1986 YEAR IN REVIEW

The protection of Canada and Canadian interests, in both their military and quasi-military dimensions, attracted renewed attention during 1986. Particularly noteworthy--since it appeared likely to portend themes in the forthcoming white paper--was a 17 October speech by Defence Minister Perrin Beatty. The minister reminded his Toronto audience that 'membership in NATO does not relieve Canada, or any other country, of the responsibility, within the alliance framework, to enhance its [own] security and defence' and warned that Canada's 'airspace, the ocean areas off our east, west and Arctic coasts, and the waterways between our Arctic islands are gaining increased strategic importance.'

Mr. Beatty observed that Canada 'could leave it to the Americans to take care of Soviet activities in all or in most of these areas,' but wondered if we could emerge 'with our sovereignty unimpaired' if 'we were to ask the Americans to take care of our security because we were either unwilling or unable to do so.' Canadian sovereignty in the Arctic, warned the minister, 'cannot be complete if we remain dependent on allies for knowledge of possible hostile activities in our waters, under our ice, and for preventing such activities.' In particular, 'we need to consider how to remedy our present military incapacity to operate and to maintain surveillance under the Arctic ice. The three conventionally-powered submarines we have today cannot do the job. The Soviets and the Americans have nuclear-powered submarines which can cope with Arctic conditions, but we do not and must consider how best to deal with this problem.'

The minister stressed two further points. First, that 'Canadians tend to believe the ideas of sovereignty and security are not related 2 to each other. We see them as different problems requiring different solutions. However, we are reaching the point where, at least in our defence policy, the two ideas must be brought together. Increasingly, we can expect to be judged sovereign to the degree which, in the context of alliance and collective defence, we can contribute to our own national security.' And second, that: We need to give real substance to the guiding principle, asserted but little honoured by previous governments, that military activities undertaken in Canada for purposes of collective defence will be carried out, as much as possible, by the Canadian Forces. By accepting the responsibilities of a sovereign state for national and collective defence and by making sure that the Canadian Forces can effectively meet those responsibilities both at home and abroad...the government can best assure both the security and sovereignty of Canada. The Arctic, and Canadian sovereignty and security in the Arctic, also figured prominently in Independence and Internationalism, the final report of the Special Joint Committee on Canada's International Relations. A concern that 'under present circumstances' Canada 'would have to call on U.S. submarines' if it 'wanted to take action against [northern] intruders for any reason' prompted committee members 'to inquire of witnesses what would happen if Canada were to acquire submarines able to operate under the ice.' The witnesses, said the final report, indicated 'that not only would this [acquisition] strengthen Canada's assertion of sovereignty in the region, but it would also put the U.S. Navy in a position where it would have to share knowledge with Canada of the movement of U.S. submarines in Canadian waters. The result could be enhanced naval cooperation of the United States with Canada.'

The Special Joint Committee noted that the Senate Committee on 3 National Defence had in 1983 (Canadian Annual Review, 1983) advocated the acquisition of a fleet of 'modern diesel-electric submarines, pointing to their great effectiveness as weapons in anti-submarine warfare. While the [Senate] report focused mainly on ice-free waters, it expressed the opinion that "adequate surveillance of the Northwest Passage could be provided, for the time being, by conventionally powered submarines stationed at the entry and the exit of the passage." The [Special Joint] committee recommends that the possibility of equipping the Canadian navy with diesel-electric submarines be reviewed in the context of a general examination of the country's naval forces and, more generally, of Canada's defence policy.'

The final report of the Special Joint Committee added that 'a number of factors must be considered carefully before a decision can be reached that Canada should acquire modern submarines. The cost of standard nuclear-powered submarines is very high. The committee was informed of developments in conventional [i.e. hybrid] propulsion systems that could permit non-nuclear-powered submarines to undertake extensive under-ice operations. Although these systems are considerably cheaper, they have not yet been proven. The cost of even conventional modern submarines would have to be assessed carefully, because, apart from acquisition costs, there are servicing, training, shore establishment and other program costs, all of which are expensive. Finally, if a decision to acquire modern submarines were to involve a transfer of some resources from Canadian forces in Europe, the government would have to take into account the reaction of Canada's NATO allies.' 4 Canada's International Relations, the Mulroney government's 4 December response to the report of the Special Joint Committee, posited that 'the changing nature of military activity in the Arctic and the reemergence of that region's strategic importance make it vital for Canada to acquire the "eyes and ears" that will permit us effectively to monitor northern aerospace, land, surface and subsurface waters for military activity.'

It added, without elaboration, that 'the government will pay particular attention to problems of underwater defence in the Arctic' and that 'options for acquiring submarines capable of under-ice operations to replace Canada's aging Oberon-class vessels are now...being explored.' Two days before the tabling of these rather cryptic comments on 'submarines capable of under-ice operations,' Associate Defence Paul Dick informed the Standing Committee on National Defence that in addition to the project management team working on the Canadian Submarine Acquisition Project--which envisaged acquisition of a fleet of conventionally-powered submarines--'there is an entirely different committee working within the Department considering nuclear submarines and that option. When both [groups] have completed their research, then they will come together for a comparison, and at that time a decision will be made on whether we should go with the conventional or whether we should really look more seriously at the nuclear.

It is premature [to speculate on the propulsion system]. They are just trying to get the information available and pulled together at this stage' (SCND, 2 December). In an 11 December appearance before the Standing Committee, Defence Minister Beatty acknowledged that "full" nuclear-powered submarines--as distinct from diesel-electric/nuclear 5 "hybrids"--were 'indeed expensive. There is no question about that. I guess, though, what we should be driven from is the question of our perception of the threat. What do we need adequately to protect Canada's security and Canada's sovereignty? We should work back from that.' Less spectacular initiatives related, in whole or in part, to the protection of Canadian sovereignty and security in the Arctic included an increase in the number of northern surveillance patrols conducted by CP-140 Aurora long-range patrol aircraft (from 16 in 1985 to 20 in 1986) and the navy's first venture into the far north in almost a decade, The epitome of multiple tasking, the northern surveillance patrols were designed to meet military, quasi-military, and even non-military (i.e. wildlife surveillance and ice reconnaissance) objectives. The enhanced naval presence involved the fleet diving support ship, HMCS Cormorant, and a naval research vessel, CFAV Quest.

During a mid-year deployment of approximately 60 days, the ships visited Clyde River, Nanisivik, Resolute Bay, and Pond Inlet and carried out acoustic research relevant to Arctic anti-submarine warfare. Both initiatives were foreshadowed by the government's 10 September 1985 declaration on sovereignty and security in the Arctic (Canadian Annual Review, 1985). The increased naval and air presence envisaged by the declaration of 10 September 1985, the forthcoming Canadianization of the northern radar network (see below, 'NORAD'), and the Mulroney government's obvious interest in nuclear-powered submarines did not, however, squelch complaints about the Arctic surveillance capabilities of the 6 Canadian Forces.

Two retired brigadier-generals, Clay Beattie and Keith Greenaway, for example, suggested that air defence and Canadian sovereignty would be better served by sitting the new North Warning System (NWS) farther north--around the periphery of the Arctic archipelago. Placing the NWS along the path of the existing DEW (Distant Early Warning) Line, they argued, would misuse modern technology, provide less warning time, and deprive Canada of indigenous surveillance coverage over disputed waters. A concomitant concern was the proposed use of American AWACS aircraft, with 'token' Canadian representation, in the Canadian high Arctic. This situation, said Beattie and Greenaway, 'is clearly prejudicial to Canada's claims to sovereignty' (Northern Perspectives, September-October 1986). Major-General R.W. Morton, however, argued that the NWS, as planned, would provide 'more than adequate time to carry out the attack warning and assessment function.' Moreover, 'while it can be argued that Canadian sovereignty would be better served by extending the coverage around the Arctic islands, the increased costs which would be incurred in an already expensive project designed first and foremost to do the attack warning mission could not be justified' (Canadian Defence Quarterly, Winter 1986-1987).

The heightened sensitivity to Arctic sovereignty and security was mirrored, albeit on a smaller scale, by increased attention to the sovereignty and security challenges off Canada's east and west coasts. At the root of the sovereignty problem, particularly on the east coast, was a rapid increase in the number of detected intrusions by unlicensed foreign fishing vessels. The Department of National Defence, in addition to its regularly scheduled support of the Department of Fisheries and Oceans (i.e. 65 ship-days of surface surveillance and several thousand 7 hours of dedicated and multi-purpose air surveillance), provided special assistance to that department on two occasions during 1986. On 2 March, for example, the Tribal-class destroyer HMCS Algonquin assisted the fisheries patrol vessel, Cape Roger, in arresting the Panamanian-registered trawler, Peonia 7. In the most serious incident, in May, two Spanish trawlers--which had been stopped and boarded by personnel from the Cape Roger--fled for Spain via the Azores, with four fisheries protection officers still aboard. After a lengthy chase, the trawlers Amelia Meirama and Julio Molina were boarded in mid-Atlantic by an RCMP tactical squad operating from Canada's newest fisheries patrol vessel, the Leonard J. Cowley. Adding to the drama was a report from a Spanish marine radio station--which proved unfounded--that up to 50 Spanish trawlers 'planned to form a blockade just outside Canada's 200-mile economic zone to prevent the [Leonard J. Cowley] from escorting the two Spanish trawlers, arresting...for fishing violations, back to Canada for prosecution' (Globe and Mail, 27 May). Air surveillance during the incident was provided by CP-121 Tracker aircraft from Canadian Forces Base (CFB) Summerside, Prince Edward Island, and CP-140 Aurora aircraft from CFB Greenwood, Nova Scotia. Exasperated by the continuation of 'illegal foreign fishing within Canadian waters and over fishing by foreign fleets of "transboundary" stocks which straddle the 200-mile limit,' the secretary of state for external affairs, Joe Clark, and the minister of fisheries and oceans, Thomas Siddon, unveiled new fisheries protection measures on 13 June.

Among other changes, the ministers announced that Atlantic offshore patrol vessels would be armed--a project which ultimately saw the Canadian Forces provide both weapons (i.e. heavy machine guns) and 8 training for personnel from the Department of Fisheries and Oceans (DFO)--and that DFO would 'explore' with the Department of National Defence and the Ministry of Transport 'means of increasing dedicated air and sea surveillance.' Somewhat paradoxically, given the proposed discussions with the Department of National Defence, the government also announced that civilian aircraft under contract to DFO would play an increased role in fisheries surveillance. Also apparent during 1986 was an increased naval sensitivity to maritime coastal defence (i.e. surface surveillance, shallow water anti-submarine warfare, and mine countermeasures). The renewed interest in maritime coastal defence--a role which had languished since the early to mid-1960s--was reflected in approval of a new role and mission statement for the Naval Reserve and in plans to create a new Maritime Coastal Defence Organization, which would be drawn largely from the Naval Reserve. Plans to re-equip the Naval Reserve with a new generation of minor war vessels, however, remained unfunded at the close of 1986. Also awaiting a decision was an update or replacement program for the venerable CP-121 Tracker, a medium-range patrol aircraft utilized for a wide variety of military, quasi-military, and non-military missions.

Equipment Programs

The defence procurement agenda was dominated, as in 1985, by the Low Level Air Defence (LLAD) project, the Tribal-class Update and Modernization Project (TRUMP), the New Shipborne Aircraft (NSA) project, and the Canadian Submarine Acquisition Project (CASAP). The LLAD and TRUMP projects, together worth in excess of $2.2 billion, received final government approval and formal contract award during 1986, while the CASAP and NSA projects, together worth a minimum of $4 billion (and potentially much more) received approval to enter the project definition phase. A new and controversial player on the defence procurement stage during 1986 was the CF-18 Systems Engineering Support (SES) program. Also putting in an appearance, and temporarily running in parallel to the original Canadian Submarine Acquisition Project, was an examination of the advantages and disadvantages of acquiring a fleet of nuclear-propelled attack submarines (SSNs).

Initiated in 1982, the $1 billion LLAD project sought to provide a comprehensive, all-weather air defence system for the Canadian Mechanized Brigade Group (4 CMBG) stationed in southern Germany, the Canadian Air-Sea Transportable (CAST) Brigade Group stationed in Canada but earmarked for the defence of northern Norway, and the Lahr and Baden-Soellingen airfields of the Germany-based 1 Canadian Air Group. The missile, gun and radar systems making up the LLAD package would replace the geriatric Boffin anti-aircraft gun and the aging, shoulder-launched Blowpipe surface-to-air missile.

The LLAD project, which touched off a heated international competition, had drawn bids in 1984 from seven would-be suppliers, all of them European-based (Canadian Annual Review, 1985). Three of these firms, and their respective Canadian 2M partners, were in turn short listed by the Mulroney government on 8 May 1985: Bofors (Sweden) and Canadian Marconi Company (offering the Trinity gun system and the RBS 70 ARMAD missile system); Contraves (Switzerland) and Raytheon Canada Limited (bidding the GDF-005 anti-aircraft gun, the RIM-7M Sparrow missile system, and the ATAK 35 anti-aircraft tank); and Oerlikon-Buhrle (Switzerland) and Litton Systems Canada Limited (offering the ADATS missile system and the GDF-005 anti-aircraft gun). On 16 April 1986, the associate minister of national defence, Harvie Andre, announced that the team led by Oerlikon-Buhrle had won the LLAD competition. The main contract, finalized on 12 June, was valued at $650 million and covered the purchase of 36 M113A2-mounted ADATS 'fire units,' 20 GDF-005 35mm anti-aircraft guns, and 10 Skyguard fire control radars. An additional $350 million was allocated for ammunition, spare parts, trucks, training and maintenance facilities, and sundry other expenditures.

The associate minister and project officials indicated that the most significant factors in the selection of the Oerlikon Buhrle bid were the resistance to countermeasures and the degree of survivability bestowed by ADATS' passive electro-optical target tracking and laser beam-rider guidance. The Swiss firm's bid also included a highly rated industrial benefits package for Canadian industry. Initial deliveries of LLAD equipment, to the newly-established Air Defence Artillery School at CFB Chatham, New Brunswick, were scheduled to begin in 1988. The last of the four frontline LLAD units (one in Canada, three in Germany) was expected to be fully operational with the new equipment by the spring of 1991. 3M The recipient of final approval on 9 May, the Tribal-class Update and Modernization Project sought to convert the four existing Tribal-class destroyers (Algonquin, Athabaskan, Huron, and Iroquois) from a primary anti-submarine warfare (ASW) role to a primary anti-air warfare (AAW) role. In addition to providing the Canadian fleet with a much-needed area air defence capability--and a reduced dependence on allied navies--TRUMP would improve the Tribals' ability to support an embarked commander and update or replace systems which were no longer logistically supportable.

Serving as prime contractor on the $1.2 billion undertaking--the most ambitious Canadian warship conversion project in more than two decades--was Litton Systems Canada Limited of Toronto. At the core of the update package were two state-of-the-art, American-designed products--the General Dynamics Standard 2 surface-to-air missile and the Martin Marietta Mk 41 vertical launch system. The much-modified destroyers also were to receive new long-range, medium-range, and fire control radars; a Phalanx close-in weapon system, and an OTO-Melara 76mm Super Rapid gun. In addition to a new command, control, and communications system, the rejuvenated Tribal-class destroyers were also stated to receive strengthened hulls, a water-compensated fuel system, and habitability improvements. So-called 'stand-alone' improvements, which were to be funded separately but carried out concurrently, included new cruise engines and a new electronic support measures system. The Tribal conversions were to retain their 4 existing ASW sonars and their distinctively large flight decks and hangars. Work on the first ship, HMCS Algonquin, was expected to begin in November of 1987, with completion in the fall of 1989. The last of the four, HMCS Huron, was to begin conversion in November 1990, with completion in the summer of 1992. These dates represented a slippage of one year from the original TRUMP timetable (Canadian Annual Review, 1985). Also modified was the Trudeau government's 1983 decision to pre-designate Versatile Davie Inc., of Lauzon, Quebec, for the shiypard portion of the TRUMP program. Under the revised plan, Versatile Davie would convert the first two ships, with Litton Systems holding a separate competition to select the shipyard for the third and fourth conversions. The decision of the Mulroney government to proceed, simultaneously, with both the LLAD and TRUMP projects--at a time when the capital portion of the DND budget was under considerable pressure--evoked surprise in some quarters. Indeed, it appeared for a time in early 1986 that the LLAD project, in particular, might be deferred or even dropped. There was also concern in some quarters that TRUMP might have to be scaled back, possibly by converting less than four ships or by adopting a less expensive update package (i.e. the older Standard 1 missile and Mk 13 launcher) for all four ships (Aerospace Canada International, July-August 1986).

While there was ultimately some slippage in the TRUMP timetable (in part the result of squabbling over the shipyard portion of the contract) and, by comparison with Litton's 1985 'baseline' configuration, a very slight reduction in the scope of the TRUMP update (i.e. the decision to update the ships' existing torpedo handling equipment rather than install an entirely new system), the Mulroney government adopted the 'baseline' configuration essentially unchanged. Although, at $1.2 billion, considerably more expensive than the government's preliminary 1983 'design-to-cost' estimate of $650 million (in 1983-1984 dollars), the navy's need for an area air defence capability was judged sufficiently pressing to justify additional expenditures. In the case of LLAD, the decision to forego deferment or cancellation was rooted in the operational need for a new air defence capability in Europe, fear of an adverse reaction from NATO, and the prospect of substantial industrial benefits from the ADATS system. As the newest of the LLAD contenders, the ADATS system was felt to hold considerable export potential. The search for a successor to the venerable Sikorsky CH-124A Sea King ASW helicopter entered a new phase on 5 August with the announcement of government approval for the project definition phase of the New Shipborne Aircraft (NSA) project.

The NSA would be capable of performing two primary missions--anti-submarine warfare and anti-ship surveillance and targeting--and such secondary naval missions as search and rescue, vertical replenishment, and medical evacuation. At an estimated cost of $2 billion, the NSA promised, by a substantial margin, to be the largest and most complex helicopter procurement program in Canadian military history. Released on 12 September, the NSA 'request for proposals' asked would-be suppliers to provide bids on lots of 28, 40, and 51 aircraft, a request which reflected uncertainty over warship procurement beyond the first six City-class patrol frigates (Canadian Annual Review, 1985) and over the requirements of the Pacific fleet, the number of attrition replacements, and the reliability and 6 maintainability of the various contenders. The NSA schedule anticipated contract award by late 1989, first flight in 1992, and initial deliveries in 1994. The competition was expected to draw variants of the Sikorsky SH-60 Seahawk (United States), the EH Industries EH 101 (United Kingdom/Italy), and the Aerospatiale Super Puma (France). All were expected to utilize a Canadian-designed mission avionics suite. Still more helicopters of the basic NSA-type would be required if the machine also proved suitable for battlefield airlift and 'primary' search and rescue requirements. Also moving forward, but facing something of an uncertain future, was the Canadian Submarine Acquisition Project (CASAP). Under this project, which received government approval for its project definition phase on 16 July, the Department of National Defence sought 'a minimum of four new conventional submarines to replace its current fleet and restore a minimum submarine capability on the West Coast.'

Although the existing fleet of three British-built Oberon-class submarines had been partially modernized under the Submarine Operational Update Project, they suffered from the performance limitations inherent to diesel-electric submarines of their generation, were increasingly difficult to maintain, and--given the need to recharge their batteries by surfacing or 'snorkeling'--unable to operate under ice. The 1986 CASAP schedule envisaged the selection of two finalists for funded project definition studies by early 1988, the selection of the winner by late 1989, and the formal contract award by early 1990. The first boat would enter Canadian service in 1995 (the 1985 schedule had anticipated service entry in 1992-1993), with the remainder following in 1997, 1998, and 1999. As the United States had long since eschewed the production of conventionally-powered submarines, CASAP was expected to draw a lengthy list of bidders from France, Germany, Sweden, Italy, the United Kingdom, and the Netherlands. In addition to the basic requirement for four submarines, would-be bidders on CASAP were being invited to quote price and availability on increments of two, four, and eight additional boats.

Moreover, as Defence Minister Beatty noted in an 11 December appearance before the Standing Committee on National Defence, 'we [have] invited potential suppliers to indicate to us whether or not the submarines they are offering would have under-ice capability.' The latter would necessitate adding some form of air-independent propulsion (AIP) system to the standard diesel-electric submarine, thereby producing an AIP/diesel-electric 'hybrid.' Among the potential options were the Swedish Stirling engine, the German fuel cell system, and two Canadian-designed systems--the Autonomous Marine Power Source-Nuclear (AMPS-N) from Ottawa-based Energy Conversion Systems Inc. and the so-called 'nuclear battery' from Atomic Energy of Canada Limited. The European systems required on-board storage of such difficult-to-handle fuels as liquid oxygen or liquid oxygen and hydrogen. Endurance, although a substantial improvement over that offered by 'standard' diesel-electric submarines, was consequently a function of the hybrid submarine's storage capacity. The AMPS-N, a relative of Atomic Energy of Canada's highly successful Slowpoke research reactor, and the nuclear battery, however, were expected to offer virtually unlimited endurance at low to moderate speeds. Naval opinion on the viability of the hybrid option appeared mixed. A serving naval officer, Commander E.J.M. Young, for example, wrote 8 that 'the cost of a production version [of an AMPS-N hybrid submarine] is estimated to be less than an additional 10% on the acquisition cost of a conventional submarine, or about 5 to 6% in terms of program costs of the vessel.' Moreover, 'because the design of the reactor system is relatively simple and safe, the required shore support facilities would be much less extensive and simpler than those required for the SSN type submarine. Costs of such support should be of the same order as the additional ones for the system itself.

Thus for a very reasonable additional expenditure Canada could obtain a viable under ice capability in addition to a marked tactical advance in other areas of interest. While such submarines could conceivably conduct polar operations, at the very least we would have the ability to operate in the seasonal ice-covered waters of our Arctic. If Canada took this step the potential for export sales would be very great; the "hybrid" could revolutionize conventional submarine concepts' (Canadian Defence Quarterly, Summer 1986). Later in the year, however, CASAP officials indicated to the Financial Post that 'none of the air-independent propulsion systems are available right now, and it is not clear whether they could be added on to existing submarine designs later. It would therefore be risky to run the submarine project on the assumption that such a system will become available, and DND is not interested in undertaking a high-risk development project' (Financial Post, 1 December). On a parallel track to CASAP was the study group established to examine the feasibility of acquiring up to twelve fully nuclear-powered attack submarines (SSNs). Headed by the chief of maritime doctrine and operations, Rear-Admiral C.M. Thomas, the study group was investigating the cost, infrastructure requirements, and legal ramifications of a 9M Canadian SSN fleet (Jane's Defence Weekly, 13 December). Although running in parallel with the initial project definition phase of CASAP, it was apparent that any governmental decision to procure SSNs would mean the elimination of CASAP, at least in its diesel-electric or AIP/diesel-electric hybrid form. The first serious Canadian consideration of nuclear-powered attack submarines in almost three decades, the study was focusing on two designs: the French Rubis/Amethyste-class and the British Trafalgar-class. Both types were in full-scale production for their respective navies. American SSNs were deemed far too large and expensive to warrant serious Canadian consideration.

The decision to study the SSN option--which could apparently be traced to late 1985 and then-Defence Minister Erik Nielsen--was in part rooted in the government's concerns over sovereignty and security in the Arctic, but it also appeared to reflect the realization that nuclear-powered submarines could be relevant to national and Alliance commitments in the Atlantic and the Pacific and the discovery that the 'sail-away' cost of the British and, in particular, the French built SSNs compared favourably with the cost of modern patrol frigates and destroyers. An additional factor was concern over the unproven nature of the proffered AIP systems and the calculation that even the most advanced hybrid submarine could not match the speed or other operational attributes of the SSN. A powerful reminder of the intense emotions that can be fuelled by the awarding--or the failure to award--defence contracts surfaced in October with the Mulroney government's decision to award the potentially lucrative Systems Engineering Support (SES) contract for the McDonnell 10M Douglas CF-18 Hornet fighter aircraft to Montreal-based Canadair. Canadair prevailed over Bristol Aerospace of Winnipeg, even though the Bristol bid had been judged--by government experts--to be somewhat superior on cost and technical grounds. The Mulroney government declined this advice, however, on the basis that Canadair, unlike Bristol, was also an aircraft manufacturer, and thus in a position to better utilize the technology transfers which would accompany the CF-18 SES (i.e. maintenance) program. Late in the year there were indications that Bristol, which had long provided repair and overhaul services for Canadian fighter aircraft, would receive a less technically attractive, and shorter duration, contract to update 56 aging CF-5 fighter aircraft as fighter-trainers. The affair outraged Manitoba premier Howard Pawley, who described the pending CF-5 contract as 'a consolation prize' that would not satisfy Manitoba residents who believed that Bristol deserved the CF-18 SES contract (Globe and Mail, 23 December). Adding insult to injury for Manitobans was the fact that the CF-5s had been manufactured by Canadair. The federal government's practice of pursuing industrial benefits (i.e. the production of components, regional distribution of procurement, small business participation, technology transfer, and new investment in Canada) was the subject of a lengthy examination by the Nielsen Task Force on Program Review.

The study team charged with an examination of defence and other high-technology procurement by the federal government found that: --the government's expectations of securing 100 per cent offsets of equal technology to the equipment being procured have been unrealistic. Benefits acquired have been much lower than expected and have mostly been of short-term value to Canada. Costs of achieving industrial benefits have not been easily ascertained and have been substantial; 11 --while some benefits of lasting value to Canada have resulted, these have not been as significant to Canadian industrial development as had been anticipated; --the growing deficit in U.S.-Canadian defence trade is a major concern and will persist with the increase in the number of planned [Major Crown Projects]. A relative decline in the technology base of Canadian industry is a key factor in the increasing deficit; --the emphasis on offsets in Canada's industrial benefits programming has become a trade irritant with the United States and Europe while producing marginal long-term benefits to Canada; and that --there are linkages among these factors which point the way to changes which will produce greater net benefits to Canada, while reducing irritants and costs.

The study team came to the conclusion that a need 'exists for a much clearer purpose in the direction given by Ministers for industrial benefit strategies for major Crown projects'; that 'the procurement lever has not effected the anticipated broad range of industrial benefits'; and that 'a new strategy is needed if Canada is to be successful in using procurement as a lever to generate long-term benefits.' That strategy 'must be sharply focused on improving the competitiveness of Canadian-based industry in world markets. It must result in the advancement of technology, greater investment in Canadian industry, and improved access to domestic and foreign markets. A major element of the strategy should be to preposition Canadian industry for procurement to the maximum when domestic and associated export opportunities are attractive.' The study team recommended to the Task Force that the government consider developing an industrial benefits policy for federal procurement that would 'enhance the international competitiveness of Canadian industry, by establishing long-term industrial and regional development as the primary national objective for major procurements' and 'take into account the potential for Canadian industry to participate in the servicing of major equipment purchases during their operational life.' end equipment section

MILITARY AND SECURITY ISSUES

Unlike 1985, which had seen major controversies erupt over the North American Air Defence Modernization (NAADM) agreement, the American invitation to participate in the SDI (Strategic Defence Initiative) research program, and the voyage of the U.S. Coast Guard icebreaker Polar Sea through the Northwest Passage, 1986 was a relatively quiescent--and therefore more typical--year on the Canadian defence policy front. The year was not devoid of controversy, however.

NOTICED IN 1986

Also serving to draw attention to defence or defence-related matters during 1986 were the findings of the Nielsen Task Force on Program Review, a number of reports and studies generated by the 1982 sinking, off Newfoundland, of the semi-submersible drilling rig OCEAN RANGER, and the Mulroney government's decision to assign responsibility for Canada's anti-terrorist Special Emergency Response Team (SERT) to the Royal Canadian Mounted Police (RCMP) rather than the Canadian Armed Forces.

The year also witnessed the deployment of the Canadian contingent assigned to the MFO (Multinational Force and Observers) peacekeeping operation in the Sinai. Established in September 1984 under the chairmanship of Deputy Prime Minister Erik Nielsen, the Task Force on Program Review had two major objectives: better service to the public and improved management of government programs. Charged with the onerous task of reviewing 989 federal programs and services, the Nielsen Task Force consisted of 19 study teams comprised of public service and private sector executives.

On March 11, 1986, the Task Force--which had in fact completed most of its work during the course of 1985--released its 2 21-volume final report grouped under four major themes: management of government; services to the public; improved program delivery; and economic growth. Mr. Nielsen emphasized that the options and proposals outlined in the reports would be studied by the federal government and Parliamentarians, and would not necessarily become government policy (Hansard, 11 March). Several of the volumes touched on defence or defence-related matters. The study team charged with an examination of real property, for example, concluded that the Department of National Defence (DND) 'has too much infrastructure, and this oversupply is causing wasteful expenditure and manpower utilization.' The study team noted that 'if military requirements were the only criterion, DND internal documents indicate that the number of [military] bases in Canada could be reduced by at least seven from the 33 which currently exist.' The report attributed the oversupply to changing military requirements, 'slow adjustment by DND to changing urban/community conditions,' 'lack of a powerful challenge function outside DND in central agencies,' and, in particular, to 'powerful local socio-economic pressures, which hitherto have led government to direct that installation which DND wishes to close should remain in operation.'

The study team added that 'mobilization contingencies' were also used 'to justify the retention by DND of redundant infrastructure.' In the view of the study team, 'prolonging indefinitely the life of defence installations with no essential military function is not the way to encourage the social and economic evolution of host communities; the costs to all outweigh the benefits.' Its report also asserted that 'an alternative approach to accommodation for mobilization which would entail a combination of prefabricated building, canvas and designated 3 civilian buildings would appear to offer a much more cost effective yet practical solution than maintaining redundant facilities.' The study team therefore recommended to the task force that 'the government should consider asking DND to develop medium (one to five years) and long range (five to ten years) infrastructure proposals. The rationalization plan should include provision for cooperative planning with provinces and local communities for the socio-economic adjustments which would have to be made.'

PROCUREMENT

Insofar as search and rescue (SAR) was concerned, the Nielsen study team concluded that 'the assignment of responsibilities for SAR to [the Canadian Coast Guard] in the marine mode and to [the Department of National Defence] in the air mode and in coordination of search activities causes some problems. It is not clear, however, that any other assignment of responsibilities would be superior or decrease the number or severity of problems.

Segregation of the SAR budgets in the two main departments would lead to a better understanding of the costs involved but operationally the [search and rescue] program works.' The study team did not, however, that: Rescue Coordination Centres can make better use of non Coast Guard resources (e.g. municipal or provincial police forces). In addition, it might prove effective to utilize private helicopters and vessels in marine search if not in rescue. This may necessitate the federal government providing SAR kits for helicopters and ships, and entering into contracts on a contingency basis. Moreover, in reequipping [the Coast Guard's] helicopter fleet, the Department [of Transport] should consider the merits of taking into consideration SAR as a secondary mission for establishing the operational requirements of the aircraft. Search and rescue--the largest, most expensive and most important of the myriad 'national development' roles performed by Canada's armed forces--also figured in a report on military air transport prepared by the Special Committee of the Senate on National Defence. Tabled in February, the Senate report recommended that the long-serving de Havilland CC-115 Buffalo search and rescue aircraft employed by the Halifax, Trenton and Victoria SAR regions by phased out by 1992 and their tasks assigned to an augmented fleet of Lockheed CC-130 Hercules aircraft.

The Senate committee also recommended that the de Havilland CC-138 Twin Otters utilized by the Edmonton SAR region be replaced by six de Havilland Dash 8s by 1992, and that the Boeing-Vertol CH-113/CH-113A Labradors (Canadian Annual Review, 1985) be succeeded by 20 new helicopters by the mid-1990s. The committee did not endorse a specific type of helicopter, but it did take note of the advantages inherent in commonality with other military procurement programs (for example, the eventual successor to the Sikorsky CH-124A Sea King anti-submarine warfare helicopter). next--ocean ranger and responses 5 On 10 March, Perrin Beatty, then the solicitor general, announced that responsibility for Canada's long-mooted Special Emergency Response Team (SERT) would be vested in the Royal Canadian Mounted Police. An integral part of Canada's counter-terrorism program, the team would be employed 'in those rare cases where all efforts to negotiate a peaceful end to a hostage seizure have failed and where the hostages are in immediate danger, [and] the authorities have no choice but rescue by armed assault.' The 49-person team, unlike existing RCMP response units, would be held 'in a constant state of readiness and training.'

The Special Emergency Response Team would be based in the Ottawa area and make use, as required, of military air transport. Although the rise in international terrorism ensured a generally positive response to the creation of such a unit, Ottawa's decision to make it part of the RCMP, rather than the armed forces, drew criticism from John Starnes, a former head of the RCMP's security and intelligence section, Professor Leslie Green, a University of Alberta specialist on terrorism, Jean-Jacques Blais, a former solicitor general and minister of national defence, and Robert Kaplan, also a former solicitor general. In Mr. Starnes' view, 'the raison d'etre of a soldier, his experience and training seem naturally to fit the anti-terrorist role. The idea of assigning to a law enforcement officer a task which is essentially military in nature leaves me a bit uneasy' (Toronto Star, 11 March).

In response to such criticism, the deputy solicitor general, Fred E. Gibson, told an April 1986 conference of the Toronto-based Canadian Institute of Strategic Studies (CISS) that he should make clear the government's position that terrorist acts, however political in their ultimate objective, inevitably involve criminal offences which in our system of government fall within the purview of the civil law enforcement authority. On this basis, we view this [counter terrorism] role as a logical and legitimate expression of the RCMP's law enforcement responsibility, consistent with the force's national obligations for the investigation of security offences as set out in the [Canadian Security Intelligence Service] Act. Furthermore, this arrangement ensures that those required to carry out counter-terrorist assaults will be subject in all respects to the authorities, and to the ACCOUNTABILITY, imposed on peace officers, by virtue of the Criminal Code of Canada.

PEACEKEEPING

The major development on the peacekeeping front involved the dispatch of the Canadian contingent--136 military personnel and nine CH-135 Twin Huey helicopters--assigned to the MFO (Multinational Force and Observers) peacekeeping operation in the Middle East. Deployed to El Gorah in the northern Sinai Peninsula during March, the Canadians assumed responsibility for the MFO's Rotary Wing Aviation Unit (RWAU). Previously provided by Australia and New Zealand, the RWAU was responsible for the transportation of MFO observers on their verification tasks, the insertion and extraction of temporary observation posts, logistical support, medical evacuation, and MFO-related search and rescue.

The decision to join the MFO followed requests from the governments of Egypt and Israel (Canadian Annual Review, 1985). Canada's first venture into non-UN peacekeeping in the region, the MFO commitment required approximately 25 per cent of the country's tactical transport helicopter assets. Although few of the submissions to the Special Joint Committee on Canada's International Relations dealt specifically with peacekeeping, the committee found most witnesses of the opinion that peacekeeping was 'an appropriate and constructive way for Canada to contribute to maintaining peace in the world.'

The committee advanced four peacekeeping-related conclusions and recommendations: that a continuing Canadian contribution to the United Nations Force in Cyrpus (UNFICYP) helps to prevent fighting on the island and maintain stability on NATO's southern flank; that Ottawa 'consider making significantly greater use of the reserve forces for peacekeeping'; that Canada 'continue to make its peacekeeping expertise available to the armed forces of other countries'; and that the 'best approach to invitations to become involved in peacekeeping operations is for Canada to apply its criteria on a case-by-case basis, while maintaining its preference for operations under United Nations auspices.' The government's December 1986 response indicated that it would 'remain alert to possibilities to act constructively in [the peacekeeping] role, wherever they may arise in the world and whenever resources allow if Canadian interests would thus be served, and a Canadian presence would be acceptable.'

The response also expressed support for the recommendations of the Special Joint Committee. of one [issue] should be conditional upon the resolution of the other." In his September 27 address to the General Assembly, the Secretary of State for External Affairs added that "South Africa's precondition to implementation, the withdrawal of Cuban forces from Angola, cannot legitimize its illegal occupation of Namibia. The question of principle is clear. Namibia should have its independence regardless of what happens or does not happen in Angola." In June, both the Secretary of State for External Affairs and Canada's ambassador to the United Nations expressed frustration over the seemingly irreconcilable situation in Cyprus. Mr. MacEachen reportedly warned the UN Secretary-General, Javier Perez de Cuellar, that Canada might withdraw its troops from the United Nations peacekeeping force in Cyprus (International Canada, June-July 1983). Mr. Pelletier told the Security Council on 15 June that "the two communities of Cyprus and others involved in the dispute have displayed a regrettable lack of will to make the necessary difficult compromises required for a successful political solution" (International Canada, June-July 1983). In general, however, Canadian support for peacekeeping remained firm.

The December Speech from the Throne indicated that "renewed attention" would be given "to the contribution Canada can make to peace and stability through peacekeeping operations under the control of the United Nations." On December 28, the United States officially informed the United Nations Educational, Scientific and Cultural Organization (UNESCO) that it would be withdrawing from the agency effective January 1985. The United States would, however, retain the right to rejoin at a future date should UNESCO correct a number of highly objectionable ARMS CONTROL AND DISARMAMENT Canadian arms control policy was studied, explored and promoted in an unusually diverse range of for a in 1983.

The new-found prominence was not surprising for, as the Secretary of State for External Affairs noted in his September 27 address to the General Assembly, "questions of disarmament and arms limitation have become the central preoccupation of our time." In his address Mr. MacEachen expressed "regret that a working group on arms control and outer space was not established this year by the Committee on Disarmament." He reiterated Prime Minister Trudeau's warning to the UN Second Special Session on Disarmament that "we cannot wait much longer if we are to be successful in foreclosing the prospect of space wars."

The Secretary of State stressed the urgency of the issue and pressed for the timely creation of a working group. Canada was "prepared to cooperate fully in the detailed examination of the issues" and continue "its research program on both the legal and technical issues." Mr. MacEachen also stressed the "absolute necessity of verification if we are going to make real progress in international disarmament and arms control negotiations." He noted that Canada had "attached special importance to the development of international verification mechanisms" and [had] "assigned a high priority to research in this area." Canada hoped to "make a real contribution to the Committee's effectiveness" through increased research into the technical and practical aspects of verification.