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Friday, July 26, 2024

Explaining My Current 2% Skepticism

 While I have long been critical of the 2% metric for whether one is a good NATO ally or not--that is, does a country spend at least the equivalent of 2% of its GDP on defense--the current skepticism is about whether Canada can reach that target by 2032 as the Trudeau government hastily promised.  Let me listicle the reasons why Canada will fall short:

  1. The decision was made hastily without a plan, just months after a long-awaited defence policy update made no commitments to get to 2% and the commitment to get to 1.76% was probably unrealistic.  
  2. The most obvious obstacle would not be a lack of sincerity by the Liberals (they did dramatically increase defense spending since they came into office, but the growth of the denominator and lags in procurement have meant that they made some progress towards 2% but not as much as hoped), but a new Conservative government.  Pierre Poilevre cares far more about deficits, so his only words about this are aspirational, akin to Harper who helped inject the aspirational language into the 2014 Wales Summit declaration--that countries would work towards getting to 2% ... and then Harper cut defence spending.
  3. The Treasury Board is still compelling the CAF and DND to cut spending by $1b as part of all agencies cutting spending.  The best way to start getting to two percent is, um, not to cut spending, but yet that hasn't happened.
  4. The personnel crisis.  You can't spend money on salary, benefits, food, training, etc. for those soldiers/sailors/aviators who don't exist.  The CAF is down something like 15% or more (I keep learning the many different ways that recruitment is broken, and I feel bad for LGen Lise Bourgon as she inherited a clusterfuck that seems impossible to uncluster), so that is money that will be unspent.  
  5. The subs are not a magic bullet for getting to 2% because procurement takes time.  Unless the government decides to sole source, the competition will take time. They will have to specify the requirements (the one emphasized to me was range under water, the various competitors (South Korea, Germany/Norway, Spain?, Japan, etc) will have to launch bids, the bids will have to be evaluated, etc).  This all is very time-consuming, so there may be a decision to buy a specific set of subs in the next eight years, it is highly unlikely that the navy will receive a single one, let along 12!* by 2032.  If Vegas set the over/under at one sub by 2032, I would bet the under.  Unless Canada pre-pays for the subs (which is not how things work here), the money for the subs simply will not be spent by 2032.
  6. Canada has learned a lot of lessons from the Russian re-invasion of Ukraine, so there is a long shopping list of stuff that the CAF needs, that if bought, would get Canada closer to 2%--drones, anti-drone technology, advanced artillery, etc.  The problem is that everyone is learning these lessons, and the producers of these things are not really able to produce at scale.  Which means that Canada will be on the waiting list for HIMARS, for example.  Which again means not being able to spend the money allocated for such stuff.
  7. Speaking of procurement, one important element of the Defence Policy Update was to hire more defence procurement folks.  That takes time, as those folks don't grow on trees (they do grow at NPSIA).  So, it will take awhile to recruit and train those folks.  

I think Canada will continue to move towards 2% as everything is more expensive, as the previous procurement decisions finally kick in (hey, we finally started building one of the surface combatant ships), and as the personnel crisis gets remediated-ish.   But 2%?  Nope, not gonna do it, as a hasty promise will meet the harsh realities of messed up procurement, broken recruitment, defence contractor collective action problems (will Davie stick a spoke in the sub wheel by trying to get domestic production of subs which would be so expensive and so time-consuming that the subs would take  many decades?) and, yes, politics.


*Re the sub personnel thing, I mentioned on the Hilltimes podcast my skepticism that the Navy could staff 12 subs.  I got push back from a senior naval officer about this, as they argued why they could start training enough submariners (squids) once they have a few operational subs (the navy has ... one) to staff 12 subs.  But that missed my point which was not the training but the recruiting.  This led to a conversation in which the officer gave a number of examples of how broken recruiting is, so, no, in my humble and semi-informed opinion, the navy won't be able to staff 12 subs.  

 

 

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