This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 OTTAWA 000629 
 
SIPDIS 
 
E.O. 12958: DECL: 03/04/2013 
TAGS: MCAP PGOV PREL CA
SUBJECT: DEFENSE MINISTER MCCALLUM AND THE CANADIAN FORCES 
 
REF: OTTAWA 178 
 
Classified By: Political Minister Counselor Brian Flora, 
Reasons 1.5 (b) and (d). 
 
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SUMMARY 
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¶1. (C) Nine months into his tenure as Minister, John McCallum 
is starting to put his mark on the Department of National 
Defense.  He was able to get a greater-than-expected increase 
in defense spending in the latest GoC budget, and he has 
announced a defense review to guide transformation of the 
Canadian Forces.  McCallum's economics background and 
determination to find savings have helped him in Cabinet, 
specifically in the budget battle.  His limited political and 
military experience has shown at times, and has caused some 
friction with the Canadian Forces and defense advocates.  But 
McCallum has greater strategic vision and influence in 
Cabinet than his recent predecessors, and he is a consistent 
advocate for strengthening the U.S.-Canada defense 
relationship.  END SUMMARY. 
 
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BUDGET VICTORY 
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¶2. (C) The GoC budget announced on February 18 was a real 
victory for McCallum, though he has gotten little credit from 
defense advocates here because the needs are so much greater. 
 The baseline defense budget increased by US$533 million per 
year (from US$7.9 billion in the 2002-2003 budget) for three 
years, and McCallum has promised US$133 million per year in 
administrative savings (e.g., greater efficiency in 
procurements).  McCallum argues that one-fourth of all 
incremental spending in the 2003-2004 GoC budget went to 
defense, and that he could not have gotten more given 
competing domestic priorities (especially health care). 
McCallum asserts that DND got all that he was asking for, and 
all that it could use efficiently in 2003-2004.  While we 
disagree with his argument that more was not justified - 
especially given the upcoming deployments to ISAF IV and V - 
his point about the limits on defense spending in the 
Chretien Government is certainly valid. 
 
¶3. (C) Under these circumstances, McCallum did well in the 
2003-2004 budget, but you would never have known it from his 
address to the Conference of Defense Associations (CDA) on 
February 27.  McCallum grew visibly agitated as he fielded 
one critical comment after another about the budget and the 
pending deployment to Aghanistan.  The audience's mood was 
not helped by the disclosure earlier in the week that the new 
budget eliminates future funding for the CDA.  It is not yet 
clear whether this was simply a cost-cutting measure, or 
retribution for an organization that has loudly criticized 
the GoC's defense program for years. 
 
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OVERSTRETCHED CANADIAN FORCES 
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¶4. (C) While McCallum will not lose any sleep over veterans 
organizations, he does have to concern himself with Canadian 
Forces' morale.  McCallum admitted to the CDA audience that 
some in the Army were unhappy over the decision to deploy to 
Afghanistan.  Many in the Canadian Forces would have prefered 
a GoC commitment to contribute land forces in Iraq, and the 
size and duration of the ISAF commitment - a battalion and 
brigade headquarters for 12 months - will exacerbate the 
military's biggest problem, operational tempo.  The Canadian 
Forces leadership was also upset because it had little or no 
advance warning of McCallum's February 12 ISAF announcement. 
Chief of Defense Staff GEN Henault told the CDA that the 
"content" came as no surprise, though it did lead one senior 
officer - MGEN Cam Ross, DND Director General of 
International Security Policy - to resign in protest. 
 
¶5. (C) On the positive side, McCallum has made a concerted 
effort to bolster the U.S.-Canada defense relationship, which 
is crucial for the Canadian Forces.  He pushed through a 2002 
agreement for a binational, counterterrorist Planning Group 
at NORAD, despite sovereignty concerns in Ottawa, and has 
forced missile defense cooperation onto the Cabinet's agenda 
(outcome still to be determined). 
 
¶6. (C) Within a divided Cabinet, McCallum has also advocated 
keeping open the option of military participation in Iraq - 
i.e., naval or air assets already in theater - without a 
second UNSC resolution.  McCallum got burned, however, when 
he publicly stated that this was GoC policy after his January 
9 meeting with Defense Secretary Rumsfeld.  McCallum had it 
right, but Chretien has not wanted to admit publicly that 
Canada might act without UN blessing.  After Chretien reined 
him in (reftel), McCallum overreacted by ordering Canadian 
military planners at CENTCOM to not attend a coalition 
planning meeting the following week.  This unnecessary 
action, which did not reflect any change in GoC policy, 
damaged Canada's credibility for Iraq planning in Tampa and 
in Washington. 
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DEFENSE REVIEW 
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¶7. (U) Shortly after becoming Defense Minister, McCallum 
directed DND to undertake a "defense update" focused on 
immediate needs for the 2003-2004 budget cycle.  As GEN 
Henault describes it, funding increases in the latest budget 
allow the Canadian Forces to shift their focus from 
survivability to sustainability.  The next step will be 
transformation, and McCallum has said that a full-scale 
"defense review" will be conducted to guide that process. 
McCallum cautions that this may or may not result in 
increased funding for the military, but that it should point 
the way on bigger procurement decisions. 
 
¶8. (U) On one of the military's biggest needs, strategic 
lift, McCallum has publicly stated that a stand-alone 
Canadian purchase of C-17s is not in the cards.  His 
reasoning is that given limited GoC funding, purchasing C-17s 
would gut the defense budget, making it impossible to meet 
other needs.  Instead, DND is looking into a combined 
purchase of C-17s with NATO allies.  McCallum has also 
expressed doubts over the continued need for tanks, so long 
as the Army has some direct-fire capability (e.g., the 
planned U.S. combat system/mobile gun system).  McCallum did, 
in the latest budget, allocate US$467 million in funding over 
the next ten years for Intelligence, Surveillance, Target 
Acquisition and Reconnaissance (ISTAR). 
 
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LIBERAL PARTY LEGACY 
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¶9. (C) One procurement issue that continues to haunt the GoC 
is a replacement for its Sea King maritime helicopters, which 
entered service in 1963.  In the 1993 campaign, Chretien 
attacked the Tory Government's plans to purchase EH-101 
maritime helicopters as extravagant.  After the election 
Chretien cancelled the deal, and he has stymied subsequent 
DND efforts to let a new contract.  Meanwhile, the Sea Kings 
continue to diminish the Canadian Navy's effectiveness.  The 
latest example came on February 27 when the Canadian 
Destroyer HMCS Iroquois, headed for a Canadian-led, combined 
naval task force in the Persian Gulf, had to return to 
Halifax after its Sea King crashed onto the deck.  The 
Iroquois set sail again on March 5, this time with no 
helicopter, 
 
¶10. (C) The Sea King fiasco is a reminder of the challenges 
the Canadian Forces will continue to face in Ottawa.  While 
Chretien is set to step down in February 2004, we expect the 
Liberal Party to remain in power for the foreseeable future. 
While Chretien's successor - probably ex-Finance Minister 
Paul Martin - may be better disposed toward the Canadian 
Forces, he is also unlikely to make dramatic increases to the 
defense budget.  McCallum and his successors will have to 
continue to make incremental moves and plenty of hard 
choices.  The hope here is that a defense review can be ready 
to go soon after Chretien leaves office, and that the next 
Prime Minister will be more supportive of the Canadian Forces. 
KELLY