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MINISTER'S MESSAGE

As Minister of National Defence, it is my pleasure to present the department's Report on Plans and Priorities for fiscal year 2010-11. As outlined in the Canada First Defence Strategy (CFDS), the Canadian Forces (CF) and the Department of National Defence (DND) are vested with three primary responsibilities - to protect Canada's territory and citizens, to be a strong and reliable partner in the defence of North America, and to project leadership abroad.

None of this would be possible without the members of the Defence Team – the Regular Force members, Reservists and Civilians – in whose work I take great pride.

In fiscal year 2010-11, Defence will conduct a number of operations in Canada. Building on the experience gained from the Vancouver 2010 Olympic and Paralympic Winter Games, Defence will stand ready to partner with lead departments and agencies at the G8, G20 and North American Leaders' Summits, all being held in Canada in 2010. Throughout the reporting period, the Defence Team will also maintain a high profile in the Arctic, a Government of Canada priority. The CF will conduct routine and contingency operations in the North, and Defence will support the Government in demonstrating our sovereignty. The CF will also maintain search and rescue capabilities to help Canadians in distress anywhere in the country, including the Arctic.

The Defence Team will continue to work closely with the United States, our most important ally in the defence of our shared continent. From our daily cooperation through the North American Aerospace Defence Command (NORAD), to participation in exercises, operations and bilateral meetings, the Defence Team will continue to strengthen our long-standing and entrenched relationship with the US. Within the Americas, we will build new relationships and strengthen existing ties through defence diplomacy.

Defence will also work to project Canada's leadership abroad, working closely with our Allies. The upcoming reporting period will be distinguished by the evolution of our role in Afghanistan and will thus be significant for both the CF and DND. We will focus on preparing for the end of the current mission while planning to ensure that military readiness levels are maintained. While fulfiling our commitments in Afghanistan, the CF will be prepared to deploy elsewhere around the world if asked by the Government of Canada as their rapid and effective response to the tragic events in Haiti has demonstrated.

In order to meet these and other unforeseen operational demands, we need to capitalize on the Defence Team's experience while continuing to recruit and retain Canada's brightest and most capable individuals into the CF and the Department's civilian workforce. We must also continue to support our ill and injured CF members, our veterans, and their families. The Defence Team will continue to implement measures designed to address the challenges that our members and families face and provide high levels of casualty support programs and health services.

Defence must continue to generate and sustain a military that is fully integrated, flexible, multi-role and combat-capable. To accomplish this, the CFDS outlines a plan to rebuild the CF through balanced investment across the four pillars upon which military capabilities are built – personnel, equipment, readiness and infrastructure. Defence will carefully manage its resources across the four pillars to ensure that the CF can deploy quickly and effectively in response to Government direction.

The members of the Regular and Reserve Force and the civilian personnel who comprise the Defence Team will continue to work closely to ensure that Defence delivers on the investment priorities outlined in CFDS. Increasing the flexibility of our investment plan and ensuring prudent and responsible management of our resources is necessary if we are to procure and maintain the equipment and infrastructure necessary to deliver on our commitments to the Government.

During the reporting period, Defence will also continue to offer significant benefits to Canadians. A strong military will provide our country with defence and security in this uncertain world.  As well, the long-term investments of CFDS will provide Canadians across the country with high-value jobs, help stimulate the economy, and further research and development.

In 2010, the CF will celebrate the first one hundred years of its maritime presence in Canada. Events commemorating the Canadian Naval Centennial will take place in communities across the country – one which is bordered by three oceans. This will be an ideal opportunity for Canadians to learn about our proud naval traditions and to honour the contributions of the men and women who have served Canada so well over the past century. Building on the past, we look forward with promise to the next 100 years.

I am proud to fulfil my duties as the Minister of National Defence and represent the dedicated and committed members of the Defence Team.

The Honourable Peter MacKay, P.C., M.P.

Minister of National Defence

SECTION I: DEPARTMENTAL OVERVIEW

Introduction

The following recurring themes and challenges are highlighted within the report and outline the focus of our planned activities for the 2010-11 reporting period:

• Caring for our people. Defence[1] is facing the same demographic pressures as the rest of Government and private industry as we plan to replace a significant number of personnel who will be retiring over the next ten years. The Department is committed to providing the best support possible to Canadian Forces (CF) personnel and their families. Defence is also working hard to implement the Canada First Defence Strategy, which necessitates managing personnel capability while delivering trained military forces for operational missions together with addressing the challenges of recruiting Canadians to fill under-strength military and civilian occupations;
• Implementing the Canada First Defence Strategy and ensuring success in domestic, continental and international operations. More specifically, Defence is ensuring CF members have the best equipment and support possible to ensure they are ready to perform critical activities in both training and operational roles. Prudent investments in infrastructure, training and personnel growth will ensure that required CF readiness levels are attained and maintained;
• Contributing to the security and economic prosperity of Canadian society. Defence will play an essential role in demonstrating Arctic sovereignty and will continue to provide ongoing surveillance of Canada's air, land and maritime approaches. CFDS investments in infrastructure, equipment and personnel will contribute to the economic well-being of communities and industries throughout Canada.

Raison d'être and Responsibilities

On behalf of the people of Canada, the CF, with the support of the Department of National Defence (DND), stand ready to perform three key roles:

• Defend Canada - by delivering excellence at home;
• Defend North America - by being a strong and reliable partner with the United States in the defence of the continent; and
• Contribute to International Peace and Security - by projecting leadership abroad.

The Defence mandate is carried out by DND and the CF with the support of a group of related organizations and agencies within the portfolio of the Minister of National Defence. For further details on selected Defence Portfolio organizations, please refer to Section III: Other Items of Interest – Selected Defence Portfolio HR and Financial Resources.

The National Defence Act establishes DND and the CF as separate entities, operating in an integrated National Defence Headquarters, as they pursue their primary responsibility of providing defence for Canada and Canadians. Defence continues to adapt to an evolving strategic global security environment and is prepared to meet emerging non-traditional challenges such as piracy and cyber attacks, as well as traditional ones, including global terrorism, weapons proliferation and the enduring threat of regional conflicts manifesting around the world. In addition to the global financial situation, the foregoing will continue to occupy the international agenda and challenge Canada's security and prosperity. For further information on the Legislation and Regulations for which the Minister of National Defence is responsible, please see Section III: Other Items of Interest – Legislation and Regulations Administered.

Strategic Outcomes and Program Activity Architecture

The Program Activity Architecture (PAA) is mandated by Treasury Board Secretariat (TBS) as the planning, management and reporting mechanism for Defence. It is broken down into five strategic outcomes, supported by a set of 17 program activities. This structure enables the Department to tell a more comprehensive performance story while facilitating accountability through the use of clear financial attributions and reporting.

With the evolution of the TBS' Management, Resources and Results Structure (MRRS) policy, a requirement arose to have more than one program activity linked to each strategic outcome. In addition, the existing PAA structure did not provide a sufficiently detailed explanation of how Defence spends its budget and is, therefore, unable to tell a comprehensive performance story for the Department. As a result, Defence redesigned the PAA to create a management tool that not only allows ease of accountability through clear financial attributions and reporting in the PAA, but also aligns programs to the way the Defence services programme is managed.

Each Defence strategic outcome and program activity is aligned to Defence priorities, corporate risks, and to one or more of the Government of Canada Outcome Areas. For further information, please refer to Section III: Other Items of Interest – Departmental Link to Government of Canada Outcome Areas.

For a full illustration of the Defence PAA, please refer to Section III: Other Items of Interest – Defence Program Activity Architecture. For descriptions of Defence strategic outcomes and associated program activities, please refer to Section II: Analysis of Program Activities by Strategic Outcomes.

Program Activity Architecture (PAA) Crosswalk

The PAA structure has been revised to better reflect the vast scope of Defence's mandate. This is realized through the identification of all programs allowing Defence to acquire the necessary resources; bring those resources to a desired state of readiness; utilize them in military operations as directed by government; and provide the necessary supports for Defence Team members while contributing to Canadian society.

2009-10 Program Activity Architecture (2009-10 forecast - $thousands)			Crosswalk	2010-11 Program Activity Architecture (2009-10 forecast - $thousands)
Strategic Outcome	Program Activity			Strategic Outcome		Program Activity
Description	Description	Forecast $		Description	Forecast $	Description	Forecast $
Canadians' Confidence that DND/CF has relevant and credible capacity to meet Defence and Security Commitments	Generate and Sustain Integrated Forces	14,318,016		Resources are Acquired to meet Government Defence Expectations	4,093,668	Defence Science and Technology	375,368
						Recruiting of Personnel and Initial Training	589,969
						Equipment Acquisition and Disposal	2,484,711
						Real Property and Informatics Infrastructure Acquisition and Disposal	643,620
				National Defence is Ready to meet Government Defence Expectations	10,016,639	Maritime Readiness	2,100,697
						Land Readiness	3,782,951
						Aerospace Readiness	2,109,481
						Joint and Common Readiness	2,023,510
Success in assigned missions in contributing to international peace, security and stability	Defence operations will improve Peace, Stability and Security wherever deployed	3,848,242		Defence Operations will improve Peace, Stability and Security wherever deployed	4,307,808	Situational Awareness	658,795
						Canadian Peace, Stability and Security	344,372
						Continental Peace, Stability and Security	183,324
						International Peace, Stability and Security	3,121,317
Good governance, Canadian identity and influence in a global community	Defence operations will improve Peace, Stability and Security wherever deployed	1,083,186		Care and Support to the Canadian Forces and Contribution to Canadian Society	1,274,250	Defence Team Personnel Support	747,916
						Canadian Identity	344,554
						Environment Protection and Stewardship	163,660
						Non-Security Support	18,120
Internal Services		1,488,545		Internal Services			1,045,623
Totals:		20,737,989					20,737,989

Risk Analysis

Defence is influenced by a wide range of factors – both domestic and international – that have an impact on how we carry out our mandate. These factors present us with both risks and opportunities, which will be taken into account as we deliver on our roles and responsibilities. Our continuous monitoring of these emerging issues, developments and trends allows us to anticipate and respond to the challenges, mitigate the risks and take advantage of opportunities.

The Corporate Risk Profile (CRP) documents the key risks facing Defence and is, therefore, an important influence in our planning and resource allocation decisions. It is a tool through which the executive leadership can provide guidance and direction to mitigate those corporate risks vital to the establishment and sustainment of Defence operations. In general, operational and tactical risks are not elevated to the CRP as these are inherent to Defence's business and are successfully managed on a day to day, routine basis.

The CRP has been derived from the review of a multitude of identified external and internal risks that require mitigation. For fiscal year 2010-11, three key corporate risks having a Defence-wide impact have been highlighted. These include, but are not limited to, Defence Team Capacity Issues, Canadian Forces Reconstitution, and Investment Plan (IP) Flexibility. The key corporate risks, as well as their attendant mitigation actions, are presented below.

To fulfill the Government's expectations, Defence will continue to manage these corporate risks in an effective manner.

Planning Summary

Table: Financial Resources

The decrease in Planned Spending in fiscal year 2011-12 is as a result of the reduced spending requirements for the Afghanistan mission which are higher in fiscal year 2010-11 than fiscal year 2011-12, and lower cash flow requirements for major capital projects in fiscal year 2011-12.

An explanation of the future trend in Defence spending is detailed on page 13.

Table: Human Resources

Class A and B Reserve Force FTE numbers are calculated using a different methodology, and are not included in this table. Further information on Primary Reserve Planned Expenditures can be found in Section III: Other Items of Interest - Reserve Force - Primary Reserve Planned Expenditures / Primary Reserve Full Cost Estimates.

Tables: Planning Summary

Planned Spending for Fiscal Year 2010-11 by Program Activity

Financial Spending Trend

The change in financial spending between fiscal years 2010-11 and 2011-12 is mostly attributable to items that are reflected in the spending authorities for fiscal year 2010-11 and not in the spending authorities for fiscal year 2011-12 such as Afghanistan funding and capital equipment projects. Details are provided in Section III - Supplementary Information.

The Canada First Defence Strategy (CFDS) was approved beginning fiscal year 2008-09.

The Canada First Defence Strategy

To help Defence carry out its roles and responsibilities, the Canada First Defence Strategy (CFDS), released in May 2008, ensures that Canada maintains a first-class, modern military that is well trained, equipped and prepared to meet the challenges of the evolving security environment.

To accomplish this, the CFDS provides a 20-year roadmap to rebuild and modernize the CF with stable and predictable funding that permits long-term planning and investment in four Defence capability areas or pillars:

• Personnel: Expand the CF to a total strength of 100,000 (Regular 70,000/Reserve 30,000) by fiscal year 2027-28;
• Equipment: Renew the CF's core equipment platforms;
• Readiness: Maximize personnel training and equipment availability; and
• Infrastructure: Improve the overall condition of Defence infrastructure over the long term.

The CFDS articulates the broad strategic vision for Defence aligned with the level of ambition identified by the Government and outlines six core CF missions in domestic, continental and international contexts:

• Conduct daily domestic and continental operations, including in the Arctic and through the North American Aerospace Defense Command (NORAD);
• Support a major international event in Canada such as the G8, G20 and North American Leaders' Summits;
• Respond to a major terrorist attack;
• Support civilian authorities during a crisis in Canada such as a natural disaster;
• Lead and/or conduct a major international operation for an extended period; and
• Deploy forces in response to crises elsewhere in the world for shorter periods.

For further information on the Canada First Defence Strategy please visit the following website: www.forces.gc.ca/site/focus/first-premier/index-eng.asp.

The Defence Priorities

The Defence Priorities are informed by key corporate risks and represent a focused number of areas where efforts and resources will be directed to mitigate those risk areas and in so doing, address gaps in capability or capacity to enable Defence to act effectively on government direction. To respond to the Government's priorities for Defence and support the activities essential to achieve excellence in our operations and management, the Defence Priorities articulated in RPP 2010-11 are to:

• Deliver Excellence at Home;
• Conduct International Missions;
• Contribute to Whole-of-Government Priorities;
• Strengthen the Defence Team; and
• Enhance Defence Management.

Table: Contribution of Defence Priorities to PAA Strategic Outcome(s) and Government of Canada Priorities

This table illustrates the Operational and Management Priorities for Defence which will support Government of Canada Priorities during the reporting period. The description provides the rationale and outlines the planned activities for each Defence priority. Performance information will effectively measure the progress of each activity and will facilitate a meaningful assessment of how well these activities have contributed to the achievement of Defence's Strategic Outcomes.

Defence Planning and Performance Reporting Framework

The following diagram illustrates the alignment of Defence's PAA, Risks and Priorities to the CFDS. This framework forms the basis for communicating Defence's planning story throughout this report.

Figure: Defence Planning and Performance Reporting Framework

Voted and Statutory Items

The Voted and Statutory Items table replicates the departmental summary table displayed in the Main Estimates. This table provides the fiscal year 2010–11 Main Estimates information tabled in Parliament just a few weeks before the RPP, and is presented to Parliament before approving a supply bill. Parliament approves the voted items on an annual basis, and the statutory items are displayed for information purposes only. The major increases and decreases in funding between the fiscal year 2009-10 and fiscal year 2010-11 Main Estimates resulted in a net increase of $1,862.1 million.

Due to rounding, figures may not add up to totals shown

The Main Estimates of fiscal year 2010-11 are $1,862.1 million higher than those of fiscal year 2009-10.  The increases in funding are as follows: $822.0 million increase for the Afghanistan mission to ensure the safety and operational effectiveness of Canadian troops; $297.4 million for the Medium-to Heavy-Lift Helicopter project, which provides a new capability and CH-147 Chinook helicopters for the CF; $246.6 million for the Tactical Airlift Capability Project, to replace Hercules aircraft that are reaching the end of their useful life; $200.0 million for the Maritime Helicopter Project, to replace the CH124 Sea King with a fleet of new helicopters; $196.0 million in funding to offset the loss of purchasing power due to price increases; $166.6 million for increases to military pay and allowances; $128.1 million for the Tank Replacement Project to replace the aging Leopard 1 tank fleet; $125.4 million for the Family of Land Combat  Vehicles projects, to upgrade or replace armoured military vehicles to modernize the CF; $122.8 million for increases in civilian pay; and a $180.3 million increase for miscellaneous Departmental requirements.

The increases in funding are being offset by the following reductions in annual spending requirements: $219.1 million for the Strategic Airlift Capability Project which is providing a new capability and C17 aircraft for the Canadian Forces, $184.7 million as a result of the end of a three year temporary funding injection into several areas of the Defence Service Program; $219.3 million of reductions for miscellaneous Departmental requirements.

The benefits referenced in the Supplementary Retirement Benefits Act and the Defence Services Pension Continuation Act relate to pensioners who predate the introduction of the existing pension plan. With time, the number of recipients of these benefits is decreasing.

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