CDA Institute fellow, Charles Davies discusses the perceived failure of Canada’s Defense Procurement Strategy and identifies key factors contributing to this perception. These factors include political constipation, bureaucratic inertia, technological complexities, and challenges in defining operational requirements. To address these issues, he suggests assigning the responsibility for defence procurement to a single accountable authority and streamlining decision-making processes. Davies also emphasizes the importance of making timely decisions in acquiring new capabilities and highlights the need for depoliticization, rational discussions, and a well-defined defence industrial base.
What are the key factors contributing to the perceived failure of Canada’s Defense Procurement Strategy, and how can these issues be addressed to ensure the delivery of the right equipment to the CAF?
There is certainly a perception that the defence procurement strategy is failing or has been a failure, but I’m not certain that’s universally agreed upon. The decision-making architecture has improved—we have to be fair about it. There’s more discipline and a single staff officer in some departments can no longer significantly stall the consideration of a project because they now have to answer to higher-ups who are meeting with their deputy ministers and Assistant Deputy Ministers regularly to track progress.
Files can’t just be held up by bureaucratic inertia. We have seen improvement there. There is also a view in some quarters that trying a more radical change would be more disruptive than it’s worth in this context. That said, I question the basic foundations of the model. To be fair, no matter what model we have, if there’s political constipation in decision-making, then it doesn’t matter.
If politicians are not prepared to make timely decisions, then the framework within which you’re operating is a secondary issue. With that as context, I do think that we need to recognise that defence procurement, certainly when it comes to major systems, is inherently complicated and challenging. There are technology complications that must be dealt with, particularly with major platforms, where a lot of different systems have to be integrated. That is hugely difficult.
The operational requirements for the Canadian Armed Forces are also very complex because we can’t afford to have purpose-designed pieces of equipment for every potential contingency. We need more broadly capable systems that can be applied to different kinds of problems. For example, the U.S. has a whole range of different kinds of aircraft, warships, etc., and they can afford it. We can’t afford to operate that way. We have to be more general-purpose, which brings complications.
Further, there are legitimate defence industrial readiness issues around defence procurement that are complicated, no matter how you’re managing it. The problem for Canada is that on top of these inherent challenges that every nation faces, it layers on a unique set of business management complexities, with multiple ministers all having an effective veto over moving any project forward. That’s where the defence procurement Strategy fell short and continues to fall short.
How can the issue of fragmented decision-making in Canadian defence procurement be effectively addressed? What measures or reforms could be implemented to improve coordination and streamline the decision-making process among government departments involved?
You do it by defining one bellybutton you’re going to poke: one minister who is accountable to the Prime Minister and to Parliament for managing the process of determining defence equipment requirements and the process of actually acquiring that equipment. The Defence Production Act covers all the authoritative bases necessary to acquire defence supplies and manage defence industrial capabilities. If the government were to choose to assign those powers, which are currently with the Minister of Public Services and Procurement, to a single Associate Minister of Defence, for example, for defence materiel, then I think the machinery of government issues would be overcome relatively quickly.
The bits and pieces are actually already in place. The Department of Public Services and Procurement has a separate defence and marine acquisitions branch. The defence industrial readiness piece is already in the Defence Production Act. So, if a single Minister were assigned responsibility for doing that, and put together with DND’s equipment lifecycle management responsibilities, that would be a very robust, capable package for executing all of that complex hard stuff to make defence procurement much more efficient and effective in Canada.
It will never be perfect because of the inherent complexities. No country does it perfectly, simply because of the amount of difficulty inherently involved in what you’re trying to do. However, you can solve the machinery of government problems by putting it under one single, responsible authority. Put all the pieces together and then, over time, you can rationalise the internal structure and optimise the business.
Drawing from the F-35 fighter jet acquisition, what are the key considerations that Canada should keep in mind when making decisions on acquiring new submarines?
Make timely decisions. That’s the key. A submarine programme, even if you’re going to buy it offshore, will take a minimum of 15 years. Our current boats are already 30 years old. You can’t really run them to 40 or 50 years. Submarines have unique material challenges. As hulls get old, they lose elements of their integrity. That’s what led us to retire the Oberon class in 2000, the predecessor to the Victoria class. We went for a number of years with no submarines.
You have to make decisions early enough about whether or not you’re going to replace, if you’re going to replace is it one-for-one, or is it like-for-like, or is it a new technology? You have to make those decisions early and we’re already a good five years behind the curve on making a decision about the replacement for the Victoria class submarines. I have seen reports that the Navy is aware of this and they’re looking at options for more quickly procuring submarines, but we’re very likely going to be in a position where we’ll have to buy what we can get in the right timeframe, not what we really need, and not necessarily in the quantities that we need.
When we bought the Victoria class, we only bought four because that’s how many we could get. We need a lot more than four. We have the largest coastline in the world, we have massive Arctic, Atlantic, and Pacific coastal areas to exercise sovereignty over. If we’re not in the submarine game, then everybody else who is basically has a free ride to do whatever they want in our waters. I’m deeply worried that constipation in political decision-making is seriously eroding our national sovereignty. It’s done it before and seems likely to do it again.
In Charlie Foxtrot, Kim Nossal points to the lack of criticism directed at the civil service regarding the defence procurement process as contributing towards some of the difficulties in our procurement system. I have spoken with other experts who suggested something different—that a highly critical media and Canadian public have potentially contributed to a certain rigidity in the system, where members of the civil service are overly worried about making mistakes, and that this potentially impedes certain processes. Where do you stand on this issue?
I think there’s a certain amount of all of the above involved here. It is absolutely true that defence procurement has been historically highly politicized, and we have seen governments make what are in fact, disastrous decisions for the country based on political considerations. Jean Chretien’s cancellation of the EH-101 helicopter procurement in 1993 cost us at that time, half a billion dollars to buy nothing. There is a reason why the F-35 decision took so long, and that is purely the political environment stemming from the 2015 election. Political leaders need to work towards a better consensus on defence and national security policy direction for the country.
I think there is some recognition of that. Certainly, I’ve heard some politicians in recent years talk a little bit about that but both sides have been guilty of it so I wouldn’t point a finger at any one party here. Politicization gets reflected in the public debate, in the media, and elsewhere. That’s a fact of life and it has created a reluctance or an abundance of caution within the bureaucracy.
I think the second problem is what we talked about before: the complexity of the bureaucracy and the number of players. We have a construct where many people can say no and only one person can say yes, the Prime Minister of the country. That adds to the problem, and I think we can do something to fix it in terms of the reorganization of defence procurement. There’s plenty of blame to go around here. I really think that it is time, given the way global events have been unfolding and look to be unfolding, that Canada got its house in order in terms of depoliticization of defence procurement and having rational adult conversations about defence needs.
There’s also a factor in defence industries that complicates things further and drives that bureaucracy to much higher levels of care and time in going through the analytical processes, in terms of picking which system we’re going to buy. That is a scorched earth approach that industry sometimes takes. If they haven’t won the competition, they will do everything in their power to overturn the competition result and force the government to go back to the drawing board to give them another chance.
I know why they do it. Defence acquisitions globally are relatively very few and far between. It is highly competitive. It is very expensive for these companies to put together a credible bid with a realistic chance of winning. There was a British study a number of years ago that suggested you had to put in potentially as much as 5% of the expected contract value into preparing a credible bid that had a really good chance of winning, but there is no guarantee you’re going to win.
I get why the companies take it hard when they don’t win, but I think all of us need to sit back and start thinking differently about how we approach defence procurement. That includes industries that are involved, that includes the bureaucracy that includes the political leadership, and it includes the public.
I believe we need to also be thinking, within this defence procurement construct, about what kind of defence industrial base we want to have. I think there are a couple of principles that we might want to consider. One is that we need to focus on being able to provide in-service support and, if possible, midlife upgrades for the major platforms that we have. We can’t afford a complete design and build capability for every system, but I think we need to be able to support what we have robustly without being overly reliant on external partners. The lesson of the Afghanistan War, and the lesson we’re seeing in the Ukrainian war, is that when our demand for critical support goes up, so does everybody else’s.
In addition to in-service support for major platforms that we have, we also need to meet our own needs for combat supplies, particularly ammunition, but also food, fuel, as well as high-usage spare parts to the degree we can. Again, we won’t be able to do everything across the board, but we need to be very thoughtful about what capacities we’re going to maintain. We also need to be agile in being able to adjust those capacities. I think that’s an area we need to think deeply about.
