The DND’s Strategic Uncertainty

The new effort by the Department of National Defence to save money via ‘Defence Renewal’ has a variety of aspects that can and should be examined.  Saving a billion dollars a year would be significant, representing more than five percent of the budget.  However, besides the various hopes and dreams built into this process, there is one piece that is almost stunning in its lack of realism – the part about strategic clarity:

Strategic clarity is the articulation of a clear organizational direction and strategy for success, and the translation of that strategy into specific goals and targets throughout all levels of the organization. It is an essential component of ensuring priorities and resources within an organization are aligned and focussed on delivery a set of commonly shared objectives.

There are two basic problems here: much of this lies outside of DND; and thus far this government has done a lousy job setting priorities.

Sure, it would make a great deal of sense for DND to figure out what its future is and then orient itself around that.  However, the pattern of the past several years indicates that the strategic direction of the CF and its civilian masters is subject to fairly rapid change at the whims of the folks in the Prime Minister’s Office.  As far as I can tell (including conversations in Brussels and Ottawa with people who should know), DND and the CF were not involved in the decision to send 900 troops to Afghanistan for the training mission that is now wrapping up.  The announcement earlier this year to send a single plane to help out the French in Mali for a very short bit of time with a series of extensions also seemed to lack any military input – it seems hardly credible that the French would only need a few days of help.

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Blackmail or Bad Math?

Lockheed Martin must be getting nervous about Ottawa’s decision to entertain alternatives to their F-35 fighter jet.  The company has indicated that $10.5 billion of potential work for Canadian companies could disappear if Canada doesn’t buy the plane.  Oh my gosh let’s run out and confirm that we want the F-35 right now, or they might kill the hostage!

Or not.  Let’s do some simple math: $10.5 billion over 40 years is about $250 million a year.  Which is not peanuts, but in defence spending terms, it is not that big of a deal.

However, there are clearly heaps of budgetary consequences if the government does choose to buy the F-35.  This Lockheed Martin calculation ignores the ‘opportunity costs’ of the purchase – that is, the money that could be spent elsewhere if the F-35 turns out to be more expensive than the alternatives.  Indeed, the government could not buy any plane and just spend $250 million a year for the next 40 years on industrial policy, and it might just be better for the Canadian economy.

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