The Department of National Defence has launched a top-down review of how it manages its back office with a goal of finding about a billion dollars a year in savings it can reinvest in operations and training.

The so-called Defence Renewal initiative was launched in the summer of 2012, but really took flight after Gen. Tom Lawson took over as chief of the defence staff. One of his goals was finding "more teeth and less tail," as Prime Minister Stephen Harper put it.

Gen. Tom Lawson was installed as chief of defence staff a year ago, amid a call by the prime minister to reduce administrative costs. (Adrian Wyld/Canadian Press)

After more than a year of review, the Defence Department on Monday laid out a five-year plan to review and realign activities such as maintenance, information technology, contracting and personnel management.

Defence planners expect these and other similar efforts to result in significant manpower savings. Planners say they expect to be able to reassign between 2,800 and 4,800 military and civilian personnel.

Although there will likely be layoffs and redundancies amid the changes, the Defence Department maintains the overall number of employees won't change, meaning there will be no troop or defence employee cuts as a result of the process.

By 2017, this defence renewal could account for as much as $1.2 billion in cash the military can then reassign to high-priority items.

Cyber-force, training and surveillance

Defence planners speaking at a background briefing Monday said the money could go to bolstering a nascent military cyber-force, providing more forces to manage space missions and surveillance activity, as well as operations and training for the air force, navy and army.

Defence Minister Rob Nicholson introduced the plan at a news conference at National Defence headquarters in Ottawa.

"I think it's quite comprehensive," he said. "And I think it's the next step in terms of making National Defence as efficient and cost-effective as possible and delivering what National Defence does in terms of military readiness.

"That being said, this is the next step in a number of steps that the government has already taken to rationalize and contain expenses and to make sure that the money that is spent is put to where it is most effective."

The Defence Department has already been subject to several cost-cutting reviews, including the Conservative government's Deficit Reduction Action Plan. On Monday, military finance experts at the briefing said those reviews have resulted in a $2.1-billion cut to the defence budget — a roughly 10 per cent cut.

But those cuts follow an unprecedented period of budget growth at Defence, with a $7-billion increase over six years. That increase accompanied a frenetic period of war in Afghanistan. It's now recognized inside the military and Defence that the pressure of managing that war led to staff growth and economic inefficiencies.

It's this realization, and the context of now shrinking budgets, that made defence renewal a military priority.

The review it proposes is widespread and could result in serious reductions in politically sensitive areas, such as base closures and other major military realignments.

Spotlight on inefficiencies, managers

It's also designed to target inefficiencies, such as military aircraft technicians spending only 20 per cent of their time actually fixing planes and the rest of it doing other less vital or even unnecessary work.

Defence planners also revealed that headquarters has become bloated with too many managers with too few responsibilities managing too few staff. This, they say, will change.

The military also hopes to save cash by better managing its vast stockpiles of gear and spare parts and transforming how it manages its personnel.

It also expects savings in information technology, as well as through more use of simulation technology for training, such as high-tech flight simulators, or even tank and truck simulators.