The Quest for Control in Canadian Defence Policy: The Evolution of Defence Management and Organization, 1963–1972 Michael Thompson Thesis submitted to the Faculty of Graduate and Postdoctoral Studies in partial fulfillment of the requirements for the Doctorate in Philosophy degree in History Department of History Faculty of Arts University of Ottawa © Michael Thompson, Ottawa, Canada, 2014 ABSTRACT This study examines the evolution of Canadian defence organization and administration from the integration and unification of the Canadian Forces, starting with the arrival of Paul Hellyer as Minister of National Defence in 1963, to the full integration of military and civilian staffs at National Defence Headquarters in 1972. It seeks to understand the underlying defence management philosophy by explaining the evolving decision-making process and how and why certain management techniques and organizational concepts came to be embodied in the policy process. The goal of this work is to gain insight into not only the management of defence but its relationship to, and place within, general organization and management theory. The idea of rationalizing the business of defence lies at the heart of the history of the reorganizations in the 1960s and early 1970s. Management and organization were arranged to allow defence decision-making to become a more rational process, characterized by new degrees of control, in order to aid the overall effectiveness of the policy-making process. Overall, there existed a progression of administrative and management rationalization that had been occurring not only in the post-Second World War era, but since the turn of the century, both within and without the public sphere. While there was much to be critical about unification and the general defence policy vision of Hellyer, the evolution and development of modern management techniques in defence during the 1960s can largely be situated within an ongoing history of bureaucratization and management evolution of large scale organizations in general and military organizations in particular. ii ACKNOWLEDGEMENTS This thesis would not have been possible without the support of many people. First of all, I would like to thank my advisor Dr. Damien-Claude Bélanger, not only for his useful comments and revisions, but for taking me on as a student mid-way through the program. I would also like to thank Dr. Jeffrey Keshen for believing in my abilities and bringing me to the University of Ottawa. His guidance in those early and less certain days is much appreciated. Thanks also to the Department of National Defence for their support through the Defence Engagement Priorities Scholarship, without which the timely completion of this thesis would have been much more difficult. Special thanks to Paul Hellyer for granting me permission for an interview and for his insightful comments and critiques, and to Peter Kasurak for his friendly and useful discussions on the history of defence policy. Finally, thank you to my wife, parents, and numerous family and friends who had to endure this long process with me but who also contributed invaluable support, patience, and understanding. iii TABLE OF CONTENTS Abbreviations………………………………………………………………………………………………………………………………………….iv List of Figures………………………………………………………………………………………………………………………………………….vi INTRODUCTION……………………………………………………………………………………………………………………………………….1 HISTORIOGRAPHY………………………………………………………………………………………………………………………………….26 CHAPTER 1: MANAGEMENT, THE MILITARY, AND THE PRUSUIT OF EFFICIENCY…………………………………….49 CHAPTER 2: CANADA’S POST-WAR DEFENCE ESTABLISHMENT.……………………………………………………………..88 CHAPTER 3: DEFENCE MANAGEMENT UNDER REIVEW IN THE EARLY 1960s………………………………………..121 CHAPTER 4: CANADIAN FORCES INTEGRATION……………………..…………………………………………………………….155 CHAPTER 5: UNIFICATION……………………………………………………………………………………………………………………196 CHAPTER 6: THE NEW APPROACH TO DEFENCE ADMINISTRATION………………………………………………………224 CHAPTER 7: THE MANAGEMENT REVIEW GROUP & THE INADEQUACIES OF DEPARTMENTAL MANAGEMENT………………………………………………………………………………………………………………………………......262 CHAPTER 8: THE EVOLUTION OF DEFENCE MANAGEMENT THROUGH THE YEARS & ITS EFFECT ON THE MILITARY PROFESSION ………………………………………………………………………………………………………………..........307 CONCLUSION……………………………………………………………………………………………………………………………………….325 BIBLIOGRAPHY…………………………………………………………………………………………………………………………………….345 iv ABBREVIATIONS ACDS Assistant Chief of Defence Staff ACM Air Chief Marshall ADM Assistant Deputy Minister AM Air Marshall AVM Air Vice Marshall CAS Chief of Air Staff CCSC Chairman, Chiefs of Staff Committee CDC Cabinet Defence Committee CDRB Chairman, Defence Research Board CDS Chief of the Defence Staff CF Canadian Forces CFHQ Canadian Forces Headquarters CG Comptroller General CGS Chief of General Staff (Army) CLE Chief of Logistics and Engineering CNS Chief of Naval Staff COR Chief of Operational Readiness COSC Chiefs of Staff Committee DC Defence Council DCDS Deputy Chief of the Defence Staff DM Deputy Minister DMC Defence Management Committee DND Department of National Defence DPMS Defence Program Management System DRB Defence Research Board DSP Defence Services Program DSS Department of Supply and Services ICBM Intercontinental Ballistic Missiles JAG Judge Advocate General MCCRT Management Command and Control Re-engineering Team MIC Military Industrial Complex MND Minister of National Defence MRG Management Review Group NATO North Atlantic Treaty Organization NDA National Defence Act NDHQ National Defence Headquarters NORAD North American (Aerospace) Defence Command NPM New Public Management NRC National Research Council OA Operational Analysis/Operations Analysis OR Operational Research/Operations Research v PCB Program Control Board PCO Privy Council Office PJBD Permanent Joint Board on Defence PPBS Planning, Programming, Budgeting System RCAF Royal Canadian Air Force RCN Royal Canadian Navy SA Systems Analysis TB Treasury Board TQM Total Quality Management UN The United Nations VCAS Vice Chief of the Air Staff VCDS Vice Chief of Defence Staff VCGS Vice Chief of the General Staff (Army) VCNS Vice Chief of the Naval Staff vi FIGURES Figure 1: Quinn and Rohrbaugh Competing Values Framework …………………………………………………………….14 Figure 2: Current Organization of the Department of National Defence ……………………………………………….23 Figure 3: Department of National Defence, Pre-1964………………………………………………………………………….191 Figure 4: Integrated Office of the Chief of Defence Staff, 1964…………………………………………………………….191 Figure 5: Integrated Office of the Deputy Minister, 1964…………………………………………………………………….192 Figure 6: Management Review Group Proposed Defence Organization……………………………………………….291 Figure 7: National Defence Headquarters, 1972…………………………………………………………………………………..296 vii INTRODUCTION By the time the Korean War ended in 1953 the Canadian defence budget had reached roughly ten times what it had been during the years immediately after the Second World War, just shy of 2 billion dollars. In the decade that followed, however, that budget would be in a slow decline and military needs would rise, along with costs to address them. In addition to the defence controversies surrounding Canada’s aerospace policy and the acquisition of nuclear weapons, defence expenditures declined under the Diefenbaker government to 26% of federal spending—down from an average of 41% under the previous Liberal government. By 1962, the defence budget had become greatly imbalanced, with 83% of expenditures going to operating and maintenance costs, versus and 17% for equipment.1 What is more, the number of military personnel grew, accounting for 33.1% of the budget in 1960 where it had only been 26% four years earlier, all while the purchasing power of the Canadian defence dollar slumped amidst inflation.2 At the same time, there was a growing list of needs for the Armed Forces, such as replacing the Centurion tanks for the Germany Brigade. In the early 1960s an examination of military needs was undertaken to understand what measures could be taken in order to increase the effectiveness of the ‘sharp end.’ Each of the three services had a list of wants for both the short and long term, which included increasing personnel, accelerating ship building programs, a build-up of the 4th Canadian Infantry Brigade Group (4CIBG), an increase in air transport capability, accelerated airfield improvements, and the acquisition of new helicopters for search and rescue and anti-submarine roles. Along with sand-filled warheads on the Bomarc missiles and toothless (that is non-nuclear) CF-101 Voodoos, Honest John surface-to-surface rockets, and CF-104 Starfighters, the operational effectiveness of the armed forces was in jeopardy. Both Desmond Morton and Aaron Plamondon write that no major procurement had been acquired from 1 Peter C. Newman Renegade in Power: The Diefenbaker Years (Toronto: McClelland and Stewart Ltd., 1963), p. 343. 2 Desmond Morton, A Military History of Canada, 5th ed. (McClelland and Stewart, 2007), p. 246. 1 1957 until the end of the Diefenbaker years.3 While budgets stagnated and spending on equipment decreased, the administrative tail of the Department of National Defence increased. In 1963, the Royal Commission on Government Organization—also known as the Glassco Commission—wrote that payments to or for personnel accounted for nearly half of defence expenditures.4 While equipment went from 42.4% in 1954 to 19.3% in 1960, personnel costs went from 22.2% in 1954 to 36% in 1960.5 This imbalance needed to be addressed. When Lester Pearson replaced John Diefenbaker as Prime