I’m sure that many a retired Admiral was shocked last week when they saw the headline: “Canada's top admiral says navy staff, resource needs in ‘critical state.’” They must have been dumbfounded to learn that the article wasn’t a result of an internal DND memo that’d been leaked to the Ottawa Citizen, but an authentic video that had been posted — in the name of transparency — by the Royal Canadian Navy.
“Suffering in silence” might have been the norm in prior generations, but VAdm Angus Topshee had a message for his sailors, and, in this day and age, YouTube is the most efficient way of getting the word out to your globally-deployed team. And what a message it was: retention, recruiting, maintenance, delayed delivery of new ships…it covered everything that might potentially undermine the RCN’s ability to fulfill it’s sacrosanct “readiness commitments in 2024 and beyond.” Given that the Navy’s motto is Ready Aye Ready, you can imagine how serious the situation must be if the Commander feels the need to warn his team that it might not be able to meet it’s traditional commitments. Full credit to NDHQ’s MND & CDS for not undercutting this frank assessment (see the VAdm Topshee Substack interview with Paul Wells, for example), given every government or military’s reflexive instinct — the world over — to control uncomfortable narratives.
None of his message should be misunderstood as capitulation by VAdm Topshee, as he goes on to vow, for example, that crewing the new ships as they come into service as being a “considerable challenge that we cannot and will not fail.”
Having had the honour of being close to the RCN family for more than a decade, I can tell you that the challenges raised are truly more complicated than they sound. I can attest that our military leaders have been seized with these core issues for many years. And it’s going to take more than money and talent to even begin to solve the obstacles currently facing our military personnel.
But before we get to the “So, now what?” part of the blog, the topic warrants a bit of perspective.
When I look back at our first century of naval service, what truly stands out for me is how closely the story of your Navy parallels the story of the nation itself. It is a story of service, of a long and ceaseless watch in which those who wear “Canada” on their uniforms take great pride, because we know that Canada’s place in the world was secured in part through the contributions and sacrifices of sailors and maritime aviators.
I can’t pretend to foresee all the stormy seas that await our Nation (see prior representative post “Talking past each other” Nov 7-23) in the future; but I am sure of these three things as it relates to VAdm Topshee’s video:
The Royal Canadian Navy needs to have the right tools to fulfill the tasks it will be assigned in the coming decades.
For workers and business owners across Canada, the jobs these shipbuilding projects will create come at a time when our manufacturing employment base would welcome a shot in the arm.
We need to be more innovative when it comes to recruiting, posting and retention. There’s no point in building new ships if we don’t have the right people to crew them.
Let’s start with equipment: Large warships that can sail for weeks at a time off the shores of Taiwan, or in our Arctic, are hard to come by. It’s not like going to the local Chevrolet dealership when you’ve won a big contract in your business and you need to buy a new panel van to fulfill your new customer’s need. As the sailors of today squeeze as much juice as they can out of our existing blue water frigates, it took the commitment and foresight of the Mulroney government to start laying the keels of our current frigates and coastal defence vessels back in the 1980s. That was a looooong time ago.
Although you might associate it with the City of Halifax, the original $9 billion Canadian Patrol Frigate procurement saw 19% of its Canadian content wind up in the hands of Ontario-based companies, more than any other region of the country. More recently, an Ontario-based company undertook $1.4 billion of work for the modernization of these same frigates, which represented about half of the entire project—a multi-faceted and highly complex procurement, by the way, that was on time and on budget.
That was unfortunately followed by a long pause — one that sailors are paying for today, as new Defence Minister Bill Blair immediately recognized upon taking the helm at DND.
In June 2010, then-Prime Minister Stephen Harper announced that Canada would have something called a National Shipbuilding Procurement Strategy. Although Canada has a long history of building our own vessels, the industry has suffered from a series of boom-bust cycles over the decades. Shipyards get busy and then the workers get laid off or the company goes bankrupt once the multi-year construction project is completed.
The government of the day announced several new classes of ships for the RCN:
First, a replacement surface combatant for our twelve general purpose ‘workhorse’ frigates, as well our four Iroquois-class destroyers (Ed note: that’s why the CSC procurement is for at least 15 ships vs 12);
Second, new Arctic & Offshore Patrol Ships, which provide the RCN with a capability to operate in our High North;
Third, a replacement for our replenishment ships.
Which, along with investments in the Coast Guard, and a replacement submarine, will give Canada the tools she will need to protect our sovereign interests, both at home and abroad, for much of what remains of the 21st century. The ships we launched 35 years ago aren’t going to last forever, and I think the Harper Government did the right thing when it announced a prudent replacement strategy. Whether or not it was sufficient, even a tad overambitious — with the benefit of hindsight — may now be on the table for discussion. That said, conversations of the “Would-a, Should-a” type aren’t going to get you closer to sailing a new batch of ships. Tempting as it is.
It must be acknowledged that the National Shipbuilding Strategy wasn’t just about catching drug runners in the Caribbean, protecting tankers in the seas off Somalia, or delivering aid to Haiti after an earthquake. There was an economic impact to all of this as well.
The construction cost of these new combat, Coast Guard and ice breaking vessels will not be cheap. We already know that the two key shipyards are based in North Vancouver and Atlantic Canada. But these ships will be filled with electronics, and engines, and steel, and communications gear — much of which firms in Central Canada are in line to produce.
But getting from the effective but aging fleet we operate today to that highly capable fleet of the future requires our collective commitment as voters and taxpayers. Here comes the “gulp” part….
The reality is that “Defence Inflation” is accepted to be 5-10% per annum, all-in, depending on the item. Despite plenty of academic study, I can’t tell you why that is exactly, when overall inflation in most years is less than half those figures; but it’s a reality just the same. Which means that if a government announces the intention to design, procure and build a batch of 15 ships for ~$25-26 billion in 2012, the “cost” of those ships won’t remain at $26 billion in 2024, assuming we’re still in the pre-production phase of the build. And that cost estimate is before you pay for the crew, fuel and maintenance that’s required to send that ship, say, to the Baltic Sea when Russia attacks Ukraine. The last Canadian Surface Combatant (“CSC”) cost estimate was $56-60 billion (Feb-22), meaning that the cost had about doubled over the decade — reflecting annual inflation of ~7%; given what’s going on with the cost of everything in society, one can’t expect the next estimate to be lower than that range.
Adding grist to the mill, the Parliamentary Budget Officer tries to anticipate what the entire CSC program will cost over the ship’s multi-decade lifetime, at $306 billion, understandably causing confusion for all but the most avid observers when such figures hit the press. It will not cost $306 billion to build 15 ships.
There are two topics at play here that folks seem to forget. 1) Whatever we announced in 2012 will cost a lot more when the time comes to cut the cheque a decade or two later, and 2) that the “total cost of ownership” will be in addition to the original estimated purchase price should surprise no one: the sticker price on the window of your new Chev doesn’t include the cost of insurance, gas, parking, snow tires, oil changes or necessary, longer term repairs.
Obviously, the only way to avoid serious “Defence Inflation” is to buy something off the shelf as immediately as you can, just as the Harper government did when it acquired four C-17 aircraft in 2007. Unlike Light Armoured Vehicles, for example, Canadian industry doesn’t have a capacity to design and build heavy-lift military aircraft.
For reasons that are understood by some, there’s an inclination to construct naval ships in Canada, but not niche military aircraft, despite the fact that such ships are likely far more complicated to design, build and outfit. If the National Shipbuilding Strategy works as designed, that may only become clear in, say, 2065, when our domestic yards are still humming with business and institutional knowledge. As VAdm Topshee pointed out last week, substantial effort is going to be required to keep the 12 current frigates going while the CSC procurement process carries along through to its conclusion. As of the last formal update on Feb 18-22, “the construction of the first CSC vessel is expected to begin in 2023/2024.”
I had two lines about gov’t procurement when I took the reins of the inaugural Windsor-Detroit Bridge Authority Board in 2014: “The sooner we start, the sooner we’ll finish,” and “If we don’t start, we’re never going to finish,” depending on the hurdle that was being thrown in front of us by Treasury Board or Transport Canada Officials on any given day. And this was on an infrastructure project that was recognized as the government’s highest priority. Imagine what it must be like if you’re trying to procure something that conflicts with other, equally important spending pressures?
The best way to keep costs down in any large government procurement is to avoid bureaucracy, delay and, yes, outright stupidity. As far as the CSC is concerned, each year that passes further strains the existing frigate fleet, serving to increase maintenance costs far beyond whatever had been modelled back in the early 1990s. And that additional planned/unplanned maintenance puts even more pressure on the Navy’s skilled marine trades, a talent category that’s already hard to retain when the private sector is in hot pursuit of the same folks.
“Talent” is a good segue to the other key threat(s) identified in VAdm Topshee’s overview: recruiting and retention. This wasn’t news to the Canadian military family, as Chief of the Defence Staff Gen. Wayne Eyre had made clear in 2022: "I'm very, very worried about our numbers. And that's why we're putting as a priority effort -- the priority effort -- the reconstitution of our military."
Even as an insider-outsider, it’s impossible for me to weigh how much of the current recruiting / retention problem is due to lack of new equipment, low unemployment, historical culture stains, Covid-19 vaccination policies, pay and benefits, and limited foreign mission opportunities.
Things are clearly tough right now, and acquiring modern gear is only part of the equation. I’m hopeful that our military leaders will be given both the latitude and funding to find, train and retain the personnel that are needed to fill the ~10,000 roles that are currently empty in the Canadian Armed Forces. I think folks understand their “purpose,” and the “culture piece” is front of mind for every military leader. But as VAdm Topshee made crystal clear, recruiting has been a challenge for more than a decade.
Every Canadian understands why the Armed Forces needs its candidates to undergo a Medical exam, pass an Aptitude Test, and be sufficiently trustworthy to be granted a Security Clearance. What will be hard to comprehend is why that takes two years or more to complete, no matter how basic the trade.
The G20 militaries that have tried to use outside recruiting professionals to solve their intake problems aren’t claiming “victory” just yet, and every U.S. military branch (other than the Marines) missed their recruiting target last year. As much as that’s context, it’s not going to fix the problem here at home. The “no fail” mentality that our troops bring to bear when they’re under fire in the field, whether it be 1943 or 2013, is warranted on the recruiting front in 2023, too.
The global threat environment is as serious as it’s been for decades. Canada is an export nation, and the fact that 90% of the global economy moves across the oceans of our planet makes it essential that we have a modern and highly-skilled naval capability. As a wealthy and populous democratic nation, we cannot expect the U.S., U.K., French, German and Australian taxpayers to pick-up our tab. Freedom isn’t free, which most of us understand.
If you listen carefully, it sounds as though our military leaders are at “Actions Stations.” We should heed their warnings.
MRM
(note: this post reflects a personal Opinion and is in no way meant to be on behalf — or with the prior knowledge or consent of — any other organization or individual)