclusion, that I believe that only by maintaining a multi-purpose, combat-capable force can we manage to operate across the full spectrum of conflict areas that we see emerging, including the fight against terrorism.

[English]

We recently began an internal update of the defence policy set out in the 1994 white paper. Obviously, the events of September 11 are being factored into that assessment in terms of both future security challenges and how best to respond to them in terms of our own capabilities. But the government recognized the widening challenges posed by asymmetric threats well before September 11. In fact, that is what led to the creation of OCIPEP. The government assessed that cyberterrorism and threats to our national infrastructure were among the new realities of post-Cold War security, and that we needed to develop and manage our country's response to those new realities.

In closing, Mr. Chairman, the message I'd like to leave with the committee is that we are preparing to meet head-on the challenges and threats of the future. Obviously, the answers to the current crisis are not all on the table at this point. Therefore, what we need to do, and what we are preparing to do, is conduct a government-wide analysis of the way ahead, an analysis that will include all departments and agencies that work to ensure the safety and security of Canadians. I can assure you that the Department of National Defence, as a key instrument of domestic security, will be an integral part of that careful and balanced assessment.

In the end, our response will require hard choices. It will also require more funding, not only on the part of my department, but on the part of all Canadians. Only by working together will we best decide how we, as Canadians, can successfully contribute to the fight against terrorism and ensure our national security and defence.

Thank you. Merci beaucoup.

The Chair: Thank you very much, Minister.

We'll now proceed to the question-and-answer session. We'll begin with a five-minute round, and it will be led off by Mr. Benoit.

Mr. Leon Benoit (Lakeland, Canadian Alliance): Thank you, Mr. Chair.

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Welcome again, Mr. Minister.

One of the things I've been concerned about is how difficult it is to get real information and some real answers on what is going on at National Defence. One thing you refer to quite often, Minister, is the idea that you spent $3 billion more. There is an accounting here. If you're telling Canadians you spent $3 billion more, I think they would really assume it's $3 billion this year over last year, which isn't the case. That number would be $665 million. Do you, as minister, feel that $665-million increase in spending from 2000-01 to 2001-02 is a number Canadians can count on as being accurate?

Mr. Art Eggleton: In the $3 billion, there are both one-time expenditures—in-year investments, as I describe them—as well as ongoing moneys that go into the base of the department. As you can see, that has meant we've gone from the low of $9.4 billion in 1998-99 up to $11.4 billion currently. That money, the $665 million, is ongoing. It's in the base.

Mr. Leon Benoit: The Conference of Defence Associations pointed out that the $3 billion isn't exactly as it appears. First, it's accumulated over the three-year period and some isn't continuing. They also said a lot of that money...in fact, most of the increase, this $665 million, is actually paying off accumulated operations and maintenance deficits. In fact, there's only $360 million in new funding. Is that accurate, Mr. Minister?

Mr. Art Eggleton: I'll ask Mr. Emond, who is our ADM of finance, to respond.

Mr. R.M. (Bob) Emond (Assistant Deputy Minister, Finance and Corporate Services, Department of National Defence): Mr. Chair, I'm not clear on that figure of $665 million.

Mr. Leon Benoit: That's the number shown on your own chart here as increased spending for this year over last year. The Conference of Defence Associations said this is in fact not right, because a lot of it is actually used to pay off accumulated operations and maintenance deficits.

Mr. Bob Emond: That's not used to pay off accumulated operations and maintenance deficits. It's new in-year money. It's baseline funding, Mr. Chairman, so I'm not clear on what—

Mr. Leon Benoit: So that's new money that's there to help improve operations in the forces?

Mr. Bob Emond: To improve operations and invest in equipment, yes.

Mr. Leon Benoit: In the 2000-01 supplementary estimates, $214 million is provided. That would be included in that number, I assume.

Mr. Bob Emond: Mr. Chairman, no, the $214 million being referred to in that context is one-time money that was received last year. It's what we refer to as investment opportunity money, and that was a part of it.

Mr. Leon Benoit: Is that part of the $3 billion the minister refers to?

Mr. Bob Emond: Yes, it is.

Mr. Leon Benoit: It is? But $214 million of that will have to actually be paid off in the future by DND, so it's not really increased spending. In fact, $200 million will have to be paid off when future money is provided, is that not correct?

Mr. Bob Emond: No. In fact, in terms of what we use investment opportunity money for—and specifically the $214 million—I come back to one of the examples the minister used, which was the submarines. When we bought out the lease of the first submarine for $72 million, that relieved a pressure of $12 million a year for six years into the future. It's to our advantage.

Mr. Art Eggleton: It's $12 million we can use on other—

Mr. Bob Emond: Exactly.

Mr. Art Eggleton: —services within the defence budget or on equipment.

Mr. Leon Benoit: So no part of that is money that will have to be paid off by the department in coming years?

Mr. Art Eggleton: No, we keep it.

Mr. Leon Benoit: The CDA reports that, of the $11.2 billion in the defence budget in 2000-01, about $3 billion of that is actually flow-through money that does absolutely nothing to support actual military utility or add to military utility. It goes to things such as pension plans. So when you're looking at the military utility, $3 billion out of the budget really doesn't do a thing. Is that a fair a comment from the CDA?

Mr. Bob Emond: No. In fact, there are certain funds that are included in the defence program. For example, you've mentioned the statutory contributions. That money obviously does not go to defence for operations; however, the increase year over year in that account is very small.

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The other account that is a major one with flow-through money is disaster financial arrangements. As I recall, it was about $450 million last year, and it's $250 million for this year. So $3 billion is not an accurate statement.

Mr. Leon Benoit: So the CDA has it wrong.

In terms of what the minister is going to ask the finance minister for this year, I think Canadians really want to know about that for the long term, of course, but also in terms of helping to deal with this new situation that has developed. I'd like the minister to just give Canadians some idea of what he plans to ask the finance minister for, and where that money will be spent in terms of things like JTF2. He referred to the idea that he would expand that and other things like chemical and biological protection for Canadians.

If you would, Mr. Minister, please give us a breakdown on that, in terms that won't jeopardize national security, of course.

Mr. Art Eggleton: That, of course, is all in evolution at this point in time. As I indicated, we have been reviewing our policy paper this year vis-à-vis the resources we have and the capabilities we have. We were already doing that before September 11. Now, of course, with the increased focus on safety and security of Canadians, we are looking at matters in that realm. We hope to bring this all together soon and to have an indication as to what resources we'll need.

As you've correctly pointed out, one of the areas we'll look at is JTF2, as are the DART and the NBC Response Team. Those are all areas under consideration, and we are currently fleshing out and reviewing plans with respect to them. When we have that review completed, I'll have a better idea as to what resources we need.

Mr. Leon Benoit: No idea—

The Chair: Mr. Loubier.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Thank you, Mr. Chairman.

Mr. Manley repeated today what he told the media yesterday, namely that since the events of September 11th, the world has changed and will never be the same again. He spoke of a comprehensive plan addressing both our foreign policy and security. Indeed, he is chairing a Cabinet Committee on Security that is expected to table, within the next week, both a plan and the accompanying legislation.

Mr. Manley also said that if Canada wants to strengthen its foreign policy and fulfill its ambitions while living up to its international reputation, he will need additional funds in order to finance that plan.

Given that defence is a very important component of Canada's foreign policy, and especially the deployment of peacekeeping forces, ever since Mr. Pearson invented them some years ago, does the Minister already have a plan in mind for intervention in the mid- or long-term, given the new environment that has come about as a result of the events of September 11th and the new role he will be taking on as part of the fight against terrorism?

[English]

Mr. Art Eggleton: As I said, we are in the process of reviewing and looking at various options and possibilities to do that. There's nothing more important right now than ensuring the safety and security of Canadians. The security environment has changed dramatically and fundamentally in this country and in the world. But we have to be careful to examine these issues and examine our responses to these issues in a thorough and balanced way, without rushing headlong into an ill-conceived plan. We're doing those examinations. We are working continuously at them at this moment in the committee you mentioned, and also within my own department and the other departments.

[Translation]

Mr. Yvan Loubier: Minister, you must have some idea of what you will be proposing to the Cabinet committee next week, because you are planning to work on this comprehensive security plan next week, with a view to introducing legislation in the House when Parliament resumes.

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I am sure you have some idea of the major components of your own sectoral plan, as well as the potential cost. The reason we invited you here today was to get some indication from you of what additional effort may be required. National Defence already has a budget of $11 billion, and the purpose of this exercise here is to ascertain what additional amounts will be rolled into the budget next year, in view of your role being redefined. You must have some idea what that represents; at least an order of magnitude. I cannot believe that only a few days away from your meeting with your colleagues and the chair of this new committee, Mr. Manley, you have no idea of what additional costs your new responsibilities could entail.

[English]

Mr. Art Eggleton: I have lots of ideas about different things, but they're in a state of evolution, they're in a state of planning—

[Translation]

Mr. Yvan Loubier: That's essential.

[English]

Mr. Art Eggleton: —and it would be premature for me to speculate.

[Translation]

Mr. Yvan Loubier: You referred earlier to your 1994 White Paper, which made provision for investments in the Armed Forces, technology, new technologies, and more sophisticated equipment, but other than what is discussed in your 1994 White Paper, which resulted in additional budget allocations in subsequent years, just since September 11th and the tragic events that occurred in the United States, what additional amounts have you added to your current budget, or what resources did you have to move around within that budget to meet emerging needs linked to the events of September 11th?

[English]

Mr. Art Eggleton: As I indicated previously, we have taken additional CF-18s and put them into the NORAD system, but these are already part of our ongoing operations. We just reassigned them into that system.

In terms of intelligence gathering and analysis, we already do that, but we've added to and expanded our operations there to help to off-load the vast amount of additional information that has been coming in, particularly into the United States. At their request, we have therefore increased intelligence analysis. But these are all being handled inside our present operating budget. If there's going to be a need for additional funds, though, you can bet I'm going to ask for them.

The Chair: You have time for a final question.

[Translation]

Mr. Yvan Loubier: Minister, you must have some idea of the direct costs borne by your Department as a result of the tragic events of September 11th. For example, you refer to an enhanced effort within NORAD. You say that you have deployed more CF-18s in order to meet current requirements. You also told us that there is now expanded activity within the Canadian Security Intelligence Service. That expansion is not a figment of our imagination. It is something very real that implies certain costs. So, we would very much appreciate your giving Committee members an estimate of the cost of any short-term interventions on the part of your Department in response to the events of September 11th. We are quite anxious to see these figures.

[English]

Mr. Art Eggleton: Well, it's being managed within our resources now. The costs have not been a heavy burden to this point in time, and I'm not going to speculate on what the total cost will be. It's still too early to tell, but we've been able to manage it within our existing resources to this point in time.

The Chair: Thank you very much, Mr. Loubier.

Minister, thank you.

We have four questioners on the government side. Please be mindful of that when you're asking your questions.

We'll start with Mr. Volpe, followed by David Price, Larry Bagnell, and David Pratt.

[Translation]

Mr. Joseph Volpe (Eglinton—Lawrence, Lib.): Thank you, Mr. Chairman.

Minister, as I see it, you have two specific goals in the current environment. The first is to restore confidence in Canada's defence forces and their ability to respond effectively to events such as the ones we witnessed three weeks ago. The second is to let Canadians know that our military is functional, effective and efficient. I believe you have succeeded.

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[English]

Because you have succeeded, I guess the first impression we should all have—and I don't want to put words in your mouth—is that Canadians are neither laggards nor braggarts. If we're not laggards and we haven't been bragging enough to give Canadians a sense of comfort, now that you've achieved that with your introductory statements, would you be defeating your purposes by asking us for more money to oil an already efficient machine?

Mr. Art Eggleton: That's a good question.

As has been identified on many occasions, because of our desire to eliminate the deficit during the nineties, very substantial cuts were made not only to defence, but to all other budgets. However, the operation tempo has increased in the Canadian Forces. Over the last few years, we have also instituted the greatest amount of reforms and changes in the history of the institution of the Canadian Forces. At the same time, we have found ways to make the organization more efficient to ensure the effectiveness of Canadian taxpayers' dollars. As was identified by the Auditor General, though, we do have a need for additional funds.

We have been reviewing our policy position this year in relation to our capabilities and in relation to the resources we have. We now have the additional challenges brought about by September 11, and our desire is to ensure that we play the best possible role in supporting the counter-terrorism plan of this country for the protection of our people.

So that review, as it is completed this fall, will help to determine what further resource levels we may need.

Mr. Joseph Volpe: We've removed ourself from the big surprise of September 11. I use the word “surprise” deliberately, because I'm assuming—I assumed it then, and I assume it now—our own preparedness has always been at its peak. But when we have surprises like the one of September 11, everybody reassesses the situations and circumstances within which they operate.

I haven't yet heard an argument that suggests the circumstances, as far as Canada is concerned, deserve to be brought up to a higher standard in any way. If you're suggesting to us that what we need to do in the upcoming budget—and this consultation is a part of that preparation—is to expend more funds in order to take on an entirely different role from that which preceded September 11, would you give us an indication of what that new role might be?

Mr. Art Eggleton: It's not necessarily an entirely new role. In fact, I wouldn't see that as being the case. But we could be expanding and enhancing some of the roles we have now. That's what we're having a look at right at the moment.

For example, we're looking at our counter-terrorism tactical unit, the Joint Task Force 2 personnel who are primarily intended for domestic purposes but can also play an international role. We're looking at that in both of those areas—both in terms of domestic security and in terms of our contribution to the international campaign against terrorism.

The possibility of acquisitions—

Mr. Joseph Volpe: So we're not talking about acquisition of new equipment, new hardware.

Mr. Art Eggleton: I couldn't say at this point in time. There may well be. In most cases in which you have additional personnel, you also have additional equipment needs.

For the DART, the Disaster Assistance Response Team, the possibility of its operations being expanded is being examined. As well, the Nuclear, Biological, and Chemical Response Team is being examined.

The Chair: Thank you very much, Mr. Volpe.

We'll now move to Mr. Larry Bagnell.

Mr. Larry Bagnell (Yukon, Lib.): Thank you, Mr. Chair.

I have just two short questions. Just to set the stage for them a little bit, I have always been a big supporter of the military and would like lots of expenditures on it and on everything else, as I'm sure everyone would.

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In this situation, just related only to the effects of September 11, traditional armaments discussion is really somewhat academic in the sense that the coalition already has, I'm sure, a hundred times more traditional armaments than Osama bin Laden. We obviously have more aircraft carriers, tanks—

Ms. Paddy Torsney (Burlington, Lib.): Guns.

Mr. Larry Bagnell: —F-18s and armies than he does, and obviously they're only one small part of the campaign. So as I said, traditional armaments in this particular situation are just an academic discussion. But I do want to put one thing on the record related to traditional armaments, just because they have come up in the discussion.

You could confirm that our military, like any other military, obviously has limited resources. It has exceptional equipment in areas that we deem to be of high priority. Obviously, we have to prioritize.

I was on a piece of equipment this year, and the commander was telling me it was state of the art. It was brand new and it was being launched. It was state of the art in the world, and the United States was looking at it. So I just want to confirm that, in some areas, with some types of equipment, we are state of the art and are leading the world in military technology and equipment.

Mr. Art Eggleton: Absolutely. There always seem to be people who want to talk about the cup being half empty, but I prefer to talk about it being half full. In fact, it's better than half full.

We have either replaced or are in the process of replacing or upgrading just about every major piece of equipment that we have, and we've done a number of them already. The new submarines are an example. The LAV III, the light armoured vehicle III, which is made in Canada in London, Ontario, is now being bought by the United States. After they borrowed some of ours to try them out, the Americans are now going to buy them. When the biggest military in the world tests a Canadian product, likes it, and decides it's going to buy it, I think that says something for the state-of-the-art equipment that we have.

The Coyote reconnaissance vehicle was asked for and deployed from Bosnia into Macedonia recently. There are also upgrades going on for the CF-18s and for the Aurora aircraft. And our frigates are considered to be state of the art. In fact, they are invited by the Americans to participate in U.S. aircraft carrier-led missions quite frequently. They go with an aircraft carrier and a number of other ships into the Persian Gulf. Continuously, we've had our frigates participate in that.

We have our MCDVs, our coastal defence vessels. We have more water around Canada than any other country in the world, so the MCDV, our coastal defence vessel, is vitally important in that situation.

We do have a lot of great pieces of equipment, but we also have some that do need to be replaced, like the Sea King helicopters. That's quite obvious. But let's not just focus on those, let's get a balanced picture here, instead of the kind of distortion and exaggeration that frequently goes on.

If you look at it in the total context, we're moving quite well along this path. We're on the right track. We're putting more money into capital expenditure. We're upping the percentage of our budget in capital expenditure. On top of that, we have great, dedicated, professional people who can operate that equipment, too. So if you put those two things together, it means we can step up to the plate, fight above our weight, and do a very effective job.

Mr. Larry Bagnell: Thank you.

In this particular campaign against terrorism, as I said in my preamble, this is obviously a very sophisticated and stealthy enemy who is all over the world. There are obviously many different fronts to that campaign, and many very sophisticated tools that we're going to have to use. Some of these fronts are obviously not in your department, so I don't know if you want to comment on any of the other areas that might be relevant to defence other than just the big, traditional armaments.

Mr. Art Eggleton: A couple of weeks ago, we had a meeting of the defence ministers and chiefs of defence of all the different countries in NATO. We went around the table after the representative of the United States spoke, and all of the commentary was strongly supportive of this campaign against terrorism. Not one person referred to it as a war. Nobody referred to it as anything close to a conventional kind of conflict. Everybody talked about the fact that it was probably going to be won ultimately by non-military means—and again, this was at a meeting of NATO defence ministers and chiefs of defence.

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It's going to be a long campaign, as has been said many times by the Americans. It will take diplomatic, political, and economic pressures. Following the money trail and cutting off funding is going to be a big part of this campaign, as will be disrupting and destroying the networks that exist amongst the different cells that exist in so many different countries in the world.

The possibility of a conventional military operation, while it can't be ruled out, is unlikely. It's more likely to be a surgical, special operations kind of endeavour, but that decision hasn't been made yet. The planning is still going on. Ultimately, it is going to be won on a multi-dimensional basis. Yes, the military will be a part of it, particularly in the early stages. But in the long haul, it's going to be means other than military ones that are going to win this campaign against terrorism.

The Chair: Thank you very much.

We'll get one question each for Mr. Price and Mr. Pratt.

Mr. David Price (Compton—Stanstead, Lib.): Thank you, Mr. Chair. I will follow up on Mr. Volpe's question.

Minister, you talked about the possibility of increasing the JTF2 and moving their role probably a little further abroad, and about probably using DART a little more on the home front. You also talked about the Office of Critical Infrastructure Protection and Emergency Preparedness, and then there is the NBC program. These are all programs that we had already in place, I'm happy to say, but they all need to be increased. At the same time, we are going to have to maintain our military role as we have it now, and we probably even have to upgrade that to a certain amount. Therefore, we are definitely talking about more dollars here. Or do you see another way of doing it?

Mr. Art Eggleton: I think I've indicated on a number of occasions that I will need more dollars, but I think we also have an obligation to make the organization as efficient and effective as we possibly can. We have a lot of taxpayer's dollars. As I said, it's the seventh-largest amount of the nineteen NATO countries, and I think we have an obligation to make sure it is well spent.

We have changed a lot of our management systems. We have engaged the private sector through alternate service delivery in some of our operations so that we can take the money we do have and put it toward our core capabilities, our core requirements. As I indicated earlier, we have been reviewing the situation in terms of what our resource requirements are, and also to see how effective we have been in reducing spending in some of these other areas so that we have more money that we can transfer into core capabilities.

We do still have needs in terms of peace support operations. We can't forget there still is a role in which we can play a very strong part in contributing to international peace and security. But even then, we're looking at the asymmetric threats—the possibility of cyberterrorism, the possibility of other forms of terrorism—although I don't think any of us imagined what was going to happen on September 11. But certainly what has happened on September 11 has now brought another focus to bear on this review, this update, and that is all coming together.

This fall, we'll determine what additional resources we will need or what reallocations we can make. But it's not all going to be done with additional resources. We still have to make some hard choices as to what our priorities are. We can't have every capability in the Canadian Forces. Let's determine what the priority areas are, let's use the money we have now in the most efficient and effective way in providing for them and in changing our priorities, and then let's see what we need in the way of additional financial resources.

The Chair: Thank you, Mr. Price.

Mr. Pratt.

Mr. David Pratt (Nepean—Carleton, Lib.): Thank you, Mr. Chairman.

Mr. Minister, gentlemen, thank you for being here today.

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Presuming, Mr. Minister—and it may be large presumption, granted—that we are able to get more resources for the Canadian Forces, I think spending that money wisely and in a manner that contributes to Canada's industrial base is obviously critical. In my view, Canada has been known to be something of a boy scout when in comes to military procurement, in the sense that we open up the contracts to foreign bidders and have a largely open process in many cases, whereas other countries are much more restrictive with their military contracts—and as you know, that's something completely allowed under WTO rules. Is the department prepared to do more to ensure Canadian industry gets more benefits from potential increases in military spending domestically?

Mr. Art Eggleton: Quite definitely. If you look at the recent purchase of search and rescue helicopters, we're actually getting more than the value of a contract in terms of investments in Canada. Industrial regional benefits are well spread throughout the country. Even though the helicopter is manufactured offshore, many aspects of its maintenance and its upgrades are going to be done in this country, to the benefit of Canadian industry and job opportunities for Canadians. So, yes, that's quite important. We always keep an eye on industrial and regional benefits in any of our procurement processes.

At the same time, we have to make sure we get what meets our operational requirements. Sometimes we can't get that within Canada. If we can get that within Canada, great, then let's have it within Canada. But we need to be competitive, and we need to have competitions to ensure we are getting what will meet our operational needs at the best possible price for taxpayers. At the same time, we'll do our best to make sure the job opportunities and economic benefits flow through to Canadians as much as we possibly can.

The Chair: Thank you very much, Mr. Pratt.

We'll go to a five-minute round for Mr. Stoffer and Mr. Brison.

Mr. Peter Stoffer (Sackville—Musquodoboit Valley—Eastern Shore, NDP): Thank you, Mr. Chair.

Mr. Minister, again, I thank you for appearing, as you did yesterday in front of the defence committee.

When you hear the expressions from the American ambassador saying “step up to the plate”, and the foreign affairs minister talking about “going to the washroom”, I get a disturbing picture.

That was a joke, by the way, folks.

I just wanted to thank you very much for your comments on the work done by the personnel throughout the country on September 11. Especially at CFB Shearwater, in Nova Scotia, you did a great job.

I also want to thank you for your comments about the priority of human resources, of the families of any military men and women who are going to be asked to go overseas in any circumstances. I would encourage you to encourage the government to really focus on the family aspect of the men and women who do go overseas, in terms of the resource centres and of the children who are affected by these concerns as well.

You did mention that there was additional pay for the military personnel in terms of their housing, but you forgot to mention that you also raised the rents on those base houses as well. I say that just in fairness.

Another concern is that we saw what happened to a lot of the Gulf War vets who returned. In regard to their care after they got out of the service with various illnesses that are being attributed to that war, concerns are still in the news and in the media. I would encourage you to keep a close eye on any veterans who may return from any overseas operation in order to ensure that their after-service health is well maintained as well.

This next one is more or less for the ADM: Sir, you had mentioned your investment opportunities and everything else, but missing from the charts are any revenues or moneys to be received from the divestiture of the supply chain, for example, and the divestiture of the 1,100 acres at the Shearwater air base, for example. As you know, there's an extremely long runway on that base, sir, and you did indicate the other day that you are planning to go ahead with that plan. Although I personally disagree with that, I can understand the reason for doing it.

There must be other divestitures throughout the country. Can you please tell the committee what revenues the government would save or plans to retrieve from the sale or divestiture of any properties that you have throughout the country?

Mr. Art Eggleton: You've raised a number of valid points, and I appreciate your comments about military personnel and what they did on September 11. I might also say that in your province and in a number of provinces in this country, the people, the citizens, did a terrific bit of work themselves. They poured their hearts out to these people and were very helpful to them.

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Thank you for also mentioning the family aspect of things, because we've put millions upon millions of dollars into that the last few years. Again, that's where some of this $3 billion has been going, with respect to family resource centres and helping to support the families. While we need to support the troops, at times they go away for six months, and we need to make sure their families get the kind of support they deserve and need.

You mentioned the housing and that we raised the rent at the same time. Because most of our people live in market housing and pay market rents, for the properties that we have—the PMQs, as they're called—we're required to provide them at market rates as well, in accordance with what CMHC tells us is the prevailing market rate. We have been doing that slowly. We have tried to hold back from any large increases while gradually getting up to that level. I'd say most of our married-quarters housing is still below market rents, but there is a requirement to get to market rents.

At the same time, we also have provided a post-living differential for people who are in high-priced areas, high-cost areas. We have increased the pay substantially so that the amount of money that goes to our troops far exceeds the cost of those raises in rates.

As for what you say about vets, yes, we've established a number of centres—five of them—in Canada for post-deployment conditions where people require some medical assistance. Of course, we have a number of people who are experiencing or suffering from post-traumatic stress disorder or who have other physical ailments that come about as a result of their service, and we do have these post-deployment clinics.

We also have a service here in Ottawa—it's a central service with a 1-800 number—that is a joint effort between ourselves and Veterans Affairs Canada, so that people aren't caught between the two. The two organizations come together so we can give a continuum of service to our people who have served. If they're ill as a result of service, then we need to look after them. That is a high priority.

With respect, you mentioned the revenue supply chain project. Well, the supply chain project isn't implemented yet, but it's well on its way to being implemented. We anticipate saving $74 million a year on it, and I'd imagine that would show up in a reduction of expenditures, as opposed to on the revenue side. It would be the same for other ASD situations as well. And as I've said, what we're looking to do as we save that money is to put it into our core capabilities. It wouldn't show as a decrease in the bottom line, because we take the savings and we reinvest it in our organization.

I'll let the ADM further respond on that matter.

Mr. Bob Emond: Just on your last point on sales of property, the department does receive the benefits of property sales up to $5 million. Above that, there's a negotiated amount with the Treasury Board. But you'll appreciate that, because of the environmental liabilities, etc., it takes us a long time to achieve the sale of a piece of property.

The Chair: Thank you.

Mr. Art Eggleton: If you want to tell the Treasury Board that it should give me 100% of everything we sell, I'd be happy with that.

The Chair: Good.

An hon. member: [Inaudible—Editor].

The Chair: That's the risk you run when you have long preambles.

Mr. Brison.

Mr. Peter Stoffer: That wasn't long.

Mr. Scott Brison (Kings—Hants, PC/DR): Now he's trying to give my preamble.

Thank you, Minister, for appearing before us today.

Since September 11, the U.S. has sought formal military commitments on a bilateral basis from Australia, Britain, France, Germany, and Italy. The U.S. has not made a formal request to Canada on a bilateral basis for specific military resources. Is this because the U.S. already knows we don't have the resources or capability to contribute meaningfully?

Mr. Art Eggleton: I'm not aware of the bilateral requests to those other countries that you're talking about. The U.S. has made a series of eight requests to NATO, and that's now public information. For the requests the Americans have made to us—and they have made two requests that I've talked about previously, one with respect to NORAD levels of operation and the other with respect to intelligence analysis—we have met both of those requests. We are in discussions with them about other ways in which we might be of assistance, plus we endorsed the NATO request, and that involved several hundred of our personnel as well.

• 1410

Mr. Scott Brison: You mentioned Turkey earlier, and mentioned that we actually invest about the same amount in our military as Turkey in real dollars. As a percentage of GDP, Turkey actually invests 5.5% of its GDP in its military, while Canada invests 1.2%. The only country in our NATO partnership that invests less as a percentage of GDP is Luxembourg. Comparatively, then, we as a country are not investing as much in defence as our NATO partners.

Even before September 11, the Conference of Defence Associations identified serious shortfalls within the Canadian Forces in terms of resources and capabilities. You, your parliamentary secretary, and the department have implied that these retired military leaders somehow may not understand modern military engagement. How can you disregard these leaders and their analyses when they are based on your own department's level-one business plans?

Mr. Art Eggleton: First of all, on this question of percentage of GDP, what does it get you at the end?

An hon. member: Ha!

Mr. Art Eggleton: What's important is the kind of product you produce for the money you have. When it comes to productivity and the output of the Canadian Forces, we don't take second place to anyone.

As for the percentage of GDP, yes, we have a lower percentage, but that's because we have a bigger economy. We have a big, successful economy. We are spending about the same amount of money as Turkey spends. And by the way, it's 6% of their GDP that is spent on defence. But the amount of money we spend is not the whole story. It's what you produce with the money that you get. What we produce with the money we get is a very effective use of taxpayers' dollars.

Mr. Scott Brison: I think it's fairer to say that what your armed forces produce with the amount of money they get is actually quite exceptional. Nobody is questioning that.

Mr. Art Eggleton: Well, fine. Thank you.

Mr. Scott Brison: Will you table your level-one business plan to this committee for our analysis?

Mr. Art Eggleton: It's in section III of the estimates. It's there already.

I'd also like to further comment on what you said about retired military leaders. I respect people who have served in the Canadian Forces. They have every right to give their opinions about what we do or what they think we should be doing. I just don't necessarily agree with it.

We happen to have an advantage, though. We happen to have current information. We happen to have people who are operating within the military and who have the best insight into what our needs and requirements are today and in the future, not based on the way things were when many of those who are expressing opinions might have served.

I very much respect their service and I respect their opinions, but I don't necessarily agree with them. Some of them are thinking of the way things were in the Cold War past. One of the great concerns that you hear frequently is about military planning for the last war instead of the next conflict. We just can't afford that kind of approach to things. There is some “old think” that is involved, but there are also many people who have good ideas out there, and I certainly respect those ideas.

Mr. Scott Brison: There has never been a time when the integrity of our borders has been more important than right now, particularly in a post-September 11 environment. Will you reverse your earlier decision to reduce the number of Aurora surveillance aircraft from 21 to 16? Will you reverse that decision and maintain all 21 Auroras? Further, will you commit to updating and maintaining all 21, as opposed to simply upgrading the 16 remaining ones?

Mr. Art Eggleton: It's not just a question of the number of aircraft, it's a question of the ability of the aircraft and the equipment in the aircraft to be able to do the job. We will not reduce meeting our requirements in terms of the safety and security of Canadians and the surveillance of our airspace. We will continue to do that. We have not reduced it.

• 1415

Mr. Scott Brison: You have reduced the number of planes from 21. I'm asking you if will you reverse that, given the heightened sense of importance—

Mr. Art Eggleton: I'm saying the number of planes is not an indication of the level of service.

Mr. Scott Brison: So you're saying pilots should fly them faster, perhaps?

Mr. Art Eggleton: We can still provide the service level that is required and do what is required for proper surveillance of our airspace.

The Chair: Thank you very much, Mr. Brison, Minister. I now have a question.

As you know, we deal with budgets in this committee. I don't think there is any question that there is already a consensus amongst all parties about the national security issue and the idea that we should provide greater resources for those organizations that deal with national security, whether you're talking about the RCMP, CSIS, or DND. However, we also deal with the reality of the deficit in this committee, and we understand the trade-offs one must make in order to maintain a balanced budget. As a minister of the crown, how important is it to you that Canada not return to a deficit position?

Mr. Art Eggleton: I would hate to see that happen. I think the sound fiscal management that this government has brought about, with the support of your committee and the support of the House and the Senate, is vitally important to maintain. I think we can do that. I think we can in fact rework our priorities. We can give a tighter focus to the needs of the safety and security of Canadians while still maintaining sound fiscal management.

The Chair: This may in fact require the government to re-profile some of those resources, but above and beyond a government-wide re-profiling of resources, and given the fact that we are now living in an era in which many commentators are saying this is not a traditional war—some have called it a campaign against terrorism—there is a greater emphasis being given to the entire issue of intelligence. Therefore, there is a greater focus on the integration of intelligence, enforcement, and investigation. That will require the leadership of your department, the RCMP, CSIS, and other organizations, to determine some sort of strategic position.

As we look to the future, what kind of defence system or department are you looking at? Has the time arrived when we, as members of an alliance, must perhaps begin to look at specializing in certain areas? In other words, is it better to direct a lot of resources at one area and be the very best we can be internationally, since we are pooling resources with our allies, or is it better to be all things to all people?

Mr. Art Eggleton: I don't think we can be all things to all people. For quite a number of years, we have been developing niche capabilities, ones that work well with those of our allies, and ones that help toward meeting our commitments to our partners in NATO and NORAD, and we'll continue to do that.

We can't be all things to all people. We cannot have equipment or capabilities in every area. We're never going to be the size of the United States' armed forces or those of many of the other major countries in terms of numbers of people, in terms of our amount of equipment, or in terms of a wide array of equipment. But in the areas we have in fact been specializing in, I think we do exceptionally well. We have a good, quality product.

Intelligence is important, particularly post-September 11. Intelligence obviously didn't provide information that what happened on September 11 was going to happen.

The Chair: Perhaps it was a lack of intelligence. Is that what you mean?

Mr. Art Eggleton: Yes, it certainly was. That's an area that therefore needs to be strengthened by all the countries that are part of the coalition, part of NATO, including us, and we are looking at ways in which we can strengthen it.

I have responsibility for two branches with respect to intelligence information. One is in the Canadian Forces proper, and the other is in the Communications Security Establishment, which deals with electronic equipment. We are looking at both of those areas in terms of ways in which we can strengthen intelligence gathering and analysis.

The Chair: Minister, would you say that's going to be the major shift in your policy, in that there will be a greater focus on intelligence?

Mr. Art Eggleton: There are other areas as well. I don't want to quantify which one will be more important than the other, but intelligence certainly is a very important part of it.

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The Chair: Thank you.

Ms. Gallant.

Ms. Cheryl Gallant (Renfrew—Nipissing—Pembroke, Canadian Alliance): Thank you, Mr. Chairman.

It's nice to see you again so soon, Minister.

Mr. Art Eggleton: Familiar faces.

Ms. Cheryl Gallant: In the Standing Committee on National Defence and Veterans Affairs yesterday, the minister was asked why he hasn't announced plans to re-form the Canadian Airborne Regiment. This unit is one that could have the principal role in the defence of Canada in operations against small-scale enemy incursions in the north. The provision of this unit for short-notice response to UN and NATO requests for peace operations and operations in limited or general war within the context of a larger allied force would be possible, particularly as a special service missions force—including pathfinders, deep patrolling, and winter operations—in things like insertions that are going to happen in Afghanistan this year. It could also perform domestic operations, such as responding to the threat of terrorist attacks. It would be a group that would train regularly, on a daily basis, in anti-terrorist measures. The response was that the thought of, request for, or need for such a highly specialized unit within the Canadian Forces was outdated and unnecessary. Instead, the minister stated that he is thinking about expanding the JTF2, Canada's equivalent to the American Delta Force.

JTF2 is comprised of highly specialized workers. It's a unit that takes years to train, and money should be allocated toward this special service unit. But the forces are already short of personnel, and taking away from the existing brigades just isn't possible right now given our current commitments. Why doesn't the government just admit it made a mistake in disbanding the Canadian Airborne Regiment—whose talents could have been playing an integral role over the past 24 days—and provide direct funding toward reconstituting and training an airborne regiment? That is an achievable, cost-effective solution to the crisis we now face.

Mr. Art Eggleton: I don't impose organizational structures on the military without them giving me advice as to what they think is the proper way to carry out their functions. If you think you have the best idea for military planning, then you should go talk to them. They've clearly said to me that they don't need an airborne regiment again.

Many of the kinds of skills and capabilities you're talking about do exist in the Canadian Forces, although they don't all exist in one unit. We have fashioned our force structure in a way that serves the defence policy. The defence policy is, in fact, the guideline for our forces in terms of their operations, their equipment, etc., and the kinds of deployments that are going to flow to the forces are from that defence white paper.

I don't know whether or not the Vice-Chief of the Defence Staff wants to add something to this.

Ms. Cheryl Gallant: Minister, at the time—

Mr. Art Eggleton: General Macdonald is a person in uniform who will also further respond.

Ms. Cheryl Gallant: The disbanding was done against the recommendation of the former Chief of the Defence Staff, General John de Chastelain.

Mr. Art Eggleton: You're talking about something that is years old. It's a decision that was made a number of years ago, it was carried out, and we have no need for a Canadian Airborne Regiment. Now, we have a need for many of the skills you've talked about, and we have a need for many of the capabilities, but not in the resurrection of a Canadian Airborne Regiment.

I'd like the vice-chief to talk further about the military capabilities. I appreciate that the member thinks she's terrific at military planning, but I think we should hear about it from somebody in uniform.

Lieutenant-General George E.C. Macdonald (Vice-Chief of the Defence Staff, Department of National Defence): Thank you.

Clearly, the Canadian Forces have had to focus on niche capabilities. We cannot do everything. We do not have the resources, nor do we have a fundamental reason to be able to do everything. But a niche capability is something we can certainly focus on in some areas.

• 1425

While many may have an emotional attachment to the former Canadian Airborne Regiment, there is not now, in 2001, a strong case that can be made for our parachute capability. As the minister has said, there are some reasons why some of the kinds of things you could do with an airborne regiment are still needed and exist, but they exist in other forms in the organization of the Canadian Forces.

So there's no specific reason or threat that re-forming an airborne regiment would meet today.

Ms. Cheryl Gallant: Are you going to drive into Afghanistan, then?

LGen George Macdonald: The question is, do we have a need in the Canadian Forces to have the kind of unit—

An hon. member: A capable unit.

LGen George Macdonald: —that would conduct that sort of operation. We're specializing in other areas that are responsive to the military threats that face Canada and North America, in protecting and contributing to international undertakings, not necessarily by parachuting into places like Afghanistan.

Mr. Art Eggleton: Helicopters are now used much more in terms of taking in troops than parachuting is. The United States uses helicopters a lot more now.

The Chair: Thank you very much, Ms. Gallant.

[Translation]

Mr. Loubier.

Mr. Yvan Loubier: Thank you, Mr. Chairman.

Minister, I am sure you would not want your appearance before the Committee this afternoon to have been pointless or just about. I would remind you that this is the Finance Committee, and that we have a specific mandate, which is to carry out pre-budget consultations with a view to getting an overall picture of new funding requirements or those that have been exceeded to help the Minister of Finance prepare his next budget.

Ever since you arrived here this afternoon at the Finance Committee—not the Defence Committee—we have been asking you questions about figures. There is no doubt in my mind that since you are only a few hours away from beginning your work with Mr. Manley, in your Security Committee, you must have some idea of what additional costs you have defrayed since the tragic events of September 11th in the United States, in terms of supplementary expenditures, your commitments to NORAD, intelligence, etc., as well as any new requirements for the upcoming fiscal year.

If you can't give us an approximate figure, how do you expect us to fulfill our mandate? Mr. Chairman, if every meeting with sectoral ministers is going to play out like this, the Finance Committee may as well not hold any meetings. This is not the Defence Committee, nor is it the Security Committee. This is the Finance Committee. If you don't want to provide us with any figures, Minister, there is absolutely no point in pursuing our discussions. Do you have figures?

[English]

Mr. Art Eggleton: Mr. Chairman, this is about the sixth time the member has asked me the same question in a different way, and I really have the same answer. Maybe you should have invited me at a later stage when I do have money. I'd be happy to come back when I can give you those kinds of dollar figures, but I'm here at your invitation.

[Translation]

Mr. Yvan Loubier: You should have informed us that you could not provide us with any numbers, and we would have told you not to bother coming for the time being. Our mandate is to get an overall understanding of new requirements, and you are not in a position to give us what we need.

[English]

Mr. Art Eggleton: No, I think I've told you what the needs are. I've told you what some of the things are that we're looking at. Our needs are obviously relevant to improving the security of Canadians. Those options that we're looking at are still in an early evolution. When I have dollar figures that I can put on them, I'd be happy to come back and talk to you about them.

The Chair: Thank you very much.

Ms. Torsney, then Mr. Stoffer, and that will be it, Minister.

Ms. Paddy Torsney: Thank you, Minister. It has been terrific to hear from you today, because there certainly has been a lot of difficult rhetoric and silly rhetoric about the state of our military.

Our constituents are somewhat nervous in light of the events of September 11. If there was one single message that you wanted them to think about this week and in the weeks to follow, what would you say to Canadians about the state of our military and its capability to face these challenges?

Mr. Art Eggleton: They're ready and able to participate in the campaign against terrorism. They're ready to play a role in the international effort with our allies. We are firmly committed to it.

We are firmly committed to that effort because it speaks to the safety and security of Canadians. It speaks to our values, our way of life, so we want to be part of that international effort. At the same time, we also want to make sure we strengthen the security of Canadians.

We have a counter-terrorism plan in this country. We don't have an imminent threat, but that's not something we can take for granted. We have to continue to improve upon that plan, but there are no quick fixes.

• 1430

I would also offer to the last questioner that, in terms of not having dollar figures here at this point in time, we are evolving through this. It's not only Defence, it's other departments of the government, as well. We're attempting to pull together the ways in which we can improve dealing with the security of Canadians in this post-September 11 environment. There's nothing more important than that right now. We'll continue to work to do that, and when we can bring you some dollar figures on what it's going to cost and how we're going to pay for it, we're going to do that, too.

The Chair: Mr. Stoffer, very briefly.

Mr. Peter Stoffer: Yes, sir. Thank you, Mr. Chair.

Mr. Minister, I'd like to give you the opportunity to speak to all those people who are very concerned about the Sea Kings. Can you please tell us, unequivocally, when we will see the first Sea King replacements? And how much do you estimate the contract should cost?

Mr. Art Eggleton: Our costs are still the same, at $2.9 billion. That is more than a billion-dollar savings from the former Conservative government's proposition, and it will get us a helicopter that's more in tune with what our needs are today.

Our aim is to have the first helicopter delivered before the end of 2005. That hasn't changed either, and it will be a challenge. Because of the time it's taking to go through the process to this point, we'll need to find a means of making up some time. I'm hopeful that when we get down to the stage of awarding a contract, we'll be able to speed up the process. That will certainly be our effort, because I do want to get the Sea Kings replaced just as quickly as we can.

However, we're only going to continue to use the Sea Kings as long as it's safe to do so. We have a very rigorous regime of maintenance that keeps them safe to fly, but their effectiveness as an operating platform is not what it should be, so I'd like them replaced as quickly as possible. I've told the Minister of Public Works that we should try to find a way to speed up this process in order to get the replacements just as soon as we can, but my aims are still to get the first one coming in before the end of 2005 and to stay within the budget that we presently have allocated.

The Chair: Thank you.

Our final questioners are Mr. Benoit and Mr. Brison, very briefly.

Mr. Leon Benoit: Thank you, Mr. Chair.

Mr. Minister, in question period today, I asked you about an operational unit. I believe you referred yesterday to an operational unit in the forces that would deal with chemical and biological attacks, and with the protection of Canadian citizens during chemical and biological attacks. You didn't answer my question as to whether or not there actually is such an operational unit in the forces. You referred to the training unit at Borden, and I believe you also referred to the Office of Critical Infrastructure Protection and Emergency Preparedness. Will you, as minister, tell this committee whether there is actually an operational force ready to be deployed to help protect Canadians in the case of a chemical or biological attack?

Mr. Art Eggleton: The answer is yes. You know, I do answer your questions, but the answers don't seem to sink in for some reason. So let me try this one again.

Yes, it is a training entity. It is a school. At any school, you obviously not only have students, you have teachers. You have people who have capabilities and expertise in this. And as I said earlier today in the House in answer to your question, all Canadian Forces personnel are available to help Canadians in times of need. If this unit is needed, it will be available.

Mr. Leon Benoit: So the extent of the unit, then, is the people at the training centre in Borden?

Mr. Art Eggleton: The extent of the unit is as it is now in Borden, but as I've also said—here today, yesterday, and on other occasions—that is one of the entities we are also looking at in the aftermath of September 11 in terms of expansion possibilities.

The Chair: Thank you.

Mr. Brison has the final question.

Mr. Scott Brison: It's a question on the doctors in the military, and that situation.

It has been reported that the Canadian military is having a significant shortfall of doctors, and that this is compromising our future operational abilities. Given that the main problem regarding medical staff is an attrition rate of about 70% to 80%, and given that Canadian Forces medical officers are only paid approximately half as much as their civilian counterparts who work alongside them in many of the bases in this country, doing effectively the same job, we shouldn't be surprised that doctors are quitting, first of all. What are you doing to fix this crisis?

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Mr. Art Eggleton: I don't know about your numbers there. They don't sound right to me. But let me not focus on those, let me focus on what we're doing to correct the problem.

Yes, we have a shortage of doctors, and we are trying to find a number of means of attracting doctors into our service. For example, for a number of years, we have allowed them to go into private civilian practice at times so that they can keep up on their skills. This way, it helps to assist their professional development, and that helps us to keep people.

We have also put into effect the bonus system—we just increased it quite substantially—that effectively pays for or helps to pay for their education. That's an additional way in which we can attract doctors.

We're looking at ways to retain and ways to attract doctors, and we're looking at them in a flexible way. In fact, this is one of the things we're doing in terms of our recruitment overall. We're looking at a lot more flexibility. We're instituting a lot more flexibility in terms of service for people, in order that there will be an attraction to come into and be part of the Canadian Forces and contribute to them.

We're looking at a number of ways, and I don't know whether the vice-chief wants to....

LGen George Macdonald: No.

Mr. Art Eggleton: All right, then.

The Chair: Thank you, Mr. Brison.

Minister, on behalf of the committee, I'd like to express to you our sincerest gratitude for your presentation. I know it has been quite helpful. Canadians always want to know what's going on, and this has provided yet another opportunity, given the recent developments. Thank you very much.

The meeting is adjourned.