War Appropriation-Air Services
Significance of increases and changes in expenditures.
4. The combined training organization increase. merits no particular observation other than that increases naturally prevail in most classes of expenditure of a recurring nature such as pay, operating costs, maintenance, etc. These are partially offset by declines in construction and clothing. The C.T.E. has grown and is still growing. The strength (all ranks) at July 1, 1942, was over 109,000 and at May 1, 1943, was over 150,000. These figures represent net effective strength and do not include personnel on leave without pay. It must be noted that the expenditures for 1942-1943 relate to the old British commonwealth air training plan for three months and to the combined training organization (which is the new nomenclature for the training organization which had its inception on July 1, 1942, as a result of the agreement of 5th June, 1942, between Canada, the United Kingdom, Australia and New Zealand) for nine months only, whereas the cash requirement for 1943-1944 represents the combined training organization for a full twelvemonth period. C.T.E. expenditures are running currently at about $40,000,000 per month. On this basis, without making any allowance for further expansion, cash requirement for 19431944 would be approximately $480,000,000. The amount of cash requirement for 1943-1944 is stated as $445,335,845, it being considered that Canada will stand to benefit by United Kingdom contribution to a somewhat greater extent than heretofore because of greater deliveries of aircraft and supplies for British account being expected in 1943-1944 from the United States and from Great Britain. Also, capital expenditures are expected to decline in 1943-1944.
5. Western hemisphere operations.
This increase, amounting to approximately $128,000,000, may be attributed, generally, to the effects of the expansion programme which was embarked upon in the middle of 1942. This expansion has had the effect of just about doubling the present strength of all ranks in the western hemisphere operations. It may be noted that the strength of all ranks in western hemisphere operations, between April 1, 1942, and May 1, 1943, showed a very substantial increase. The expansion has involved an extensive construction programme of aerodromes and buildings and the procurement of large numbers of additional aircraft, mechanical transport, bombs, wireless and other major equipment. Much of this, already contracted for, remains to be paid for and the year 1943-1944 will see deliveries off contracts presently outstanding.
6. Overseas war establishment.
The increase under this heading amounts to approximately $363,000,000. This amount includes the effect of the additional obligations assumed by Canada as of April 1, 1943. This increase is accounted, generally, to the following:
Capital cost of 35 squadrons $ 74,112,600
Maintenance cost (excluding pay
and allowances and clothing and
necessaries) of 35 squadrons.... 213,339,393
Capital cost of ancillary units.... 344,500
Maintenance cost (excluding pay and allowances and clothing and necesaries) of the ancillary units 8,790,536
Pay and allowances (adjusted to R.C.A.F. rates) and clothing and necessaries of all R.C.A.F. personnel overseas 66,414,444
Provision has to be made for the ever-increasing numbers of R.C.A.F. personnel overseas. This increase will continue quite apart from the obligation upon Canada to assume, as from April 1, 1943, the pay of the personnel previously the responsibility of the R.A.F. Without divulging exact figures, it may be stated that over 40,000 R.C.A.F. personnel have been sent overseas, which number includes both aircrew and groundcrew.
7. Additional obligations overseas as from April 1, 1943.
On April 20, 1943, an Agreement was entered into between the government of the United Kingdom and the government of Canada, effective April 1, 1943. This agreement is
supplementary to the agreement of June 5, 1942, about the training of pilots and aircraft crews in Canada and their subsequent service. Under the terms of this supplementary agreement, the government of Canada assumes financial liability for the following costs and expenses connected with R.C.A.F. personnel who are made available for service with or in conjunction with the Royal Air Force:
(a) Pay and allowances.
(b) Clothing and necessaries.
(c) Transportation to and from overseas.
(d) Insurance contributions (employers1 share) necessary to insure benefits under Canadian schemes.
(e) The excess (if any) of pensions and other non-effective benefits admissable under Canadian regulations over the corresponding benefits admissable under United Kingdom regulations for personnel entered for the duration of the war.
(f) All costs of the R.C.A.F. squadron overseas (excepting the three squadrons for which Canada had assumed liability) and of the formations and units formed overseas for their administration and maintenance.
Usually when dealing with these estimates we divide them into three headings. In former years they were divided into home war, British commonwealth joint air training plan and overseas operations. On this occasion I propose to change the order, but to retain the same headings. My reason for this is that up to this year the joint air training plan was an infant which was being fed, in so far as personnel, instructors and all persons who went into it were concerned, by the R.C.A.F. prewar establishment or by such new persons as had come in since. But this child has now grown up to a lusty parent and the British commonwealth joint air training plan is now the feeder of the former services, that is to
War Appropriation-Air Services
say, the home war establishment and the overseas establishment. They draw their personnel from those who have been trained in the Training plan. It is for that reason that I intend to mention it first.
It is a small matter, but perhaps I should refer to the fact that some confusion has arisen in the public mind and in our own minds with respect to the name of this particular organization. During the training conference the financial people found that owing to the fact that new commitments were being undertaken, that is that there was to be a kind of financial pool as well as a training pool as between the Royal Air Force transferred schools and our own schools, and wishing to make a cut-off date for financial as well as administrative purposes, they invented the name "Combined Training Organization" to indicate that which would happen after July 1 when the two organizations were merged together. It became the common custom within the department to call what was formerly the British commonwealth joint air training plan, the Combined Training Organization. Strangely enough I mentioned this name in a speech which I made in Toronto, and the protests were so strong that we decided that the name "Combined Training Organization" did not give much inspiration and did not mean very much. Therefore, with the agility which characterizes the air force, we promptly changed the name back again and I can assure the house that it will be known as the British Commonwealth Joint Air Training Plan for the duration.
I come now to the financial aspect of the joint air training plan particularly as it developed after the agreement made in June of this year. Important and far-reaching changes in the financing of this project were made as a result of the air training conference held in June, 1942. The financial arrangements under the British commonwealth air training plan, under the agreement signed in 1939 were:
1. Canada paid for the recruiting, manning and all training of R.C.A.F. aircrew up to the stage of advanced training, these same costs being borne by New Zealand and Australia in respect to the aircrew of those dominions, who subsequent to such training were sent to Canada for advanced training.
2. United Kingdom supplied all twin engine aircraft, except Anson wings, a certain number of single engine aircraft and one-half of the engines for the elementary training aircraft.
3. The total costs of the plan excluding (1) and (2) were to be borne by-
New Zealand 8-08
Subsequent to these arrangements and owing to exigencies of war, the United Kingdom was unable to provide from the United Kingdom all the aircraft and parts when required as called for by the contract and subsequent expansions and Canada as agent for the United Kingdom purchased on their behalf the necessary aircraft, engines, parts and supplies. The cost to- the United Kingdom in this respect was approximately $98,000,000.
As a matter of administrative convenience and to effect economy in the administration, supplementary agreements were entered into with Australia and New Zealand whereby the governments of those dominions agreed to pay in the case of Australia a lump sum to March 17,1942, and on a per capita basis thereafter, and in the case of New Zealand a lump sum to the end of the contractj March 31, 1943.
In the latter part of 1941 certain RA.F. schools were established in Canada, the entire cost of which, except land, was to be borne by the United Kingdom.
A new agreement was entered into on June 5, 1942, to come into effect at July 1, 1942, - and to extend the activities of the training plan to March 31, 1945.
At June 30, 1942, the financial situation under the old agreement was substantially as
Total expenditures under the plan excluding contribution in kind by
the United Kingdom $500,567,000
Of the above there was payable by Australia and New Zealand approximately the following:
New Zealand 35,000,000
The United Kingdom had either furnished in kind or obligated itself to pay for all twin-engine aircraft, excluding Anson wings, which were manufactured in Canada, a certain number of single-engine aircraft and one-half of the engines for elementary training aircraft as well as the capital cost and operating cost of the R.A.F. schools in Canada. The total monetary obligation of the United Kingdom under this arrangement at July 1, 1942, was approximately $279,000,000, of which approximately $66,500,000 had been received and the balance is at present being examined by both governments for final settlement. The value of the contribution in kind- actually delivered from the United Kingdom to July 1, 1942, is not available but would be very substantial and probably in excess of $100,000,000.
The present agreement calls for the maintaining of all the R.C.A.F. and R.A.F. schools in existence at June 30, 1942, and the institution of certain additional schools particularly