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2008-2009
Reports on Plans and Priorities

National Defence

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The Honourable Peter G. MacKay, P.C., M.P.
Minister of National Defence

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Table of Contents

SECTION I: DEPARTMENTAL OVERVIEW

Minister’s Message

Management Representation Statement

Raison d’être

Organizational Information

Program Activity Architecture

Voted and Statutory Items Displayed in the Main Estimates

Departmental Planned Spending and Full-Time Equivalents

Summary Information

SECTION II: ANALYSIS OF PROGRAM ACTIVITIES BY STRATEGIC OUTCOMES

Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces

Conduct Operations

Contribute to Canadian Government, Society and the International Community

SECTION III – SUPPLEMENTARY INFORMATION

Table 1a: Departmental Links to Government of Canada Outcome Areas

Table 1b: Link to Government of Canada Outcome Areas

Table 2: Sustainable Development Strategy

Table 3: Cost Estimates for CF International Operations

Additional Financial Information

SECTION IV: HUMAN AND FINANCIAL RESOURCES TABLES ON SELECTED PORTFOLIO ORGANIZATIONS

Table 1: Reserve Force

Table 2: Communications Security Establishment Canada

Table 3: Office of the Judge Advocate General

Table 4: Office of the Ombudsman for the Department of National Defence and the Canadian Forces

Table 5: Defence Research and Development Canada

Table 6a: National Search and Rescue Secretariat

Table 6b:  Search and Rescue (SAR) Personnel Requirements (FTEs)

Table 6c:  Costs by Participating Department/Organization

SECTION V: INTERNAL SERVICES

Management and Oversight Services

Financial Management Services

Facilities/Asset Management Services

Information Management Services

Legal Services

Public Affairs / Communications Services

Evaluation Services / Internal Audit Services

Other Support Services

SECTION VI: ADDITIONAL INFORMATION

Appendix A: Legislation and Regulations Administered

Appendix B: Key Partners and Stakeholders

Appendix C: DND/CF Strategy Map

Appendix D : Contact Information

Appendix E: List of Acronyms

Section I: Departmental Overview

Minister’s Message

As Minister of National Defence, I am honoured to present to Parliament the Report on Plans and Priorities for 2008-2009.

This report reflects the integration of the Treasury Board Program Activity Architecture (PAA) framework and the management of National Defence. The PAA provides a clear means to communicate the relationship between resources and results when it comes to:

• ensuring that the Department and the Canadian Forces (CF) have a relevant and credible capacity to meet their defence and security commitments;
• contributing to domestic and international peace, security and stability by achieving success in assigned missions; and
• promoting good governance and Canadian identity, and exerting influence in the global community.

Our military is a key element in the whole-of-government approach to defence and security. In the coming months, we will continue to explore measures to increase the total effective strength of the CF in order to address the challenges posed by greater operational demands and attrition rates, and to ensure the sustainability of a viable and effective defence force. We are also committed to modernizing the CF thereby ensuring our country possesses a first-class modern military that can effectively respond to security challenges in Canada, in our hemisphere and around the world. The announcement in Budget 2008 of a long term funding plan for the CF will go a long way towards helping us fulfill this commitment.

The primary role of the CF remains to achieve excellence in domestic operations. In an increasingly complex security environment, the role of the military to protect Canada and its sovereignty is of paramount importance. As part of our Canada First Defence Strategy, we will increase the CF capability footprint across Canada, to enhance their ability to monitor and control our territory and approaches, and to take part in search and rescue operations and assist civil authorities in responding to emergencies, including in the Arctic. In addition, we will support the Royal Canadian Mounted Police-led security mission in preparation for the Vancouver 2010 Olympic and Paralympic Games, demonstrating our commitment to assisting our Canadian security partners. The CF will also continue to work with their American counterparts in the defence of North America.

The Government is also committed to maintaining a leadership role abroad. In this context, the CF will continue to help restore peace and security in troubled areas. Canada's ongoing contribution to the United Nations-mandated, North Atlantic Treaty Organization-led mission to restore stability to Afghanistan will remain the primary focus of CF operations overseas. Indeed, we are committed to achieving sustainable progress in that country. That is why the Government accepts the analysis and recommendations of the Independent Panel on Canada's Future Role in Afghanistan (the Manley Panel), and is committed to taking action accordingly.

To protect Canada and its interests abroad, we rely on the dedication and commitment of all members of the Defence team, both military and civilian. I am proud to lead this great national institution. I look forward to continuing my work with Canadians and Members of Parliament and the Senate to strengthen our Forces, and to provide ongoing support to our courageous men and women in uniform.

 

 

The Honourable Peter G. MacKay, P.C., M.P.
Minister of National Defence

 

 

Management Representation Statement

I submit for tabling in Parliament, the 2008-2009 Report on Plans and Priorities (RPP) for the Department of National Defence.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2008-2009 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

• It adheres to the specific reporting requirements outlined in the Treasury Board Secretariat (TBS) guidance;
• It is based on the department's strategic outcomes and program activities that were approved by TBS;
• It presents consistent, comprehensive, balanced and reliable information;
• It provides a basis of accountability for the results achieved with the resources and authorities entrusted to the DND/CF; and
• It reports finances based on approved planned spending numbers from TBS.

 

Robert Fonberg
Deputy Minister

 

Raison d’être

The Defence Mission

The mission of the DND/CF is to defend Canada and Canadian interests and values while contributing to international peace and security.

Under Canadian defence policy, the Canadian Forces (CF) are called upon to fulfill three roles:

• protect Canadians at home;
• defend North America in cooperation with the United States; and
• defend Canadian interests abroad.

To carry out these roles successfully, the CF maintain a range of military capabilities including modern, combat-capable sea, land, air and special operations forces.

The Defence Portfolio

The Department of National Defence (DND), the CF and a group of related organizations and agencies, including the Communications Security Establishment Canada (CSEC) and Defence Research and Development Canada (DRDC), carry out the Defence mission.

The CF also maintain the following:

• a police service, comprising the Military Police and the National Investigation Service, operating under the technical supervision of the Canadian Forces Provost Marshal;
• a justice system administered under the superintendence of the Judge Advocate General;
• chaplaincy services;
• extensive communications networks in Canada and abroad;
• firefighting services;
• medical and dental services because CF members are excluded from both the Canada Health Act of 1984 and the Public Service Health Care Plan;
• youth programs, specifically the Canadian Cadet Program and the Junior Canadian Rangers;
• the Canadian Defence Academy;
• the Canadian Forces Grievance Authority;
• the Canadian Forces Housing Agency; and
• the Canadian Forces Personnel Support Agency.

Defence also includes the following organizations under the responsibility of the Minister of National Defence:

• the Office of the Judge Advocate General;
• the Office of the Ombudsman for the Department of National
  Defence and the Canadian Forces;
• the National Search and Rescue Secretariat; and
• Commissioner Canadian Security Establishment.

The National Defence Act establishes DND and the CF as separate entities operating in close co-operation under the authority of the Minister of National Defence. The Minister of National Defence is responsible for the administration of the statutes, regulations and orders listed at Appendix A. The National Defence Act also establishes a Deputy Minister to be responsible for policy, resources, interdepartmental co ordination and international defence relations, and designates the Chief of the Defence Staff, the senior serving officer of the CF, as the person "… who shall, subject to the regulations and under the direction of the Minister, be charged with the control and administration of the Canadian Forces."

The Canadian Forces Grievance Board and the Military Police Complaints Commission report to the Minister of National Defence although they are not part of the Department of National Defence. This reporting arrangement and organizational status are designed to ensure accountability while maintaining an arm's-length relationship.

Specific accountability for results and associated performance measurement areas at the level of the Assistant Deputy Ministers, the Environmental Chiefs of Staff (ECS) and Operational Commanders are detailed in the Defence Plan.

Organizational Information

 

Organization Chart

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Defence Key Partners and Stakeholders

Defence works with many Canadian and international partners that help support its mission, programs and activities. The broad scope of the Defence mandate is reflected in the complexity and diversity of its partners and stakeholders. Please refer to the complete listing at Appendix B.

Overview of Delivery Mechanisms

The rules and principles governing Government grants and contributions are outlined in the TBS Policy on Transfer Payments <http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12257>. Transfer payments constitute transfers of money, goods, services or assets made from an appropriation to individuals, organizations or other levels of government, without the federal Government directly receiving goods or services in return, but which may require the recipient to provide a report or other information prior to receiving payment. These expenditures are reported in the Public Accounts of Canada <http://www.pwgsc.gc.ca/recgen/text/pub-acc-e.html>.

The following website provides additional information on grants and contributions awarded by Defence: http://www.admfincs.forces.gc.ca/pd/gc/overview_e.asp?sel=pd.

Program Activity Architecture

Treasury Board approved the new Management, Resources and Results Structure (MRRS) for Defence on 30 August 2005. In accordance with Treasury Board policy, the Defence MRRS consists of three elements: a Program Activity Architecture (PAA); clearly defined and measurable strategic outcomes; and a description of the current governance structure that outlines the Department's decision-making mechanisms, responsibilities and accountabilities, as described below.

The three strategic outcomes for Defence are:

• Canadians' confidence that DND and the CF have relevant and credible capacity to meet defence and security commitments
• success in assigned missions in contributing to domestic and international peace, security and stability; and
• good governance, Canadian identity and influence in the global community.

Defence in effect is comprised of only one program, namely "The Defence Services Program". It is not a program-based organization as are other federal departments. As such, Defence's PAA encapsulates the three main functions of Defence to deliver on its mission and contribute towards its strategic outcomes. Defence generates multi-purpose forces trained and prepared for the eventuality of an operation; conducts operations when needed; and interacts with domestic and international communities for the prevention of incidents.

Defence has been migrating from a Cold War threats-based planning model to a capability-based planning model, responding to asymmetric threats, which is consistent with our allies' current planning and management. Once capability-based planning and management is fully implemented, it will embody the spirit of MRRS policy requirements. The Defence PAA is consistent with capability-based planning and represents the multi-purpose nature of our capabilities. This allows us to leverage the same resources in the most efficient manner while maintaining the ability to contribute to several outcomes at once.

Each program is composed of three levels: program activities, program sub-activities and program sub-sub-activities. The activities that make up each program are causally linked to produce the program's main output, and each program output contributes or leads to a strategic outcome.

Internal Services, a parallel but separate construct, provides a place to list the organizational entities, such as finance and information management, that do not directly produce program outputs, but support and provide coherence to all the program activities. The costs of Internal Services activities are distributed across the three program activities according to a pro-rated formula.

The PAA structure is distinct from the organizational and financial structure of Defence and the CF under departmental Assistant Deputy Ministers and the ECS. An electronic interface links the organization identification numbers and the associated financial tracking system consisting of fund centres and cost centres. There are also separately tracked Work Breakdown System accounts, for each Level One[1] (L1) organization with the PAA at the program sub-sub-activity level.

The governance structure of the MRRS outlines the decision-making mechanisms, responsibilities and accountabilities of Defence. It consists of the following:

• a corporate governance structure operating department-wide at the highest level to provide strategic, resource and management direction, decision-making and accountability for the whole institution and its programs;
• a governance structure for each program activity to guide program development and effectiveness, provide advice on the key contributing processes, and ensure accountability for program outcomes and results; and
• a process and functional governance structure for the overall business model, with its major processes and functional activities, to ensure effective process and functional management, functional policy alignment, and integration of each process to the whole business model.

Defence uses the MRRS to underpin departmental planning, management of the Defence Plan, resource planning and management, and performance monitoring and reporting - especially external reporting. As part of the full implementation of the MRRS policy, Defence is following the requirements of steps one to five as laid out within the Treasury Board Secretariat call-letter dated 14 December 2006. Currently, this involves the development of a Performance Measurement Framework of the PAA as Step II of the MRRS implementation. This framework aims to integrate much of National Defence's current performance measurement systems into an overall system. The framework also aims to develop performance indicators that are S.M.A.R.T. (Specific, Measurable, Achievable, Realistic and Time-Based).

The Performance Management Framework for the PAA will continue to be evolutionary. It is dependent on efforts to progress towards establishing and integrating readiness levels across the CF, rewriting the Defence Tasks, and the development of new data sources.

The Program Activity Architecture and Performance Management

To compliment National Defence`s PAA Performance Measurement Framework, a Strategy Map and supporting balanced scorecard provide Defence with a means of identifying potential problems before they escalate. Combined with risk management and leading performance measures, the strategy map and the supporting balanced scorecard are important industry-specific management tools that allow senior management to focus on performance issues that are critical and relevant to a military organization. More information on the Balanced Scorecard is available online at: http://www.vcds.forces.ca/dgsp/pubs/dp_m/pm/intro_e.asp#3.

In comparison, the developing PAA Performance Measurement Framework is a means of associating performance with all of National Defence's activities to provide an all-inclusive perspective of DND/CF`s performance and link it to the expenditure of all allocated funds. The PAA structure supports all of National Defence's results-based management and financial reporting. To ensure that both management tools support goal achievement, both the Strategy Map and the PAA share three common strategic outcomes, as referenced earlier. For more details see Appendix C.

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Defence Priorities for Fiscal Year 2008-2009

The Defence priorities represent a focused number of areas in which Defence will direct additional efforts over a fiscal year in order to address gaps in capability or capacity, or where broader government direction dictates that greater action be taken. They help to translate long- and medium-term goals and objectives into short-term direction for action, while recognizing the necessity of addressing the requirements of the current operating environment. Priorities do not define the Defence mandate or on-going duties and responsibilities, which are set out in legislation The National Defence Act, policy statements, government announcements/budgets and specific Deputy Minister/Chief of the Defence Staff (DM/CDS) direction. In addition, the Defence priorities do not preclude the allocation of resources to undertakings necessary for the successful execution of the Defence Services Program.

Defence priorities, which are linked to specific program activities in the Program Activity Architecture, are not listed according to their perceived importance. They are intended to assist Level One organizations to identify how they will support the advancement of the Defence priorities through specific initiatives within their planning submissions. Once approved within the business planning process, the planned efforts of Level One organizations are articulated to Parliament as Defence priority activity within the Report on Plans and Priorities (RPP). Furthermore, measures of success articulated within the RPP will permit the Vice-Chief of the Defence Staff and Chief of Programme organizations to track progress in advancing the priorities and facilitate follow-up reporting in the ensuing Departmental Performance Report (DPR).

The Deputy Minister and the Chief of the Defence Staff approved the Defence priorities for fiscal year 2008-2009.

Relationship Between Defence Priorities and Program Activities

The following crosswalk table was developed to show the relationship between Defence's priorities and program activities. This link ensures that high-level performance measurement and resource information for Defence priorities and related initiatives is reported through the program activities.

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Voted and Statutory Items Displayed in the Main Estimates

Vote or Statutory Item ($Thousands)	Truncated Vote or Statutory Wording	2008-2009 Main Estimates	2007-2008 Main Estimates
1	Operating expenditures	13,519,620	11,848,854
5	Capital expenditures	3,356,705	3,592,868
10	Grants and contributions	192,396	210,451
(S)	Minister of National Defence salary and motor car allowance	76	75
(S)	Payments under the Supplementary Retirement Benefits Acts	6,796	7,020
(S)	Payments under Parts I-IV of the Defence Services Pension Continuation Act (R.S., 1970 c. D-3)	1,493	1,550
(S)	Payments to dependants of certain members of the Royal Canadian Air Force killed while serving as instructors under the British Commonwealth Air Training Plan (Appropriation Act No. 4, 1968)	82	90
(S)	Contributions to employee benefit plans - Members of the Military	938,132	957,396
(S)	Contributions to employee benefit plans	278,456	263,300
	Total Department	18,293,756	16,881,605

Note:

1. The Main Estimates of 2008-2009 are $1,412.2 million higher than the Main Estimates of 2007-2008. This increase can be explained by the following: $815.2 million in additional funding for Canada First, $700 million to fund the expansion of the Canadian Forces, $209.8 million in funding for Tactical Airlift Capability Project, $200 million to address the shortfall in operating budgets (Sustainability), $190 million to partially offset the loss of purchasing power due to price increases, $170 million in funding for Medium Support Vehicle System Project, $150 million reprofiling from fiscal year 2007-2008 to fiscal year 2008-2009, $132 million in funding for Main Battle Tanks acquisition project, $105.3 million in additional funding for military pay raises, $89.7 million funding for Medium- to Heavy-Lift Helicopter Project, $89.2 million in funding for transfers and technical adjustments, offset by $1240.9 million reduction due to reprofiling previously approved budgetary resources, a $111.6 million reduction of the department's share of the Expenditure Review Committee reallocations and cost efficiencies, and $86.5 million reduction in annual spending required for the Strategic Airlift Capability Project.

Departmental Planned Spending and Full-Time Equivalents

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Notes:
1. Expected approval of items in the adjustments to Planned Spending Levels:

1. Reprofiling of expenditure authority for Budget 2005 and Budget 2006 major capital projects will be sought at the end of 2007-2008.
2. Reprofiling of expenditure authority for the Maritime Helicopter Project will be sought at the end of 2007-2008.
3. Spending authorities will be sought through 2008-2009 Supplementary Estimates (A). For 2009-2010 and beyond, spending authorities will be provided through the 2009-2010 Annual Reference Level Update.
4. Renewal of the program will be sought to ensure continuous funding resuming in 2010-2011.
5. Expenditure authority for implementation phase for Budget 2005 and Budget 2006 major capital projects will be sought during 2008-2009.
6. Spending authorities will be sought through 2008-2009 Supplementary Estimates (A). For 2009-2010 and beyond, spending authorities will be provided through the 2009-2010 Annual Reference Level Update.
7. Spending authorities will be sought through 2008-2009 Supplementary Estimates (A). For 2009-2010 and beyond, spending authorities will be provided through the 2009-2010 Annual Reference Level Update.

Summary Information

OVERVIEW OF FINANCIAL RESOURCES BY PAA

Financial Resources - All

($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Departmental Spending	18,000,610	18,852,539	19,411,699	19,423,022
Capital spending (included in Departmental spending)	3,592,868	3,762,860	4,146,257	4,189,249

Overview of Human Resources

Human Resources – Full Time Equivalents (FTEs)

(FTEs)	Forecast FTEs1 2007–2008	Planned FTEs2 2008–2009	Planned FTEs 2009–2010	Planned FTEs 2010–2011
Regular Force3	64,779	66,161	66,992	67,742
Class C4	1,400	1,400	1,400	TBD5
Total Military FTEs6	66,179	67,561	68,392	—
Civilian7	25,8288	25,0009	25,0009	25,0009
Total	92,007	92,561	93,392	—

	Forecast 2007-2008	Planned 2008-2009	Planned 2009-2010	Planned 2010-2011
Primary Reserve paid strength (All Classes)10	26,000	26,000	26,000	26,000
Primary Reserve total strength (All Classes)11	35,500	35,500	35,500	35,500
CIC	7,500	7,500	7,500	7,500
CA Rangers12	4,365	4,525	4,685	4,845

Notes:

1. Forecast FTE count is based on current strength numbers (December 2007) plus end-year growth forecast.
2. Planned FTE counts are based on planned establishment numbers.
3. This number reflects Regular Force Planned Total Strength. Current fiscal framework limits Regular Force expansion up to 68,000 by fiscal year 2011-2012. This strategic limit does not include personnel seconded to OGDs and Project Management Personnel Resources (PMPR) paid under Vote 5 projects.
4. Class C members currently augmenting operationally deployed forces for Task Force Afghanistan (TFA). Class C are being reported separately to maintain visibility of reservists employed in support of deployed/contingency operations.
5. Class C commitment for TFA past February 2009 is currently unknown.
6. Military Full-Time Equivalent statistics include Class C.
7. Civilian FTE statistics include Communication Security Establishment Canada (CSEC), National Search and Rescue Secretariat (NSS) and the Office of the Ombudsman.
8. Approximate Civilian FTE end fiscal year 2007-2008 forecast figure based on 25,828 FTE count at the end of the third quarter (December 2007).
9. Long term sustainment of the civilian workforce has been established at 25,000 FTEs. In preparation for expected increased attrition with "baby boomer" retirement, the Department is currently developing investment opportunity options to hire above the 25,000 limit for the next five years.
10. Primary Reserve average monthly Paid Strength reporting, planning and allocations are based on monthly reports provided by ADM(Fin CS)/DSFC and ADM(IM)/DHRIM. Current fiscal framework limits Reserve Force expansion up to 26,000 (Average Paid Strength) by fiscal year 2011-2012.
11. Primary Reserve Total Strength reporting, planning and allocations are based on monthly reports provided by ADM(Fin CS)/DSFC. Primary Reserve Total strength figure is a forecasted end-year snapshot.
12. Canadian Ranger expansion to 5,000 by fiscal year 2011-2012.

In order to ensure that the CF are better prepared and equipped to meet evolving domestic and international defence requirements, the Government of Canada indicated its intent to increase the size of the Regular Force to 75,000 and Primary Reservists paid strength to 35,000. CF force expansion is currently targeted at 68,000 Regular Force and 26,000 Primary Reserve paid strength personnel (achieved) by fiscal year 2011-2012. This growth will provide additional military personnel resources that will be used in the coming years to sustain international operations, to prepare for Olympics 2010 and to support CF transformation efforts.

Within the current fiscal framework, and with the increased focus on high operational tempo, transformation and military expansion, the longer-term sustainment of the civilian workforce will be 25,000 Full-Time Equivalent (FTE) personnel. This level is seen as realistic in light of expected increased retirements (depicted on the Retirement Eligibility graph below) and a declining national labour force. Defence initiatives such as apprenticeship programs will help alleviate the upcoming workforce renewal challenges.

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 Program Activities by Strategic Outcomes

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1. The Defence priorities are described in detail on pages 11-14.

The Benefits of Defence Investment by Strategic Outcome

Defence is constantly looking at ways to improve its ability to defend Canada and Canadians, promote Canadian interests and values, and enhance Canada's role in the world. A carefully planned program of modernization and transformation is improving the ability of the CF to meet the challenges of the evolving security environment. Investment in defence capabilities ensures that Canadians can have confidence in National Defence's ability to meet defence and security commitments, to succeed in assigned operations and tasks, and to demonstrate Canadian values through leadership and good governance.

Confidence that DND and the CF have Relevant and Credible Capacity to meet Defence and Security Commitments

Fulfillment of the CF's roles is founded on the production of multi-purpose forces at high readiness for integrated employment on combat, security, and humanitarian operations. Canadians can be confident that their CF will have a range of military capabilities, including modern, combat-capable sea, land, air and special operations forces, ready for missions and tasks when called upon by the Government of Canada.

Defence recognizes that adjustments to Canada's evolving security environment requires building the forces of the future while serving the current needs of Canadians. To respond to those ongoing and future employments, the CF is transforming and modernizing its maritime, land, air, and special operations forces to meet the Defence challenges of the 21st century. The three services, embodied in the Environmental commands, are responsible for the generation of naval, land and air forces that are recognized internationally for their exceptional competence and professionalism. A Strategic Capability Roadmap, currently in development, will provide the blueprint for the next generation of maritime, land, aerospace and special-operations capabilities that fit the Government's policy objectives for defence. The Department and the CF will be concentrating special effort in the recruitment, development and retention of civilian and military members to renew and strengthen Canada's Defence Team. In this area, the Chief of Military Personnel is transforming the function of attracting and recruiting sufficient military personnel to generate and sustain authorized force structures and levels.

Success in Assigned Missions in Contributing to Domestic and International Peace, Security and Stability

The outcome of assigned missions is a significant determinant of the strategic impact the Government will have to shape and protect Canadian interests. The operational focus of Defence highlights a deep appreciation of the significance of each mission.

The defence and security of Canada remains the CF's first priority. Canada COM is responsible for conducting all CF operations in Canada and North America. Supported by an integrated operational-level command headquarters, the Commander of Canada COM will employ assigned Defence assets to effectively pre-empt and meet threats and emergencies within Canada. Canada COM is also responsible for leading Canadian military operations related to the defence of North America and the maintenance of continental security in co-operation with the United States, except for operations under aegis of the North American Aerospace Defense Command (NORAD).

Historically, more than 9,100 CF members are employed daily in roles supporting domestic operations. These operations are varied in nature and include the provision of domestic security to high profile events within Canada in support of other government departments and agencies. The CF also conducts surveillance patrols of Canada's territorial, aerospace and maritime approaches, concentrating on areas where Canada's interests are most likely to be challenged, while continuing to ensure the safety of Canadians. The significance and visibility of this role is clearly demonstrated by the number of search and rescue incidents (surpassing 9,200) that the CF responded to in 2007.

To meet our international defence and security commitments, the CF's Canadian Expeditionary Forces Command (CEFCOM) will provide the planning, rapid response and oversight capabilities to effectively conduct all overseas operations, including humanitarian, peace support and combat operations. The maritime, land, air and special force assets necessary to provide assistance to humanitarian operations and conduct peace support or combat operations wherever they are required internationally will be employed by commander CEFCOM. The CF will conduct these operations in concert with national and international partners to achieve timely and decisive effects in support of Canada's national interests.

The CF will deploy two separate rotations over the coming twelve-month period, in order to sustain a force of approximately 2,500 personnel on the ground in Afghanistan. Of each rotation, approximately 1,500 will be land-force Regular Force personnel with a further 500 army Reservists and the balance composed of personnel drawn from across the other environmental commands. These numbers do not include many specialists who deploy to theatre for short periods in response to specific technical needs. Although Afghanistan is expected to remain CEFCOM's main effort during this period, there are close to 300 additional personnel deployed world-wide in support of other international missions that collectively contribute to international peace, security and stability.

Reservists currently comprise approximately 20 percent of DND's deployed strength abroad, with the majority supporting international efforts in Afghanistan. CF Transformation and anticipated commitments in international operations suggest that this rate of reservists' participation in operations will be maintained, if not increased, under the Integrated Managed Readiness System.

Canadian Special Operations Forces Command (CANSOFCOM) will maintain the ability to deploy independently, or in support of Canada COM and CEFCOM, with a broad spectrum of agile, high readiness, special operations capabilities. The Canadian Operational Support Command (CANOSCOM) has the important operations-support mission of ensuring fast and efficient logistical and air and sealift support to all national or international operations.

Good Governance, Canadian Identity and Influence in the Global Community

The Department of National Defence and the CF reinforce Canada's identity at home and strengthen our reputation and influence abroad. DND is held to the same standards of governance as any other federal department, including legislation that cuts across departmental jurisdictions and with an increased emphasis on accountability. For their part, the CF are also subject to the additional stipulations of the National Defence Act and the Code of Military Discipline. The Department and the Forces will meet the requirements of these codes of conduct as they continue to evolve.

Strengthening Canadian Identity

Taken together, DND/CF form one of Canada's strongest national institutions. They maintain a presence in every province and territory across Canada. The membership of both organizations is drawn from every walk of Canadian life, and both organizations have sought to become more representative of the dynamic nature of Canadian society. Reserve units and Ranger patrols in Canada's North, supported by Cadet units and Junior Ranger patrols, further strengthen the linkages between the CF and Canadian society.

The work of the CF also reinforces the image Canadians associate with their country. The CF are regularly employed for search and rescue, disaster relief, and protecting Canada's sovereignty and resources. In particular, as Arctic security issues continue to emerge, Canadians will expect the CF to play a suitable role in protecting Canadian interests in this vital region.

The Department's activities also strengthen Canada's national and local economies, as well as the health of Canadian industry and the country's technological base. Defence will continue to make a vital contribution to the economic wellbeing of Canadians.

Promoting Canadian Values and Influence

DND/CF work abroad will continue to promote the deeply held Canadian values of democracy, freedom, human rights and the rule of law. Among the approximately 4,000 CF personnel deployed or stationed outside Canada, close to 1,350 of them are posted to diplomatic, liaison, exchange and alliance staff positions. These CF members further strengthen Canada's reputation as a compassionate and collaborative country working to bring peace and security to troubled regions of the world. The CF will continue to be instrumental in the Government of Canada's broader humanitarian relief efforts in response to natural disasters.

Apart from their role in military operations, Defence will also contribute to building Canada's reputation for establishing good governance abroad. Whether through offering peacekeeping training (both at home and abroad), promoting democratic concepts of civil-military relations, or contributing to the Strategic Advisory Team in Afghanistan, civilian personnel and military members will continue to contribute to foreign defence and governmental institutions in a way that reflects professionalism and expounds Canadian values. These efforts are appreciated not only by the recipient countries, but also by Canada's allies and other international partners.

PLANNING CONTEXT

Any number of domestic and international considerations will determine the context in which Defence planning takes place. These factors will not only shape the demands placed on Defence but also affect Defence policies, programs and activities. In order to successfully carry out our mandate, we must base decisions on a thorough understanding of these factors.

Internationally, the danger of large-scale conflict continues to be low, yet the world remains dangerous and unpredictable. The principal international security concerns relate to failed and failing states as well as intra- and inter-state conflicts, international terrorism and weapons of mass destruction. In particular, international terrorism will remain a serious threat for many years to come and the possibility that terrorists will obtain and use weapons of mass destruction in the future cannot be ignored. The international community will also continue to be concerned about humanitarian issues in failed and failing states and the potential for human suffering to escalate into wider conflict.

Regional issues will, as well, continue to draw the world's attention as the potential for wide-scale conflict in the Middle East and East Asia can never be entirely ruled out. However, the challenges of the international environment will not be faced in isolation and the need for Canada to continue working in close cooperation with our North Atlantic Treaty Organization (NATO) partners and other international organizations, to resolve issues of global concern, will remain fundamental to our defence planning and preparation efforts.

As past experience also demonstrates, the possibility of failed states serving as the gathering places of international terrorist organizations will be of concern. The Government has approved the mission in Afghanistan until February 2009. This mission requires close cooperation with other government departments and agencies, particularly Foreign Affairs Canada and the Canadian International Development Agency. Indeed, a comprehensive whole-of-government approach will continue to frame Canada's response to future international operations. Continentally, we will continue to work with Canada's closest ally, the United States, to defend North America through arrangements such as the North American Aerospace Defence Command (NORAD).

Domestically, protecting Canadians and defending Canada's sovereignty will remain as the CF's highest priority. Any effort to increase the number of personnel in the CF, and by extension its capabilities, will need to recognize the considerable economic and demographic changes taking place in Canada. Economically, the excellent fiscal situation has resulted in Canada becoming the only G8 country with a budgetary surplus. But having a robust economy can be double-edged as while a strong economy can mean more funding for Defence the competition for skilled and unskilled workers in what is a "hot-marketplace" will be very high. At the same time, the Canadian workforce is changing and these changes will challenge even the most careful, well thought-out expansion plans. For example, retirements from the CF will increase while the proportion of Canadians between the ages of 16 and 30 - the traditional pool of potential recruits for the CF - decreases.

Canada's ethno-cultural mosaic is also shifting, with immigration from non-European countries increasing and more Canadians than ever belonging to visible minority groups. In fact, immigrants now account for more than 70% of all Canadian labour force growth, a proportion that will grow to 100% in the next 10 years. Finally, half of Canadians between the ages of 25 and 35 have post-secondary education - either at university, college or technical school, giving Canada the highest rate of post-secondary achievement among Organisation for Economic Co-Operation and Development (OECD) member countries. These developments mean that Defence will need to strengthen human resources planning. As a start point, in recognition of changes in the labour market and to cultivate diversity, Defence will need to continue its diversity recruitment initiatives to meet the needs of the future.

Expenditure Management Review

This is the fourth year of scheduled reductions as Defence continues toward the goal of a steady-state reduction of $203 million by fiscal year 2009-2010. The Expenditure Review Committee (ERC) target fiscal year 2008-2009 will be $172 million. The specific efficiencies have been assigned in the table on the following page.

Expenditure Management Review

($ millions)	2008-2009	2009-2010
		(Steady-State)
PROGRAMME EFFICIENCIES / REDUCTIONS
O&M and National Procurement Support to Air Assets	$37.0	$53.0
Canadian Parachute Centre	$5.0	$7.0
Light Armour Vehicles	$7.0	$7.0
Non-military Vehicles	$7.0	$7.0
Total	$56.0	$74.0
Corporate Efficiencies / Reductions
National Capital Region – Staff, Operations and Maintenance	$52.4	$52.4
Materiel Acquisition & Support Optimization Project (MASOP)	$20.0	$20.0
Support for IM/IT Corporate Information Systems	$16.0	$29.0
Research and Development (R&D)	$15.0	$15.0
General and Administrative Support	$13.0	$13.0
Total	$116.4	$129.4
Target	$116.0	$129.0
Total ERC Target	$172.0	$203.0

Fiscal year 2008-2009 will see the steady-state targets reached for six of the nine efficiency areas, representing 85 percent of Defence's final target. The three remaining programme efficiencies for the reduction in Operations and Maintenance (O&M) and National Procurement Support to Air Assets, the Canadian Parachute Centre and Support for IM/IT Corporate Information Systems, representing an incremental reduction of $31 million, will reach steady-state values in fiscal year 2009-2010. The entire ERC targets have been programmed up to and including steady-state values since fiscal year 2005-2006 and all senior managers have had their current and future year financial resources reduced accordingly. The Department will continue to report annually on ERC until the entire steady-state reductions are in effect. More information is available on the following TBS ERC website: <http://www.tbs-sct.gc.ca/emis-sigd/ab-ap/index_e.asp>.

Procurement Reform Initiative

A component of the ERC exercise, procurement reform was intended to reallocate $2.5B over a five-year period - fiscal years 2005-2006 to 2009-2010 - as a result of procurement efficiencies. Departmental savings targets under this initiative were adjusted in Budget 2007. This program is now referred to as Budget 2007 Efficiencies, with the departmental target for fiscal year 2008-2009 being $145 million. Future-year adjustments to this savings target will be determined following a planned baseline review during fiscal year 2008-2009.

Transformation of the CF

CF transformation, a multi-year process initiated in 2005, is progressing as expected and is being closely monitored. The evaluations of the progress of transformation conducted in 2007 inform the fiscal year 2008-2009 stages of transformation which focus on refining national and regional command structures, clarifying strategic-level governance, outlining the strategy for force employment, force generation and force development, and codifying processes and procedures at all levels of the integrated Defence organization.

The CF will gain additional domestic experience by conducting both routine operations, including sovereignty patrols and contingency operations, such as in response to natural disasters and national emergencies. The CF will thus be enabled to more effectively engage in initiatives with departments and agencies at all levels of government. That experience will yield rich feedback for command structures and procedures and will energize centralized capability development work.

During the coming year, CF transformation initiatives will focus on further unifying command of operations, aligning strategic-level governance, as well as adapting processes and doctrine to the new operating environment.

Canada First Defence Strategy

Defence will continue to support the Government in further developing and implementing the Canada First Defence Strategy, which will help rebuild the CF into a modern, first-class military. Indeed, the CFDS will further enhance the military's capability to provide effective surveillance and protection for the country, cooperate in the defence of North America, and defend our interests abroad by contributing to global peace and security.

Investment Strategy

Defence has begun work on a comprehensive Investment Plan for the continued modernization and transformation of the CF. Many key capability announcements, such as the acquisition of strategic airlift, have already been made and will be found in the Investment Plan. The Investment Plan itself will present resource allocation plans for equipment, personnel, infrastructure and other essential contributions necessary for the fielding of new equipment and capabilities over the next 10 years. The success of the Investment Plan will also ensure long-term sustainment of all future plans.

The Investment Plan will be greatly influenced by the Capability Based Planning (CBP) exercise led by the Chief of Force Development (CFD). This work, commencing with an extensive examination of the Future Security Environment and the creation and study of Force Development Scenarios, will eventually lead to development of a new Strategic Capability Roadmap (SCR) in fiscal year 2008-2009. After an examination of the current force structure and capabilities against the perceived needs of the future is completed, the new SCR will describe the preferred set of capability alternatives and options to address any and all capability gaps believed present. The capability alternatives and choices provided in the SCR are expected to help decision makers determine what the CF require to meet the challenges of the evolving security environment. These capability choices will be captured and funded in the Investment Plan.

Impact of Operations

The incremental cost of CF participation in the Afghanistan mission will continue to affect defence planning in fiscal year 2008-2009. While additional government funding is anticipated to cover a significant portion of the total incremental expense, some costs will be absorbed within Defence's current reference levels as a reflection of operational and strategic decisions in support of the mission.

Funding requirements for all operations that exceed incremental funding provided from government or current internal Defence allocations will continue to be managed through DND business planning and governance processes to prioritize and redirect financial resources from lower priority activities as needed. As in past years, any reprioritization will direct funding away from routine equipment and infrastructure maintenance and will affect the Department's ability to address operating budget pressures. Readiness of the CF may be affected, dependent on the degree of reprioritization required.

Section II: Analysis of Program Activities by Strategic Outcomes

Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces

Strategic Outcome: Canadian's confidence that DND and the CF have relevant and credible capacity to meet defence and security commitments.

Defence plans for fiscal year 2008-2009 include ensuring the efficient conduct of current and future operations and recruiting and training personnel in order to expand the Regular Force to 68,000 personnel by fiscal year 2011-2012. Some initiatives announced by the Government, such as the establishment of a deep water docking and refueling facility in Nanisivik, Nunavut and the Air Expeditionary Wing in Bagotville, Québec will continue to be implemented throughout the reporting period.

To support decision-making efforts regarding major capital projects, the Chief of Force Development will continue efforts to create a Strategic Capability Roadmap and support the Chief of Program with updating the Defence Plan and the Investment Plan. The Defence Plan assigns a variety of operational tasks to the Department's senior managers that will be revised over the coming year to assign measurable readiness criteria to appropriate tasks. This will enable the Department to confirm the CF's ability to meet its defence and security commitments.

Program Activity: Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces – Total spending Net of Revenues
Resources ($Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Departmental Spending	14,614,397	15,047,593	15,489,007	15,506,067
Capital Spending (included in departmental spending)	3,370,129	3,390,779	3,774,966	3,815,408

Departmental and Capital Spending - Planned (Net of Revenue in $ thousands)

Departmental Financial Resources by PAA Sub-Activity Level	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces
Sub Activity:
Generate and Sustain Forces Capable of Maritime Effects	3,752,845	3,909,397	3,971,992
Generate and Sustain Forces Capable of Land Effects	5,542,977	5,671,141	5,665,405
Generate and Sustain Forces Capable of Aerospace Effects	3,243,349	3,386,832	3,399,654
Generate and Sustain Joint, National, Unified, and Special Operations Forces	1,432,397	1,423,256	1,347,077
Allocation of Internal Services	1,076,025	1,098,381	1,121,938
Total Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	15,047,593	15,489,007	15,506,067

Note:

1. This is the Department's first attempt at reporting planned spending figures by the sub-activity level of the program activity architecture, therefore the numbers are subject to continued revision and refinement

Capital Financial Resources by PAA Sub-Activity Level (included in Departmental Spending)	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces
Sub Activity:
Generate and Sustain Forces Capable of Maritime Effects	820,439	962,644	1,033,801
Generate and Sustain Forces Capable of Land Effects	599,817	709,166	721,065
Generate and Sustain Forces Capable of Aerospace Effects	1,513,669	1,638,141	1,662,623
Generate and Sustain Joint, National, Unified, and Special Operations Forces	355,445	346,380	265,158
Allocation of Internal Services	101,409	118,635	132,761
Total Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	3,390,779	3,774,966	3,815,408

Note:

1. This is the Department's first attempt at reporting planned spending figures by the sub-activity level of the program activity architecture, therefore the numbers are subject to continued revision and refinement.

CF Readiness Levels

Readiness is defined as a percentage of a full operational capability (FOC) that will be available for employment on a contingent operation in a specified time. The components of readiness are specified for each standing commitment - national or alliance. A Strategic Readiness Directive (SR Dir) will be released in the summer of 2008. The new SR Dir will collate all CF commitments and help to shape DND/CF expectations and requirements regarding CF readiness[2].  It will provide a common foundation that contributes to the prioritization and allocation of strategic resources within Defence.

Generate and Sustain Forces Capable of Maritime Effects

The Commander Maritime Command, also the Chief of Maritime Staff, is the principal source of expertise on the development, generation and employment of sea power. Maritime Command's most demanding effort is to generate and maintain combat-capable, multi-purpose maritime forces for employment by operational commanders at home and abroad.

The navy's challenge is to strike a balance between meeting current commitments and developing a navy that will be able to fulfill future commitments. The navy's strategic priorities are to:

• Produce Forces that succeed in operations. Success in operations is fundamental to the credibility of the navy as a force generator and, in turn, readiness is central to operational success. The CF's ability to maintain naval forces at high readiness for extended periods provides unique options to the Government.
• Transition the navy. The navy has made much progress over the past year in reinforcing the case for comprehensive investment in each component of the maritime capability. This force development momentum must be maintained. To this end, the CF will be continuing efforts towards replacing the surface fleet major combatants, and support the department in progressing the Joint Support Ship, the Halifax Class Modernization/FELEX and the Arctic Offshore Patrol Ship projects to effective project approval.
• Build future Maritime capability. Building the future navy depends on how well Canadians understand the importance of maritime capability to their security and prosperity. The CF has a fundamental obligation to ensure that public discourse is informed by our professional advice and judgment. To this end, the CF must develop an overarching strategy that includes plans for strategic communications, recapitalization of the fleet, naval infrastructure renewal, and personnel.

On the international front, the Navy will contribute a ship to the Standing NATO Maritime Group 1 (SNMG1) during the standby phase of NATO Reaction Force (NRF) 11 (July 2008 - January 2009). As part of the global campaign against terrorism we will continue to support OP ALTAIR, by delivering theatre level effects[3] in support of Task Force Afghanistan (TFA).

In the current resource constrained environment, it is understood that there are insufficient resources to fully support all of the operational readiness requirements. However, Defence will focus considerable resources more specifically on operationally committed assets in order to generate deployable, combat capable maritime forces. In terms of resource allocations, Defence intends to maintain the current force structure and focus resources on the prioritized force generation of the following activities:

• sustain one operational submarine for force generation and force employment taskings;
• generate high readiness (HR) units to support force generation and force employment taskings;
• generate full submarine operational capability;
• continue Halifax Class Modernization baseline preparations; and
• generate standard readiness (SR) units to support force generation and force employment taskings.

Generate and Sustain Forces Capable of Land Effects

Land Forces Command (LFC) is the CF's Centre of Excellence for land-based operations. As the primary force generator for domestic and expeditionary land based operations, LFC is responsible for providing validation training for other Environmental Commands (EC) and CF organizations deploying into a land-centric operation, ensuring that interoperability and efficiency are maximized in the current, increasingly joint environment.

Land Forces Command (LFC) operates within the larger context of the CF and the Department of National Defence and will continue to organize, equip, train, educate, generate, recover and sustain combat effective, multi-purpose land forces to meet Canada's defence objectives. These forces will be designed to excel within the context of full spectrum, joint and combined operations for both domestic and international operations.[4]

Experience in Afghanistan clearly illustrates that a decisive military force operating in a contemporary land-centric environment needs a wide range of CF capabilities beyond those inherent to LFC. Critical force enablers, generated by other CF organizations, are essential to LFC in supporting all priority lines of operations. While remaining focused on the CF Joint Task Force Afghanistan (JTF-AFG) mission, authorized to February 2009, LFC continually develops contingency plans that would support any government mandate beyond the current commitment.

LFC continues to plan and build for future operational requirements; however, the existing level of commitment in Afghanistan has consumed the resources of both our first and second lines of operation. A progressive reduction of the current level of CF overseas commitment would allow LFC to reallocate resources to a second line of operations. To sustain current and future force generation needs, the army will expand its Regular Force establishment to 21,903, which reflects real growth and component transfers related to transformation activities, while sustaining current Reserve Force numbers.

Force generation will aim to:

• generate a task force of a battle group and complementary task force enablers on the first line of operations while concurrently force generating a brigade size HQ capability, able to work in a joint, interagency, multi-national public environment;[5]
• generate a strategic reserve constituted around a combined arms sub-unit, dependant on resource availability; and [6]
• generate a second line of operations, which under current force generation demands will require significant force expansion.

Operational realities require the army to transform in a balanced manner consistent with its long-term vision for the Army of Tomorrow and to transition towards two lines of operation based on combined-arms teams. The integrated and complementary structures of the Regular and Reserve forces permit the effort to be distributed as follows:

• expeditionary operations conducted by Regular Force formations augmented by the Reserve Force; and
• domestic operations conducted by Reserve Force formations augmented by the Regular Force.

The Regular Force will transition into cohesive Affiliated Battle Groups operationally focused on full spectrum operations.^[7] The Reserve Force will augment the Regular Force and backfill personnel shortfalls within the army, balanced against the institutional and training requirements of the Army Reserve.

The Army Reserve is capped at Total Average Paid Strength of 17,300 and employs approximately 23 percent of its paid strength in full-time sustainment support to deployed operations, to the institutional army and to other CF organizations. The balance represents a fixed pool of personnel to spread across an ever-increasing variety of demands. The Army Reserve will significantly increase its force generation responsibilities, both in terms of depth (by providing reinforcement to both domestic and expeditionary operations) and of breadth (by providing unique capabilities not available in the Regular component, such as civil-military co-operation and psychological operations).

Training is vital to soldier development and to meet the challenges of training an accelerating flow of new soldiers, LFC will enhance its training systems and develop initiatives which will accomplish three primary objectives: expand the force, increase training capacity and reduce the requirement to augment the training institutions with field-force personnel.[8]

As the CF's Centre of Excellence for land operations, the LFC will continue to provide critical training, preparing all CF personnel for deployment to land operations through our individual training base (Combat Training Centre), our professional development system (Canadian Land Force Command and Staff College) and an integrated road to operations that takes deploying land Task Forces through simulated and field exercises culminating at the Canadian Manoeuvre Training Centre (CMTC).[9] CMTC, initially an internal army-focused training establishment, has evolved to become a critical CF enabler in preparing all CF personnel for operations in land-centric theatres and is now the premier instrumented field training venue for higher interoperability and training validation. CMTC will continue to provide training opportunities to other Environmental Commands and CF organizations ensuring maximum efficiency in the current, increasingly joint environment.

The sustainability of personnel and equipment are key issues. As army Regular and Reserve Forces experience greater operational demands and escalating attrition rates that are outstripping growth, there is an increasing need to expand the civilian component to effectively support the military component in its force generation activities. LFC will focus on a number of stressed trades, critical to the army, some of which can be offset by civilian expertise. With the need to create a more sustainable program base, achieving a viable mixture of manning levels and expertise between military and civilian personnel will require proactive planning and development of the personnel component. In addition, the equipment component will focus on a range of activities, such as new equipment capabilities, including the Medium Support Vehicle System, Tank Replacement Project, Mounted Soldier Survivability and the Weapons Effects Simulator.

The LFC construction plan aligns with departmental priorities and the Environment Program has made great strides in legal compliance and in respecting due diligence. Escalating infrastructure maintenance costs are challenging funding levels and significant progress must be made to stop the further deterioration of army realty assets. The definition of infrastructure encompasses the clearance of unexploded ordinance at legacy sites and is expanding to include sites declared surplus.

Generate and Sustain Forces Capable of Aerospace Effects

The new CF vision is very much enabled by aerospace power capabilities. Canada's air force is transforming and will continue to ensure that transformation activities result in more effective, relevant and responsive aerospace power capabilities for the CF.

Air force priorities include generating and maintaining the CF's capability to meet Canada's domestic commitment to North American Aerospace Defence Command (NORAD), national Search and Rescue (SAR), and other integrated CF operations at home and abroad.

The CF-18 Hornet supports a constant NORAD Alert posture and as part of the Air Expeditionary Unit (AEU), will be ready for deployment for worldwide taskings on notice. The ability to meet both of these commitments is interrelated. The CC-130 Hercules, the CC-150 Polaris and the new CC-177 GlobeMaster III fleets include the capability to provide air-to-air re-fuelling and have a dual-role in support of air defence.

The air force will continue to provide the capability to respond to aeronautical and maritime Search and Rescue (SAR) incidents in all parts of Canada and its internationally agreed SAR regions. Domestic SAR continues to be provided by the CH-149 Cormorant, the CC-115 Buffalo, the CC-130 Hercules and the CH-146 Griffon aircraft in Trenton (OP STARFISH).[10] The air force will generate forces to meet the CF SAR mandate while phasing in a new Fixed Wing SAR aircraft. Over the same period, the air force will provide the capability to render humanitarian assistance and conduct DART activities anywhere in the world; provide the capability to assist civil authorities in Aid of the Civil Power (ACP) operations; and aid in an air evacuation of Canadians from areas threatened by imminent conflict, in permissive and non-permissive environments.

In its strategic airlift role, the delivery of two CC-177 GlobeMaster III aircraft will enable the CF to deploy this new capability by flying missions in support of operations in Afghanistan. Delivery of the remaining two airframes is expected by April 2008. The CC-177 aircraft are expected to have full operational capability by summer of 2009.

Tactical airlift capability is provided by the CC-130 Hercules aircraft. The CC-130 fleet currently generates an Air Expeditionary Unit (AEU) committed to a Joint Task Force in Afghanistan. The tactical CC-130s, which are nearing the end of their operational life, will be replaced with the CC-130J aircraft. First aircraft delivery should be not later than 2010, with Initial Operating Capability (IOC) expected by fall 2011. Delivery of all aircraft should be achieved no later than 2012 with Full Operational Capability (FOC) projected for winter 2013.

Building on the experience gained through the operational employment of CU-161 Sperwer Tactical Unmanned Aerial Vehicles (UAVs) in Afghanistan, the CF will increase the use and expand the roles of that capability. The deployed CU-161 Sperwer capability will be maintained until February 2009. As part of the plan to advance CF airborne Intelligence, Surveillance and Reconnaissance and Control (ISR&C) capabilities, the CF plans the acquisition of proven, capable surveillance and strike capabilities. This will include the acquisition of UAVs under a DND UAV acquisition program, and the continued modernization and structural upgrades to the majority of the CP-140 Aurora aircraft fleet until such time as a future replacement capability is acquired.

The CP-140 Aurora long-range patrol aircraft and ship-borne CH-124 Sea King helicopters will continue to support maritime operations. The CH-124 Sea King will be replaced with the CH-148 Cyclone helicopter, with delivery dates to be determined. The Government has recently been informed by the prime contractor of a delay in the planned delivery date for the CH-148 Cyclone helicopter. Government representatives are currently conducting a detailed review of all aspects of the contractor's schedule to determine how to minimize the impact of these delays and to ensure that they will not affect the key performance and airworthiness requirements of the CF.

The CP-140 Aurora provides limited long-range northern sovereignty patrol capability as well as maritime air support to the navy and other government departments. The CP-140's traditional Anti-Submarine Warfare (ASW) focus will be reduced in order to develop the overall ISR&C capability within current resources.

A single Combined Forces Air Component Command (CFACC), located in Winnipeg, Manitoba, coordinates and tasks all air support to Canada COM and the subordinate Joint Task Forces (JTF), including Joint Task Force North (JTFN).

Air Command will continue to maintain the capability to provide forces able to operate as part of a multi-national coalition force, up to and including, mid-level joint and combined operations. These aerospace capabilities will be able to operate anywhere in the world and have the capacity to provide vanguard components of the Main Contingency Force for UN Operations. Moreover, the air force will continue to provide personnel to various NATO headquarters and continuously provide aircrews and other personnel to serve in the NATO Airborne Early Warning System, participate in NATO training and exercises, and provide the opportunity for allied air forces to conduct training in Canada.

As per the MND announcement on 20 July 2007, an Air Expeditionary Wing (2 Wing) will be established in Bagotville, Québec. 2 Wing will enable the rapid and decisive expeditionary capability in Canada, North America or abroad. An initial cadre will be in place in Bagotville in the summer of 2008 and an IOC will be in place by 2011.

To enable rapid capability development, Air Command created the CF Aerospace Warfare Centre. This unit will serve as the engine of air force transformation and will continue to work closely with other centres of excellence and deployable forces to develop aerospace power doctrine, explore new concepts, and make best use of lessons learned to improve the effective evolution of aerospace power. The air force is also leveraging new technologies to deal with asymmetric threats and will increasingly use space-based technology, such as satellites for beyond-line-of-sight communications.

Realizing that CF realty assets are deteriorating, Air Command will also direct activities to enhance and rebuild its infrastructure and facilities. The equivalent of 1.3 percent of the realty replacement cost on maintenance and repair activities undertaken in fiscal year 2006-2007 will be gradually increasing to 1.7 percent in fiscal year 2008-2009 and to 2 percent in fiscal year 2009-2010.

Joint, National, Unified and Special Operations Forces

The Canadian Forces Joint Headquarters (CF JHQ) is a rapidly deployable integrated, high readiness command and control team allocated to CEFCOM. It plans, reconnoiters and executes CF tasks by either utilizing its own resources or by employing Environmental Command generated and assigned forces.

CANSOFCOM

CANSOFCOM will continue to provide task tailored Special Operations Task Forces (SOTF) that generate a broad spectrum of agile SOF capabilities at high readiness to support CANADA COM, CEFCOM, NATO and other allies as directed by the Government of Canada. Their self-contained and comprehensive nature will ensure that they can respond immediately to threats at home and abroad. CANSOFCOM will be a strategic asset; conceived, built and honed for high risk tasks. In the Domestic security environment, it will complement the CF's role as the force of last resort by offering specific capabilities that no other agency can muster.

In the campaign against terrorism, it will be capable of applying subtle, discrete and surgically-precise kinetic and non-kinetic effects under the most hostile, difficult or politically sensitive conditions. CANSOFCOM-generated high-readiness task-tailored SOTFs will also be interoperable, and capable of operating in parallel with national and/or multinational domestic or mission-specific deployed task forces.

CANSOFCOM will continue to develop initiatives and programs, as well as an evolving force structure and capability with the capacity to provide the requisite direct effects in support of operations. Constant situational awareness will be maintained by a robust command structure and comprehensive command relationships with other commands, as well as the embedding of liaison officers with key CF counterparts and international allies.

CANOSCOM

The sustainment of current operations in Afghanistan continues to require significant effort. Although it is unlikely that a second major line of operation will emerge in the very near future, CANOSCOM must create the conditions that will enable the support and sustainment of a second theatre of operations.

The transformation of the Canadian Forces (CF) will continue in fiscal year 2008-2009. CANOSCOM will continue to support this effort, adhering to the CDS priorities to make the CF more relevant, responsive and effective. CANOSCOM's ongoing challenge is to provide even better support to CF operations, be they domestic, continental or expeditionary.

CANOSCOM will mount and deploy numerous technical assistance visits (TAVs), Supply Inspection Visits (SIVs), Rotation Supply Assistance Teams (RSATs) and Intermediate Staging Teams (ISTs) to ensure the effective movement into theatre and the efficient and effective support while in theatre of equipment and materiel. In addition, CANOSCOM stands ready to provide effective support to a wide range of domestic and international operational missions.

Long-Term Strategic Plan for Joint Collective Training

To maintain constant operational readiness of force elements, the CF will develop the necessary joint, collective training and force generation expertise and capacity to sustain the required forces in the most effective and efficient manner. Training will be monitored and standards measured in order to maintain high standards and to ensure appropriate accountability.

The Strategic Joint Staff will enhance the readiness of integrated capabilities through more centralized:

• synchronization and integration of joint and interagency training;
• design, development and conduct of exercises that involve strategic planning and crisis action planning; and
• management of the Collective Training and Exercise Account (CTEA) to support joint and interagency collective training.

The following bodies support the development of the CF Integrated Training Plan (CF ITP):

• the CF ITP Working Group to conduct the detailed development of the ITP; and
• the CF Integrated Training Board to conduct a strategic review, editing and endorsement of the ITP and associated strategic guidance documents.

Military Personnel Management

Regular Force

To generate and sustain military personnel capability for operations, at home and abroad and to ensure the sustainability of a viable and effective defence force, the CF recruits people from the civilian population and gives them the training and development they need to become operationally functional. Military personnel management is the complex system that addresses all aspects of recruitment, career management, training and education, health services, compensation, fitness, personnel support and recognition. Given the inherent risks and unique challenges of military service, Military personnel management must provide types and levels of support to CF members and their families that are often unlike those provided by other employers. The increased incidence of casualties of both injured and fallen, at levels not seen since the Korean War, has reinforced our operational and moral imperatives not only to ensure that the appropriate support mechanisms exist, but that they provide members with the confidence that their loved ones are well taken care of in their absence.

Expanding the CF is a national priority and will continue to be both an exciting opportunity and constant challenge to military personnel management. Force expansion has had a significant impact throughout the entire system beginning with the challenges associated with attraction, recruitment, training and supporting an increased volume of CF members and their families. It is imperative in the coming year to identify the mid to longer-term impacts of this growth on the system and address the remaining post-expansion sustainment issues. The Department has instituted innovative approaches, expanded below, to integrate and synchronize ways of conducting business to ensure the success of force expansion goals and objectives.

A key component of the military management system is the conduct and coordination of military personnel research and related analysis of topics and issues affecting the current and future force, based on best practices, evidence-based research and proven analysis techniques. Leading challenges in this area include research and monitoring of attrition, retention, recruiting and critical occupations issues, human dimensions of operations and operational tempo. A strategy undertaken to address these challenges has been the launch of a research and development (R&D) partnership that will leverage military personnel research capabilities through improved access to science and technology-based resources as well as a network of partners in the form of allies, academia, and Canadian Industry.

Recruitment

Effective recruiting is the first step in the generation of defence capability. To recruit the best for the CF, we will connect with Canadians to attract recruits across all geographic and ethnic communities. This is not only the right thing to do; it is fundamental, both for the CF's continued resilience as a national institution and to ensure Canadians connect with the men and women of their armed services. Through a broad range of coordinated activities, the CF will attract and enroll high quality recruits, both full and part-time, through a single, common enrolment, who are representative of Canadian diversity in order to meet the Government-mandated goal of force expansion.[11] A variety of applied research initiatives will be explored in support of these objectives including:

• New and emerging computer testing technologies that may well lead to significant enhancements in the CF's capacity to test complex mental abilities and serve to streamline the selection testing process; and
• Focus on the complex system simulation environment to develop new and enhanced simulation methodologies capable of modeling more complex scenarios, enabling more integrated strategic projections of force production, force generation and force employment as they relate to personnel and other resources.

Recruitment is an essential enabler in the development and maintenance of human capability and does not occur without its challenges. CF recruitment, from a total force perspective, has met force expansion enrolment goals and objectives. There remain, however, critical shortages in specific occupations.[12] The total number of distressed occupations has increased from last year and this has occurred due to a combination of factors such as:

• higher attrition (release) rate than the historical norm. Last year the attrition rate was 7.9% versus the historical rate, which hovered around 6.2 to 6.4%. To note, this rate includes all CF Regular Force releases, from the new enrollee to those who reach compulsory retirement age. In short, despite the success in recruiting over the past few years, higher attrition has hindered the CF growth;
• growth from force expansion, in terms of established positions, in occupations that were already critically below Preferred Manning Level (PML), has compounded the problem and extended the time required to restore the distressed occupation to a healthy status such as Artilleryman Field, Combat Engineer, Crewman, Intelligence Operator, Signal Operator, Vehicle Technician;
• stiff competition with the civilian sector in recruiting those with professional Health Services skills/qualifications, such as Medical Officers, Pharmacist and those with medical technical qualifications such as Medical Lab Technologist, Biomedical Electronics Technologist and Medical Radiation Technologists; and
• difficulty in attracting candidates in most technical occupations particularly within the army and navy electronic engineering technician fields, such as Naval Electronic Technician, Naval Weapons Technician, Electro Optical Technician, or LCIS Tech.

Challenges in recruitment can be attributed to a number of external factors including record high levels of employment in Canada, continued increases in Canadians' level of education, a below-replacement birth rate, an aging workforce and labour force growth driven primarily by immigrants. In order to be effective, the CF will have to aggressively position our strengths in relation to our competitors by focusing on our ability as an employer to provide careers that offer an opportunity to make a difference; offer challenging, meaningful work in a diverse environment; and ensure ongoing personal and professional development for all members.

A key initiative in fiscal year 2008-2009 will be Focused Recruiting. This pertains to specific attraction and processing activities for individuals from the Canadian population who are currently under-represented in the CF. The CF is also focused on promoting and encouraging enrolment in occupations where particular recruiting difficulties are experienced. Within this context, CF recruiting has adopted a very aggressive Diversity Outreach Campaign to increase public awareness of the CF's education, training, employment and career opportunities among the Designated Groups - Women, Aboriginal Peoples and Visible Minorities - specifically identified in the Employment Equity Act. Some events in the Diversity Outreach Campaign will include:

• presenting to university/college Women's Student Associations;
• networking through professional organizations such as Women in Science and Engineering and Women in Aviation;
• presenting to university/college Aboriginal Student Associations;
• networking through National Association of Friendship Centres;
• conducting visits to Aboriginal Communities;
• participating in Pow Wows and other cultural events;
• presenting to university/college Visible Minority Student Associations and Town Hall meetings; and,
• networking through professional associations and visible minority community organizations.

In addition to our ongoing outreach programs, the CF will continue to support the RMC-sponsored Aboriginal Opportunity Leadership Year (ALOY), which will provide Aboriginal youth exposure to RMC.

In fiscal year 2008-2009, the following initiatives to support recruiting operations will be fully implemented:

• Canadian Forces National Recruiting Contact Centre (central point for all customer contacts for consolidated responses to requests for information and application packages);
• expanding the Recruiter for a Day program beyond the current Employment Equity (EE) paradigm to include recruiters within specific distressed occupations as well as more senior officers and senior non-commissioned members for activities with key influencers; and
• final implementation of Mobile Recruiting Concept, designed to deploy from existing Recruiting Centres and Detachments across Canada for a variety of activities from focused attraction to processing at community centres, or special events such as enrolment ceremonies in the local area of the new recruits.

The foregoing recruiting activities ultimately seek to increase the number and diversity of recruits into occupations that are experiencing shortages. The CDS has directed that 70% of applicants be enrolled within 30 days.[13]  This standard accounts for difficulties applicants may encounter when they must consult third parties to provide information required by the recruiting process eg.. letter from family doctor or specialist where the response time is generally not within the 30 days. The timeframe begins when the applicant signs the Employment Application Form and ends the moment the applicant is offered a position as a member of the Regular Force.

Training and Education

An important aspect of the CF's ability to generate and sustain forces includes the training and retention of sailors, soldiers, airmen and airwomen. Training and education is a critical enabler for successful operations. To enable rapid response to urgent operational requirements, considerable capabilities and the resources of the CF Individual Training and Education System (CFITES) will continue to provide essential training and education support. This includes the following:

• providing foreign language training to reduce the language barriers between deployed CF personnel and foreign civil/military authorities;
• implementing improvements to leadership development following an examination of the requirements, expectations, and Canada's capacity, to act as both a partner and a coalition leader in current and future operations in order to provide future CF leaders with recommendations/considerations prior to assuming key leadership roles;
• providing pre-deployment legal training and awareness;
• providing operational training such as the Conduct After Capture course; and[14]
• transforming the IT&E capabilities and processes to ensure timely response to lessons learned in operations.

Expanding the Regular and Reserve Forces to meet domestic and international commitments will continue to create challenges for the training system not only to provide a large amount of additional training with constrained resources but also to retain recruits that are representative of the fabric of Canadian society. To address some of these challenges and progress towards achieving expansion targets, Chief Military Personnel will conduct several activities. Key among those will be the stand-up of Royal Military College Saint Jean (RMC Saint Jean) as an independent military educational institution on the campus of the former Collège Militaire Royal (CMR) at Saint-Jean-sur-Richelieu. Its primary mission will be to deliver a two-year Collège d'enseignement général et professionnel (CÉGEP) program with a capacity of 200 candidates and four program pillars: Academic, Profession of Arms, Physical Fitness, and Bilingualism.

Health Services

Change in Frequency and Process of Periodic Health Assessments (PHA). Canadian Forces Health Services will introduce an evidence-based, enhanced PHA approach that will improve the common health-care management system for all members and make pre- and post-deployment screenings more efficient and effective. By increasing the frequency of periodic assessments so that all personnel have a recent assessment, and decreasing the complexity of pre- and post-deployment assessments, it is anticipated that better quality assessment and surveillance of force health issues will result.

Mental Health. The Rx2000 Mental Health initiative has a project deadline of 31 March 2009. The CF Health Services will work towards the achievement of end state staffing with the addition of 218 new mental health positions across the country. To date 101 of these positions have been staffed. For the provision of consistent mental health practices, a comprehensive set of web-based policies and procedures, based on the new mental health model, will be put in place. Completion of the new Mental Health clinic in Shilo, Manitoba, is scheduled for fiscal year 2008-2009;

Montfort Hospital Partnership.  The CF has entered into a contract with the Montfort hospital to relocate all components of the National Capital Region (NCR) clinic from its Smyth Road location into a long-term leased location at the Montfort hospital facility. The construction of the new building on the Montfort site is scheduled for completion in June 2008 and the complete relocation of equipment and services is anticipated for February 2009. [15]

Accreditation. In May 2008, the independent Canadian Council for Health Services will survey the CF Health Services Headquarters Quality Improvement Section and three CF health clinics, namely Comox, Esquimalt, and St. Jean for accreditation. Seven additional CF clinics will be working towards achievement of their accreditation in May 2009, namely Winnipeg, Shilo, Edmonton, Cold Lake, Kingston, Ottawa and Trenton.

Chaplain and Spiritual Support

In response to the needs of the CF and in cooperation with the faith communities in Canada, the Chaplain Branch is developing an approach to multi-faith ministry, which is unique within the world. Currently, Muslim, Jewish, and lay and ordained Christian chaplains, as well as advisors from other faith groups and the Aboriginal communities work collegially, often in uncharted waters, to support all CF members and their families. This is an important step for the Chaplain Branch and is a new capability for the CF to provide spiritual support, pastoral services and ethical advice to all members and their families, irrespective of religious beliefs.

Physical Fitness Strategy

The CF has a culture of health and fitness that is integral to military service and underpins human capability. The health issues affecting Canadians are attributed to low fitness levels, high rates of obesity, and growth in chronic illnesses such as diabetes and asthma and they present similar challenges for the CF. A less fit and healthy population is likely to result in a substantially changed pool of applicants from which the CF must draw and build. To ensure that the CF continues to maintain its high level of fitness and readiness, the CF is developing and implementing a comprehensive strategy that supports the promotion of a lasting healthy lifestyle.

The strategy also seeks to establish occupational fitness standards for the air force, army, navy and Special Forces to develop and sustain a CF that is physically, mentally and socially fit.

The following represent major milestones:

• April 2008 - Release of Health and Physical Fitness Strategy, Internal Communications and policy, and Awareness Campaigns;
• April 2009 - New Fitness Standards and Programs for the air force, army and navy; and
• 2010 - Fitness Data Collection System in place.

Support

Retention is the end of a continuum that begins with the attraction and recruitment process followed by training and successful employment. The desired effect is to have the right amount of people, in the right job at the right time in their careers so that the CF is capable to meet its mission. A key to achieving this effect is to maintain a healthy balance between attrition (the number of people who exit the CF) and recruitment (the number of new people needed in the CF). Successful employment for CF members includes being adequately prepared to do their job and effectively supported by a healthy work and home environment. Military personnel management is responsible for the oversight of many of the programs and initiatives that effect successful employment of CF members and contribute to the success of the Defence Priorities. Ultimately, the cumulative effects of all support activities contribute to retention of highly skilled and trained CF members.

Attrition is an important element of force renewal. Some attrition is essential to ensuring the continuous flow of new recruits through to the most senior officers and non-commissioned members. What constitutes problematic attrition will vary across time and circumstances. Any amount of unexpected attrition in an understrength or very small occupation will be problematic. As well, training requirements from enrolment to being ready for operations can vary from 18 months to seven years. Unexpected attrition, in occupations having extended training and experience requirements, will have greater impact than would the same rate of attrition in an occupation having a shorter training period. The CF has established a number of indicators designed to ensure early identification of negative trends and to ensure appropriate intervention is taken in a timely manner. When attrition increases, high-level reviews are conducted to better identify whether or not it is a trend or an explainable 'blip'. If a trend develops, more detailed surveys for problem identification are undertaken and intervention strategies are developed where warranted.

Key activities for fiscal year 2008-2009 will include:

• administering the CF Retention Survey to eleven (11) occupations, including infantry officer, infantryman, crewman, engineer, ammunition technician, intelligence, intelligence operator, communications research, pilot, air navigator, boatswain;
• assembling multidisciplinary intervention teams designed to identify, develop and implement retention interventions; and
• developing a culture of retention throughout the DND/CF. 

Care and Employment of the Injured, the Fallen and their Families. Care and Employment of the Injured, the Fallen and their Families is the highest priority within Chief Military Personnel. Canadians have witnessed, over the past year, the professionalism of the CF not only as a fighting force, but also in caring for its fallen and their families. A number of activities, including casualty and family support in all phases -pre-, during and post-deployment in order to alleviate deployment-related stress for service personnel and families, are being progressed in fiscal year 2008-2009. As risks continue to exist for our men and women serving in hostile regions of the world, it is crucial to ensure the mechanisms for repatriation, support for members and families and recovery function effectively.

Service Integration. Service integration remains the highest priority for the military personnel management system. An array of casualty and family support policies and programs intended to support commanding officers in meeting their obligation of care to members is extremely diverse and complex and involves close collaboration between military personnel management and Veterans Affairs Canada (VAC) at the base/wing/unit level. It is essential to ensure timely, effective and appropriate assistance to individual members and their families in negotiating the recovery, rehabilitation, and reintegration processes. The inaugural CF Care of the Injured and Fallen Lessons Learned Symposium - February 2008 - will be a forum to discuss results and plan related activities to enhance the current program and service framework which will be implemented in fiscal year 2008-2009.

Health Care to the Injured. The CF Health Services must provide excellent care for ill and injured CF members returning from deployment. The goal must be to maximize the injured member's recovery and rehabilitation in a collaborative and multi-disciplinary manner.

DND/VAC Program Harmonization. Programs within VAC, as well as services and treatments included in the CF Spectrum of Care, will be reviewed and harmonized as appropriate.

Case Management Phase III. Following a joint DND/VAC process mapping of casualty support case management, a standardization program for complex case management will be instituted to address seamless Case Management between DND and VAC. The goal will be to increase current capacity for a smooth transition from the CF.

Operational Stress Injuries (OSI) are defined as those that injure the mind or the spirit. Those wounds can also prove fatal. Therefore, one of the integral parts of the preparation, support, pre- and post-deployment of our members is Operational Stress Injury Social Support (OSISS). In fiscal year 2008-2009, a new initiative to manage and operate a national peer support network for members, veterans and families dealing with OSI will be enhanced. This initiative seeks to improve the chances of full rehabilitation and functioning for members with an OSI.

Military Families

There are 40 Canadian Military Family Resource Centres (MFRC) located across Canada, the United States and Europe that assist CF families to manage the stresses associated with the unique characteristics of the CF lifestyle.

As the vanguards of family support in CF communities, in fiscal year 2008-2009, the MFRCs will evolve their practice:

• implementing the revised and improved policies and programs for CF families, to include Deployment Support, Child Care Research, and Support to Families of the Injured and Fallen;
• spearheading the Military Families - Strength Behind the Uniform campaign, which will acknowledge the capacity and resilience of families of CF members, as well as make them aware of the vast array of publicly funded military family support services; and
• expanding and delivering the CF National Youth Model Services where MFRCs and CF youth will work together to develop local programs that will support and connect, provide leadership development and healthy living choices to the children of CF members serving across Canada, the US and in Europe.

Reserve Force

The Reserve Force is composed of CF members who enrolled for service other than uninterrupted full-time military service. The Reserve Force has four sub-components: the Primary Reserve, the Supplementary Reserve, the Cadet Instructor Cadre, and the Canadian Rangers.

Primary Reserve

The Primary Reserve structure includes the Naval Reserve, the Army Reserve, the Air Reserve, the Health Services Reserve and the Legal Reserve. As of April 2008, the Communications Reserve will be integrated into the Army Reserve. In international operations, the role of the Primary Reserve is to augment, sustain and support deployed forces. With respect to domestic operations, the Primary Reserve will continue to conduct coastal operations, air operations, as well as providing the personnel for Territorial Battalions. Some 7,000 reservists are employed full-time in performing staff duties in headquarters, schools and units, continuing to provide a valuable service to the CF. In addition, there are approximately 1,500 reservists employed in support of international and domestic operations.

The growth of the Reserve Force is a government priority. All Primary Reserve establishments are under-strength, and all could conceivably grow in order to satisfy the Government's intentions to increase the overall numbers within the Reserves. Any level of growth must come with a concomitant increase in funding to enable the training and development of these new reservists. The Reserves will continue to connect with Canadians, as well as conduct training and education to progress in the profession of arms. In support of the growth of the Reserve Force investment in training aids such as materiel, information management (IM)/information technology (IT), equipment and facilities are required to ensure their capacity and capability to generate trained reservists. Better and more effective use must be made of e-learning resources that currently exist to allow CF members to complete training online via the Internet or the DND Intranet and to ensure the highest standard of delivery of information is achieved.

Plans for Enhanced and Ongoing Support to Regular Force Personnel Deployed on Domestic and International Operations

The Reserves are committed to providing continued support to deployed operations as well as demonstrating leadership and contribution when called upon for contingency operations at home. Reserve units are located in Canada's communities, and as residents of those communities exercise regularly with local first responders to ensure that when called up in the event of an emergency, they can provide an effective contribution that reduces the effect of the crisis and assists in the return to normal. Fiscal year 2008-2009 will see continued emphasis on exercises at the local level in preparation for the Vancouver 2010 Olympics and Paralympics and renewed emphasis on recruiting to grow the Reserve Force. As Québec City celebrates its 400^th anniversary in 2008, this event will see Reserves in support of many different activities.

Readiness Thresholds and Risks

The Reserve Force is now expected to meet the minimum Physical Fitness requirements of the CF. Physical fitness underpins an individual's ability to achieve readiness for operations. The primary risk to achieving readiness is a lack of investment in resources to equip and train reservists so that they can develop and maintain their combat competencies.

Education and Training

The Environmental Chiefs of Staff (ECS) are responsible to meet the training requirements of their Reserve Forces. The Canadian Defence Academy (CDA) provides education opportunities for reservists to ensure that reservists are as well educated as their Regular Force counterparts. Programs and courses are modularized to be accessible to part-time reservist.

Future of the CF Reserves

In a letter signed 12 June 2007, the CDS provided clear intent for the CF Reserves. The CDS's Planning Guidance for the Future of the CF Reserves provides the impetus for change within the Primary Reserve. Efforts are now underway to rationalize CF policy with respect to the Primary Reserve to enable transition from full-time service to part-time service and vice versa. These changes are required to more easily integrate Reserve personnel into operations and to ensure Canada's Reserve forces are relevant in the 21st century. Reservists are expected to participate in operations, and be physically and medically fit so that they can respond to crisis situations at home or deploy abroad. The CDS's Planning Guidance for the Future of the CF Reserves may be viewed at <http://www.vcds.forces.gc.ca/vcds-exec/pubs/Reserve-Issues/docs/CDSPlanningGuidance-FutureofCFReservesSIGNED2.pdf>.

The Government has indicated a desire to grow the force, both regular and reserve. In view of current resource realities, Defence has achieved a long-term sustainable amount of 26,000 Reservists. Any achievement of further growth will be contingent upon additional financial resources.

Primary Reserve

Naval Reserve

The Naval Reserve provides highly trained, combat-capable sailors for the ships' companies of the navy's Kingston class maritime coastal defence vessels and for coastal operations. The Naval Reserve will continue to recruit and train sailors and grow to established strength while being recognized as the premier Reserve organization and, building upon our heritage, the navy's link to communities across Canada. Their Mission is to generate sailors to support and sustain CF operations.

The total strength of the Naval Reserve stands at 3,870 personnel in all ranks. DND expects the Naval Reserve to reach its approved strength ceiling of 5,100 members by 2015. The Naval Reserves highest priority is to aggressively advance the total strength by expanding its numbers of recruiters at the Naval Reserve Divisions to achieve the 2015 goal.

The Naval Reserve will re-align the regional structure to be more responsive to Canada COM, provide an increased Naval Reserve presence in key national organizations, and ensure key programmes are properly maintained. The on-going transformation of Naval Reserve headquarters will allow greater responsiveness to the formations and to fulfill mandated requirements, such as the Comptrollership Action Plan and Integrated Risk Management.

Army Reserve

Canada's Army Reserve (Militia) is organized in 130 units in 110 cities and towns across the country. The roles of the Army Reserve are to provide the framework to mobilize, augment and sustain the Regular Force and serve as a link between the military and civilian communities.

The Army Reserve has successfully expanded to meet its Total Average Paid Strength target of 17,300 soldiers, and will be ready to conduct further expansion as directed. It will continue to provide augmentation to the Regular Force for domestic and international operations, and to backfill Regular Force personnel shortfalls within the army and the CF at all levels of responsibility. These demands will be balanced against the needs of the Army Reserve for its own leadership and management personnel.

Within the context of the army strategy, both the Regular and the Reserve components will go through significant change in the upcoming year, to streamline and improve force generation. This effort will significantly increase Army Reserve's force generation responsibilities, both in terms of depth - by providing reinforcement and of breadth - by providing unique capabilities not available in the Regular component (i.e., chemical, biological, radiological and nuclear response; civil-military co-operation, and psychological operations).

Communication Reserve

The Communication Reserve is mandated to generate forces and sustain combat-capable communication and information systems (CIS) elements and information operations support elements to augment deployed operations and strategic missions at home and abroad. The Communications Reserve is also providing CIS support to Army Reserve training activities. The Communication Reserve will continue to focus on centralized training locations, currently Canadian Forces Base (CFB) Kingston for occupational training and CFB Shilo for recruit and leadership training until fully integrated into the Army Individual Training System.

Air Reserve

The Air Reserve has been an integral part of defence planning throughout the history of the air force. The air force has integrated the highly trained men and women of the Air Reserve into total force (integrated full- and part-time military personnel) units with a single chain of command that supports all aspects of air force operations. Currently, the total strength of the Air Reserve stands at approximately 2,300 personnel in all ranks. The integrated air force structure means that air reservists are readily available for the day-to-day operation of the CF. Air Reserve members are now serving in many of the newly established command organizations, helping to ensure the effective integration of reservists into the new CF structure.

CF Health Services Reserve

Two core tasks assigned to the CF Health Services Reserve are to provide health services to the Army Reserves during field training exercises, and to sustain the CF Health Services Group domestic and expeditionary commitments. A prime driver of success is the Trained Effective Strength (TES) and therein the capacity of the Reserve Force to meet its obligations. A successful instructional cadre and sufficient notification of flexible course scheduling will significantly influence the TES.

To achieve these elements, an instructional cadre will be developed, a communication plan will be implemented, and work will continue to facilitate the modularization of courses for Regular Force members to improve accessibility for Reserve members. Two primary risks are associated with achieving these initiatives - factors such as personnel availability, course backlogs and other factors that are beyond the control of CF Health Services may delay progress, and existing personnel data on CF members, which is somewhat unreliable, and collection of accurate data difficult.

Legal Reserve

The planned strength of the JAG Primary Reserve List (PRL) is 90 percent of the JAG PRL Establishment or at 59 of 66 of positions staffed. The PRL legal officer strength is currently at 93.5 percent, or 58 of 62 positions filled. Reserve Force legal officers are employed on Class A service providing legal advice in all areas of military law. They are also employed on Class B (full-time, temporary) service to replace deployed Regular Force legal officers and to advance JAG Transformation. They have been and will continue to be deployed on international operational tours of duty on Class C service.

Supplementary Reserve

The Supplementary Reserve is composed of personnel with previous military service who could be recalled for military service in an emergency. Members of the Supplementary Reserve may serve on a voluntary basis, but are not required to perform any duty or training except when placed on Active Service. Defence will implement a new website to advertise employment opportunities for reservists. Wider visibility of CF requirements and employment opportunities will result in an increase of Supplementary Reserve personnel volunteering for service.

Cadet Instructor Cadre

The Cadet Instructor Cadre (CIC) is a sub-component of the Reserve Force, consisting of officers who have undertaken, by the terms of their enrolment, to perform such military duty and training as may be required of them. It consists of officers whose primary duty is the supervision, administration and training of cadets 12 to 18 years of age.

The CIC are committed to provide continued support to the Cadet Program, notably ensuring the cadets' safety and welfare while developing in them the characteristics of leadership, citizenship, physical fitness and stimulating an interest in the sea, land and air activities of the CF.

Canadian Rangers

The Canadian Rangers will continue to assert Canada's sovereignty by providing a military presence in sparsely settled, northern, coastal and isolated areas of Canada that cannot be covered by other elements of the CF. The size of the Rangers will increase to approximately 5,000 personnel over a five-year period. This will be achieved through growth within existing Canadian Ranger Patrols and with the establishment of new Patrols where sustainable. Canadian Ranger training and equipment will be refocused to align with their assigned role, mission and tasks which will result in a requirement for additional funding for pay and a modest capital investment to fund an equipment enhancement project over the same six-year period.

Canadian Forces Liaison Council

Canada has had a Reserve Force Employer Support Program since 1978, which starting in 1992, has been managed by the Canadian Forces Liaison Council (CFLC). The CFLC is a Ministerial Organization of senior civilian business and educational leaders nation-wide, who voluntarily promote the Reserve Force with the sole aim of getting Reservists the Time off to Serve without penalty. Legislation such as Bill C-40, An Act to amend the Canada Labour Code, the Canada Student Financial Assistance Act, the Canada Student Loans Act and the Public Service Employment Act, which is currently at the Senate, reflects the ongoing and evolving role of the CFLC to develop partnerships with employers and foster understanding of the value they gain from employing reservists. Further information on Bill C-40 can be obtained by accessing <http://www2.parl.gc.ca/HouseBills/BillsGovernment.aspx?
Language=E&Mode=1&Parl=39&Ses=2#C40>.

The Council, which is supported by a military part-time Field Services and full-time Secretariat, conducts programs that target businesses and educational institutions to voluntarily develop their own military leave policies to allow reservists the available time to deploy on CF international and domestic operations, conduct military training, or participate in an exercise, while knowing that they would be able to return to their civilian jobs without penalty once they have completed their Reserve service. The CFLC's priorities for fiscal year 2008-2009 are to advance the following programs:

Reserve Unit Support / Inreach Program (RUSP)

With the increased numbers of reservists deploying on CF operations, the CFLC must continue to connect at all levels of the chain-of-command to provide reservists and their units with the resources to help them gain the support of local employers. The program's goals are to conduct CFLC presentations and Military Leave Representative training at all reserve units, and to meet with all Areas/Formations/Brigades.

ExecuTrek Program

The CFLC will continue to connect with employers and educational institutions by giving them a first-hand view of the quality of military training and benefits that reservists gain. This direct involvement in experiencing the reservists' training helps the employers understand the importance of the ongoing professional development the military offers, which in turn would result in employers granting time off for their reservists and/or have their companies draft military leave policies. The plan is to conduct up to 20 ExecuTreks comprising of a total of 500 guests/employers which would result in all guests signing a statement of support for the Reserve Force and voluntarily drafting military leave policies within their organization.

Reserve Assistance Program

The RAP program helps prevent conflicts between reservists and employers, and assists in resolution when necessary. The CFLC anticipates that the RAP program will provide direct assistance to the reservist when help is needed the most, to facilitate common ground between the reservist and the employer or educational institution. The best measurement of success is that all cases identified to CFLC are resolved quickly and to the satisfaction of both the reservist and the employer.

Outreach Program

Outreach is CFLC's way of telling large numbers of employers and the public about the value of military training for the civilian workplace. Direct mail, trade shows and conferences, magazine articles and speaking opportunities are the ways that CFLC will spread the word to gain employer support for the Reserve Force.

Awards and Recognition Program

Recognizing employers and educational institutions that have been supportive in granting time off for training and operations is essential in maintaining the Profitable Partnership. Reservists are highly encouraged to show their appreciation by formally thanking their employers and educators by nominating them for an Employer Support Award. The plan is for all provinces to conduct an Awards ceremony, with a goal of having at least 180 nominations.

Force Expansion

Force Expansion will continue to create challenges for the CF training system not only to provide a large amount of additional training with constrained resources but also to retain recruits that are representative of the fabric of Canadian society.

To address some of these challenges and achieve Force Expansion targets, we will:

• reduce the number of recruits who are automatically released for failing to achieve the required standards of fitness and education. A programme will be introduced to coach as many of the recruits as possible to meet the standards. This will involve analyzing, planning and implementing a programme bringing recruits to a higher level of education or fitness (e.g., prior to the Basic Military Qualification (BMQ) course) to ensure success on BMQ and subsequent courses;
• re-open Royal Military College Saint-Jean (RMC Saint-Jean) as an independent military educational institution on the campus of the former Collège Militaire Royal (CMR) at Saint-Jean-sur-Richelieu with a primary mission to deliver a two year Collège d'enseignement général et professionnel (CEGEP) program with a capacity of 200 candidates and four program pillars: academic, profession of arms, physical fitness, and bilingualism. The strategic objective is to enhance officer production as part of force expansion by offering a two-year CEGEP equivalency program that would facilitate recruitment of quality candidates from the secondary educational system of the Province of Québec and continue to provide a 'prep year' for RMC as necessary for officer candidates from the other diverse educational systems of Canada; and
• implement a program to increase training capacity by Alternative Training Delivery strategies (ATD). The ATD initiative includes partnerships with community colleges, more effective use of instructional technologies and more robust and responsive On-Job-Training (OJT) programs.

Civilian Human Resources

The Assistant Deputy Minister (Human Resources-Civilian) (ADM (HR-Civ)) Group exists to effectively support the CF in conducting operations by developing and implementing plans, policies and programs to recruit, develop and retain civilians. ADM (HR-Civ) is a service delivery function, responsible to ensure a consistent, cohesive, coherent and integrated approach to civilian human resources management in DND and the CF.

ADM (HR-Civ) activities and plans continue to be developed in line with governmental objectives such as the Clerk of the Privy Council's Public Service Renewal initiative, and with CF/DND strategic plans and priorities. Emphasis will be placed, during fiscal year 2008-2009, on improving the provision of expert and timely advice to DND/CF senior leaders. ADM(HR-Civ) will continue to focus on building people capacity while continually searching for productivity improvements and the means to capitalize on emerging technology.

Integrating Business Planning with HR Planning

We will strive to more fully integrate human resources and business planning to develop a unified plan that captures high-level key objectives, performance measures and achievements.

In the strategic HR planning area, more substantive feedback will be provided to senior leaders at regular intervals in the planning cycle. A mid-year civilian Strategic Intake Plan (SIP) - a validation exercise that integrates HR planning and financial management processes - will also be conducted.

Recruitment

Recruitment efforts will continue to be challenged during the coming year in an environment of keen labour competition for talent. Approximately 30% of the civilian population is eligible to retire by 2012. In order to ensure that the Department can recruit and develop the next generation of its civilian workforce, we will need to develop sustainable recruitment/retention strategies and expand our apprenticeship program. The apprenticeship program activities will allow us to hire and train apprentices over the next 5 years with the intention of having them to address the pending retirement wave. In addition, plans to enhance the external recruitment website, and design pilot programs of pooled recruitment for specialized needs areas will be undertaken. Opportunities to improve recruitment will be maximized through the development of electronic tools and supporting processes.

Corporate succession planning framework

Efforts to establish a corporate succession planning framework, and the ongoing implementation of the departmental retention strategy and apprenticeship framework will continue.

Employee Development

Capability, recruitment and retention are inextricably linked to the imperative to train and foster employee development. In doing this, ADM(HR-Civ) has, and will continue, to synchronize learning with the needs of the CF and the Public Service while fostering leadership at all levels and supporting individual learning plans for all. DND currently boasts a completion rate of 90 percent for individual learning plans.

Enabling Infrastructure

HR service delivery is an essential support function to the CF, but one that is experiencing the strain of continual high demand. Civilian population growth, high turnover rates, and an aging population have created a demand for more and faster HR services. The existing service delivery model is no longer useful. We will examine alternatives to the current model to achieve a more efficient service. Some of these include enabling employee self-service and capitalizing on new Public Service Modernization Act (PSMA) flexibilities, such as collective staffing. Partnering with CMP with regards to recruitment, outreach, diversity, as well as awards and recognition activities will be explored. New tools and technology will also be explored to enhance service delivery such as an interactive website for resumes, web-enabled recruitment, and an electronic pay card.

ADM(HR-Civ) plans to undertake a number of new initiatives to improve its client service to managers and employees. One such initiative is to create a new service cell in the National Capital Region Service Centre that will focus on self-service improvements (i.e., more web-enabled delivery). A number of services will be made available to employees online using the new technology of HRMS v 8.9, leave self service and online pay.

Materiel Acquisition and Support

Defence spending has a significant impact on Canadian jobs and provides other economic benefits to Canada, throughout the country. Canadian aerospace and defence firms have built successful businesses in Canada, across the industrial spectrum, for domestic and global markets. In terms of its impact, total aerospace and defence employment, including maintenance, repair and overhaul, is estimated at 73,000 jobs. The defence industrial base includes aerospace, ammunition, shipbuilding, military vehicles and defence electronics industries. Typical defence industries expenditures in fiscal year 2006-2007 accounted for $3.54 billion.[16] In addition, expenditures of approximately $3.89 billion were spent on "not so typical" defence-related goods and services such as: construction, fuel, transportation, telecommunications and related services and utilities. [17]

The acquisition and support of materiel (the equipment or supplies necessary to equip, operate and maintain defence-related activities) is a considerable proportion of defence spending. DND is the Government's largest materiel manager and, as of 31 March 2007, the Department had a total asset value of $51 billion, with $27 billion related to materiel expenditures (i.e., ships, aircraft and vehicles).[18] In fiscal year 2007-2008, DND will spend approximately $2.4 billion on materiel and services to support the equipment in the Department's inventory.

In terms of fiscal year 2008-2009 priorities, DND will continue to focus on completing the major crown projects arising from the increase in approved capital spending. The Department is taking steps to strengthen the capacity to deliver projects. These include rebuilding DND project management workforce and other specialist staffs and enhancing centres of excellence for major acquisitions through professional development and further standardization of project management and project support tools. DND will also continue to focus on introducing rapid enhancements to soldier survivability, particularly in the area of protection against Improvised Explosive Devices (IEDs), and quickly fielding new equipment in response to approved operational requirements.

A primary enabler for all aspects of defence planning will be the development and implementation of concrete and justifiable defence planning methodologies to prioritize investment projects through the Defence Investment Strategy. A holistic and integrated investment strategy will improve materiel acquisition programming and prioritization and thereby enhance DND's ability to deliver projects.

Defence will also implement several initiatives to improve the overall acquisition system while continuing to adhere to Parliamentary and Treasury Board rules and processes. The acquisition system will be enhanced by:

• developing high-level statements of requirements and minimizing customization and detailed specifications;
• focusing on off-the-shelf technology - proven solutions which save time, cost and reduce complexity and risk;
• ensuring appropriate accreditation and training for procurement officers; and
• continuing to work closely with Public Works and Government Services Canada to ensure timely award of contracts and delivery of equipment and services to meet CF needs while ensuring best value for Canadians.

Defence will continue to respect approval and oversight processes and the basic tenets of fairness, openness, and transparency continue to be the cornerstone of our acquisition practice.

Planned Capital Acquisition

Defence's key focus in fiscal year 2008-2009 will be to continue investment in core capabilities to ensure that transformation and modernization of the CF progresses as planned. The DND Investment Plan Framework forms the basis of this plan. Following the development of a DND Campaign Plan and Strategic Capability Roadmap, the investment plan is expecting approval by the end of fiscal year 2008-2009.

The following major projects will be seeking expenditure authority for either definition or implementation during the next 12-24 months.

Joint Support Ship

This project will replace the aging Auxiliary Oiler Replenisher class with a vessel capable of supporting not only other ships, but also land and air forces operating from those ships. The Joint Support Ship Project, currently in the definition phase, has two industry teams developing proposals for preliminary ship design, a project implementation plan, and an in-service support plan. Intention is to deliver the first of these multi-role vessels in 2012. These plans will be evaluated, and the team that produces the better plan will be selected to execute the project. Formal effective project approval will be sought in 2008.

Halifax-Class Modernization

The backbone of Canada's navy, the Halifax-class frigates are approaching mid-life and, consequently, require updates not only to ensure their continued operational viability but also to ensure the bridge to the fleet of the future. This project, currently in its first phase of implementation, includes strategic, non-strategic and national procurement projects. The second phase, for which approval will be sought in 2008, will implement the Combat System Integration component of the project. This phase will see the selection of a prime contractor, who will procure, install, and integrate five major combat systems in each of the 12 ships. The first frigate will commence its modernization in 2009.

Arctic/Offshore Patrol Ships

The Arctic/Offshore Patrol Ship Project will procure six to eight ships capable of operating in the frequently ice-bound waters of Canada's North. Currently in the definition phase, this project is estimated to cost approximately $3.1 billion for the ships and associated infrastructure. Government approval for implementation will be sought in 2009.

Medium- to Heavy-Lift Helicopter Project

This project will deliver a medium- to heavy-lift land-based helicopter to fill the gap in CF tactical aviation mobility capabilities that opened during the 1990s when the CH 147 Chinook was retired. This project entered its definition phase in June 2006, and is expected to seek approval for implementation in 2008. The CH-147 Chinook, manufactured by Boeing, is the preferred airframe. Delivery of up to 16 helicopters is scheduled to begin in 2011. However, in response to the report of the Independent Panel on Canada's Future Role in Afghanistan (Manley Panel), the Department is actively working to select and deploy an interim medium-lift capability as soon as possible.

Fixed Wing Search and Rescue Project

With the objective of acquiring 15 aircraft to replace the six Buffalo and ten CC-130 Hercules transport aircraft currently used in search and rescue training and operations, this project will allow the Government of Canada to respond effectively to aeronautical and maritime incidents in the Canadian SAR area of responsibility. It is intended that this project proceed into its definition as soon as possible and may be ready for approval in 2008. Delivery of the new fixed-wing SAR aircraft to 19 Wing Comox, 17 Wing Winnipeg, 8 Wing Trenton and 14 Wing Greenwood will begin by fiscal year 2014-2015.

Uninhabited Aerial Vehicles

The JUSTAS Project will bring the CF a fleet of medium-altitude Uninhabited Aerial Vehicles (UAVs) capable of overland operations, in Canada and abroad, providing intelligence, reconnaissance, surveillance and target acquisition information. The principal objective is to procure an integrated and joint interoperable UAV system that includes the air vehicles, sensor suites, communications and infrastructure. The project is aiming to deliver an initial operational capability in 2011. Pending delivery of JUSTAS, Project NOCTUA will provide a leased improved interim UAV capability to support current operations, beginning in 2009 when the Sperwer system becomes no longer supportable. This will address one of the key issues raised by the Independent Panel on Canada's Future Role in Afghanistan (Manley Panel).

Utility Transport Aircraft

The objective of the Utility Transport Aircraft Project is to replace the four CC-138 Twin Otter transports currently in service with up to 12 robust, cost-effective aircraft that meet the requirements of utility airlift in Canada's remote and Arctic regions to increase CF capacity in the North. This capability will be delivered in the form of a new purchased aircraft between 2011 and 2013. The project will enter its definition phase in 2009.

Integrated Command and Control System

The Integrated Command and Control System (IC2S) Project will develop and implement a command and control information system for the entire CF that will permit effective conduct of all phases of operations in the global security environment of the future. To achieve this aim, the IC2S Project will achieve the following objectives:

• integrate existing CF classified command and control capabilities into a seamless secure, reliable core command and control information system for the entire CF;
• link the CF command and control information system with other information capabilities at the tactical level in the CF, at DND and other Canadian Government departments, in allied nations, and with public systems;
• implement new capabilities that enable users of the CF command and control information system to conduct tasks in support of the four DND/CF core functions; and
• implement new capabilities to increase the reliability, survivability and maintainability of the CF command and control information system.

The IC2S project will be seeking preliminary project approval in 2008.

Medium Support Vehicle System (Medium Trucks)

The Medium Support Vehicle System (MSVS) project will replace the in-service medium lift logistics trucks that will not be supportable due to parts shortages and ever increasing operations and maintenance costs by 2008. This project will provide medium lift trucks to the operational Field Force, Reserves, air force and Joint units with the capability of administratively transport combat troops and tactically transport cargo and equipment.

Up to 1,500 Standard Military Pattern vehicles, 300 trailers, 300 armour protection systems will be procured. Another 800 Military Commercial off-the-shelf vehicles and 1,000 Special Equipment Vehicle (SEV) kits that encompass, but are not limited to medical, dental, engine repair, communication equipment repair, optics repair, weapons repair etc. will also be procured. The project is currently in its definition phase and will be seeking approval for phased implementation commencing in 2008.

Family of Land Combat Systems

This programme will seek to extend life, replace and modernize the current fleet of land combat vehicles. The programme will consist of several distinct projects to address specific capabilities such as close-combat vehicles, light and medium armoured vehicles, artillery systems and ground based air defence systems. Programme identification is ongoing and approval for the definition phase of this programme will be sought in 2009.

Tank Replacement Project

The Tank Replacement Project will seek to replace Canada's aging Leopard C2 tank fleet with a modern, heavily protected, mobile, direct fire support capability. Up to 100 tanks and support vehicles will be procured. This project is in its first phase of implementation and deliveries have commenced. Approval for the next and final phase is planned for 2009.

Accrual Budgeting for Major Capital Projects

[Click on image to enlarge]

Note:

1. The investment table reflects the planned cash expenditures and accrual expenses for the projects that have received Cabinet and Treasury Board approval, with the exception of the Joint Support Ship, which has received Cabinet approval only. The table also includes additional reprofiling request to be sought prior to the end of fiscal year 2007-2008.

Conduct Operations

The capability to conduct operations effectively at home and abroad is provided by efficient, professional maritime, land, air and special operations forces, supported by many partners and agencies. It comprises a variety of activities, including international operations in conjunction with NATO and the UN, continental NORAD operations, and domestic operations, such as surveillance and control of Canadian territory.

Strategic Outcome: Success in assigned missions in contributing to domestic and international peace, security and stability.

Program Activity: Conduct Operations – Total spending Net of Revenues
Resources ($Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Departmental Spending	2,454,835	2,582,092	2,638,827	2,619,827
Capital Spending (included in departmental spending)	196,508	313,998	311,557	314,500

Departmental and Capital Spending - Planned (Net of Revenue in $ thousands)

Departmental Financial Resources by PAA Sub-Activity Level	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-20111
Conduct Operations
Sub Activity:
Perform Intelligence, Surveillance, and Reconnaissance Activities including through Networks and Collaboration	934,684	943,676	941,701
Employ Forces to Conduct Domestic and Continental Operations	478,457	488,885	482,836
Employ Forces to Conduct International Operations	1,050,960	1,085,917	1,072,281
Allocation of Internal Services	117,991	120,349	123,010
Total Conduct Operations	2,582,092	2,638,827	2,619,827

Note:

1. The 2009-2010 and 2010-2011 planned spending figure for International Operations assumes that the Government will continue with international deployments at a level comparable to the current operational level.
2. This is the Department's first attempt at reporting planned spending figures by the sub-activity level of the program activity architecture, therefore the numbers are subject to continued revision and refinement.

Capital Financial Resources by PAA Sub-Activity Level (included in Departmental Spending)	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-20111
Conduct Operations
Sub Activity:
Perform Intelligence, Surveillance, and Reconnaissance Activities including through Networks and Collaboration	239,930	235,612	239,834
Employ Forces to Conduct Domestic and Continental Operations	9,729	9,729	8,574
Employ Forces to Conduct International Operations	53,219	53,216	51,536
Allocation of Internal Services	11,120	12,999	14,556
Total Conduct Operations	313,998	311,557	314,500

Note:

1. The 2009-2010 and 2010-2011 planned spending figure for International Operations assumes that the Government will continue with international deployments at a level comparable to the current operational level.
2. This is the Department's first attempt at reporting planned spending figures by the sub-activity level of the program activity architecture, therefore the numbers are subject to continued revision and refinement.

Constant Situational Awareness

The Defence Intelligence function is a critical enabler that supports CF operations, senior Defence and Government of Canada decisions-makers, as well as allies and key domestic and international partners. The Chief Defence Intelligence (CDI) is the DND/CF Authority responsible for the Defence intelligence function.

The CDI's all-source analytical capacity has been eroded in recent years and requires attention in the near-term to maintain support to current operations and strategic decision-making, and to contribute to international partnerships with key allies.

In fiscal year 2008-2009, CDI will complete a study on counter-intelligence, with a view to improving service with respect to national-level and operational requirements. CDI continues to develop a force-generation strategy for counter-intelligence and human intelligence capabilities, which are critical to commanders' situational awareness. In addition to maintaining its counter-intelligence, human intelligence, geospatial intelligence and various other programs, Defence Intelligence will continue to support and contribute to Canada's integrated signals intelligence program, which entails close partnership and program delivery by the Canadian Forces Information Operations Group and the Communications Security Establishment Canada (CSEC).

In fiscal year 2008-2009, CSEC will continue to evolve its strategic direction to support the Government of Canada's intelligence objectives. CSEC will focus on government priorities regarding security, defence and foreign affairs, including actionable intelligence on foreign terrorists and support for Canada's mission in Afghanistan. CSEC will also provide advice, guidance and services to help protect electronic information and information infrastructures of importance to the Government of Canada. Over the next three years, CSEC will take measures to further enhance performance of its mandate, including improving infrastructure, expanding technological and scientific capabilities, maturing governance, and transforming culture to better support its people.

The Joint Information and Intelligence Fusion Capability (JIIFC) Project will lead to a common operating picture[19] for commanders at all levels. A long-term infrastructure plan for the JIIFC Project is being developed.

The mission of the Marine Security Operations Centres (MSOC) is to generate maritime situational awareness by combining the knowledge and skill sets of the Government departments and agencies involved in marine security. Functioning coastal MSOCs comprised of DND, RCMP, DFO, TC and CBSA personnel are close to achieving Initial Operational Capability in DND facilities in Halifax and Esquimalt. Unresolved legal issues constrain the sharing of some information and intelligence among partners and have hindered the rapid implementation of the project. Efforts to resolve these issues are ongoing. Previous intentions to house the MSOCs in purpose-built facilities have been put on hold due to the rapid escalation of building costs. The effect of this accommodation arrangement on achieving Full Operational Capability (initially planned for 2010) is being re-assessed. Both the Halifax and Esquimalt MSOCs will likely remain housed within existing DND facilities for the foreseeable future.

Domestic and Continental Operations

As the operational headquarters responsible for CF operations in Canada and its approaches, as well as in the United States (except for operations conducted under NORAD) and Mexico, Canada COM will conduct routine and contingency operations within its area of responsibility to detect, deter, prevent, pre-empt and defeat threats and aggression aimed at Canada. These operations span the spectrum of military activity, from the simple provision of personnel and equipment, through complex consequence management operations, to the commitment of combat-capable forces to support the defence of Canada.

Canadian Operational Support Command (CANOSCOM) works in conjunction with Canada COM to develop and implement plans to support domestic and continental operations by deploying high-readiness support capabilities as required. CANOSCOM manages the Canadian supply and ammunition depots as well as the domestic movements system that, together, permit the CF to respond to domestic requirements. As the CF continues to focus on domestic response issues, CANOSCOM will expand the commercial aspects of the transportation system to meet CANADA COM's needs.

In cooperation with other government departments and agencies, Canada COM will contribute to asserting Canada's sovereignty and ensuring the security of Canadians. In this context it will continue to enhance cooperation and foster relationships with Public Safety, the RCMP, Canadian Coast Guard and other security partners. It will also continue to promote the exchange of timely and pertinent information and participate in a wide range of exercises and operations with other government departments and agencies such as OP NANOOK 2008, which will take place in the eastern Canadian Arctic.

In fiscal year 2008-2009, annual domestic and continental interdepartmental table-top exercises will contain a series of scenarios to test Canada's preparedness for the 2010 Vancouver Olympic and Paralympic Games. Canada Com will provide support to other government departments and agencies, in particular Public Safety Canada, in preparing for the Games.

Canada Com will also provide support to other government departments and agencies in the pursuit of broader activities to ensure Canada's national security. In this regard, the CF will continue to provide naval and air capabilities to OP CARIBBE, Canada's mission in support of Joint Interagency Task Force South (JIATF(S)). JIATF(S) is a multi-national mission to counter narcotic trafficking activities in the Caribbean, Gulf of Mexico, Eastern Pacific and Western Atlantic. The CF will seek to contribute between 60 and 90 ship days and 200 flying hours in support of JIATF(S) operations.

The CF will continue to provide a presence in the three northern territories through Canada COM's regional Commander responsible for the North. The Canadian Rangers, who are to be expanded and their equipment modernized, will continue to conduct regular sovereignty patrols in the region. In addition, the CF will continue to increase both the range and complexity of their joint exercises in the Arctic. The establishment of an Arctic Training Centre in Resolute Bay and a deep-water docking and refueling facility in Nanisivik, the construction of the new Arctic/Offshore patrol ships, and ongoing scientific research into remote surveillance and sensing equipment suitable for northern operations, will further increase the CF' presence and enhance their surveillance capabilities in the Arctic as well as their capacity to support other departments and agencies' activities in the region.

The CF, through Canada COM, will work with their US counterparts to develop and improve the concepts of operations, and command and control structures in North America that will include developing a Combined Defence Plan. To this end, Canada COM, in conjunction with the North American Aerospace Defense Command (NORAD) and the US Northern Command (NORTHCOM), will continue to conduct bilateral training and exercises.

The Commander Canada COM is responsible for domestic aeronautical and maritime search and rescue (SAR) operations. The air force provides the equipment and personnel for aeronautical incidents, and the Canadian Coast Guard provides marine resources and personnel for maritime incidents. Where and when required in each search and rescue region across Canada, maritime and/or aeronautical responses are accomplished by CF and Canadian Coast Guard personnel working closely in Joint Rescue Coordination Centres.

International Operations

Security in Canada ultimately begins with stability abroad and the CF have an important role to play in maintaining international peace and security.

The Commander of Canadian Expeditionary Forces Command (CEFCOM) is responsible for the conduct of all overseas operations, including assistance to humanitarian operations, as well as peace support and combat operations.

Through CEFCOM, the CF will support a range of international operations and, should the Government request it, will be prepared to engage in:

• deploying forces globally, as directed by the Government, to participate in operations with NATO, the UN or other coalition partners;
• supporting Canada's commitments to NATO and the UN by making maritime, land and air forces available to provide a rapid response capability for use in international emergencies and other security challenges;
• delivering funds and materials from CIDA to civil-military co-operation projects in theatres of operation;
• providing humanitarian assistance and conducting disaster relief activities in Canada and anywhere in the world which could include: helping civil authorities provide humanitarian relief, providing medical assistance, and re-establishing local infrastructure through the Disaster Assistance Response Team (DART), possibly as part of an international joint and combined force; and
• evacuating Canadians from foreign countries threatened by imminent conflict, in conjunction with the military forces of other nations.

The deployable organizations under command of CEFCOM include:

• Disaster Assistance Response Team who will continue to provide humanitarian support and disaster relief to domestic and overseas missions, as directed. The core DART consists of four elements: primary medical care, water purification, Command and Control (C2) and integral support capable of expanding to include additional existing CF capabilities. The DART Enhancement Project, expected to be completed in fiscal year 2007-2008, enhances the DART concept as it relates to its flexibility by adding equipment to better serve disaster response needs. The lessons learned from the deployments to Sri Lanka and Pakistan will be used to guide equipment requirements; and
• Canadian Forces Joint Headquarters (CFJHQ) which will continue to provide, within 48 hours of notice, reconnaissance and leadership for the DART, Non-Combatant Evacuation Operations (NEO) and leadership for, and subject-matter expertise in, Theatre Activation.

Lessons learned through the conduct of worldwide operations will be applied to make improvements to the effectiveness and efficiency of operations conducted by CEFCOM. In particular, there will be increased focus on:

• an integrated and unified approach to operations with increased focus on providing value-added support to deployed forces;
• enhanced warning and planning capabilities;
• improved responsiveness to contingencies; and
• expedited transition to operations through improved force preparation (with the Force Generators), and continuous transformation.

Beyond the sphere of the CF, CEFCOM will continue to reinforce the whole-of-government aspects of operations abroad, engage our international partners and help build Team Canada.

CEFCOM deployed operations are enabled by Canadian CANOSCOM, who will continue to conduct worldwide support operations, in support of CEFCOM missions. These operations will typically include the deployment of Interim Staging Teams, movement control detachments and other support teams. CANOSCOM will continue to coordinate the force generation of support and technical assistance teams for employment within CEFCOM operations as determined and approved by CEFCOM.

The evolution and development of operational support capabilities necessary to meet current and future support requirements remains a dynamic element of CANOSCOM's role. A key CANOSCOM role is to work with NATO nations and other partners to create better support through collaboration and sharing national capabilities when deployed. This ongoing effort has already resulted in improvements and as CANOSCOM continues to influence key allies, the CF will benefit from the resulting economies of scale for deployed support. An Operational Support Engineering Group was stood up in March 2007 and is pursuing improvements in the CF general support engineering capacity. Also, the newly formed Operational Support Military Police Group expects to stand-up the initial cadre of a Protective Services Unit in 2008 and CANOSCOM is actively engaged in a number of studies examining support concepts and technologies.

Contribute to Canadian Government, Society and the International Community

Strategic outcome: Good governance, Canadian identity and influence in a global community.

Program Activity: Contribute to Canadian Government, Society and the International Community – Total spending Net of Revenues
Resources ($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Departmental Spending	931,378	1,222,855	1,283,865	1,297,129
Capital Spending (included in departmental spending)	26,231	58,083	59,734	59,341

Departmental and Capital Spending - Planned (Net of Revenue in $ thousands)

Departmental Financial Resources by PAA Sub-Activity Level	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interest and Values
Sub Activity:
Provide Advice to the Government of Canada	78,869	77,980	78,367
Contribute to Canadian Government and Society in accordance with Canadian Interests and Values	582,833	582,806	576,478
Contribute to the International Community in accordance with Canadian Interest and Values	472,660	532,535	549,975
Allocation of Internal Services	88,493	90,544	92,309
Total Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interest and Values	1,222,855	1,283,865	1,297,129

Note:

1. This is the Department's first attempt at reporting planned spending figures by the sub-activity level of the program activity architecture, therefore the numbers are subject to continued revision and refinement.

Capital Financial Resources by PAA Sub-Activity Level (included in Departmental Spending)	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interest and Values
Sub Activity:
Provide Advice to the Government of Canada	1,482	1,490	1,450
Contribute to Canadian Government and Society in accordance with Canadian Interests and Values	16,526	16,733	16,228
Contribute to the International Community in accordance with Canadian Interest and Values	31,736	31,731	30,740
Allocation of Internal Services	8,340	9,780	10,923
Total Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interest and Values	58,083	59,734	59,341

Note:

1. The 2010-2011 planned spending figure for International Operations assumes that the Government will send the Canadian Forces on operations elsewhere in the world at a level comparable to the current operational level.

Provide Advice to the Government of Canada

National Defence will continue to advise the Government of Canada on defence policy and military matters.

In support of the Minister of National Defence and the Government of Canada, DND, through the Deputy Minister, provides the analytical basis for defence policy options; develops advice on issues affecting Canada's international defence and security; and coordinates national policies with Cabinet, Parliament, other government departments and the public.

Through the Chief of the Defence Staff, the CF advises the Government of Canada on military requirements, capabilities and options, and on the likely consequences of either undertaking or failing to undertake various military activities. With four operational headquarters and the Strategic Joint Staff, the CF are better equipped for the new domestic and international security environment and to provide the Government with timely and more comprehensive military advice.

Through the Deputy Minister and the Chief of the Defence Staff, the Chief of Defence Intelligence (CDI) provides a wide range of integrated military and civilian defence intelligence analysis to support decision-making processes. CDI also maintains extensive domestic and international intelligence partnerships, which enable the DND/CF both to benefit from, and contribute to, Canadian and allied intelligence assessments.

Contribute to Canadian Government and Society in Accordance with Canadian Interests and Values

Research and Development (R&D)

The Defence Science and Technology Strategy that is guiding Defence Research and Development Canada (DRDC)'s response to CF transformation and to the changes in Canada's defence and security environment, is now well into its implementation phase. Its objective is to maximize the impact of Science and Technology (S&T) on Canada's defence and security priorities.

This will be accomplished by:

• establishing a Defence S&T Enterprise, a horizontal and functional governance mechanism that connects S&T providers with Defence clients;
• developing a full-service Defence S&T capability that serves all of the institution's core processes; and
• developing strategic partnerships between Defence organizations, and between Defence as a whole and other institutions in government, industry and academia, in Canada and abroad.

The S&T Program, through which much of DRDC's mission is delivered, contains many varied projects, including the following examples:

Northern Watch

In response to the Government's commitment to assert Canadian sovereignty in the Arctic, scientists from DRDC are joining forces with leading military, industrial and academic experts and researchers to examine current arctic command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) issues. Northern Watch, representing the DRDC's contribution to this effort, is a four year project under the auspices of the Technology Demonstration Program (TDP), with a mandate to identify and characterize combinations of sensor and systems that could provide effective surveillance of Canada's Arctic waterways. The three pillars of work involve annual field trials of surface based sensors at navigation chokepoints; studies and simulations of space and surface based sensors for approaches to the Arctic; and knowledge-sharing through annual technical conferences. DRDC is soliciting industry and academic input to the project, and has budgeted $10 million to complete the work.

R&D for Soldier Survivability

The biggest threat to Canadians deployed on operations in Afghanistan is the improvised explosive device (IED) - a makeshift bomb. IEDs are terrorists' weapon of choice and have contributed to over 55 percent of recent CF fatalities. They are lethal, simple to make and very difficult to detect.

DRDC is currently in the second phase of a coordinated R&D effort to examine technologies that have the potential to counter this deadly threat. Some results of this work have already been fielded, ensuring improved personal protective equipment and armoured vehicle protection. Enhanced capabilities to detect the IED will be employed in 2008. Ideas from Canadian industry including geo-profiling systems used by police services to catch criminals are also being evaluated. Over the five years of the project, the Counter IED TDP will provide about $10 million in funding to projects that deal specifically with the improvised bomb problem, and allocate about $15 million more to other soldier survivability issues such as mine detection and neutralization, camp defence and vehicle armour.

Communicating CF History and Heritage to Canadians

The CF will foster a sense of pride through the preservation and dissemination of CF history and heritage that collectively cultivates an image of the CF in accordance with Canadian national values and interests. To achieve this, DND will continue to manage the Canadian Military History Gateway, a website with links to the sites of National Defence, Parks Canada, Library and Archives Canada, the National Film Board, the Canadian Broadcasting Corporation, Veterans' Affairs Canada, and the Canadian War Museum. The website and the partner network of sites promote Canadian military history and heritage throughout the world. In addition, the following activities will be progressed in fiscal year 2008-2009:

• supporting CF Museums in Québec in time for the 2008, 400th Anniversary of the Founding of Québec;
• publishing a first volume of a popular history of Canada's War in South-West Asia, 2001 to end of campaign;
• documenting the history of International Security Assistance Force, Regional Command South; and
• publishing a history of aboriginal contributions to the Canadian military in the first volume of Traditions and Customs of the CF: The Framework of CF Tradition and Heritage, and The Insignia and Lineages of CF: Infantry Regiments.

National Search and Rescue Secretariat

The National Search and Rescue Secretariat (NSS), established in 1986, provides leadership to the National Search and Rescue (SAR) Program through the Interdepartmental Committee on Search and Rescue (ICSAR). ICSAR includes representatives from central agencies and the federal departments and agencies that provide SAR services. The NSS reports directly to the Minister of National Defence, who is the lead Minister for SAR. The NSS is accountable to the Minister through ICSAR for the development, co-ordination, analysis and review of federal SAR program policies and plans, and for specific program activities. The NSS also provides leadership in enhancing co-ordination between provincial, territorial and federal SAR programs, and advises the Minister on program issues.

National SAR Program Strategic Directions and Priorities

ICSAR has adopted the following strategic directions and priorities for the National SAR Program:

• improving SAR Program information management and data exploitation to guide planning decisions and develop prevention and awareness campaigns;
• improving interoperability amongst SAR partners to facilitate an integrated, co-ordinated response on land, at sea and in the air in any SAR operation;
• engaging in public education and awareness to minimize the number of SAR incidents;
• enhancing the SAR volunteer community to increase SAR capacity and capability;
• investing in, and leveraging technology and best practices to improve effectiveness and reduce risk to SAR responders; and
• strengthening SAR partnerships with the public safety community to facilitate and enhance SAR prevention, co-ordination and response activities.

National SAR Secretariat Activities

To support National SAR Program priorities, the NSS will cooperate with SAR partners in the following activities during fiscal year 2008-2009:

• clarifying the National SAR Program to improve national program needs and international obligations;
• fostering closer links between ICSAR and the Ground Council of Canada, which includes provincial and territorial SAR authorities;
• advancing the Northern SAR Strategy by partnering with the territorial governments and federal stakeholders to strengthen the northern SAR infrastructure and SAR related plans and procedures;
• continuing implementation of an improved comptrollership framework for the Search and Rescue New Initiatives Fund, and promote use of the Fund;
• renewing the NSS website to improve the availability and accessibility of search and rescue information;
• coordinating national efforts to transition COSPAS-SARSAT to a system based on mid-earth orbit satellites;
• implementing of a multi-pronged Beacon Awareness Strategy to focus on information and awareness building around Canada's beacon system and registry, in particular an understanding that the COSPAT-SARSAT satellites will stop listening to the 121.5 MHz beacon signals as of February 1, 2009;
• transferring the Canadian Beacon Registry to the CF's Canadian Mission Control Centre (CMCC) in Trenton and develop communication and education material for beacon owners; and
• exploring with ICSAR members the merit of initiating a technology foresight focusing on policy directions of future SAR technologies.

For the financial details of the National SAR Program and the National Search and Rescue Secretariat, refer to Table 6 in Section III. More information about the NSS is available online at the following address: <http://www.nss.gc.ca/>.

Ombudsman

The Ombudsman's office (OMB) acts as a direct source of information, referral and education for the men and women of the CF, employees of National Defence, military families and other constituents. The office helps individuals access existing channels of assistance or redress when they have a complaint or concern. The office also investigates complaints and serves as a neutral third party on matters related to the Department of National Defence and the CF and, when necessary, reports publicly on these issues.

The OMB will continue to contribute to substantial and long-lasting improvements to the overall quality of life of military members, civilian employees, Defence families, and other constituents.

Priorities of the OMB in fiscal year 2008-2009 will be:

• strengthen overall program delivery, above all its level of service to DND/CF members and their families, consistent with the 2008-2009 priorities for Defence;
• strengthen capacity and expertise to uphold longer-term delivery on its mandate for all members of Canada's Defence community; and
• improve accountability and openness in its investigations and operations.

Work Environment

Defence is committed to a workplace that promotes equitable treatment and respect in a diverse environment. The successful recruitment and retention of a diverse workforce in the CF is of utmost importance. As such, Defence continues to improve efforts in the areas of diversity, employment equity (EE), official languages (OL) and alternative dispute resolution.

Chief Military Personnel Group (CMP) will continue to monitor the implementation of the CF Employment Equity (EE) Plan.[20] The CF EE Plan can be viewed at: <http://hr3.ottawa-hull.mil.ca/dmgiee/ee/docs/English/CF_EE_Plan_e.pdf>. The expected result is improved representation for visible minorities and Aboriginals by fostering inclusive cultural change initiatives and by facilitating career development of Designated Group Members.

In addition, CMP will conduct an extensive OL policy review to reflect the new strategic intent as outlined in the National Defence Official Languages Program Transformation Model.

CF and DND formal workplace conflict resolution mechanisms will be aligned with the informal Alternative Dispute Resolution (ADR) mechanism to make ADR the default option for dealing with workplace conflicts will strengthen the leadership competency and departmental capacity for dealing with workplace conflicts as the lowest level possible. ADR skills will be incorporated into training for those going on operational deployments.

The Assistant Deputy Minister (Human Resources-Civilian) Group (ADM(HR-Civ)) will continue to coordinate and manage the provision of statutory second language training within DND as a result of bilingual non-imperative staffing.

ADM(HR-Civ) will also conduct an Employment Systems Review (ESR) leading up to the next Corporate EE Action Plan. An exhaustive workforce analysis will follow to orient the ESR findings. The resulting recommendations will fuel the development of an updated EE plan that will contain measures to address the barriers to employment of designated group members at DND.

Recognition

A fundamental element in Canada's proud military tradition is to recognize loyalty, honour and actions above and beyond the call of duty. Public recognition ensures that Canadians understand and continue to appreciate the dedication of our men and women in uniform. From a CF perspective, recognizing CF members contributes to retention and instills continued pride in, and loyalty to, the organization.

Contribute to Youth – Cadets and Junior Rangers

Canadian Cadet Program

The Canadian Cadet Program is a federally sponsored national training program for youth between the ages of 12 and 18, conducted by Defence in partnership with the Navy Cadet League, the Army Cadet League and the Air Cadet League. The leagues recruit cadets, and organize accommodation and sponsors for each cadet unit. The CF provides personnel from the Regular Force, the Primary Reserve and more specifically, members of the CIC (Cadet Instructor Cadre). The CF also provides uniforms, some infrastructure and other support services such as airlift.

The Cadet Program will be:

• developing in youth the attributes of good citizenship and leadership;
• promoting physical fitness; and
• stimulating the interest of youth in the sea, land and air activities of the CF.

Approximately 58,200 young Canadians will benefit from cadet training from September to June. This will include some 1.7 million training days. Approximately 23,300 cadets will be selected to attend national activities such as biathlon or marksmanship or one of the 24 Cadet Summer Training Centres located across the country either as trainees, or as Staff Cadets in leadership roles.

Junior Canadian Rangers

The Junior Canadian Rangers (JCR) Program is for approximately 3,300 youth between the ages of 12 to 18 years. 111 JCR Patrols are located in communities that have Canadian Rangers. The JCR Program provides structured youth activities promoting traditional cultures and lifestyles in remote and isolated communities of Canada.

The JCR Program is conducted in collaboration with local committees of adult community members who are, in many cases, supported directly by the band, hamlet or municipal council. The community provides a location for training, screens potential volunteers and instructors, and schedules training activities. The CF provides uniforms, training, financial and administrative support to the JCR Program, and CF Regular Force and Primary Reserve personnel assist in the delivery and evaluation of JCR training during regular visits and field training exercises. The CF also provides Canadian Rangers with opportunities to serve as program developers, leaders, facilitators, and supervisors.

In fiscal year 2008-2009, the JCR Program will include some 75,600 local training days for 3,600 Junior Canadian Rangers and 5,460 enhanced training days to its 780 leaders, facilitators, supervisors and program developers.

Contribute to the International Community in Accordance with Canadian Interests and Values

DND and the CF contribute to the international community in accordance with Canadian interests and values through military operations abroad, bilateral and multilateral activities, industrial defence cooperation, scientific and technological cooperation, and the provision of military training assistance.

Support to Regions and Countries at Risk

In a globalized and unpredictable security environment, the best way to prevent threats from reaching our borders is to address them at their source. In addition, working to bring peace, good governance, and development to less fortunate parts of the world reflects Canadian values.

The CF will continue to deploy in support of international operations abroad. For example, CF personnel will continue to serve on missions in Europe, the Middle East and Africa. In addition to the mission in Afghanistan, Defence will continue to support international efforts to implement peaceful solutions to the crises in Darfur and the Sudan, through the African Union/United Nations Hybrid operation in Darfur (UNAMID), with CF personnel and the continued loan of armoured vehicles to troop contributing countries, as well as the United Nations Mission in the Sudan (UNMIS).

Multilateral Organizations and Other International Activities

Defence contributes to several multilateral and bilateral organizations that are both aligned with our national values and serve as mechanisms through which we can advance and protect our interests on the international stage. NATO and North American Aerospace Defence Command (NORAD) are central pillars of Canadian foreign and defence policy and the CF will continue to take part in operations led by these organizations. In addition, National Defence will continue to contribute funding and personnel to support the command structures and common-funded programs of the Alliance and NORAD.

Over the next year, officials from Canada and the United States (US) officials will continue to explore ways to improve the defence and security of North America by further enhancing bilateral coordination, training, plans, and other initiatives between Canada Com and NORTHCOM, including the refinement of a comprehensive Combined Defence Plan. Officials will also work to further develop the concept of operation for NORAD's maritime warning mission.

In addition, Defence will work with other organizations, such as the European Union, the African Union, and the Organization of American States, to further global stability and promote Canada's values abroad. For example, Defence will support Canada's engagement in the Americas by hosting the 2008 Conference of Defence Ministers of the Americas.

Industrial Defence Cooperation

In fiscal year 2008-2009, Defence will seek to enhance cooperation with our allies, such as being involved in the development of the Joint Strike Fighter (JSF) program, a US-led collaborative effort to produce an affordable, next-generation, multi-role aircraft. In addition, Defence will continue to explore opportunities to cooperate with the US under the Security and Prosperity Partnership. DND will also continue to promote Canada's financial, industrial and policy interests through NATO working groups and programs.

Scientific and Technological Cooperation

The involvement of Defence Research and Development Canada in numerous international defence science and technology working groups and collaborative research fora facilitates the exchange of knowledge, and heightens Canada's profile on the world stage as a leader in scientific and technical innovation. These fora include the Technical Co-operation Program - an international research forum made up of Canada, the US, the United Kingdom, Australia and New Zealand - and the NATO Research and Technology Organization. In the fall of 2006, DRDC and Public Safety Canada jointly established the DRDC Centre for Security Science, which fosters interdepartmental collaboration on security-related technology and liaises with the US Department of Homeland Security.

Military Training Assistance Program (MTAP)

MTAP promotes Canadian interests and values abroad and contributes to international peace and security, by providing language courses, professional development (including command and staff courses), and peace support operations training to over 60 member countries. In fiscal year 2008-2009, MTAP will continue to work in cooperation with other allies to build and enhance peace support and capacity-building training initiatives in line with CF strategic objectives.

For additional information on the MTAP Program see Section III Table 9c: Detail Narrative on Transfer Payments Programs over $5 million or visit the TBS website at: <http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp>.

SECTION III – Supplementary Information

Table 1a: Departmental Links to Government of Canada Outcome Areas

[Click on image to enlarge]

Table 1b: Link to Government of Canada Outcome Areas

Defence actively contributes to all Government of Canada Outcomes. The following table provides a summary of the linkages between Defence Strategic Outcomes and Government of Canada Outcomes. Additional details on past contributions of Defence can be obtained on the Canada's Performance and the 2006-2007 Defence Departmental Performance Report websites.

Government of Canada Strategic Outcomes	National Defence’s Strategic Outcomes
	Canadian’s Confidence that DND/CF has relevant and credible capacity to meet Defence and Security commitments	Success in assigned missions in contributing to domestic and international peace, security and stability	Good governance, Canadian identity and influence in a global community
Economic Affairs
· Income security and employment for Canadians	◘
· An innovative and knowledge-based economy	◘		n
· A clean and healthy environment	◘
Social Affairs
· Healthy Canadians	◘
· Safe and Secure communities	n	n	◘
· A diverse society that promotes linguistic duality and social inclusion	◘		◘
· A vibrant Canadian culture and heritage			n
International Affairs
· A safe and secure world through international cooperation	◘	n	n
· Global poverty reduction through sustainable development		◘
· A strong and mutually beneficial North American partnership	n	n	n
· A prosperous Canada through global commerce	◘
Government Affairs			◘

Table 2: Sustainable Development Strategy

1. SDS Departmental Goal:   Since its first Sustainable Development Strategy (SDS) was tabled in Parliament, Defence has focused on the overarching goal of integrating environmental considerations into decision-making at every level of the organization. Our environmental vision, as set out in the 2006 version of the Defence SDS, as well as the Defence Administrative Order and Directive 4003-0, reiterate the SDS departmental goal. The Defence SDS explains in detail the nature and extent of the integration of environmental considerations in DND.

2. Federal SD Goal including Greening of Government Operations (GGO) goals: Implementation of the fourth iteration of our SDS began on April 1st 2007. Defence focuses equally on all of the goals, objectives and targets (or commitments) made in the SDS in order to achieve sustainability within the organization. Our efforts are focused on four strategic commitments, each supported by measurable and time-bound sub-commitments (targets). The four strategic commitments are to: Develop a framework of land use management putting our lands on a steady-state footing of sustainability; Actively promote the application of innovative Green Building principles and share lessons learned with the broader federal community; Implement a proactive and comprehensive Green Procurement program across the Defence organization; and, Actively and innovatively prevent negative environmental impacts of specific activities over which Defence can exercise a mitigating influence. Each of these strategic commitments relates to one or more federal SD goals (specifically the GGO element of those goals). A detailed crosswalk establishing the linkages is included in the Defence SDS at Table 4, page 33 of the document which is available on the Internet at: http://www.admie.forces.gc.ca/dge/SDS/SDS2006_e.htm.

3. Performance Measure from current SDS Defence strategic commitments are supported by a total of 16 sub-commitments that provide concrete indications of the Department's progress toward achievement of the strategic commitments. Each of these sub-commitments comprises a concise statement of the desired end state (example, Strategic Commitment 4.2, Reduce the long-term impact of releases to the environment) supported by objective indicators (Increase the recovery of lead by 5% from the 2003-2004 baseline) and supporting actions (Screen backstop material on small arms ranges to recover metal fragments; Investigate the use of alternate backstop/bulletstop designs that facilitate metal recovery). These sub-commitments or targets are set out in detail in Table 1, page 23 of the Defence SDS document. In addition, Guidance sheets to support each of the sub-commitments have been produced to provide those responsible for implementing the target with the name and coordinates of a subject-specific expert for each target, the definition and scope of the sub-commitment, an action plan for achieving it, and a template to ensure uniform data collection.

4. Department's Expected Results for fiscal year 2008-2009 As noted above, each of the four strategic commitments is supported by a number of specific sub-commitments, which are measurable, time-bound targets that, taken together, will result in the successful achievement of the commitments. Since the Department's commitments are largely multi-year in nature (i.e., exceeding the three-year reporting cycle of the SDS process), the targets cannot be precisely measured as an annual percentage of completion. Rather, the data reported annually through the chain of command is analyzed and graded as: target exceeded ((if the three-year goal has been achieved before completion of the three-year cycle); target met (applicable only at the end of each three-year cycle); target on track (where progress in a given year indicates that the target can be met for the three-year reporting); or progress unsatisfactory (where analysis indicates that meeting the target will be problematic based on evaluation of the data submitted through the annual reporting exercise). The Department expects to report target on trackfor each of the 16 targets that support our strategic commitments for fiscal year 2008-2009. In addition, the Department monitors the untargeted performance of an additional four activities that are of continuing interest to the sustainable development community. This exercise provides the data that may be required for government-wide reporting, and allows Defence to identify unexplained and significant variances that would warn of the need for corrective action up to and including re-introducing the activity as a targeted activity in a future SDS.

Table 3: Cost Estimates for CF International Operations

($ Thousands)	FY 2007-2008 Forecast		FY 2008-2009 Planned
Operations	Full DND Cost	Incremental DND Cost	Full DND Cost	Incremental DND Cost
Africa
IMATT – OP SCULPTURE (Sierra Leone)	1,826	450	1,773	723
MONUC – OP CROCODILE (DRC)	1,704	350	2,008	654
UNAMIS – OP SAFARI (Khartoum, Sudan)	5,575	1,500	11,669	8,216
AMIS – OP AUGURAL (Addis Ababa, Ethiopia)	24,918	23,300	43,765	42,803
Sub-Total	34,023	25,600	59,215	52,396
Arabian Gulf Region and South West Asia
OP ALTAIR (South-west Asia)	13,731	6,500	155,480	73,600
OP ARGUS (Afghanistan/Kabul)	3,639	1,500	4,110	2,239
OP ATHENA – ISAF NATO (Afghanistan)	2,568,231	1,077,000	2,403,692	1,008,000
OP ARCHER – OEF (Afghanistan)	4,463	1,000	2,385	1,000
Sub-Total	2,590,064	1,086,000	2,565,667	1,084,839
Americas and the Caribbean
OP FOUNDATION (US CENTCOM Tampa)	1,566	500	816	510
MINUSTAH – OP HAMLET (Haiti)	713	80	730	215
Sub-Total	2,279	580	1,546	725
Europe
OP BRONZE (Bosnia) (NATO)	1,246	180	1,111	265
OP SEXTANT – (NATO)	17,956	8,500	27,779	13,150
Sub-Total	19,202	8,680	28,890	13,415
Middle East
MFO (Multinational Force & Observers) – OP CALUMET (Sinai) non-UN	3,734	500	3,341	901
UNTSO – OP JADE (Middle East)	1,228	90	1,122	215
OP PROTEUS (Jerusalem)	784	350	1,385	360
UNFICYP – OP SNOWGOOSE (Cyprus)	176	50	148	50
OP GLADIUS (Syria)	488	50	303	65
Sub-Total	6,410	1,040	6,299	1,591
Common Costs
Others (expenses related to more than one mission)	550	550	500	500
Sub-Total	550	550	500	500
Total: Operations	2,652,528	1,122,450	2,662,117	1,153,466
	UN Revenue to CRF	UN/MFO Revenue to DND	Est UN revenue to CRF	Est UN/MFO revenue to DND
Revenues/Recoveries	114	558	16	9,068

Additional Financial Information

The following tables can be found on the Treasury Board Secretariat website at <http://www.tbs-sct.gc.ca/rpp/2008-2009/info/info-eng.asp>.

• Services Received Without Charge
• Loans, Investments and Advances (non-budgetary)
• Sources of Respendable and Non-Respendable Revenue
• Summary of Capital Spending by Program Activity (includes Details on Project Spending (Capital) Greater than $30 million, and Capital Construction Program Spending over $60 million)
• Status Report on Major Crown Projects
• Details on Transfer Payments Programs (includes Summary of Transfer Payments Program by PAA, Details on Transfer Payments Program over $5 million - Narrative, Details on Transfer Payments Program over $5 million)
• Evaluations
• Green Procurement
• Internal Audits

SECTION IV: HUMAN AND FINANCIAL RESOURCES TABLES ON SELECTED PORTFOLIO ORGANIZATIONS

Table 1: Reserve Force

Primary Reserve Planned Expenditures

Primary Reserve Full Cost Estimate
The Primary Reserve accounts for 6.5% of the total Defence Services Program. The costs are divided into four categories: direct, indirect, attributed and capital costs. This method of reporting is intended to provide greater clarity on the makeup of the total costs of the Primary Reserve.

Direct expenditures include funds specifically budgeted for the Primary Reserve such as pay, travel and goods and services which are locally procured.

Indirect expenditures reflect the Primary Reserve share of departmental resources, which are controlled centrally. Included are ammunition, equipment operating costs, clothing and the cost of maintaining facilities such as armouries.

Attributed expenditures are departmental overhead costs, which are allocated, for reporting purposes, to all activities including the Primary Reserves. In reality, these costs do not vary directly as a function of activity and would largely be incurred whether the Primary Reserve existed or not.

Capital expenditures are shown for the year in which payments have been made, and do not reflect an amortization of cost over the life of the asset. The capital expenditures can vary significantly from one year to the next, depending on priorities established within the capital equipment plan and the cash flow requirements of individual projects.

Type of Expenditure ($Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009
Reserve Pay2	584,350	582,730
Regular Support Staff	127,961	134,836
Reserve Operating	86,973	90,278
Subtotal Direct	799,284	807,844
Ammunition	29,156	29,160
Equipment Usage	63,849	65,835
Clothing	14,816	15,053
Facility Operating3	40,957	29,654
Subtotal Indirect	148,778	139,702
Base Support	214,325	219,864
Training	4,248	4,352
Subtotal Attributed	218,573	224,216
Subtotal Primary Reserve
Operating	1,166,635	1,171,763
Dedicated Capital4	4,832	15,547
Shared Capital5	12,508	30,131
Subtotal Capital	17,340	45,678
Total Primary Reserve Costs1	1,183,975	1,217,441

Notes:

1. Direct pay and operating amounts do not reflect forecasted/planned spending involving members of the Canadian Rangers, the Cadet Instructors Cadre or the Supplementary Reserve sub-components. They do however include the cost of employing Primary Reservists in positions that would normally be occupied by the Regular Force.
2. The decrease in Reserve Pay is explained by in-year pressures for support to deployed operations and by recurring spending not yet reflected permanently in the planned spending.
3. Forecast spending for 2007-2008 includes an up-front basic rent payment of $12M for the relocation of the Toronto Scottish Regiment.
4. The increase in Dedicated Capital is explained by the funding allocated to three infrastructure projects which are the overhaul of the Base Transportation facility in Chilliwack, the construction of an armoury to house the Cameron Highlanders of Ottawa and the consolidation of the area support unit in London.
5. The increase in Shared Capital is explained by the delivery of Clothe the Soldier project such as Temperate Combat Boots, Rucksacks, Vehicle Crew Helmet and Rain Suits.

Table 2: Communications Security Establishment Canada

Financial Resources ($ 000's) by Fiscal Year	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Vote 1 - Salary and Personnel 1	142,759	130,986	130,986	130,986
Vote 1 - Operating and Maintenance 2	70,652	68,840	65,833	63,194
Sub-total Vote 1	$213,411	$199,826	$196,819	$194,180
Vote 5 - Capital 2	54,151	42,946	46,837	64,386
Grand total	$267,562	$242,772	$243,656	$258,566

Notes:

1. The forecasted spending in Salary and Personnel for 2007-2008 includes an amount of approximately $8M for Market Allowances (i.e. retention pay for Computer Science and Engineering staff). It also includes $4M for salary pressures and SDOA (Support to Deployed Operations Account).
2. Fluctuations for O&M and Capital are due to funding requirements for the approved mid-term Accommodations Project.

Table 3: Office of the Judge Advocate General

Financial Resources ($ 000's) by Fiscal Year	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Vote 1 - Salary and Personnel 1	5,606	5,900	5,527	5,527
Vote 1 - Operating and Maintenance	3,024	2,595	2,584	2,622
Sub-total Vote 1	$8,630	$8,494	$8,110	$8,149
Vote 5 - Capital	153	153	155	158
Grand total	$8,783	$8,647	$8,266	$8,307
Corporate Account
Vote 1 - Crown Liabilities	225	229	232	236
Grand Total	$9,008	$8,876	$8,498	$8,542

Note:

1. The decrease between 2008-2009 and 2009-2010 is explained by the termination of the Comprehensive Information Management Project.

Table 4: Office of the Ombudsman for the Department of National Defence and the Canadian Forces

Financial Resources ($ 000's) by Fiscal Year	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Vote 1 - Salary and Personnel 1	4,158	4,095	4,095	4,095
Vote 1 - Operating and Maintenance	1,801	1,832	1,859	1,887
Sub-total Vote 1	$5,959	$5,927	$5,954	$5,982
Vote 5 - Capital 1	90	192	195	198
Grand total	$6,048	$6,119	$6,150	$6,180

Note:

1. Due to higher staffing and lower permanent capital requirements, in 2007-2008 a net reallocation of $100K was made from Capital to Salary and Personnel.

Table 5: Defence Research and Development Canada

Financial Resources ($ 000's) by Fiscal Year	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Vote 1 - Salary and Personnel 1	110,837	100,256	100,306	98,656
Sub-total Vote 1 Salary and Personnel	$110,837	$100,256	$100,306	$98,656
Vote 1 - Operating and Maintenance	36,216	36,000	36,000	36,000
Vote 1 - Research & Development Contracts	80,380	82,535	84,355	86,203
Vote 1 - Environment and Infrastructure 2	12,527	7,150	7,228	7,306
Vote 1 - Centre for Security Science (CSS) 3	19,000	43,480	42,689	36,559
Vote 1 - Revenue	(3,500)	(3,500)	(3,500)	(3,500)
Sub-total Vote 1 Operating and Maintenance	$144,623	$165,665	$166,772	$162,568
Total Vote 1	$255,460	$265,921	$267,078	$261,224
Vote 5 - Capital 4	19,151	8,578	9,867	7,669
Vote 5 - Centre for Security Science (CSS)	6,000	7,000	9,000	7,000
Total Vote 5	$25,151	$15,578	$18,867	$14,669
Grand total	$280,611	$281,499	$285,945	$275,894

Notes:

1. The difference in Salary and Personnel between 2007-2008 and the future years is partially due to Terminable Allowances (i.e. retention pay) for Defence Scientists of $5.5M. The remaining difference is due to pay increments and higher permanent staffing not included in planned spending, as a result of increased research and development activities.
2. The variation between 2007-2008 and the planned years is explained by an in-year funding of $1.5M for radiological decontamination and $3.5M for infrastructure maintenance.
3. The above figures include a re-profiling of $20M as follows: $8M to 2008-2009, $10M to 2010-2011, and $2M to 2011-2012.
4. An in-year funding of $12.3M was allocated in 2007-2008 for procurement of equipment.

Table 6a: National Search and Rescue Secretariat

Financial Resources ($ 000's) by Fiscal Year	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Vote 1 - Salary and Personnel	1,686	1,686	1,686	1,686
Vote 1 - Operating and Maintenance 1	1,377	1,153	1,169	1,187
Sub-total Vote 1	$3,063	$2,839	$2,855	$2,873
Vote 5 - Capital 2	96	2,363	3,702	8,195
Vote 10 - Grants and Contributions 3	4,741	4,190	4,190	190
Grand total	$7,899	$9,392	$10,748	$11,258

Notes: 

1. The difference between 2007-2008 and future years, is due to a project aimed at informing users of a new beacon frequency, which will help in Search and Rescue activities.
2. Approximately $4M in Vote 5 funding is available to other government departments and to other National Defence organizations annually for Search and Rescue related projects. The above figures are net of the following transfers: $2,781K for 2007-2008, $1,832K for 2008-2009 and $493K for 2009-2010. The increase in funding in 2010-2011 is due to termination of the Search and Rescue New Initiatives Funds (SAR NIF) contribution program, therefore once the program is renewed, $4M from Vote 5 will be reallocated to Vote 10.
3. Vote 10 includes $190K contribution as Canada's share of the costs for the "Cosmicheskaya Sistyema Poiska Avariynich Sudov"-"Search and Rescue Satellite-Aided Tracking" COSPAS-SARSAT Secretariat and $4M for contributions in support of Search and Rescue New Initiatives Fund (SAR NIF) up to 2009-2010. Program renewal for a minimum of 5 years will be sought for continuous funding resuming in 2010-2011.

Table 6b:  Search and Rescue (SAR) Personnel Requirements (FTEs)

	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
National Search and Rescue Secretariat	23	23	23	23
Environment Canada - Meteorological Service of Canada	17	17	17	17
Parks Canada	64	64	64	64
Department of Fisheries and Oceans – Canadian Coast Guard  1	N/A	N/A	N/A	N/A
Department of National Defence – Canadian Forces	583	598	597	600
RCMP  2	N/A	N/A	N/A	N/A
Transport Canada  3	3	3	3	3
Total	690	705	704	707

Notes:

1. FTE figures for the Canadian Coast Guard were not available because CCG operations involve multi-tasking.
2. The RCMP is unable to provide exact costs as it relates to personnel requirements due to the fact that personnel are tasked with a wide variety of duties, one of which is SAR. The SAR expenditures nationally would be substantial.
3. TC has no mandate for primary SAR response and does not identify or dedicate resources to these activities. The level of personnel commitment to SAR prevention work is represented in the table above.

Table 6c:  Costs by Participating Department/Organization

($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
National Search and Rescue Secretariat 1	7,899	9,392	10,748	11,258
Environment Canada - Meteorological Service of Canada	2,100	2,100	2,100	2,100
Parks Canada	5,959	5,959	5,959	5,959
Canadian Coast Guard	103,800	103,600	103,600	103,600
Department of National Defence – Canadian Forces	100,549	106,538	108,246	109,869
RCMP 2	N/A	N/A	N/A	N/A
Transport Canada 3	628	628	628	628
Total	220,935	228,217	231,281	233,414

Notes:

1. Changes due to transfers to other government departments and to other Department of National Defence organizations for implementation of SAR NIF projects. This includes transfers of $2,781K for FY 2007-2008, $1,832K for FY 2008-2009, $493K for FY 2009-2010 and none for FY 2010-2011.
2. As the resource allocations for SAR are provided under provincial auspices, no figures are available for RCMP federal SAR activity. RCMP supports other departments with multi-tasked assets when required.
3. TC has no mandate for primary SAR response and does not identify or dedicate resources to these activities. The level of financial commitment to SAR prevention work is indicated in the table above.

SECTION V: INTERNAL SERVICES

Internal Services do not constitute a defined program activity within the Program Activity Architecture (PAA) construct but provide a place to list the organizational entities, such as finance and information management that support and provide coherence to the three program activities in the PAA structure. The costs of Internal Services activities are distributed across the three program activities according to a pro-rated formula.

Departmental and Capital Spending - Planned (Net of Revenue in $ thousands)

DEPARTMENTAL FINANCIAL RESOURCES BY PAA LEVEL	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Internal Services
Allocated to the following program activities:
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	1,076,025	1,098,381	1,121,938
Conduct Operations	117,991	120,349	123,010
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interest and Values	88,493	90,544	92,309
Total Internal Services	1,282,509	1,309,274	1,337,257

Note:

1. This is the Department's first attempt at reporting planned spending figures by the sub-activity level of the program activity architecture, therefore the numbers are subject to continued revision and refinement.

Capital Financial Resources by PAA Level (included in Departmental Spending)	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Internal Services
Allocated to the following program activities:
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	101,409	118,635	132,761
Conduct Operations	11,120	12,999	14,556
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interest and Values	8,340	9,780	10,923
Total Capital Financial Resources - Internal Services	120,869	141,413	158,240

Note:

1. The 2010-2011 planned spending figure for International Operations assumes that the Government will send the Canadian Forces on operations elsewhere in the world at a level comparable to the current operational level.

Management and Oversight Services

Results and Performance

Performance management (PM) remains a key component of the overall business planning cycle. Defence will continue its effort to align the DND/CF Performance Management Framework (PMF), the Program Activity Architecture (PAA) and the Management Accountability Framework (MAF). The PMF provides relevant information on internal, service and program results. The goal is to have a PMF with balanced and factual information to help decision-making and public reporting.

The PMF system continues to mature at DND and senior managers routinely discuss issues raised through the PMF system, in structured Balanced Scorecard discussions. The semi-annual internal performance management discussion paper and follow-on Defence Management Committee (DMC) discussion continue to be key processes for communicating and executing the Defence Strategy within the senior leadership. The PMF also allows senior management to monitor progress towards achievement of "stretch targets" in the transformation and modernization of the CF.[21]

The priority for fiscal year 2008-2009 is to continue to evolve and mature the Defence PMF to ensure the right sets of performance indicators, measures and targets are in place for the Defence Balanced Scorecard and Strategy Map to accurately monitor the progress towards the development of a modern, first-class military. The Vice-Chief of the Defence Staff organization will continue to provide focus to the Defence Performance Management Action Teams and closely monitor the evolution of the Defence PMF.

Integrated Risk Management

Integrated risk management (IRM) is making progress in the Department. The Corporate Risk Profile (CRP) is still being developed to enable Defence to assess its operating environment and capacity to deal with high-level risks associated with strategic objectives. Part one of the CRP, which sets out the background, the strategic context, the methodology for Defence risk assessment, the areas of strategic risk, etc., has now been completed. Part two of the CRP is scheduled for completion in February 2008. It will give a snapshot of strategic risks in Defence and will identify the key high-level risks that must be managed at the corporate level. These risks will be analysed and response strategies will be developed.

Having released a departmental IRM Implementation Plan with target dates, risk management principles will be integrated to an increasing extent into strategic and business planning, in decision-making processes and in reporting. Application of the Implementation Plan will also enable the integration of the practice of IRM across Defence, and will ensure the continuous learning in the risk management field.

Defence is increasingly integrating IRM into the Performance Management Framework, the main portal for reporting risk information. Further efforts to integrate IRM into other strategic processes at Defence will continue throughout fiscal year 2008-2009 in accordance with the IRM Implementation Plan. These efforts will include long-term work to develop and implement an effective IRM framework across all Defence Materiel Acquisition and Support activities.

Defence will continue to apply risk management techniques that reflect its historical funding trends. Continued application of a prudent risk management strategy that incorporates reasonable levels of over-programming in combination with identified risky investments is essential to success in achieving the Defence mission.

Accountability

The Treasury Board Secretariat (TBS) intends for the Management Accountability Framework (MAF) to continue its maturation as a definitive assessment of departmental management capacity. From a Defence perspective, the MAF will evolve into an instrument for the continuous improvement of management processes. Although previous DND assessment results have been acceptable, TBS has suggested that senior management should focus its attention on the following:

• better integration of Risk Management in departmental management processes and, in particular, development of a Corporate Risk Profile. Defence has responded by launching risk management initiatives to meet TBS requirements by the end of 2009;
• expedited development and deployment of the Management Results and Reporting Structure (MRRS). Defence is on target to meet full MRRS implementation by 2009; and
• submission of an approved investment plan to TBS by Fall 2008.

Defence management is becoming increasingly engaged with the MAF and aware of its growing importance as an instrument of compliance with central agency directives. In particular, senior managers recognize the degree of autonomy assigned to Defence will be directly dependent on MAF assessment results. Therefore, Defence intends to use the MAF throughout the whole year to improve management practices. This will have the added benefit of facilitating analyses of results and, in those instances where targets are either missed or exceeded, determine whether the results were attributable to management capacity or other factors. More information on the MAF is available on the following TBS webpage: <http://publiservice.tbs-sct.gc.ca/maf-crg/inde x_e.asp>.

Governance and Strategic Direction

In June 2007, the Chief of the Defence Staff and the Deputy Minister approved an implementation directive for a revised strategic governance model in the DND/CF. The new governance structure was fine tuned in September 2007 to support the evolution of CF transformation and Defence institutional alignment. The governance structure and processes will continue evolving to provide strategic direction and strengthen accountability. Over the next year, the new governance structure will better support the development and further implementation of the Canada First Defence Strategy, the investment plan, business plans, and project approval and oversight.

Stewardship and Comptrollership

Defence has a strong financial compliance control framework to ensure that it meets the requirements of the Financial Administration Act. The size of the organization necessitates constant fine-tuning of the framework as new resource managers assume their responsibilities and new procurement projects are launched. Also, in response to internal and external audits, the Department must strengthen areas of the framework through structured risk based analysis. This is an ongoing activity made more challenging by the multitude of disparate systems that feed data into the financial system. Medium and long-term departmental plans to consolidate these corporate systems will ensure the repeatability of compliance controls throughout the organization and strengthen the stewardship of financial resources. The key to this consolidation is DND/CF's Audited Financial Statements Project. To position itself for a controls-reliant audit of its financial statements, Defence is formalizing the documentation of all financial processes and controls, identifying opportunities to improve controls and re-engineering processes to improve the control framework. This work will prepare the Department for the Auditor General of Canada's audit of its financial statements while also codifying and strengthening the horizontal controls required to consolidate the various financial information systems.

Corporate Submission Process

The Department has recently revamped the DND Corporate Submissions Process into an integrated, comprehensive end-to-end process that combines the Project Approval Process and the Corporate Submissions Process. This includes capital submissions (for equipment and construction), regulatory and all other types of submissions seeking Ministerial and Treasury Board approvals.

The streamlined process fosters a culture dedicated to a seamless, shared commitment to processes and behaviours that result in tangible improvements and efficiencies in the flow of submissions, from identifying a need to approving expenditure for the implementation of projects. The process brings a disciplined and standardized approach to submissions development, including a consistent look and feel, quality standards, comprehensive strategic analysis as well as the challenge and validation function necessary to the exercise of due diligence, ensure that all levels of review and approvals are completed. This process meets the requirements of the Department, TBS policies and recent guidelines, and in particular, the standards dictated by the MAF.

This major renewal effort undertaken by the Director Strategic Corporate Services necessitates the combined efforts of various organizations and requires detailed changes to processes, procedures and systems throughout the Department. It has already shortened the work by three months. The Department will fully implement the DND Corporate Submissions Process in fiscal year 2008-2009.

Business Continuity Planning

Under the Government Security Policy (GSP), all departments must establish a Business Continuity Planning (BCP) Program to provide for the continued availability of services and associated assets that are critical to the health, safety, security and economic well-being of Canadians, or the effective functioning of government. As outlined in the Deputy Minister and the Chief of the Defence Staff (DM/CDS) BCP Directive distributed in January 2007, establishing a DND/CF-wide BCP Program and developing a comprehensive departmental Business Continuity Plan are high priorities of the DM and the CDS. Significant progress has been achieved during the past year. The DND/CF BCP Action Team, co-chaired by Strategic Joint Staff DG Plans and ADM(Fin CS) Director General Corporate and Shared Services (DGCSS), with Director-level representation from all Level One groups and commands, has served to raise the priority of Business Continuity Planning within DND/CF.

It should be noted that often BCP-type plans already exist to provide for the continued availability of services and associated assets that are critical to the health, safety, security and economic well-being of Canadians, or the effective functioning of government. The DND/CF BCP will catalogue and harmonize these existing plans and arrangements, as well as identify and prioritize areas requiring additional plans and resources. Working collaboratively, and with the support of all Level One organizations and commands, the Action Team co-chairs hope to produce the first draft of the DND/CF BCP in early 2008, followed by the distribution of Level One BCPs in mid-2008.

Access to Information

The number of requests received by National Defence under the Access to Information Act has quickly outpaced the available resources causing a backlog and delays for applicants. The complexity and sensitivity of the subject material being requested, such as information on operations in Afghanistan, has made it difficult to provide a quick response. Another aggravating factor is the fact that the pool of experienced Access to Information and Privacy (ATIP) employees is limited and there are numerous departments competing for them. Extra staff has been hired and organizational changes have been implemented in the past year, but this has not helped to keep up with demand. Defence is committed to regaining its position as a leader in the ATIP community by addressing current shortfalls through short-term and long-term strategies, such as hiring additional experienced ATIP personnel and creating and implementing a Professional Development Program for entry-level employees. The Department is also committed to acquiring a new software system and new hardware for processing ATIP requests. The exploration and implementation of new strategies continues but substantial improvement to response times and backlog reduction will take a number of years.

Financial Management Services

Financial Management Services in Defence are built upon a solid foundation of stewardship and comptrollership activities grounded in a strong financial compliance control framework. A solid business planning process will be bolstered over the short term by the development and application of a risk-based performance management regime at all levels within the Department. This activity will occur in conjunction with the planned development and rollout of a Department-wide decision support tool that will simplify the process of providing management with the appropriate and timely financial and non-financial information. This will aid decision-making and assure the most prudent use of public resources to deliver the key program outputs of the Department.

Accrual Accounting

Departmental appropriations are provided on the modified cash basis used for reporting and accountability to Parliament. However, the 2005 and 2006 federal budgets instituted a second subordinate basis of control over appropriated funds, called the accrual basis. In this second system, control is achieved by using an expense ceiling based on accrual expenses rather than cash expenditures.[22] Capital projects funded from either Budget 2005 and Budget 2006 resources are subject to both the cash appropriation control and the accrual control.

In keeping with modified cash and accrual fiscal control and reporting, this report will present information on planned and actual spending for fiscal year 2008-2009 in Section III.

During the reporting period, the Department will continue the process of expanding the accrual budgeting to other sectors of the Defence budget beginning with the capital construction program. This expansion is the first step in the conversion of the National Defence funding base to full accrual status.

Financial Decision Support System - Way Ahead

The Department is continuing to develop and test elements of the Financial Decision Support (FDS) module of the Defence Information Service Broker project. Once fully tested and delivered to users, the elements will provide up-to-date daily Financial Situation Reports to senior management, as well as Trial Balances in accordance with the Department's PAA structure. Full rollout of these elements is expected by early fiscal year 2008-2009. Once the capability is fully proven, more modules of the FDS will be developed to, among other things, allow restructuring of the Capability Investment Database and permit reporting of activity results and performance under the Department's PAA structure.

International Financial Linkages

Canada hosted the first Defence Senior Financial Officer (SFO) Colloquium in late 2006. ADM(Fin CS) will continue to pursue contacts with his SFO counterparts in the UK, the US, Australia and New Zealand. These discussions will concentrate on lessons learned in the accrual accounting environment, comptrollership, shared services and risk management. The lessons learned are still being developed and individual contacts with each country are being developed to transfer individual lessons learned. Contacts with NATO will continue at various levels ranging from participation in NATO-Russia Council activities, focusing on accountability and risk management, to SFO level meetings, where attention is devoted to strategic issues including funding and overall program management.

Facilities/Asset Management Services

Realty Assets

The Defence realty asset portfolio is in many respects the largest and most complex in the Government of Canada, it includes owned and leased properties of all types and ages. By area, Defence occupies about 33 percent of federal buildings and 7 percent of federal land, with 25 main installations distributed across Canada and realty assets in every province and territory, located in 309 municipalities. The total realty replacement cost of Defence-owned buildings and works, including housing, is estimated at $22 billion.[23] The responsibility associated with managing such a vast realty asset portfolio, which includes several designated heritage sites, places a significant demand on the sustainment capability of Defence.

Defence realty assets are generally considered to be in fair condition, but that status has declined over the past five years due to inadequate funding; investment levels have remained below recognized industry standards for a decade. Over the 2000 - 2006 period, there was a general decline of 15 percent in the condition of works assets, and a decline of 6 percent in the condition of non-residential buildings. If this trend were to persist, the overall condition could be expected to move from fair to poor over the next ten years (fiscal year 2015-2016). The following initiatives will be put in place to rectify the situation:

• a realty asset National Portfolio Management Framework and Plan is being developed to ensure a holistic approach to planning, development and priorities;
• the continued development of Master Realty Asset Development Plans for each base and wing to improve realty asset planning and investment decisions and ensure alignment with departmental priorities;
• increased funding for maintenance and repair of realty assets to halt the decline in their condition and minimize the impact of deferred maintenance will be provided;
• establishment of proactive preventive maintenance functions is being encouraged; and
• more reliable integrated record-keeping is being developed to improve realty asset decisions.

The Canada First Defence Strategy and CF transformation initiatives such as the introduction of new equipment, new and expanded capabilities, the increase in the number of CF personnel, Arctic initiatives and the stand-up of rapid reaction forces are driving the requirement for significant new Defence infrastructure. Over the next five years, the capital investment in infrastructure could double while these new capabilities are put in place. The funding for these new capabilities is being considered as part of the Defence Investment Plan under development within the Department. The delivery of this infrastructure in a timely fashion will be a major undertaking and challenge.

To maximize the efficiency of the realty asset portfolio and to ensure that it supports and enables Defence operations and programs, in fiscal year 2008-2009, DND will:

• implement a realty asset strategy to focus and guide realty asset activities towards a common goal;
• adopt a portfolio management approach to ensure common, integrated and efficient investment decisions;
• incorporate infrastructure planning early in the force development process through an integrated approach to the development of the Defence Investment Plan, which will consider both new capability development as well as the life-cycle sustainment of that capability, of which infrastructure is a key part; and
• develop and implement a strategic realty asset investment program as identified in the departmental investment plan to address pan CF, higher risk and high expense realty asset pressures.

For additional information on the Capital Construction Program see Section III, Table 7.

Information Management Services

IM/IT transformation priorities for fiscal year 2008-2009 will rationalize IM applications and IT infrastructure. It will also include pursuing an improved service model for the delivery of IM/IT services. Improvements will be achieved by continuing to consolidate resources to improve the effectiveness and efficiencies of internal support services and by facilitating rationalization efforts along business lines. Efficiencies realized will contribute to other Defence priorities.

The CF is engaged in an ambitious activity to converge and enhance the myriad of secret Command and Control (C2) systems as a key element to achieve the vision of a transformed CF and rationalize services and systems. The resulting, integrated solution of an Integrated Command and Control (IC2) capability will allow the seamless exchange of, and access to, secret information within the DND/CF and external sharing with other government departments, agencies and key allies. This will be pursued through a combination of in-service support initiatives, capital projects, and business transformation activities all aimed at improving access to information by operational commanders and departmental decision-makers. Similar convergence and enhancements will also be undertaken for intelligence systems.

Efforts will focus on the implementation of shared services for web and security in fiscal year 2008-2009. The Assistant Deputy Minister, Information Management (ADM (IM)) Group will, in addition, continue to develop and implement a record and document management capability, and the development of a content management plan.

Defence will continue to consolidate and strengthen the human resources management information systems. Focus will be given in fiscal year 2008-2009 to improve the systems supporting military personnel policies, processes and organizational changes. ADM(IM) is working in partnership with the military personnel functional authority, Chief of Military Personnel (CMP), to develop a strategy and detailed plan to deliver a more effective human resources management system for the CF.

The foregoing proposed approach will be comprehensive and will address the requirements of the entire military process. It will be refined during fiscal year 2008-2009 and a recommended way forward will be developed.

Legal Services

Since an efficient and responsive military justice system is central to the effective exercise of operational command, the Office of the Judge Advocate General (JAG) will also work with other military justice stakeholders to reduce the time it takes for the disposition of a matter by court martial.

During fiscal year 2008-2009, the Office of the JAG will continue to focus its efforts on support to operations. Besides providing forward-thinking legal advice on operational and international law, legal officers employed in the newly established Canadian Forces Military Law Centre (CFMLC), a section within the Canadian Defence Academy (CDA) Headquarters, will develop effective new methods for the delivery of operationally focused military legal education, training and doctrine for the CF. The Office of the JAG is reacting to spiral two of CF transformation by reviewing its legal support to the operational headquarters, and by examining the entire JAG establishment to determine whether the current structure meets the demands imposed by deployed operations.

The Office of the Department of National Defence/Canadian Forces Legal Advisor (DND/CF LA) provides a full range of legal advisory, drafting and litigation support services on all matters pertaining to the DND/CF, other than military law and military justice, specifically assigned by the National Defence Act, to the JAG. The DND/CF LA will focus on the following in fiscal year 2008-2009:

• continued organizational transformation to seek higher efficiencies and thus enhance its ability to fulfill its mission in a strategic and timely manner; and
• continued coordination efforts with the JAG to ensure seamless and integrated delivery of legal services to DND/CF clients.

Public Affairs / Communications Services

The Department of National Defence and the Canadian Forces operate in an environment that requires coherent and coordinated government messaging. As such, ADM(PA) plays a key role in communicating defence priorities.

As the recognized functional authority for Public Affairs, ADM(PA) supports all DND/CF activities and operations by managing the departmental communications function. In addition to delivering key services such as strategic planning, marketing and advertising, creative services and issues management, the organization will continue to provide advice to the commands/environments/units to ensure that their own PA plans and activities are consistent with overarching corporate policies, messaging and objectives.

In fiscal year 2008-2009, Public Affairs will continue to provide strategic direction and guidance for DND/CF communications by providing support to DND/CF announcements, coordinating media operations and PA activities, implementing a new Strategic Communications Plan and ensuring communications planning for corporate documents and memorandum to Cabinet. Furthermore, the organization will continue its support to CF recruitment through the on-going recruitment advertising campaign.

Furthermore, Public Affairs will focus on improving its management practices with a view to maximizing resource use. Management frameworks will be implemented that will allow for better resource allocation, more efficient delivery of service and better benchmarking.

Evaluation Services / Internal Audit Services

Program Evaluation

In addition to providing evaluation services increasingly focused on operational issues, program evaluation during fiscal year 2008-2009 will focus on strengthening the DND evaluation function and ensuring its ability to effectively respond to an expected new evaluation policy. This encompasses a Federal Accountability Act requirement to evaluate the relevance and effectiveness of all DND/CF grants and contributions programs over a five-year cycle. It also includes an anticipated future requirement to ensure that 100 percent of direct DND/CF program spending is evaluated over a five-year cycle. Thus, the main priority of the evaluation function during fiscal year 2008-2009 will be to develop an implementation plan for the expected new evaluation policy.

Key outputs to be achieved during fiscal year 2008-2009 will be a five-year evaluation plan and a clear description of how the evaluation function will achieve the results required by the new policy. Any potential restructuring will become an integral part of the overall Chief Review Services (CRS) organizational changes that are currently underway. These efforts aim to increase the availability and quality of information to the Minister, the Department, and central agencies to facilitate informed management, expenditure and policy decision-making. A complete list of evaluation work to be completed during fiscal year 2008-2009, as well as a tentative list of planned work, is outlined at Section III, Table 10: Evaluations.

Audits

During fiscal year 2008-2009, a key priority of the DND/CF internal audit function will be to implement the requirements associated with the 2006 Treasury Board internal audit policy, which must be fully implemented by 1 April 2009. The audit function will be restructured and expanded to fulfill the policy requirements, as well as to continue to deliver high-impact audit services of relevance to DND/CF senior leaders. This restructuring and expansion, which is part of an overall Chief Review Services organizational realignment, will also be the primary focus for internal audit during fiscal year 2008-2009.

Specific audit work will be undertaken to enable the provision of a holistic assessment, by the Chief Review Services, of the effectiveness and adequacy of risk management, control, and governance processes within the DND/CF. Much audit work will continue to take place in areas such as capital acquisition and contract management, financial management, human resources and security.

A complete list of audit work to be completed during fiscal year 2008-2009, as well as a tentative list of planned work, is outlined in Section III, Table 12: Internal Audits.

Other Support Services

Safety Programs

General Safety

The General Safety Program, available online at <http://www.vcds.forces.gc.ca/dsafeg/intro_e.asp> is the Departmental occupational health and safety program. In conjunction with ten specialist health and safety programs (i.e., flight, laser, radio frequency, fire, mobile support equipment, explosives, submarine, diving, nuclear, CF occupational health) and bound by an overarching governance structure, the DND/CF safety community is mandated to comply with the relevant regulatory frameworks to identify and mitigate hazards, and prevent and reduce dangerous events. These programs and their relevant authorities are detailed in Defence Administrative Orders and Directives (DAOD) 2007-0 - Safety, available online at: <http://www.admfincs.forces. gc.ca/admfincs/subjects/daod/2007/intro_e.asp>.

Priorities of the General Safety Program in the fiscal year 2008-2009 will include:

• improving workplace hazard identification and mitigation techniques;
• continuing reduction in the hazardous occurrence rates; and
• improving inter-program synergies through merging policies and procedures.

Nuclear Safety

The Minister of National Defence is responsible for establishing and maintaining requirements for the control and safe use of ionizing radiation sources across Defence. The Director General Nuclear Safety implements a Risk-Based Control Regime authorizing DND/CF nuclear activities in consideration of risk balanced against the requirements for health, safety, security and protection of the environment.

For more information on nuclear safety at Defence, see the Report on the Management of Nuclear-Related Activities.

CF Grievance System

Defence remains committed to sustaining a CF Grievance System (CFGS) that can support the global lifecycle of all CF grievances.[24] The CFGS will continue to promote the effective resolution of complaints throughout the CF, from the early stages of a complaint to the final grievance decision.

Priorities of the CFGS in fiscal year 2008-2009 will be:

• working with other complaint agencies to develop a comprehensive CF complaint system;
• establishing a web-based CFGS that will be multi-capable and responsive for all users and include a case management communication reporting network; and
• continuing an outreach program aimed at providing instruction on the developing CFGS through seminars and training sessions to Defence.

More information on the Canadian Forces Grievance Authority is available online at: <www.cfga.forces.gc.ca/intro_e.asp> and information about the Canadian Forces Grievance Board is available online at: <http://www.cfgb-cgfc.gc.ca/>.

SECTION VI: ADDITIONAL INFORMATION

Appendix A: Legislation and Regulations Administered

The Minister of National Defence is responsible to Parliament for many statutes, and is assigned relevant responsibilities in the administration of many laws and regulations. A comprehensive list is available at: <http://www.vcds.forces.gc.ca/dgsp/pubs/rep-pub/
ddm/rpp/rpp08-09/appa_e.asp>.

Appendix B: Key Partners and Stakeholders

DND and the CF work with many partners in Canada and abroad that help support the Defence mission, programs and activities. The broad scope of the Defence mandate is reflected in the complexity and diversity of its partners and stakeholders. To view the comprehensive list of Defence partners and stakeholders, visit: <http://www.vcds.forces.gc.ca/dgsp/pubs/rep-pub/
ddm/rpp/rpp08-09/appb_e.asp>.

Appendix C: DND/CF Strategy Map

The DND/CF Strategy Map and an explanation of its causally linked strategic objectives is located at: <http://www.vcds.forces.gc.ca/dgsp/pubs/rep-pub/
ddm/rpp/rpp08-09/strat-map_e.asp>.

Appendix D : Contact Information

Plans and Priorities and Departmental Performance Information

Lieutenant-General W.J. Natynczyk, CMM, MSC, CD Vice Chief of the Defence Staff National Defence Headquarters 101 Colonel By Drive Ottawa, Ontario K1A 0K2

Telephone: (613) 992-6052 Facsimile: (613) 992-3945

Financial Information

Rear-Admiral Bryn M. Weadon, CMM, CD, CMA, PLog Assistant Deputy Minister (Finance and Corporate Services) National Defence Headquarters 101 Colonel By Drive Ottawa, Ontario K1A 0K2

Telephone: (613) 992-5669 Facsimile: (613) 992-9693

General Inquiries

Ms Josée Touchette Assistant Deputy Minister (Public Affairs) National Defence Headquarters 101 Colonel By Drive Ottawa, Ontario K1A 0K2

Telephone: (613) 996-0562 Facsimile: (613) 995-2610 Email: information touchette.jr@ forces.gc.ca

Internet sites on the World Wide Web

Department of National Defence	<http://www.forces.gc.ca>
Office of the Judge Advocate General	<http://www.forces.gc.ca/jag/main_e.asp>
Office of the Ombudsman for National Defence and the Canadian Forces	<http://www.ombudsman.forces.gc.ca/>
National Search and Rescue Secretariat	<http://www.nss.gc.ca/>
Defence Research & Development Canada	<http://www.drdc-rddc.gc.ca>
Communications Security Establishment Canada	<http://www.cse-cst.gc.ca/>
Defence Planning and Management	<http://www.vcds.forces.gc.ca/dgsp/intro_e.asp>

Appendix E: List of Acronyms

A

ADM (Fin CS) - Assistant Deputy Minister (Finance and Corporate Services)

ADM (HR-Civ) - Assistant Deputy Minister (Human Resources – Civilian)

ADM (IM) - Assistant Deputy Minister (Information Management)

ADM (PA) - Assistant Deputy Minister (Public Affairs)

ADR - Alternate Dispute Resolution

AEU - Air Expeditionary Units

AFG - Afghanistan

ATD - Alternative Training Delivery

ATIP - Access to Information and Privacy

B

BMQ - Basic Military Qualification

BCP - Business Continuity Planning

C

C2 - Command and Control

C4ISR - Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance

Canada COM - Canada Command

CANOSCOM - Canadian Operational Support Command

CANSOFCOM - Canadian Special Operations Forces Command

CBP - Capability Based Planning

CBSA - Canada Boarder Services Agency

CCG - Canadian Coast Guard 

CDA - Canadian Defence Academy

CDI - Chief of Defence Intelligence

CDS - Chief of the Defence Staff

CEFCOM - Canadian Expeditionary Forces Command

CEGEP - Collège d’enseignement général et professionnel

CF - Canadian Forces

CF ITP - CF Integrated Training Plan

CF JHQ - Canadian Forces Joint Headquarters

CFACC - Combined Forces Air Component Command

CFB - Canadian Forces Base

CFD - Chief of Force Development

CFGS - Canadian Forces Grievance Board

CFLC - Canadian Forces Liaison Council

CIC - Cadet Instructor’s Cadre

CIS - communication and information systems

CMP - Chief of Military Personnel

CMR - Collège Militaire Royal

CMTC - Canadian Manoeuvre Training Centre

COSPAS-SARSAT - Cosmicheskaya Sistyema Poiska Avariynich Sudov"-"Search and RescueSatellite-Aided Tracking 

CRP - Corporate Risk Profile

CRS - Chief Review Services

CSEC - Communications Security Establishment Canada

D

DART - Disaster Assistance Response Team

DFO -  Department of Fisheries and Oceans

DM - Deputy Minister

DMC - Defence Military Committee

DND - Department of National Defence

DPR - Departmental Performance Report

DRDC - Defence Research and Development Canada

E

EC - Environmental Commands

ECS - Environmental Chiefs of Staff

EE - Employment Equity

ERC - Expenditure Review Committee

ESR - Employment Systems Review

F

FDS - Financial Decision Support

FELEX - Frigate Life Extension

FOC - Full Operational Capability

FTE - Full Time Equivalent

G

GGO - Greening of Government Operations

GSP - Government Security Policy

H

HR - Human Resources

I

IC2S - Integrated Command and Control System

ICSAR - Interdepartmental Committee on Search and Rescue

IED - Improvised Explosive Device

IM - Information Management

IOC - Initial Operational Capability

IRM - Integrated risk management

IT - Information Technology

J

JAG - Judge Advocate General

JCR - Junior Canadian Rangers

JIATF - Joint Interagency Task Force

JIIFC - Joint Information and Intelligence Fusion Capability

JSF - Joint Strike Fighter

JTF - Joint Task Forces

JTF-Afg - Joint Task Force Afghanistan

JTFN - Joint Task Force North

L

LFC - Land Force Command

M

MAF - Management Accountability Framework

MFRC - Military Family Resource Centres

MRRS - Management, Resources and Results Structure

MSOC - Marine Security Operations Centres

MSVS - Medium Support Vehicle System

MTAP - Military Training Assistance Program

N

NATO - North Atlantic Treaty Organization

NORAD - North American Aerospace Defence

NORTHCOM - Northern Command

NRC - National Capital Region

NRF - NATO Reaction Force

NSS - National Search and Rescue Secretariat

O

O&M - Operations and Maintenance

OGDs - Other Government Departments

OL - Official Languages

OMB - Ombudsman

OP - Operation

OSI - Operational Stress Syndrome

P

PAA - Program Activity Architecture

PM - Performance Management

PMF - Performance Management Framework

PRL - Primary Reserve List

R

R&D - Research and Development

RCMP - Royal Canadian Mounted Police

RMC - Royal Military College

RPP - Report on Plans and Priorities

S

S&T - Science and Technology

SAR - Search and Rescue

SAR NIF - Search and Rescue New Initiatives Fund

SCOPA - Standing Committee on Public Accounts

SCR - Strategic Capability Roadmap

SDS - Sustainable Development Strategy

SFO - Senior Financial Officer

SIP - Strategic Intake Pan

SOTF - Special Operations Task Forces

SR Dir - Strategic Readiness Directive

T

TBS - Treasury Board Secretariat

TC - Transport Canada 

TES - Trained Effective Strength

TFA - Task Force Afghanistan

U

US - United States

UAVs - Unmanned aerial vehicles

UN - United Nations

V

VAC - Veterans Affairs Canada

VCDS - Vice Chief of Defence Staff

---

Details of Transfer Payment Programs (includes Summary of Transfer Payments by PAA, Details of Transfer Payment Programs over $5 million - Narrative, and Details of Transfer Payment Programs over $5 million)

Summary of Transfer Payments by PAA

($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Grants
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	152	132	134	111
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interests and Values	5,360	5,360	5,360	4,100
Sub-total Grants	5,512	5,492	5,494	4,211
Contributions
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	17,229	31,789	16,505	13,739
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interests and Values	176,205	163,486	203,562	190
Sub-total Contributions	193,435	195,275	220,067	13,929
Total Grants and Contributions	198,946	200,767	225,560	18,140

1. The decrease between FY 2009-2010 to 2010-2011 is due to the fact that the approved terms and conditions and the related funding of some of the grant and contribution programs are ending 31 March 2010.

Details of Transfer Payment Programs over $5 million

Table 9b- Details of Transfer Payment Programs over $5 Million - Narrative

Supplementary Retirement Benefits Act (SRBA)

Contributions in support of the Capital Assistance Program (CAP)

Contribution Program for the Promotion of the Defence Diplomacy Objectives Implemented by the Military Training Assistance Program (MTAP)

NATO Military Budget

NATO Security Investment Program

NATO Airborne Early Warning and Control Program

Supplementary Retirement Benefits Act (SRBA)

1. Name of Transfer Payment Program: Supplementary Retirement Benefits Act (SRBA) [Statutory Payments]
2. Start Date: 1970			3. End Date: on-going
4. Description: The SRBA amount represents statutory payments to Defence Services Pension Continuation Act (DSPCA) pension recipients for inflation adjustment to their pensions.
5. Strategic Outcome: Canadians’ confidence that DND and the CF have relevant and credible capacity to meet defence and security commitments
6. Expected Results: In compliance with the legislative provisions of SRBA, to provide supplementary retirement benefits payments for certain persons in receipt of a pension pursuant to the Defence Services Pension Continuation Act chapter D-3 of the Revised Statutes of Canada 1970, as a result of having been compulsorily retired from the Regular Force by reason of any mental or physical condition rendering the person unfit to perform duties as a member of the Regular Force, as the case may be.  Statutory DSPCA and SRBA payments are processed by Public Works and Government Services Canada.
($ Thousands)	7. Forecast Spending 2007–2008	8. Planned Spending 2008–2009		9. Planned Spending 2009–2010	10. Planned Spending 2010–2011
11. Program Activity	Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces
12. Total Grants	0	0		0	0
12. Total Contributions	$7,020	$6,796		$6,796	$6,796
12. Total Other Types of Transfer Payments	0	0		0	0
13. Total Program Activity	$17,381	$31,921		$16,638	$13,850
14. Planned Audits and Evaluations: The Canadian Forces Pension Plan Comptroller manages the SRBA payments. While no specific audits or evaluations are planned, expenditures are subject to monitoring and fall into the financial control framework of the Canadian Forces Pension Plan.

Contributions in support of the Capital Assistance Program (CAP)

1. Name of Transfer Payment Program:Contributions in support of the Capital Assistance Program (CAP) [Voted payments]
2. Start Date: 1983-1984		3. End Date: 2010-2011 (up for renewal starting 2011-2012)
4. Description: The Department of National Defence uses Capital Assistance Program to fund capital projects undertaken with provinces, territories and municipalities and/or their agencies related to the operations of military bases and wings located within Canada.  Projects include the construction of community-oriented facilities (such as arenas, gymnasiums, swimming pools, water treatment plants, water distribution systems) where the forces and/or military staff and their dependants are significant users, and where provinces or municipalities are in a better position to deliver services.  Contributions are also made to support the transfer to municipalities of common infrastructure related to Residential Accommodation (formerly entitled Permanent Married Quarters) such as roads, sidewalks, sewers, storm pipes, etc.
5. Strategic Outcome: Canadians’ confidence that DND and the CF have relevant and credible capacity to meet defence and security commitments
6. Expected Results: Expected results of this contribution program are: to enter into collaborative arrangements with Provinces, Territories and Municipalities and/or their agencies (through contribution agreements); to maintain/improve infrastructure while correcting identified deficiencies; to reduce operating and capital costs; to improve cost-effective provision of infrastructure and community-based services; and, to enhance quality of life for military personnel and their dependants.
($ Thousands)	7. Forecast Spending 2007–2008	8. Planned Spending 2008–2009		9. Planned Spending 2009–2010	10. Planned Spending 2010–2011
11. Program Activity	Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces
12. Total Grants	0		0	0	0
12. Total Contributions	$450		$20,815	$5,450	$5,450
12. Total Other Types of Transfer Payments	0		0	0	0
13. Total Program Activity	$17,381		$31,921	$16,638	$13,850
14. Planned Audits and Evaluations:A mid-term review will be conducted in 2008. Also, a more extensive evaluation is planned for 2010. These evaluations will be undertaken to ensure that monies contributed under the Capital Assistance Program have been made according to the existing policies and procedures, and terms and conditions.

Contribution Program for the Promotion of the Defence Diplomacy Objectives Implemented by the Military Training Assistance Program (MTAP)

1. Name of Transfer Payment Program: Contribution Program for the Promotion of the Defence Diplomacy Objectives Implemented by theMilitary Training Assistance Programme (MTAP) – [Voted Payments]
2. Start Date: FY 2005–2006			3. End Date: FY 2009–2010 (up for renewal starting 2010-2011)
4. Description: The Military Training Assistance Program builds the capacities of member countries’ militaries through language training, professional development courses including command and staff instruction, and peace support operations training.
5. Strategic Outcomes: Good governance, Canadian identity and influence in a global community
6. Expected Results: Results expected from this contribution program include the following: promoting Canadian interests and values among developing, non-NATO MTAP member countries; promoting Canada’s independent national profile; enhancing Canada’s bilateral defence relationships; building peace support operations capacity among Canada’s peacekeeping partners; and strengthening democratic principles, the rule of law, the protection of human rights, and international stability.
($ Thousands)	7. Forecast Spending 2007–2008	8. Planned Spending 2008–2009		9. Planned Spending 2009–2010	10. Planned Spending 2010–2011
11. Program Activity	Contribute to the Canadian Government, Society and the International Community in Accordance with Canadian Interests and Values
12. Total Grants	0	0		0	0
12. Total Contributions	$10,000	$10,000		$10,000	0
12. Total Other Types of Transfer Payments	0	0		0	0
13. Total Program Activity	$181,565	$168,846		$208,922	$4,290
14. Planned Audits and Evaluations: During fiscal year 2007-2008, the Department of National Defence’s Chief – Review Services undertook a mid-term evaluation of the Military Training Assistance Program to be completed during the first quarter of 2008-2009. A summative evaluation of the Program will be conducted toward the end of the five-year renewal contribution period, at the end of fiscal year 2008-2009.

NATO Military Budget

1. Name of Transfer Payment Program: NATO Military Budget – [Voted Payments]
2. Start Date: 1949			3. End Date: 2009-2010 (up for renewal starting 2010-2011)
4. Description: To contribute the Canadian share of the NATO Military Budget—a common-funded program to finance the operating and maintenance costs of the NATO military structure and activities, including Deployed Operations and missions.
5. Strategic Outcome (s): Good governance, Canadian identity and influence in a global community
6. Expected Results: Canada’s financial contributions to the Alliance helps to ensure Canadian security, provide leverage and influence within the multi-national body. It also provides access to military capabilities, which Canada itself, does not possess.  The contributions also serve to safeguard the freedom and security of all its members by political and military means in accordance with the North Atlantic Treaty and the principles of the United Nations Charter. The benefits of Canada’s investment in NATO include access to strategic information, exercises with allied forces and an equal voice in high-level decisions affecting Euro-Atlantic security and stability.
($ Thousands)	7. Forecast Spending 2007–2008	8. Planned Spending 2008–2009		9. Planned Spending 2009–2010	10. Planned Spending 2010–2011
11. Program Activity	Contribute to the Canadian Government, Society and the International Community in Accordance with Canadian Interests and Values
12. Total Grants	0	0		0	0
12. Total Contributions	$63,333	$72,090		$76,613	0
12. Total Other Types of Transfer Payments	0	0		0	0
13. Total Program Activity	$181,565	$168,846		$208,922	$4,290
14. Planned audits and Evaluations: At the end of the year, the annual financial statements are presented for verification by the International Board of Auditors for NATO, which is mandated by national audit institutions to conduct not only financial but also performance audits.

NATO Security Investment Program

1. Name of Transfer Payment Program: NATO Security Investment Program - [Voted Payments]
2. Start Date: 1949			3. End Date: 2009-2010 (up for renewal starting 2010-2011)
4. Description: To contribute the Canadian share of the NATO Security Investment Program (NSIP)– a common funded program that finances the capital costs for the provision of communication and information systems, installations and facilities such as radar, military headquarters, airfields, fuel pipelines and storage, harbours and navigational aids needed to support the NATO military structure and activities including Deployed Operations and Missions.
5. Strategic Outcome: Good governance, Canadian identity and influence in a global community
6. Expected Results: NSIP funds projects that meet NATO’s essential purpose, which is to safeguard the freedom and security of all its members by political and military means in accordance with the North Atlantic Treaty and the principles of the United Nations Charter. The benefits of Canada’s investment in NATO include access to strategic information, exercises with allied forces and an equal voice in high-level decisions affecting Euro-Atlantic security and stability.
($ Thousands)	7. Forecast Spending 2007–2008	8. Planned Spending 2008–2009		9. Planned Spending 2009–2010	10. Planned Spending 2010–2011
11. Program Activity	Contribute to the Canadian Government, Society and the International Community in Accordance with Canadian Interests and Values
12. Total Grants	0	0		0	0
12. Total Contributions	$55,647	$40,443		$43,336	0
12. Total Other Types of Transfer Payments	0	0		0	0
13. Total Program Activity	$181,565	$168,846		$208,922	$4,290
14. Planned audits and Evaluations: The NATO International Board of Auditors (IBAN) audits the NSIP account annually. Individual projects are also audited at project completion.  The national audit institutions mandate these audits.

NATO Airborne Early Warning and Control Program

1. Name of Transfer Payment Program: NATO Airborne Early Warning and Control Program – [Voted Payments]
2. Start Date: 1979			3. End Date: 2009-2010 (up for renewal starting 2010-2011)
4. Description:To substantially improve the quality of the NATO Airborne Early Warning (NAEW) sub-systems aboard the 17 NATO E-3A aircraft.
5. Strategic Outcome (s): Good governance, Canadian identity and influence in a global community
6. Expected Results: To provide a state-of-the-art operating system that will collect and disseminate, in real-time, data received from several on-board sensors.
($ Thousands)	7. Forecast Spending 2007–2008	8. Planned Spending 2008–2009		9. Planned Spending 2009–2010	10. Planned Spending 2010–2011
11. Program Activity	Contribute to the Canadian Government, Society and the International Community in Accordance with Canadian Interests and Values
12. Total Grants	0	0		0	0
12. Total Contributions	$55,030	$49,661		$64,081	0
12. Total Other Types of Transfer Payments	0	0		0	0
13. Total Program Activity	$181,565	$168,846		$208,922	$4,290
14. Planned Audits and Evaluations:At the end of the year, the annual financial statements are presented for verification by the International Board of Auditors for NATO, which is mandated by national audit institutions to conduct not only financial but also performance audits.

Evaluations

The following is a list of all upcoming evaluations that pertain to Defence. Once completed, the evaluation reports are posted at the following link:

<http://www.forces.gc.ca/crs/rpt/reports_e.htm>

1. Name of Evaluation	2. Evaluation Type	3. Status	4. Expected Completion Date
Military Training Assistance Program (MTAP) Mid-term Evaluation	Contribution	In Progress	1st Quarter 2008-2009
Defence Ethics Program	Other	In Progress	3rd Quarter 2008-2009
CRTI	Contribution	In Progress	3rd Quarter 2008-2009
Alternate Dispute Resolution	Other	In Progress	4th Quarter 2008-2009
Support to Injured CF Members and Their Families	Other	In Progress	4th Quarter 2008-2009
CF Recruitment and Absorption Strategy	Other	In Progress	2009-2010
Military Training Assistance Program (MTAP) Summative Evaluation	Contribution	Planned	2009-2010
Contribution to the Civil Air Search and Rescue Association (CASARA):  Summative Evaluation/Review	Contribution	Planned*	2009-2010
Contribution in Support of the Search and Rescue – New Initiatives Funds (SAR-NIF): Summative Evaluation	Contribution	Planned*	2009-2010
Contributions in Support of the Capital Assistance Program (CAP) Summative Evaluation	Contribution	Planned*	2009-2010
Disaster Assistance Response Team	Other	Planned*	2010-2011
Special Operations	Other	Planned*	2010-2011
Canada Command	Other	Planned*	2010-2011
CF Information Operations	Other	Planned*	2010-2011
5. Electronic link to evaluation plan: N/a

Green Procurement

Green Procurement
1.   How is your department planning to meet the objectives of the Policy on Green Procurement? The DND and the CF are committed to applying the principles of green procurement by integrating environmental performance considerations into material acquisition and support (MA&S) policies, decision-making processes and practices in a manner that supports the concept of sustainable development, satisfies legal and policy requirements, reinforces performance management and is relevant to the DND and CF mission. In support of TBS Contracting Policy Notice 2006-1 - Policy on Green Procurement, DND/CF issued, on December 1st 2006, DAOD 3015-0 - Green Procurement and on 2 November 2007, DAOD 3015-1 - Management of Green Procurement. These directives apply to employees of the Department of National Defence and are orders that apply to officers and non-commissioned members of the Canadian Forces. DAOD 3015-0 confirms the requirement for the DND and the CF to apply the principles of green procurement by integrating environmental performance considerations into DND and CF material acquisition and support (MA&S) policies, decision-making processes and practices in accordance with the TBS Policy on Green Procurement and the DND/CF DAOD 3000-0, Materiel Acquisition and Support. The supporting DAOD 3015-1 explains how the green procurement policy is to be implemented, and defines the roles and responsibilities in respect of the management of green procurement in the DND and the CF; specific topics include operating principles, costing, integration of environment performance considerations, monitoring and reporting, and responsibilities.
2.   Has your department established green procurement targets?
Yes  X	No	In Progress
3.  Describe the green procurement targets that have been set by your department and indicate the associated benefits anticipated. The Defence Sustainable Development Strategy 2006 is the DND/CF action plan and is based on the hierarchy of strategic and operational direction through the Defence chain of command.  At the highest level, broad strategic commitment to the development and implementation of the SDS is provided through the Report on Plans and Priorities and through the Defence Plan.  The Department’s progress on meeting its SDS commitments is reported to Government as an integral part of the annual Departmental Performance Report.   The SDS Strategic commitments (land use management, infrastructure and procurement) are the key indicators upon which the Department relies to measure and report its progress in meeting its sustainable development goals and objectives. Strategic commitment 3 addresses the implementation of a proactive and comprehensive Green Procurement programme across Defence and meets the recently promulgated Federal Government Policy on Green Procurement by: supporting the federal Green Procurement agenda (SC..3.1) through leadership, collaboration and participation in federal interdepartmental commodity group management teams relevant to Defence's operational requirements; developing and integrating, where appropriate, Green Procurement modules and messages into all existing training (SC.3.2); eliminating or reducing specified nationally procured high-risk hazardous materials (HRHM) from use and examining the feasibility of expanding the scope of this initiative to include locally-procured HRHM (SC3.3); and acquiring, using and maintaining greener vehicles (SC.3.4).

Internal Audits

A list of on-going and upcoming internal audits pertinent to Defence for fiscal year  2008-2009 and 2009-2010 can be found in the table below.

Completed audit reports are posted at the following link: <http://www.forces.gc.ca/crs/rpt/reports_e.htm>

1. Name of Internal Audit	2. Internal Audit Type	3. Status	4. Expected Completion Date
Land Command Systems Support (LCSS) Contract	Assurance	In Progress	1st Quarter 2008-2009
Chemical Biological, Radioactive, Nuclear  (CBRN) Defence Omnibus Contract	Assurance	In Progress	1st Quarter 2008-2009
Contract Management Audit Follow-up – Wheeled Light Armoured Vehicle Life Cycle Support Contracts & Combat System Engineering Support Contract	Follow-Up	In Progress	2nd Quarter 2008-2009
Departmental Environmental Liabilities	Assurance	In Progress	3rd Quarter 2008-2009
Navy Weapon System Support Contract	Assurance	In Progress	3rd Quarter 2008-2009
Capital Asset Valuation	Assurance	In Progress	3rd Quarter 2008-2009
Adjustment, Write-Off and Obsolescence in CFSS	Assurance	In Progress	3rd Quarter 2008-2009
Human Resources Service Delivery	Assurance	In Progress	3rd Quarter 2008-2009
Canadian Forces Housing Agency	Assurance	In Progress	3rd Quarter 2008-2009
Revenue Management	Assurance	In Progress	3rd Quarter 2008/09
Fixed Wing Search & Rescue Acquisition	Assurance	In Progress	4th Quarter 2008-2009
Security Incident Management	Assurance	In Progress	4th Quarter 2008-2009
Summary of CRS audits & reviews 2003-2007	Other	Planned	4th Quarter 2008-2009
Selected Operations & Maintenance Contract	Assurance	Planned*	2009-2010
Selected Capital Project(s)	Assurance	Planned*	2009-2010
Selected Contract Management Audit(s)	Follow-Up	Planned*	2009-2010
Security Program Management	Assurance	Planned*	2009-2010
Accuracy and Efficiency of Financial Coding Practices	Assurance	Planned*	2009-2010
Selected Financial Management Topic(s)	Assurance	Planned*	2009-2010
Selected Financial Management Topic(s)	Follow-Up	Planned*	2009-2010
Selected Portfolio Organization	Assurance	Planned*	2009-2010
Management of Support to Deployed Operations	Assurance	Planned*	2009-2010
Comptroller-General Directed Audit	Other	Planned	2009-2010
Unexploded Ordinance Liability	Assurance	Planned*	2009-2010
5. Electronic link to internal audit and plan:  N/a

1. Assurance audits will examine some or all of the following elements: management control framework, internal controls and risk management.

Loans, Investments and Advances (non-budgetary)

($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces
Imprest Accounts, Standing Advances and Authorized Loans (Note 2)	25,830	25,167	25,167	25,170
Conduct Operations
Imprest Accounts, Standing Advances and Authorized Loans (Note 2)	2,640	2,757	2,757	2,760
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interests and Values
Imprest Accounts, Standing Advances and Authorized Loans (Note 2)	1,530	2,076	2,076	2,070
NATO Damage Claims (Note 1)	(74)	15	1	1
Total	29,926	30,015	30,001	30,001

1. Article VIII of the NATO Status of Forces Agreement signed April 4, 1949, as amended, deals with claims for damages to third parties arising from accidents in which a member of a visiting force was involved.  This account is charged with the amount recoverable from other states, for claims for damages amount recoverable from other states, for claims for damages that took place in Canada, and is credited with recoveries.
2. This account was established for the purpose of financing:  (a) public funds imprest and public funds advance accounts; (b) standing advances; (c) authorized loans and advances to employees posted abroad; and (d) authorized recoverable advances to establish military messes and canteens.  The total amount authorized to be outstanding at any time is $120 million as last amended by National Defence Vote L11b, Appropriation Act No. 4, 2001-2002.

Services Received Without Charge

($ Thousands)	2008-2009
Accommodation provided by Public Works and Government Services Canada (PWGSC)	75,098
Contributions covering employer's share of employees' insurance premiums and expenditures paid by the Treasury Board of Canada Secretariat (excluding revolving funds)	567,017
Worker's compensation coverage provided by Social Development Canada	10,520
Salary and associated expenditures of legal services provided by the Department of Justice Canada	3,096
Total 2008-2009 Services received without charge*	655,731

Sources of Respendable and Non-Respendable Revenue

Respendable Revenue
($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces
Recoveries from Members	115,218	115,380	117,549	120,122
Recoveries from OGDs	3,631	3,636	3,705	3,786
Recoveries from Other Governments/UN/NATO	14,951	14,972	15,253	15,587
Other Recoveries	34,199	34,247	34,891	35,655
Subtotal	168,000	168,235	171,397	175,150
Conduct Operations
Recoveries from Members	2,470	1,169	239	242
Recoveries from OGDs	327	155	32	32
Recoveries from Other Governments/UN/NATO	17,685	8,373	1,709	1,733
Other Recoveries	1,111	526	107	109
Subtotal	21,594	10,223	2,087	2,116
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interests and Values
Recoveries from Members	926	890	867	843
Recoveries from OGDs	1,909	1,833	1,786	1,737
Recoveries from Other Governments/UN/NATO	212,084	203,666	198,431	192,973
Other Recoveries	17,430	16,738	16,308	15,859
Subtotal	232,350	223,127	217,392	211,412
Total Respendable Revenue	421,944	401,586	390,876	388,678
Non-Respendable Revenue
($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	13,017	539	539	539
Conduct Operations	1,367	96	96	96
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interests and Values	1,350	621	642	675
Total Non-Respendable Revenue	15,7331	1,257	1,278	1,310
Total Respendable Revenue and Non-respendable Revenue	437,677	402,842	392,153	389,990

1. The 2007-2008 estimate includes $14 million in non-respendable revenue pertaining to the proceeds of disposal from the sale of Chilliwack to the Canada Lands Company.

Status Report on Major Crown Projects

Airlift Capability Project – Strategic (ACP-S)

Airlift Capability Project – Tactical (ACP-T)

Arctic/Offshore Patrol Ship (AOPS)

Armoured Personnel Carriers (APC)

Canadian Cryptographic Modernization Program (CCMP) Omnibus Project

Canadian Forces Supply System Upgrade (CFSSU)

Canadian Forces Utility Tactical Transport Helicopter (CFUTTH) Project

Canadian Search and Rescue Helicopter Project

CF18 Modernization Project

HALIFAX Class Modernization/Frigate Equipment Life Extension (HCM/FELEX)

Intelligence Surveillance, Target Acquisition and Reconnaissance (ISTAR)

Joint Support Ship (JSS)

Light Utility Vehicle Wheeled (LUVW)

Main Battle Tank

Marine Security Operations Centres

Maritime Helicopter Project (MHP)

Material Acquisition and Support Information System (MASIS)

Medium- To Heavy-Lift Helicopter (MHLH)

Medium Support Vehicle System Project (MSVS)

Military Automated Air Traffic System (MAATS) Project

Protected Military Satellite Communications (PMSC)

Submarine Capability Life Extension

 

Airlift Capability Project – Strategic (ACP-S)

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1. Description: The objective of the Airlift Capability Project - Strategic is to acquire four new aircraft that will provide the global reach and speed necessary to operate effectively over long distances to deliver personnel and cargo directly into a theatre of operations, including a threat environment.
2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and its Regional Agencies

   
   
4. Prime and Major Sub-Contractors:
   

   Prime Contractor

   The Boeing Company, St-Louis, Missouri, USA

   
   
5. Major Milestones:
   

   Major Milestones	Date
   Memorandum to Cabinet	June 6, 2006
   Synopsis Sheet (Effective Project Approval)	June 22, 2006
   Advanced Contract Award Notice Posted on MERX	July 5, 2006
   Contract Award	February 1, 2007
   Delivery First Aircraft	August 8, 2007
   Delivery Second Aircraft	October 18, 2007
   Delivery Third Aircraft	March 2008
   Delivery Fourth Aircraft	April 2008
   Initial Operational Capability (IOC)	Summer 2008
   Full Operational Capability (FOC)	Summer 2009
   Project Close-out	Summer 2010

   
   
6. Progress Report and Explanations of Variances:  The project received Effective Project Approval from Treasury Board on June 22, 2006 for the purchase of four Strategic aircraft, setup of in-service support for 20 years, ancillary contracts and project office. The contract with the Boeing Company for the Direct Sales Contract was established on February 1, 2007. A Foreign Military Sales case, through the United States Air Force to Boeing, for worldwide in-service support was established on January 31, 2007. The first two aircrafts have been accepted on schedule and have already completed several operational missions.  The project office is currently working on the implementation phase in support of this acquisition.
7. Industrial Benefits: Industrial and Regional Benefits (IRBs) are equivalent to 100% of the acquisition contract, Boeing's share of the in-service support Foreign Military Sales contract value and the value of the engines. (A separate IRB agreement was negotiated with Pratt and Whitney USA for the value of the engines for the C-17).  The three IRB agreements total $1.9B.  Boeing and Pratt and Whitney USA are currently searching for Canadian capability to fulfill their obligations.  All regions of Canada will benefit from these contracts.

Airlift Capability Project – Tactical (ACP-T)

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1. Description: The objective of the Airlift Capability Project – Tactical is to ensure a continued tactical airlift capability. In combination with the Fixed Wing Search and Rescue project, this project will replace the Canadian Forces’ ageing CC 130E/H fleet. This project will provide the Canadian Forces with an assured and effective tactical airlift capability that allows the requisite operational flexibility and responsiveness to support international and domestic operations.
2. Project Phase: Definition
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors:
   

   Prime Contractor

   Lockheed Martin Corporation, having a place of business at Marietta, Georgia, USA

   
   
5. Major Milestones:
   

   Major Milestones	Date
   Memorandum to Cabinet	June 22, 2006
   Revised Preliminary Project Approval (PPA)	June 22, 2006
   Solicitation of Interest and Qualification (SOIQ)	August 31, 2006
   Issue of Request For Proposal (RFP)	August 3, 2007
   Effective Project Approval	December 13, 2007
   Contract Award	December 20, 2007
   First Aircraft Delivery	Fall/Winter 2010
   Initial Operational Capability (IOC)	Fall 2011
   Full Operational Capability (FOC)	Winter 2013/2014
   Project Close-out	Spring 2014

   
   
6. Progress Report and Explanations of Variances: Lockheed Martin Corporation provided a response to the RFP on August 30, 2007. The Department of National Defence received Effective Project Approval through Treasury Board on December 13, 2007.
7. Industrial and Regional Benefits: This procurement will provide industrial regional benefits equivalent to 100% of the contracted value for both the capital acquisition and in-service support.  For the in-service support portion, 75% of the contract value will be direct work performed by Canadian companies.  The selected contractor will be required to identify, as specific work packages, 60% of the total acquisition commitment.  These Industrial and Regional Benefits requirements will be negotiated and accepted by Industry Canada prior to contract signing.

Arctic/Offshore Patrol Ship(AOPS)

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1. Description:  The Arctic/Offshore Patrol Ships (AOPS) has been established in order to deliver to the government of Canada a naval ice-capable offshore patrol ship to assert and enforce sovereignty in Canada’s waters including the Arctic.  When the project completes, the six to eight fully supported AOPS delivered to the Canadian Forces will be capable of:
   • conducting armed sea-borne surveillance of Canada's waters, including the Arctic;
   • providing government situational awareness of activities and events in these regions; and
   • cooperating with other elements of the Canadian Forces and other federal government departments to assert and enforce Canadian sovereignty, when and where necessary.
2. Project Phase: Definition
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and the regional agencies

   
   
4. Prime and Major Sub-Contractors: No prime contractor has been selected. Final selection of the prime contractor will occur at Effective Project Approval, planned for 2009.
5. Major Milestones:
   

   Major Milestones	Date
   Treasury Board Preliminary Project Approval	May 31, 2007
   Release of Definition, Engineering, Logistics and Management Support Request for Proposals (DELMS RFP)	November 2007
   DELMS RFP Closes	January 2008
   Memorandum to Cabinet	January 2008
   DELMS Contract Award	March 2008
   Effective Project Approval (SS(EPA))	Winter 2009
   Award of Implementation Contract	2009
   Delivery of First Ship	Fall 2013
   Initial Operating Capability (IOC) of First Ship	Fall 2014
   Project Complete	Summer 2020

   
   
6. Progress Report and Explanations of Variances: The project continues to progress steadily since obtaining Preliminary Project Approval in May 2007. Treasury Board granted expenditure authority of $42.465M (BY), full up including GST, for definition phase. Treasury Board also acknowledged the indicative full up cost of $3,067M (BY) including GST, for acquisition. So far, no variances in cost estimates have been identified.
7. Industrial and Regional Benefits:Industrial and Regional Benefits (IRBs) for this project are equivalent to 100% of the contracted value for the capital acquisition.  Should the government decide during Project Definition to pursue a long-term In-Service Support contract, Industry Canada will recommend the IRB requirements at that time.

Armoured Personnel Carriers (APC)

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1. Description:  The Armoured Personnel Carrier (APC) is essential for all foreseeable Canadian Forces roles, including territorial defence, UN peacekeeping and peace enforcement operations, other international commitments, and Aid of the Civil Power. The existing APC fleet does not meet the minimum operational requirements when compared to the modern, technically sophisticated weapons and vehicles Canadian soldiers encounter during operations. They suffer shortcomings in protection, self-defence capability, mobility, carrying capacity and growth potential. The APC Project is fielding a fleet of modern, wheeled, armoured personnel carriers. 651 Light Armoured Vehicles (LAV) III are to be procured in six configurations: Infantry Section Carrier, Command Post, Engineer, Forward Observation Officer, and TOW (Tube Launched, Optically Tracked, Wire Guided) Under Armour, and LAV III Less Kits.
2. Project Phase:  Implementation
3. Leading and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor

   General Dynamics Land Systems - Canada, London, ON

   
   
5. Major Milestones
   

   Major Milestones	Date
   Treasury Board approval	December 1995
   Contract award	December 1996
   First vehicle delivery	July 1998
   Exercise of first option	July 15, 1998
   Exercise of second option	July 15, 1999
   Exercise of third option	July 15, 1999
   Last vehicle delivery	October 15, 2007
   Project completed	March 2011

   
   
6. Progress Report and Explanation of Variances:  In August 1995, the Government approved in principle the procurement of up to 651 APCs. In January 1997, the Government announced the award of a contract to General Dynamics Land Systems – Canada (GDLS-C) to build 240 new eight-wheel-drive APCs. The contract contained three options for an additional 120, 120 and 171 APCs. All three options have been exercised. All vehicles were delivered by October 2007.

   The vehicles are equipped and configured to meet the demands of operational employment at the battle group level by Land Force infantry elements. The APC vehicle will provide a rapid response capability, both strategic and tactical, allowing the Canadian Forces to meet all tasks currently envisaged.

   On March 29, 2004, Treasury Board authorized $129M for indoor accommodation for LAV III to facilitate regular maintenance and training programs, and prevent any deterioration that would result from outdoor storage. Construction will take place in six locations: Edmonton, Wainwright, Petawawa, Montréal, Valcartier, and Gagetown. Construction activities are wellunder way and are scheduled for completion in early 2011. The project can then close in March 2011.

7. Industrial Benefits:  This project includes the following regional and small business achievements:
   

   Region	Cash Benefits
   Atlantic Canada	$233.7M
   Québec	$181.7M
   Western Canada	$391.3M
   Small Business	$767.8M
   Total	$1,574.5M

   
   

Canadian Cryptographic Modernization Program (CCMP) Omnibus Project

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1. Description:  The Canadian Cryptographic Modernization Program (CCMP) is a 12-year program (fiscal year 2004-2005 to 2015-2016) that will modernize the Government of Canada’s aging cryptographic equipment and infrastructure in order to safeguard classified information and maintain Canada’s ability to establish secure communications both nationally and internationally.  The CCMP Omnibus Project includes the following sub-projects:
   1. Secure Voice / Telephone Re-key Infrastructure
   2. Secure Voice / Telephone Replacement
   3. Classified Security Management Infrastructure
   4. Combat Identification Replacement
   5. Link Encryption Replacement
   6. Network Encryption Replacement
   7. Secure Radio Replacement
2. Project Phase:  Implementation for some sub-projects, definition for others
3. Leading and Participating Departments and Agencies
   

   Lead Department	Communications Security Establishment Canada (CSEC)
   Contracting Authority	Public Works & Government Services Canada (PWGSC)
   Participating Departments & Agencies	Government of Canada departments & agencies using cryptographic equipment to protect classified information

   
   
4. Prime and Major Subcontractors
   

   Prime Contractor	N/A
   Major Sub-Contractors	Various allied manufacturers of cryptographic equipment

   
   
5. Major Milestones
   

   Project / Sub-project Major Milestones	Date
   a.  Preliminary Project Approval for the CCMP Omnibus Project	March 7, 2005
   b.  Preliminary Project Approval for a CCMP Omnibus Project  sub-project:  Classified Security Management Infrastructure	November 2, 2006
   c.  Secure Voice/Telephone Re-key Infrastructure – Completed	March 2008 (being revised)
   d.  Secure Voice/Telephone Replacement – Completed	March 2008 (being revised)
   e.  Classified Security Management Infrastructure – Phase 1A Completed	2010
   f.  Link Encryption – Phase 1 Completed	2010
   g.  Classified Security Management Infrastructure – Phase 1B Completed	2011
   h.  Network Encyption Replacement – Completed	2011
   i.  Classified Security Management Infrastructure – Phase 2 Completed	2014
   j.  Classified Security Management Infrastructure – Phase 3 Completed	2016
   k.  Combat Identification Replacement – Completed	2016
   l.  Link Encryption – Phase 2 Completed	2016
   m.  Secure Radio Replacement – Completed	2016
   n.  CCMP Omnibus Project – Completed	2016

   
   
6. Progress Report and Explanations of Variances: On March 7, 2005, Treasury Board granted Preliminary Project Approval to the CCMP omnibus project at an estimated cost of $839M with expenditure authority for the project definition phases and management of the program at a substantive cost of $80M.

   On November 2, 2006, Treasury Board granted Preliminary Project Approval to the Classified Security Management Infrastructure project at an estimated cost of $182M with expenditure authority for the implementation of Phase 1A at a substantive cost of $31M.

   The Classified Security Management Infrastructure Phase 1A implementation is in progress and Phase 1B definition is complete.  The Project Office is currently seeking expenditure authority for Phase 1B implementation and Phase 2 definition.

   Link Encryption Replacement is in progress.

   The CCMP is currently running under budget.   PPA approval was received late in the fiscal year for both the CCMP Omnibus Project (March 7, 2005) and the Classified Security Management Infrastructure (November 2, 2006), causing spending to lag behind the approved cash flow.  No significant contingency funds have been expended since the beginning of the Omnibus Project.  The sole contingency expenditure to date is $10K which was required for Classified Security Management Infrastructure Phase 1B project definition.

   The following completion dates have changed from those recorded in the CCMP Omnibus Project PPA approved on March 7, 2005.

   • Secure Voice Re-key Infrastructure project closure was moved from June 2007 to March 2008 due to delays in receiving software updates from the US.  The completion date for this sub-project is currently being revised.
   • Secure Voice/Telephone Replacement was completed for the majority of Government of Canada departments and agencies by September 2007.  The completion date for this sub-project is currently being revised because of technical difficulties encountered with some implementations.
   • Classified Security Management Infrastructure Phase 1 completion was moved from 2008 to 2011.  Phase 1 was divided into Phase 1A and 1B to reduce the complexity of managing the project.
   • Combat Identification Replacement completion has been moved from 2010 to 2016 due to changes in the US program schedule.
   • Classified Security Management Infrastructure Phase 2 completion was moved from 2011 to 2014 due to delays in the US Key Management Infrastructure program.
7. Industrial Benefits

   N/A

Canadian Forces Supply System Upgrade (CFSSU)

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1. Description: The Canadian Forces Supply System Upgrade (CFSSU) project will meet the future supply requirements of the Canadian Forces during all operational situations while effectively and economically managing the Department of National Defence inventory. The system will have an inherent flexibility to manage changes in force structure, size and all types of missions. The CFSSU project will employ information technology to modernize Canadian Forces military supply operations. Not only will this technology dramatically improve productivity, it will also enhance the capability for performance measurement, greatly increase asset visibility, and provide a powerful management tool for provisioning. Additionally, the new supply system will have a deployed capability.  This capability has successfully been installed on three West Coast ships to date. The deployed solution is complementing the existing September 2001 corporate implementation to Bases and Wings, as well as the November 2002 implementation, which include all remaining CFSS users, at home and overseas.
2. Project Phase: Close-Out
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors:
   

   Prime Contractor	EDS Canada Inc. Ottawa, Ontario, Canada
   Major Sub-Contractors	Mincom Pty. Ltd. Brisbane, Australia ADGA Group Ottawa, Ontario, Canada

   
   
5. Major Milestones:
   

   Major Milestones	Date
   Contract Award	January 1995
   Initial Site Installation	December 1995
   Warehouse Management Information System Delivery	July 1997
   Test Development Centre Delivery	October 1999
   Commence System Development	November 1999
   Complete System Development	March 2001
   Commence System Pilot	June 2001
   Complete System Pilot	August 2001
   Commence System Rollout	September 2001
   Complete System Rollout	November 2002
   projectClose-out (E Status)	September 2004
   projectClose-out (I Status)	March 2008

   
   
6. Progress Report and Explanations of Variances: Treasury Board initially approved the CFSSU project with an estimated cost of $289.3M.  The April 2000 Treasury Board approved the de-scoping of certain functionality and an increase to project contingency funding of $9.8M. In addition, $5M was approved in order to permit DND the option of restoring the Distribution Resource Planning (DRP) component. The Implementation Phase of DRP was de-scoped and the project budget remained at $304.1M.

   The CFSSU Project has been transferred from implementation to close-out in September 2004. Close-out funding is $3.6M. On March 9, 2006, DND Program Management Board approved the usage of close-out funds for the project; these funds are to be used until fully expended or the work is completed.

   The CFSSU project is to be completed by July 31, 2008.

7. Industrial and Regional Benefits:
   

   Region	Benefits
   Atlantic Canada	$51M
   Quebec	$48M
   Ontario	$26M
   Western Canada	$105M
   Unallocated	$10M
   Total	$240M

   
   

Canadian Forces Utility Tactical Transport Helicopter (CFUTTH) Project

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1. Description:  The purpose of the Canadian Forces Utility Tactical Transport Helicopter (CFUTTH) Project is to acquire helicopters in support of national and international tactical aviation roles.  The project supports the Land Force, Air Force, Deputy Chief of Defence Staff (DCDS) operations and Civil Emergency Preparedness, as well as a wide range of defence objectives.  It replaces three aging helicopter fleets – the CH118 Iroquois, the CH135 Twin Huey and the CH136 Kiowa.  The Bell 412CF/CH146 was procured as a single role multi-mission helicopter capable of supporting a majority of the tasks previously undertaken by fleets it replaced.  The operational requirements for the CFUTTH defined the principle task requirements of the CFUTTH to include the tactical lift of troops and equipment, logistical lift, reconnaissance and surveillance, direction and control of fire, aero-medical support and casualty evacuation, command and liaison, and communications assistance.  These mission capabilities are employed in support of DND operational commitments, United Nations peacekeeping missions, and support to other Government Departments and Agencies, including Aid of the Civil Power.

   The project has delivered 100 Bell 412CF/CH146 Griffons, a flight simulator, composite maintenance trainer, facilities, mission kits (including defence electronic warfare suites), as well as other equipment, documentation and services.

2. Project Phase: Implementation
3. Lead and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Department	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor	Bell Helicopter Textron Canada, Mirabel, QC
   Major Sub-Contractors	Pratt & Whitney Canada, Montréal, QC BAE Systems Canada Inc., Montréal, QC CAE Ltd, Montréal, QC

   
   
5. Major Milestones
   

   Major Milestones	Date
   Contract Award	September 1992
   Critical Design Review	April 1993
   First Helicopter Delivery	March 1995
   Simulator Acceptance	June1996
   Last Helicopter Delivery	February 1998
   Project Completion	November 2009

   
   
6. Progress Report and Explanation of Variances:  This project receivedCabinet approval on April 7, 1992 and Treasury Board approval on September 8, 1992, with an original budget of $1.293B.  Following directed reductions to the project budget and by assuming certain performance risks, the project will be completed in November 2009 for approximately $200M less than the initial Treasury Board budget approval.
7. Industrial Benefits:  To date, Bell Helicopter has claimed $289.5M direct and $252.1M indirect industrial regional benefits, totalling $541.6M, representing 107% of the overall commitment. Bell Helicopter Textron Canada has committed to achieving $506.7M in Canadian value-added industrial regional benefits as follows:
   

   Region	Cash Benefits
   East	10.0M
   Québec	420.2M
   Ontario	32.1M
   West	12.0M
   Unallocated	32.4M
   Total	$506.7M

   
   

Canadian Search and Rescue Helicopter Project

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1. Description:  Maintaining a national search and rescue capability is a direct departmental objective.  The purpose of the Canadian Search and Rescue Helicopter (CSH) project was to replace the CH-113 Labradors with a fleet of 15 new helicopters.  The new helicopters address the operational deficiencies of the CH-113 Labrador fleet, eliminate the supportability difficulties of these older airframes, and provide a fleet size sufficient for continuous operations well into the 21st century.
2. Project Phase:  Completed
3. Leading and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Department	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor	AgustaWestland International Limited (formerly E.H. Industries Ltd. (EHI)), Farnborough, United Kingdom
   Major Sub-Contractors	GKN Westland Helicopters, United Kingdom Agusta Spa, Italy General Electric Canada Inc., Canada

   
   
5. Major Milestones
   

   Major Milestones	Date
   Treasury Board Effective Project Approval	April 2, 1998
   Contract Award	April 6, 1998
   First Aircraft Delivery (at plant in Italy)	September 2001
   Final Aircraft Delivery (at plant in Italy)	July 2003
   Project Completion (Effective Project Completion)	September 2004

   
   
6. Progress Report and Explanation of Variances:  Treasury Board (TB) granted original Preliminary Project Approval on February 8, 1996, providing Expenditure Authority for $3.3M for Definition Phase activities and approval-in-principle for $704.2M.  An amendment to the Preliminary Project Approval was granted on April 24, 1997, providing Expenditure Authority for $6.4M for total Definition Phase activities and approval-in-principle for $708.2M.

   Treasury Board provided Effective Project Approval on April 2, 1998 including Expenditure Authority for $788.0M (BY) net of GST, which included Definition funding expenditures of $6.4M.

   On April 6, 1998, E.H. Industries (EHI) Limited (renamed AgustaWestland International Ltd (AWIL)) was contracted to supply 15 AW511 Cormorant search and rescue helicopters, along with initial logistics support to the Canadian Forces. The initial support package includes training, publications, warranty, a repair and overhaul program providing coverage until October 2004, and software support until 2006.

   The project has procured the required aircraft spares, maintenance and support equipment, a Cockpit Procedures Trainer and facilities for the four Canadian Forces search and rescue bases.  The project has also established and funded the first two years of an in-service support contractor for follow-on support.

   As of July 2003, all 15 Cormorant helicopters have been delivered.  Spare parts and infrastructure are in place to support operations.  Initial training is complete.  The Cormorant have been operational at the squadrons in Comox, BC, Gander, NF, Greenwood, NS and Trenton, ON. However, CH149 operations at 424 Squadron in Trenton have been suspended temporarily due to the lack of aircraft availability and difficulty to maintain adequate aircrew training.

   It should be noted that although Effective Project Closure was achieved on the September 15, 2004, work is still ongoing and will remain so for many years to come. The Major Milestones still outstanding are tied to a three year Technical Publication Revision Service which is not expected to begin until fiscalyear 2008-2009, and a number of milestones related to outstanding aircraft deficiencies which are expected to continue over the next three years and perhaps beyond.

7. Industrial and Regional Benefits: The contractor (AWIL) has committed to providing direct and indirect industrial benefits valued at $629.8M, to be completed within eight years from the date of contract award.  It is estimated that these benefits will create or continue roughly 5,000 person-years of employment in Canada.  Canadian industry in all regions of Canada will benefit from the project.  The contractor has completed its obligations to Canada in regard to Industrial and Regional Benefits under the CSH contract.  Small businesses in Canada will also benefit from the project by the placing of $67.0M in orders.  
   

   Region	Cash Benefits
   Atlantic Canada	$43.1M
   Québec	$317.7M
   Ontario	$146.5M
   Western Canada	$86.2M
   Unallocated	$36.3M
   Total	$629.8M

   
   

CF18 Modernization Project

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1. Description:   The CF188 is Canada’s only fighter aircraft.  The CF188 fleet, based on 1970s technology, was acquired by Canada in 1982 and had an original Estimated Life Expectancy (ELE) of 2003. The requirement to modernize aircraft systems was recognized at the outset and fleet modernization was originally planned to commence in the early 1990s.  DND conducted an airframe structural test program aimed at determining the economic life of the airframe with an objective of extending the airframe life to the 2017 – 2020 timeframe.  In response to documented avionics system deficiencies, the CF188 Modernization project was initiated.

   The CF188 Modernization project is composed of 17 different projects.  Seven of these projects represent the bulk of the work to be done and are grouped under the CF 188 Incremental Modernization Project (CF 188 IMP).  The remaining 10 smaller projects include associated systems such as the Night Vision Imaging System (NVIS), Air Combat Manoeuvring Instrumentation (ACMI), Precision Guided Munitions (PGM), Advance Multi-role Infrared Sensor (AMIRS), and others. To acquire and implement these projects, TB has approved $2.65B full-up cost (GST included).

   The 7 projects included in CF 188 IMP are divided into two installation and integration phases.  Phase I (Engineering Change Proposal 583 (ECP 583)) integrated core avionics that formed the foundation upon which other CF188 IMP projects could be installed and integrated. Phase II of the modernization effort consists of ECP 583 Revision 2 (R2), developed by McDonnell Douglas Corp, a wholly owned subsidiary of Boeing Company, for Canada, and the United States Marine Corps that will procure, install, and integrate the major and most complex systems of Phase II. 

2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada

   
   
4. Prime and Major Sub-Contractors:
   
   Phase I and Phase II
   
   

   Prime Contractor	Boeing / McDonnell Douglas, St Louis, Missouri, USA
   Major Sub-Contractors	L3 Canada MAS, Mirabel, QuebecCanada

   
   
5. Major Milestones:
   

   Major Milestones	Phase I	Phase II
   Treasury Board Effective Project Approval	August 22, 2000	October 25, 2004
   Contract - Awarded	March 29, 2001	February 15, 2005
   First Aircraft delivery	May 14, 2003	July 10, 2007
   Last Aircraft delivery	August 31, 2006	March 19, 2010
   Implementation - Project Closed-Out	December 31, 2008	September 30, 2010

   
   
6. Progress Report and Explanations of Variances:  Phase I of the IMP project received Treasury Board approval on August 22, 2000, with a full up cost of $1,158M (BY) (GST included).  The prime contract was awarded to the Boeing Company on March 29, 2001.  Engineering Change Proposal 583 procured, installed and integrated the following avionics systems: a new radar, a jam resistant secure communications, a Combined Interrogator / Transponder (CIT), a Stores Management System (SMS) and integrated an Embedded Global Positioning / Inertial Navigation System (EGI).  The first Squadron received modernized CF188 aircraft in November 2003.  The last of 80 CF188s to be modernized under Phase I was delivered on schedule in August 2006.   All Canadian Fighter Squadrons are now flying the modernized aircraft with extremely positive feedback on its state-of-the-art capabilities.

   Phase II received TB Effective Project Approval on October 25, 2004 for a substantive cost of $476M (BY) (GST included).  The commercial sale contract was awarded to Boeing on February 15, 2005. Three of the subsystems to be installed are being procured via Foreign Military Sales (FMS) with the US Navy (Helmet Mounted Display (HMD), Multi-functional Information Distribution System (MIDS) & ALE-47 Counter Measures Dispensing System) and one is being purchased commercially (Multi-purpose Display Group (MDG)) under a joint program with the Royal Australian Air Force. The following items are also included in the ECP 583R2 Project:  Multi-purpose Display Group (MDG), Cockpit Video Recorder (CVR), and the Naval Aircrew Common Ejection Seat (NACES).  ECP 583 R2 is now in full implementation.  To date a total of 11 of 79 R2 jets have been delivered.  The last Phase II production aircraft is scheduled for modernization by the middle of 2010.  The remaining funds are apportioned to the number of smaller sub projects.

7. Industrial and Regional Benefits:

   ECP 583: Industrial and Regional Benefits are equivalent to 75% of the contract value on this project. The Contractor, McDonnell Douglas Corp, a wholly owned subsidiary of Boeing Company, has committed to deliver Industrial and Regional Benefits of $377M US. Boeing has currently satisfied $340M US of their obligation to the Government of Canada. The remaining $37M US will need to be completed by the end of 2008. Boeing has been working with industry in all regions of Canada on this project.

   ECP 583 R2 Industrial and Regional Benefits are equivalent to 100% of the contract value on this project. The Contractor, McDonnell Douglas Corp, a wholly owned subsidiary of Boeing Company, has committed to deliver Industrial and Regional Benefits of $137M US. They have also committed to a 25% direct requirement.  Boeing has currently satisfied approximately $39M US of their obligation to the Government of Canada. The remaining $97M US will need to be completed by the end of 2012. Canadian industry in the following regions of Canada will benefit from the CF188 Modernization Project.

   
   

   Region	Benefits Phase I	Benefits Phase II
   Atlantic Canada	5M	0.153M
   Québec	158M	0.898M
   Ontario	152M	38M
   Western Canada	25M	0.615M
   Unallocated	37M	97M
   Total	$377M	$136.6M

   
   

HALIFAX Class Modernization/Frigate Equipment Life Extension (HCM/FELEX)

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1. Description:  The HCM/FELEX project is the principal component of the overall HALIFAX Class modernization (HCM) initiative. The project will plan and manage HALIFAX Class mid-life refits, acquire the major elements of the new combat system, and deliver stability enhancements, degaussing improvements and a Commander Task Group capability in four ships.  As the Design Integration Authority for the HCM, PM HCM/FELEX is responsible for the ship level design integration of all elements of the HCM including any unique/specific engineering changes required to address integration requirements.  To ensure that the overall modernization initiative is achieved in a timely, efficient and coordinated manner, the HCM/FELEX project will conduct overall design integration, coordinate schedules, manage inter-project risk, and manage equipment installation during the mid-life refits.  Major equipment acquisitions through HCM/FELEX will include a modernized Command and Control System, Multi-Link, Identification Friend or Foe Mode S/5, upgrades to the radars, new Electronic Support Measures System, upgrades to the Internal Communications system, and an upgraded Harpoon Weapon System.  These acquisitions will both sustain current capability and contribute to the new littoral operations role of the HALIFAX Class.

   Implementation of the HCM/FELEX project will occur through three principal contracts:  two Multiship Contracts (MSC) for docking work periods/refits and one Combat System Integration (CSI) contract to develop, procure and install the majority of the combat system elements of the project.

2. Project Phase:  Definition
3. Leading and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works & Government Services Canada
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   In-Service Support Contractor (Class Design Agent)	Fleetway Incorporated, Halifax, NS, Canada
   Internal Communications System	DRS Flight Safety, Kanata, ON, Canada

   
   
5. Major Milestones
   

   Major Milestones	Date
   Preliminary Project Approval (PPA) Approval	February 2005 (FELEX) February 2007 (HCM/FELEX)
   Refit Procurement Strategy Approval by TB	March 2007
   Revised Preliminary Project Approval (Part 1)	June 2007
   Multi-Ship Contracts (MSC) Awarded (Docking Work Periods & Refits)	March 2008
   Effective Project Approval (EPA) Approval (Part 2)	September 2008
   Combat System Integration Contract Award	November 2008
   Refits Begin	October 2010
   Refits Completed	June 2017
   Project Closure	March 2018

   
   
6. Progress Report and Explanation of Variances:  Treasury Board approved the consolidation of the five projects listed above into the HALIFAX Class Modernization/Frigate Life Extension Project and provided Expenditure Authority for Part 1 (the Non-CSI component) of the implementation at a substantive full-up cost estimate, including GST, of $822.6M (BY) on June 7, 2007.

   After providing industry with detailed insight into the project’s combat systems integration (CSI) requirements and technical documentation, three qualified contractors were selected through a Solicitation of Interest Qualification process.  All three contractors attested, in writing, that they could deliver the design/build/installation and set-to-work of all twelve CSI systems, including the upgrade of all system trainers and delivery of a complete Integrated Logistics Package at a firm fixed price of $1,100M.

   The Project is presently in its definition phase.  Design integration work is continuing, the Combat System Integration Performance Specification is being finalized, and the CSI Request for Proposal documentation was released in February 2008. Documentation is being finalized for a September 2008 submission to Treasury Board seeking Effective Project Approval and Expenditure Authority for Part 2, the CSI component of the project, at a full-up cost estimate, including GST, of $2,242M (BY). Total full-up project cost, including GST, is $3,108.4M (BY). The HCM/FELEX project is currently within budget.

   A Request for Proposal for the Multi-Ship Contracts (docking work periods and refits) resulted in two successful bidders, Halifax Shipyard on the east coast and Washington Marine Group (Victoria Shipyard) on the west coast.  Final negotiations with both shipyards have been completed and award of contracts is expected in March 2008.

7. Industrial Benefits:  The HCM/FELEX input into the long-term Multi-Ship refit contracts will provide approximately, including GST, $273M (BY) in industrial benefits to east and west coast shipyards. These contracts will provide continuous workflow and thus sustainment of a skilled ship repair work force through most of the next decade. The CSI component of the project will provide approximately $1,100M in industrial benefits to the combat system industry through the next 10 years.

Intelligence Surveillance, Target Acquisition and Reconnaissance (ISTAR)

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1. Description:  The purpose of this project is to develop, deliver and evolve an integrated, interoperable, ISTAR capability that will improve the ability of commanders to visualize the operational area, manage sensors and information collection resources, and to plan and implement actions to successfully complete operational missions.  The project will provide enhancements to existing capabilities and include the acquisition of new capabilities in the areas of communications, command and control and sensors.  The project includes the acquisition of Unmanned Aerial Vehicles (UAV), Weapon Locating Sensors (WLS) and transformation or enhancement of existing sensor platforms to include Electronic Warfare (EW), Light Armoured Vehicle III, Coyote Reconnaissance Vehicle, Ground Based Air Defence, Geomatic support and Tactical Meteorology Systems.  ISTAR is an omnibus project that received Treasury Board approval for definition phase activity on April 3, 2003.  Implementation through sub-projects is anticipated upon completion of the definition activities.  Although initial delivery of equipment was estimated to occur sometime in fiscal 2005–2006, the Unforecasted Operational Requirement (UOR) for an UAV and other sensor upgrades has resulted in the delivery of a partial tactical UAV and EW capability in Afghanistan in 2003–2004.  Early deliveries of ISTAR capabilities for Op ARCHER UORs will continue during 2008 and the first sub-projects will be achieving Full Operational Capability (FOC) and will close in 2008.
2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works & Government Services Canada (PWGSC)
   Participating Department	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor for the UAV UOR Op Athena sub-project	Oerlikon Contraves Inc., Saint-Jean, QC
   Major Sub-Contractor for the UAV UOR Op Athena sub-project	SAGEM SA, France
   Prime Contractor for Beyond Line of Sight Satellite (BLOS) UOR Op ARCHER	ND Satcom, Germany
   Prime Contractors for Mobile Electronic Warfare Team (MEWT) UOR Op ARCHER	Agilent Technologies, Ottawa, ON Digital ReceiverTechnologyInc, Maryland USA Signal Technology Associates Inc., Kanata, ON Xwave, Stittsville, Ontario
   Prime Contractor for Mini UAV UOR Op ARCHER	Thales Canada, Ottawa, ON
   Major Sub-contractor for the Mini UAV UOR Op ARCHER	Elbit Systems, Israel
   Prime Contractor for Acoustic Weapon Locating System (AWLS) Op ARCHER	SELEX Sensors & Airborne Systems Ltd, Basildon Essex, United Kingdom
   Type 1 Radios Data Link Communication (DLC) project - Foreign Military Sales (FMS)	US Army, USA
   Light Weight Counter Mortar Radars (LCMR) – Foreign Military Sales (FMS)	US Army, USA

   
   
5. Major Milestones
   

   Major Milestones	Date
   Treasury Board Preliminary Project Approval	April 3, 2003
   MND Approval UAV UOR	July 2003
   Treasury Board Project Approval in Arrears UAV UOR Full Operational Capability	August 2005 October 2007
   Communications & Data Link Component Treasury Board Effective Project Approval Initial Operational Capability	December 2006 October 2008
   Command and Control (C2) Treasury Board Effective Project Approval Initial Operational Capability	February 2008 March 2009
   EW Sensors Treasury Board Effective Project Approval Phase 1 Amendment 1 (AL 1) Initial Operational Capability	November 2005 February 2008 April 2007
   In Service Sensors Enhancement Treasury Board Effective Project Approval	October 2008
   WLS Sensor Component Treasury Board Effective Project Approval	October 2008
   WLS Acoustic Sensor Initial Operation Capability (IOC) Full Operational Capability	November 2005 March 2007 Sept 2008
   Family of Mini UAV Treasury Board Effective Project Approval (UOR) Family of Mini UAV Treasury Board Effective Project Approval AL 1	November 2005 March 2009
   Light Weight Counter Mortar Radar Effective Project Approval Initial Operation Capability (IOC) Full Operational Capability (FOC)	March 2007 March 2007 December 2008
   Deliveries Complete all ISTAR sub-projects	September 2013
   Project Completion	March 2014

   
   
6. Progress Report and Explanations of Variances:  Given the ISTAR project staffs are still managing the UOR procurement for Op ATHENA and Op ARCHER and that the approval process is taking longer than forecasted it is expected that the project will be completed on the original schedule.  Although, there is as much as a year’s delay in achieving some of the ISTAR project approval, delivery after effective approval are either on schedule or ahead of schedule.  ISTAR initial operational capabilities have been procured and the overall project is expected to complete on the original schedule.

   Delivery of equipment actually started with UORs in Op Athena, and final deliveries are scheduled out to 2013.  The currently approved sub-projects in support of Op Athena and Op Archer are:

   1. UAV UOR Op Athena
   2. BLOS Op Archer
   3. MEWT Op Archer
   4. Mini UAV UOR Op Archer
   5. AWLS Op Archer
   6. LCMR Op ATHENA

   In addition the Data Link Communications project received TB approval in December 2006 and PWGSC received TB contract approval for radios February 22, 2007. The FMS cases for 1300 radios has been accepted and initialdelivery of equipment is anticipated for March 2008.  Some of this equipment is needed for Op ATHENA.

7. Industrial Benefits:  A competitive procurement process was held for the UAV UOR.   Oerlikon Contraves won with Sagem SA as the manufacturer of the SPERWER UAV system.  How Canadian industry in Canada will benefit from the ISTAR project will be determined during the approval of the implementation procurement strategy for each sub-project. 

Joint Support Ship (JSS)

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1. Description: The JSS is a Major Crown Project which will maintain the Canadian Navy’s current naval task group logistic support, while ensuring that the Canadian Forces has an adequate, assured strategic sealift capability to allow it to deploy and sustain operations in support of government policy and enhancing Canada's capability for joint command and control of forces ashore. This will be accomplished by awarding two separate contracts to one contractor for the design and construction in Canada of three vessels and another for In-Service Support of the units throughout their operational life. The ships will replace the two ageing Protecteur class support ships currently in service on the east and west coast.
2. Project Phase: Definition
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and the regional agencies

   
   
4. Prime and Major Sub-Contractors: No prime contractor has been selected. Final selection of the prime contractor will occur at Effective Project Approval, planned for 2008.
5. Major Milestones:
   

   Major Milestones	Date
   Memorandum to Cabinet	April 14, 2004
   Treasury Board Preliminary Project Approval - (SS-PPA)	November 24, 2004
   Invitation for Bids Posted on MERX	June 27, 2006
   Project Definition – Contract Award	December 1, 2006
   Treasury Board Effective Project Approval - (SS-EPA) – Approval	September 2008
   Project Implementation - Contract Award	2008
   First Delivery	2012
   Initial Operational Capability (IOC)	2013
   Full Operational Capability (FOC)	2016
   Project Close-out	2016

   
   
6. Progress Report and Explanations of Variances: The project continues to progress steadily since obtaining Preliminary Project Approval in November 2004. The Minister of Public Works and Government Services Canada (PWGSC) awarded two Project Definition contracts on December 1, 2006. Treasury Board granted expenditure authority of $72.2M, full up including GST, for the pre-qualification and definition phases. Treasury Board also acknowledged the indicative full up cost of $2,012.9M (BY), including GST, for implementation. The total full up indicative cost including GST, for implementation is now $2.1B(BY). This new cost figure reflects an increase of $16M to accommodate the recently announced acquisition of the Main Battle Tanks, and $44M that will be funded out of the current departmental program to assist in closing the Systems Requirements Document (SRD) affordability gap.
7. Industrial and Regional Benefits: Industrial and Regional Benefits (IRBs) for this project are equivalent to 100% of the contracted value for both the capital acquisition and in-service support.

Light Utility Vehicle Wheeled (LUVW)

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1. Description: Light utility vehicles are highly mobile and essential to facilitating the tactical command of combat, combat support and combat service support units, to assist in the gathering and dissemination of information and to liaison within and between field formations.

   The LUVW Project mandate is to replace Canadian Iltis vehicles with two separate vehicle acquisitions: 1,159 Standard Military Pattern (SMP) vehicles (Mercedes Benz G Wagon) with integrated logistic support and 170 Armour Protection Systems ($241.4M), for use by field force units; and 1,061 militarized commercial off-the-shelf (Mil COTS) vehicles (GM Silverado) ($65.4M) for use primarily by the Reserve Force for a total project cost of $306.8M.

2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Department	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor (Phase 1) SMP	Mercedes Benz Canada, Toronto ON
   Prime Contractor (Phase 2) Mil-COTS	General Motors Defense Military Trucks, Troy, Michigan, USA

   
   
5. Major Milestones
   

   Major Milestones	Date
   Major Milestone (Phase 1) SMP
   Award of Contract	October 28, 2003
   First Full Production Delivery	February 2004
   Final Production Delivery	November 2006
   Effective Project Completion	December 2008

   
   

    

   
   

   Major Milestone (Phase 2) Mil COTS
   Award of Contract	October 2002
   First Full Production Delivery	October 2003
   Final Production Delivery	December 2004
   Effective Project Completion	December 2008

   
   
6. Progress Report and Explanation of Variances:Project is in full implementation. The LUVW SMP (G Wagon) contract was awarded to Mercedes Benz Canada on October 28, 2003. Fielding of the G Wagon started in February 2004, five months ahead of schedule. A total of 60 basic and 24 C&R/MP (20 Command & Reconnaissance and 4 Military Police) LUVW G Wagons were delivered directly from the manufacturer’s plant in Graz, Austria to Kabul. In 2005 and early 2006, an additional 86 G Wagons were delivered to Kandahar. Delivery of all armour kits was completed in December 2005 and delivery of the total quantity of 1,159 vehicles was completed in November 2006.

   The LUVW Mil COTS contract was awarded to General Motors in October 2002 with the first vehicle delivery received in October 2003.  All 1,061 vehicles have been delivered as of December 2004. 

   There were options on both the LUVW SMP and Mil COTS contracts; however, they have both been exercised and the option quantities are already reflected in the quantities detailed above.

   The level of confidence in the LUVW is generally high. User feedback from Op ATHENA/Op ARCHER on the G Wagon has been positive and, even with the high mileage placed on the vehicles in Afghanistan, the fleet serviceability remains steady at 95%. That said, there have been problems of body cracks in the fleet, particularly those vehicles operating in harsher environments such as Afghanistan.  The Project Management Office (PMO) has been working to resolve this issue.

   In September 2006, the Senior Review Board of the Department of National Defence authorized the transfer of $1.5M of unspent funds from the MILCOTS account and $1M from contingency to the SMP account (for a total of $2.5M increase in the SMP account). This money was required to offset the increase in the cost of the EURO that has increased the cost of Design Change Requests, spare parts and special tools (none of these items was contracted for at a fixed exchange rate).

   The project was reduced to a staff of three in July 2007. This drawdown in staff was found to be too severe given the challenges of fielding the fleet directly to Afghanistan and the optional purchase of 357 additional G Wagons.  Consequently, there have been delays to the contracting and delivery of the special tools and test equipment and the project has been extended to December 2008.

   The remaining high cost items include the delivery of Integrated Logistics Support manuals and special tools and test equipment.  The PMO will also work with PWGSC to migrate the Interim Support Contract into a Long Term Support Contract.  Full Operational Capability will be declared after delivery of the special tools. This is estimated to take place between June and September 2008, followed by effective project close-out in December 2008.

7. Industrial Benefits:  The industrial benefits are required for Phase 1 for a value 100% of the contract value.  Latest report from Industry Canada indicates that Mercedes Benz Canada has exceeded the industrial regional benefit goals by $300M. There are no mandated industrial benefits for the Mil COTS contract.

Main Battle Tank

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1. Description:  The Tank Replacement Project will seek to replace Canada's aging Leopard C2 tank fleet with a modern, heavily protected, mobile, direct fire support capability.  The Tank Replacement Project is broken into two phases.  Phase 1 consists of the loan of 20 Leopard 2 A6M Main Battle Tanks (MBT) plus 2 Armoured Recovery Vehicles (ARV) from the German Government for immediate deployment to Afghanistan and the purchase of up to 100 surplus Leopard 2 MBT from The Netherlands Government.  Phase 2 consists of the upgrades to the purchased tanks.

   The project received Treasury Board (TB) approval for Phase 1 March 29, 2007 and will return to TB to seek Effective Project Approval (EPA) for phase 2.  The project is capped at $650M.

2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services (PWGSC)
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors:
   

   Prime Contractor for ARV upgrades Phase 1	Rheinmetall Land Systeme (RLS), Germany
   Prime Contractor for MBT upgrades Phase 1	Krauss Maffei Wegmann (KMW), Germany
   Prime Contractor for loaned tanks	German Government
   Prime Contractor for tank purchase	Netherlands Government

   
   
5. Major Milestones:
   

   Major Milestones	Date
   Memorandum to Cabinet	March 26, 2007
   Senior Project Advisory Committee – Procurement Strategy Endorsed	March 15, 2007
   Treasury Board - Preliminary Project Approval (PPA)	March 29, 2007
   Statement of Operational Requirements Approval	To be determined
   Phase 1 – Memorandum of Understanding with German MoD Signed for Loan	May 16, 2007
   Phase 1 - Contract to KMW for upgrades to Loaned tanks	May 30, 2007
   Phase 1 - Contract to RLS for upgrades to Loaned tanks	May 30, 2007
   Initial Operational Capability – (Phase I)	August 28, 2007
   Phase 1 - Acquisition of tanks from Dutch Government	14 December 2007
   Senior Project Advisory Committee – Phase 2 Procurement Strategy Endorsed	Fall 2008
   Treasury Board Effective Project Approval	Mid 2009
   Full Operational Capability – (Phase II)	2013+
   Project Closed-Out	2013+

   
   
6. Progress Report and Explanations of Variances:  Due to schedule constraints to meet initial operating capability, the Leopard 2 A6M tanks deployed with slat armour vice the original enhanced armour modules.

   Mine ploughs/mine rollers and dozers will not be available on the loaned tanks.  Therefore some Leopard 1 C2 will remain in theatre.

   Staffing for EPA has been initiated.  There may be scheduling and cost challenges, due to the fact that phase 2 upgrades have to be completed in Canada.  The project team is currently analyzing. 

7. Industrial and Regional Benefits(IRB):  No IRBs are required for Phase 1.  The industrial benefits for Phase 2 will be determined as part of the EPA process.  The Project Management Office and PWGSC is clarifying the Intellectual Property (IP) ownership for the tanks and variants.  The outcome of this may affect the transfer of the IP and potentially Canadian industrial benefits.

Marine Security Operations Centres

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1. Description: The National Security Policy, released in April 2004, provided government direction to the Department of National Defence to investigate the requirement for a “Domestic Maritime Inter-Agency Capability.”  The Marine Security Operations Centres Project, which will require the participation of specific federal agencies having a vested interest in maritime security, was established to conform to this direction.

   The Marine Security Operations Centres Project will establish the Marine Security Operations Centers, which will be manned by core partner personnel.  In addition, the project will ensure that the Marine Security Operations Centres will have the capacity in terms of personnel, technology and physical infrastructure resources that will allow them to bring to bear all civilian and military assets necessary to detect, assess and support a response to a direct or indirect marine security threat. 

2. Project Phase: Definition
3. Leading and Participating Departments and Agencies:
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada Defence Construction Canada
   Participating Departments and Agencies	Canada Boarder Services Agency Department of Fisheries and Oceans/Canadian Coast Guard Public Safety Canada/Royal Canadian Mounted Police Transport Canada

   
   
4. Prime and Major Sub-Contractors:
   

   Prime Contractor (Business Transformation and Integrated Information Environment)

   The project is in the process of establishing its primary goods and services contract.  The Stage 1 RFP technical proposal evaluations are being conducted with the objective of establishing a qualified bidders list by March 2008.  Stage 2 RFP development is progressing with RFP release to qualified bidders tentatively scheduled for summer 2008 while contract ward is tentatively scheduled for spring 2009.

   Prime Contractor (Construction)

   The project signed a contact with Smith Carter Architects and Engineers Inc., Winnipeg, Manitoba in December 2005 for construction architectural and engineering consulting services for initial definition phase work.  A new RFP will be released this year with a new architectural and engineering consulting services contract tentatively in place by spring 2009 for the remaining definition phase and all of the implementation phase work. The project is tentatively scheduled in 2010 to sign general construction contracts for the construction of the new MSOC buildings on both coasts.

   
   
5. Major Milestones:
   

   Major Milestones	Original Dates	Revised Dates
   Preliminary Project Approval #1	December 2005	N/A
   Initial Operating Capability	April 2007	October 2008
   Preliminary Project Approval #2	April 2007	May 2010
   Effective Project Approval	April 2008	June 2011
   Final Operating Capability	September 2010	September 2014
   Project Close out	March 2011	March 2015

   
   
6. Progress Report and Explanations of Variances:
   1. Overall the project is currently running 48 months behind schedule.  The Project Definition phase is 38 months behind schedule primarily due to the issues outlined below:
      • Initial Operating Capability.  Delayed 18 months to October 2008 due to the requirement to renovate existing facilities to accommodate increase in personnel and supporting business/information management systems;
      • Preliminary Project Approval #2 (Effective Project Approval - Construction).  Delayed 37 months to May 2010 due to delays in identifying functional space requirements and the complexity of dealing with five (5) diverse stakeholders;
      • Effective Project Approval (Business Transformation/Integrated Information Environment).  Delayed 38 months to June 2011 due to professional services procurement delays; legal option delays and obtaining approvals of critical requirements documentation; and
      • Final Operating Capability.  Delayed 48 months to September 2014 due to delays in obtaining Preliminary Project Approval #2 (Effective Project Approval - Construction) and Effective Project Approval (Business Transformation/Integrated Information Environment) approvals.  The funding to support the work to develop and deliver Final Operating Capability is not available until Preliminary Project Approval #2 and Effective Project Approval approvals are obtained.  In addition, Final Operating Capability cannot be declared until the business transformation/integrated information environment solution has been installed in the completed buildings.
   2. There is a high probability that the current project definition budget will be insufficient due to the increase in Initial Operating Capability and construction definition work.  The project is working on defining the extent of the budget short fall and will be reporting to senior management by mid 2008.
7. Industrial and Regional Benefits (IRB):
   1. Marine Security Operations Centres Project will offer, on a competitive basis, important business opportunities to most regions of the country. Regions in which the federal government has established special economic development programs to promote job creation and regional prosperity include the Atlantic Provinces, Newfoundland, Quebec and British Columbia. The Marine Security Operations Centres Project will provide small and medium size companies, as part of a consortium or partnerships, the opportunity to gain invaluable experience and product/service exposure. This exposure could lead to further business opportunities with either DND, other government departments or private industry. These companies will also have a further opportunity to play a part in the Marine Security Operations Centres in-service support contracts.
   2. Marine Security Operations Centres Project will be convening a Senior Project Advisory Committee meeting (senior procurement review committee) in 2008 in order to review procurement strategy in terms of the project primary contract request for proposal.  This review will also address the Industrial Regional Benefits component of the primary contract.

Maritime Helicopter Project (MHP)

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1. Description: The purpose of this project is to replace the CH124 Sea King with a fleet of 28 new fully equipped Maritime Helicopters bundled with a long-term In-Service Support contract and the modification of the HALIFAX class ships to accommodate the new Maritime Helicopters.  This replacement will address the operational deficiencies of the current CH124, eliminate the supportability difficulties of the older helicopter, and provide a sufficient fleet size of multi-purpose shipborne Maritime Helicopters for operations well into the 21st century.
2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors:
   

   Prime Contractor	Sikorsky International Operations Incorporated, Stratford, Connecticut, USA
   Sub-Contractors	General Dynamics Canada, Ottawa, Ontario L-3 MAS Canada, Mirabel, Québec

   
   
5. Major Milestones:
   

   Major Milestones	Date
   Preliminary Project Approval (PPA)	June 18, 2003
   Invitations for Bids Posted on MERX	December 16, 2003
   Synopsis Sheet (Effective Project Approval) SS (EPA)	November 22, 2004
   Contract Award	November 23, 2004
   First Delivery	January 2009
   Initial Operational Capability (IOC)	January 2010
   Full Operational Capability (FOC)	February 2011
   Project Close-out	2013

   
   
6. Progress Report and Explanations of Variances:  In November 2007, the project marked the three-year milestone in the implementation phase.  The project focus is now shifting from design and engineering to aircraft manufacturing and assembly followed by flight tests and delivery of the aircrafts.  The prime contractor has recently informed the government of a delay in the planned delivery date for the integrated Maritime Helicopter.  Government representatives are currently conducting a detailed review of all aspects of the contractor's schedule to determine how to minimize the impact of these delays and to ensure that they will not affect the key performance and airworthiness requirements of the Canadian Forces. Other components of the project such as construction of the Training Centre building in Shearwater, NS, and ship modification work on HMCS MONTREAL have progressed well and are on schedule.  The project is currently running within its authorized budget.
7. Industrial Benefits: The Industrial Regional Benefits is equivalent to 100% of the contract value for the capital acquisition and more than 80% of the contract value for the In-Service Support.
   

   Region	Capital Acquisition	In-Service Support
   Atlantic Canada	239.1M	825.9M
   Quebec	555.8M	399.2M
   Northern Ontario	3.2M	7.6M
   Ontario (excluding Northern Ontario)	924.3M	1,073.2M
   Western Canada	210.6M	181.4M
   Unallocated	10.0M	105.7M
   Total	$1,943.0M	$2,593.0M

   
   

Material Acquisition and Support Information System (MASIS)

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1. Description: The mission of the Material Acquisition and Support Information System (MASIS) project is to provide a Department of National Defence (DND) integrated materiel acquisition and support information system that enables the cost-effective optimization of weapon/equipment system availability throughout the life cycle. The scope of MASIS includes all end-to-end information requirements within DND/CF related to the materiel acquisition and support functions which are comprised of systems engineering, integrated logistics support (ILS), equipment configuration, technical data management, asset management, maintenance management, project management, performance management, operational support, business management, decision support analysis and contract management.
2. Project Phase: Implementation – Phase 5
3. Leading and Participating Departments and Agencies
   

   Lead Department or Agency	National Defence
   Contracting Authority	Public Works and Government Services
   Participating Departments and Agencies	N/A

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor	IBM Canada, Ottawa, Ontario
   Major Sub-Contractors	SAP Canada, Ottawa, Ontario Pennant Ottawa, Ontario, Canada

   
   
5. Major Milestones

   The project follows the standard departmental project management framework, with a phased approach implemented by a fully Integrated Project Team consisting of personnel from the Contractor, DND and PWGSC.

   
   

   Major Milestones	Date
   Definition Phase
   Preliminary Project Approval - Expenditure Authority for Phase 1	June 10, 1998
   Contract Awarded for Prime Systems Integrator	December 14, 1998
   MASIS system - Go Live Phase 1 (202 Work Depot Montreal)	September 1, 1999
   Implementation Phase
   Expenditure Authority (EPA) for Phases 2 and 3: Implementation of Complex Contracts; Implementation of the MASIS solution to the Navy; Operations Support & Maintenance for MASIS; Planning and scoping for requirements scheduled to be implemented for the Army.	June 15, 2000
   Amended Expenditure Authority (EPA) for Phase 4: Investigation of opportunities to progress the implementation of MASIS to the maximum extent possible within the future available Phase 5 funding; Management of Operations Support & Maintenance for MASIS (outside MASIS project Expenditure Authority); Project was deemed as a Major Crown Project with this approval.	December 2003
   Amended Expenditure Authority (EPA) for Phase 5 to cover rollout of additional functionality to wider user base including Air Force and Army.	June 13, 2007
   Project Close-out	2012

   
   
6. Progress Report and Explanations of Variances: Following Definition phase approval, EPA for MASIS was granted to DND in June 2000 in the amount of $147.8M. This authority provided the project the means to cover the work under Phases 1 to 3, which have been completed.

   The project follows a cyclical approval and delivery methodology. In December 2003, an additional $34.4M was approved to fund Phase 4 of the project.  On June 13, 2007, the MASIS project received Treasury Board approval in the amount of $170M for Phase 5.  Planned completion of project is 2012 timeframe.

7. Industrial Benefits: All industrial benefits are attributed to Ontario since all project expenditures occur in Ontario.

Medium- To Heavy-Lift Helicopter (MHLH)

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1. Description: Over the last decade, the ability to move personnel and equipment by air has become a vital and growing capability requirement for the Canadian Forces in fulfilling a wide range of roles. Canadian Forces operational experience, particularly in current operational theatres, has highlighted the urgent need for medium- to heavy-lift helicopters to support land, amphibious and special operations forces in a threat environment by quickly, efficiently and safely moving large numbers of personnel and heavy equipment from forward deployed bases, thus reducing their vulnerability to attack. Both at home and overseas, medium- to heavy-lift helicopters will provide the Government with a wider range of military options for addressing threats and emergencies than the Canadian Forces’ current helicopter fleets.

   The Medium- to Heavy-Lift Helicopter project will deliver the medium to heavy lift helicopter capability to support domestic and international deployments of land forces, special operations and amphibious formations. The project will acquire a minimum of 16 helicopters, integrated logistic support and other related support elements.

2. Project Phase: Definition
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors:
   

   Prime Contractor

   The Boeing Company, Philadelphia, Pennsylvania, USA

   
   
5. Major Milestones:
   

   Major Milestones	Date
   Memorandum to Cabinet	June 2006
   Synopsis Sheet Preliminary Project Approval (PPA)	June 22, 2006
   Advanced Contract Award Notice Posted on MERX	July 5, 2006
   Revised Preliminary Project Approval – Phased Approach	Spring 2008
   Contract Award	Fall 2008
   Synopsis Sheet Effective Project Approval	Fall 2009
   Contract Amendment – Phase II	Fall 2010
   First ACAN Compliant Aircraft	Summer 2011
   First MHLH	Summer 2012
   Initial Operational Capability (IOC)	Summer 2013
   Full Operational Capability (FOC)	Summer 2015
   Project Close-out	Winter 2015/2016

   
   
6. Progress Report and Explanations of Variances: The project received Preliminary Project Approval in June 2006, whereby expenditure authority of $8.4M was granted for the definition phase. Treasury Board also acknowledged the indicative cost estimate of $2B (BY) for the total project.

   In July 2006, the Government announced, via Advanced Contract Award Notice, its intent to award a contract to the Boeing Company.  Definition work is underway, consultation with industry has taken place, a continuous risk management program has been implemented and costing efforts for the implementation phase are progressing.

   Contract award has been delayed owing to delays in finalizing Technical Assistance Agreements and the need to conduct additional risk reduction and project definition tasks.  In Spring 2008, authority will be requested, through a Revised PPA, to endorse a phased approach to this procurement.  This approach consists of a non-recurring engineering and risk reduction phase followed by a production phase.

7. Industrial Benefits: This procurement will provide Industrial Regional Benefits equivalent to 100% of the contracted value for both the capital acquisition and integrated in-service support.  For the integrated in-service support portion, 75% of the contract value will be direct work performed by a Canadian company.  The selected contractor will be required to identify, as specific work packages, 60% of the total acquisition commitment.  These industrial and regional benefits requirements will be negotiated and accepted by Industry Canada prior to contract signing.

Medium Support Vehicle System Project (MSVS)

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1. Description:The Medium Support Vehicle System Project is a capability replacement project for the existing Medium Logistics Vehicle Wheeled (MLVW) fleet that has reached the end of its service life due to age, heavy usage and corrosion.  The MSVS project will cost approximately $1.1B (net of GST) and will deliver the following mix of vehicles:
   1. medium-sized Standard Military Pattern (SMP) trucks:
      - Up to 1,500 trucks, with options for an additional 650;
      - Up to 150 integrated armour protection systems, with options for an additional 150, and
      - 300 companion military pattern trailers, with options for an additional 240.
   2. medium-sized Militarized Commercial Off-the-Shelf (MiLCOTS) vehicles:
      - 800 commercial trucks with militarized components, with options for an additional 500.
   3. specially Equipped Vehicles (SEV) Kits:
      - Up to 1,000 special equipment vehicle kits, with options for an additional 150.

   Cost, cash flow and schedule estimates will be further refined before the Minister of National Defence seeks effective project approval from Treasury Board. 

2. Project Phase: Definition
3. Leading and Participating Departments and Agencies:
   

   Lead Department or Agency	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Departments and Agencies	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors: Final selection of the prime contractor will occur at Effective Project Approval (EPA).
5. Major Milestones:
   

   Major Milestones	Date
   Memorandum to Cabinet	June 2006
   Preliminary Project Approval (PPA)	June 22 2006
   Invitation for Bids Posted on MERX - Militarized Commercial Pattern Vehicles	November 15, 2007
   Invitation for Bids Posted on MERX - Standard Military Pattern Vehicles	Fall 2008
   Invitation for Bids Posted on MERX - Family of Baseline Shelter	Fall 2008
   Invitation for Bids Posted on MERX - Special Equipment Vehicle Kits	To be determined
   Effective Project Approval - EPA for MilCOTS and SEV Baseline Shelter	Fall 2008
   Effective Project Approval - EPA for SMP and SEV Kitting	Fall 2009
   Contract Award - Militarized Commercial Pattern Vehicles	Fall 2008
   Contract Award - Standard Military Pattern	Fall 2009
   Contract Award – Family of Baseline Shelter	Fall 2008
   Contract Award - Special Equipment Vehicle Kits	To be determined
   First Delivery - Militarized Commercial Pattern Vehicles	Summer 2009
   First Delivery - Standard Military Pattern	Winter 2010
   First Delivery - Family of Baseline Shelter	Spring 2009
   First Delivery - Special Equipment Vehicle (SEV) Kits	To be determined
   Delivery Complete - Militarized Commercial Pattern Vehicle	Fall 2010
   Delivery Complete – Standard Military Pattern (SMP)	Winter 2012
   Delivery Complete – Family of Baseline Shelter	Spring 2011
   Delivery Complete - Special Equipment Vehicle Kits	To be determined
   Project Close Out	Spring 2013

   
   
6. Progress Report and Explanations of Variances: Treasury Board provided the MSVS project $25.8M (BY) Expenditure Authority for the Definition phase on June 22, 2006. Design and definition work is progressing well incorporating consultation with industry whenever possible. The status of each MSVS Component is outlined below:
   1. MilCOTS - The MilCOTS RFP was released to industry November 15, 2007. Bid evaluation is scheduled for Summer 2008 and EPA in Fall 2008.
   2. SEV Baseline Shelter – RFP development is progressing well. Draft technical specifications were posted in October 2007 for industry review. Remaining documentation is being developed with an anticipated release of the final RFP in Spring 2008. EPA for this component of the project will be sought in Fall 2008.
   3. SMP - In response to current worldwide threats, the department has determined that an increased level of protection is necessary for SMP vehicles.  Therefore, the project office has conducted analyses of industry capability, feasibility studies and validation of the current procurement strategy.  A draft vehicle technical specification was posted in October 2007 for industry comment. The complete RFP is planned for release in Fall 2008.
   4. SEV Kitting - The project office, in concert with the user community, has been able to reduce the number of existing variants (such as types of kitchens, repair shops, workshops, field offices, etc.) from more than 130 to approximately 30. The development of the SEV Kitting RFP although progressing, is highly dependent on the Baseline Shelter Contract Award. The current SEV Kitting procurement strategy is being re-visited with a view to reduce complexity and risk.

   The key variance within MSVS is schedule.  Delays have been encountered and the single EPA scheduled for Fall 2007 has now been split into two phases: Phase 1 for MILCOTS and SEV Baseline Shelter in Fall 2008 and Phase 2 for SMP and SEV Kitting in Fall 2009. The delays are attributed to the following key factors:

   1. Increased protection levels of the SMP vehicles - The inclusion of higher protection levels required the project to validate current industry capability within a competitive procurement environment.  Additionally, it has been determined that industry must obtain secret classification levels in order to view the full SMP specifications all leading to delays in the original schedule.
   2. Inclusion of Human Factors testing and Vehicle Performance demonstrations - In order to allow manufacturers to demonstrate the functionality and capability of their vehicles as part of the bid evaluation process, additional time has been allocated in the bid response period.  This will allow the CF to have a more direct hands-on approach in the selection of equipment but has impacted both the MilCOTS and SMP schedules.
   3. Overall manning shortages – Human Resource efforts to fully staff the project have been underway since PPA. The project is currently manned at 85% and striving to attain full capacity.

   At this time, Project Close-Out is anticipated for Spring 2013. A continuous risk management program has been implemented and costing efforts for the implementation phase are progressing.

7. Industrial & Regional Benefits: The target Industrial Regional Benefits (IRBs) is equivalent to 100% of the contract value for the capital acquisition.

Military Automated Air Traffic System (MAATS) Project

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1. Description:  A national air traffic system project to automate air traffic services has been initiated by Transport Canada (now NAV CANADA).  To ensure that military air operations continue to function effectively, remain compatible with the national system, and keep pace with these enhancements, the Department of National Defence and the Canadian Forces established the Military Automated Air Traffic System (MAATS) Project.  The project directly supports the defence objective of conducting air traffic control operations.

   The MAATS project will provide the essential equipment and system interfaces necessary to automate data interchange between applications.  The project will deliver a stable, sustainable, and operational Air Traffic Management System (ATMS) while providing as much integration as possible with NAV Canada’s Canadian Automated Air Traffic System (CAATS).  Where equipment or system interfaces are not currently available, new equipment will be installed.  All existing Defence radar systems will be retained and interfaced to the MAATS as appropriate.

2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies
   

   LeadDepartment	Department of National Defence
   Contracting Authority	Public Works Government Services Canada
   Participating Department	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor	Raytheon Canada Limited, Richmond, BC NavCanada, Ottawa, ON
   Major Sub-Contractors	Hewlett Packard Canada Ltd, Ottawa ON CVDS, Montréal PQ Frequentis Canada Ltd, Ottawa ON

   
   
5. Major Milestones
   

   Major Milestones	Date
   Treasury Board Effective Project Approval	July 1993
   Contract Award	January 1994
   Preliminary Design Review	March 2000
   Critical Design Review	January 2001
   Factory Acceptance Test	November 2001
   Initial Delivery	April 2003
   Contract Complete	December 2004
   Approval received to disengage concurrent development with NAV CANADA project and pursue sustainable minimum military requirement	September 2006
   Begin Software Development on Phoenix Systems	October 2006
   Complete Phoenix NAMS II Development	July 2007
   Initial Operational Capability  – First Wing Operational with NAMS II Equipment	November 2007
   Full Operational Capability (FOC) – All Wings with delivered Equipment	March 2009
   Begin project Close out	April 2009
   Project complete	July 2009

   
   
6. Progress Report and Explanation of Variances:  Treasury Board initially approved the project with an estimated cost of $179.2M.  The project funding was reduced by $15M following departmental review.  Partial return of funding was approved at the December 2003 Senior Review Board (SRB). Current departmental funding is $169.2M.

   As briefed at SRB on June 30, 2006, the MAATS project objectives were declared unachievable within the existing funding envelope. Given a number of alternative options, MAATS’ Project Management Office (PMO) recommended to cease MAATS development, and continue the project with the implementation of an “in-house” solution coined Phoenix.  With the support of the Chief of the Air Staff and ADM(Mat), the Project Management Board (PMB) concurred with the PMO’s recommendation on March 15, 2007.  MAATS’ PMO was directed to de-link the project from NAVCanada’s Civilian Automated Air Traffic System (CAATS); concentrate on the re-vitalization and integration of Air Traffic Controller (ATC) information sources at each of the seven wings (Comox, Cold Lake, Moose Jaw, Bagotville, Trenton, Greenwood and Goose Bay); keep military Instrument Flight Rules (IFR) operations at the Wings vice at two Military Terminal Control Centres; and pursue the development and fielding of the Phoenix solution. 

   Since the approvals were received in July 2007, the Phoenix solution is well on its way upgrading the current Air Traffic Management System capability inclusive of the following sub-systems: the Radar Processor, the Navigational Aids and Meteorological Sub-System (NAMS), the Air Movement Statistics Package and the Flight Data System.  Phoenix is based on the proven Radar Processing Display System II (RPDS II), which was certified for Operational Air Worthiness and built on standard commercial off-the shelf (COTS) hardware and open source software, thus keeping technical risk LOW.  Installation of Phoenix equipment (NAMS II) at 8 Wing Trenton was completed and Provisional Operational Airworthiness Clearance (POAC) was granted in October 2007, ahead of schedule. Actual close out activities, including a project completion report to Treasury Board will be completed in fiscal 2009–2010.

7. Industrial Benefits.  Canadian industry in the following regions of Canada will benefit from the MAATS project.
   

   Region	Cash Benefits
   Atlantic Canada	1.6M
   Québec	1.0M
   Ontario	1.8M
   Western Canada	50.2M
   Unallocated	To be determined
   Total	$54.6M

   
   

Protected Military Satellite Communications (PMSC)

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1. Description.  The Department of National Defence and the Canadian Forces require global communications that are secure, guaranteed and directly interoperable with our allies. The aim of the Protected Military Satellite Communications Project (PMSC) is to overcome current Canadian Forces interoperability and global command and control limitations. Upon completion, this project will enable long-range communications to deployed forces and facilitate their interoperability with allies.
2. Project Phase: Implementation
3. Leading and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works and Government Services Canada
   Participating Department	Industry Canada and its regional agencies

   
   
4. Prime Contractor and Major Sub-Contractors
   

   Prime Contractor	United States Department of Defense
   Major Sub-Contractors	To be determined

   
   
5. Major Milestones
   

   Major Milestones	Date
   Preliminary Project Approval	August 25, 1999
   Effective Project Approval	November 18, 2003
   Initial Terminal Delivery	Summer 2009
   Initial Satellite Delivery	Spring 2010
   Terminal Delivery Completed	Summer 2013
   Project Complete	Winter 2014

   
   
6. Progress Report and Explanations of Variances:  The PMSC project will be implemented in two phases. Under Phase 1, a Memorandum of Understanding (MOU) with the United States Department of Defense (DOD) will guarantee Canadian participation in their Advanced Extremely High Frequency (AEHF) system. Definition studies for the terminal segment were completed in Phase 1. Under Phase II, the terminal segment will be procured, installed and tested.

   On August 25, 1999, Treasury Board granted Preliminary Project Approval to the PMSC Project, with expenditure authority for the implementation of Phase I at an estimated cost of $252M and granted approval for the Department of National Defence to enter into a Military Satellite Communication (MILSATCOM) MOU with the US Department of Defense. The MOU was signed November 16, 1999.

   On November 18, 2003, Treasury Board granted Effective Project Approval to the PMSC Project, with expenditure authority for the Implementation of Phase II at an estimated cost of $300M.  The total cost is now estimated at $552M.

7. Industrial Benefits:  Under Phase 1, the US Department of Defense has committed to a work share with Canadian industry proportional to our contribution.  Suppliers from both nations will be permitted to bid on project work.  In Phase II,  Senior Procurement Advisory Committee (SPAC) endorsed that Terminal acquisition and support will be procured through Foreign Military Sales with installation done through DND managed contracts.  Industrial and regional benefits will be sought by Industry Canada at 100% of contract value.

Submarine Capability Life Extension

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1. Description:  The Submarine Capability Life Extension (SCLE) project replaced the Oberon class submarine fleet with four existing British Upholder class (renamed Canadian Victoria class) submarines.  The project will ensure that Canada preserves its submarine capability within the existing capital budget.  The project supports Canada’s ability to conduct surveillance and control of its territory, airspace and maritime areas of jurisdiction, as well as Canada’s ability to participate in bilateral and multilateral operations.

   The project delivered four functional Victoria class submarines with up-to-date, safe-to-dive certificates, four crew trainers (including a combat systems trainer, a ship control trainer, a machinery control trainer, and a torpedo handling and discharge trainer), and four trained crews.

2. Project Phase:  Implementation
3. Leading and Participating Departments and Agencies
   

   Lead Department	Department of National Defence
   Contracting Authority	Public Works & Government Services Canada (PWGSC)
   Participating Department	Industry Canada and its regional agencies

   
   
4. Prime and Major Sub-Contractors
   

   Prime Contractor	The Government of the United Kingdom (UK) of Great Britain and Northern Ireland, Ministry of Defence, UK
   Major Sub-Contractor	British Aerospace Engineering (BAE) Marine Systems (formerly Vickers Shipbuilding and Engineering Limited (VSEL)/Marconi Marine) Cumbria, UK

   
   
5. Major Milestones
   

   Major Milestones	Date
   Treasury Board Approval	June 2, 1998
   Main Contract Award	July 2, 1998
   Initial Support Contract Award	July 2, 1998
   Commence lease 1st submarine	October 2000
   Commence lease 2nd submarine	October 2001
   Commence lease 3rd submarine	February 2003
   Commence lease 4th submarine	October 2004
   Relocate trainers to Canada	June 2003
   Lease completed, submarines purchased	April 2009

   
   
6. Progress Report and Explanation of Variances:  Canada has accepted all four Upholder submarines from the United Kingdom.
   1. Her Majesty’s Canadian Ship (HMCS) Victoria finalized her Canadianization in early 2003 and completed her transit to the west coast of Canada in August 2003.  She completed a Repair Work Period in May 2004.  Due to the incident onboard HMCS Chicoutimi, the operational pause prevented Victoria from going to sea.  Once lifted, Victoria continued operations by progressing her Operational Trials and Evaluation (OT & E) work in defining the vessels weapons envelope.  In June 2005 Victoria entered her Extended Docking Work Period (EDWP), currently being conducted in Fleet Maintenance Facility (FMF) Cape Breton, which is scheduled to complete July 2009.
   2. HMCS Windsor completed her Canadianization in December 2003.  She had begun participating in east coast exercises and patrols during the summer of 2004.  Due to the incident onboard HMCS Chicoutimi, the operational pause prevented Windsor from going to sea.  Once lifted, she continued with operations on the East Coast.  Windsor entered her EDWP in FMF Cape Scott in January 2007, which is scheduled to complete August 2009.
   3. HMCS Corner Brook started her Canadianization work in Halifax on January 5, 2004.  The modifications required from the Chicoutimi incident were completed as part of her Canadianization work, which completed summer 2006.  HMCS Corner Brook is operational and is participating in various exercises and patrols.  As the only running submarine a further extension to her materiel certificate is being investigated to ensure one submarine continues to operate through this transition period.
   4. HMCS Chicoutimi was handed over to Canada October 2, 2004. On October 5, 2004, while en-route to Canada, she had an electrical incident at sea and was returned to Canada via sealift. She was in Halifax Shipyard Limited (HSL) undergoing damage repairs and Canadianization work, which was expected to be complete in winter 2007. This Extended Docking Repair Work Period (EDRWP) has been cancelled and the submarine commenced an Extended Limited Maintenance Period (ELMP).  Some Canadianization Work Period (CWP) Engineering Changes (ECs) are to be implemented during the ELMP.  She will enter an EDWP scheduled to commence in 2009.

   Effective Project approval was granted to the SCLE project on June 2, 1998 at an estimated total cost of $812.0M (BY) net of GST.  The expenditure ceiling was increased $84.8M by Treasury Board in June 2003 to accommodate increased scope to include 17 submarine related projects and initiatives that were progressing outside the bounds of SCLE.  SCLE project is currently expending to budget.

7. Industrial Benefits:  This project will provide an estimated $200M in direct and indirect industrial benefits.  This includes Canadian modifications to the submarines and the relocation of the simulators and trainers to Canada.  A further $100M in industrial benefits has taken the form of waivers to provide industrial offsets in the United Kingdom for Canadian companies bidding on defence contracts.

Summary of Capital Spending by Program Activity (includes Details on Project Spending (Capital) Greater than $30 million and Capital Construction Program Spending over $60 million)

Summary of Capital Spending by Program Activity

($ Thousands)	Forecast Spending 2007-2008	Planned Spending 2008-2009	Planned Spending 2009-2010	Planned Spending 2010-2011
Defence Services Program
Generate and Sustain Relevant, Responsive and Effective Combat-Capable Integrated Forces	3,370,129	3,390,779	3,774,966	3,815,408
Conduct Operations	196,508	313,998	311,557	314,500
Contribute to Canadian Government, Society and International Community in Accordance with Canadian Interests and Values	26,231	58,083	59,734	59,341
Total	3,592,868	3,762,860	4,146,257	4,189,249

1. The Total Capital Spending of $3,356,705 thousand reported in Section 1 page 5 “Voted and Statutory Items Displayed in the Main Estimates” equals the capital portion of the Main Estimates for fiscal year 2008-2009.  This capital table is showing $3,762,860 thousand for fiscal year 2008-2009.  The increase of $406,155 thousand is the adjustments from the Main Estimates to the Planned Spending figure for the Strategic Capital Investments (Budget 2005 and 2006) and the reprofiling of the Strategic Capital Investments.

Details on Project Spending (Capital) Greater than $30 million

Capital Construction Program Spending over $60 million

Projects listed below have been identified as either: (1) projects in which the estimated expenditure exceeds the delegated approval authority granted to DND by the Treasury Board ($60 million), or (2) projects in which the risk is particularly high, regardless of the estimated amounts. All major capital construction projects fall under the Generate and Sustain Integrated Forces program activity. For fiscal year 2008-2009, planned spending on major capital construction projects (>$60M) represents 25% of total planned capital spending on construction.