The shake-up comes soon after government-Parliament controversies over the air force F-35 program, which the auditor general roundly criticized for alleged lack of transparency and poor performance of government departments and officials responsible for military procurement.
Conservative Prime Minister Stephen Harper's government is under fire over its alleged failure to effectively manage Canada's multibillion-dollar procurement program for Lockheed Martin's F-35 fighter. Canada has set out to buy 65 of the Joint Strike Fighters, to coordinate defenses with other NATO members but the procurement plans are increasingly in doubt.
Canadian opposition politicians frequently criticize the F-35 program for being overblown with an undefined final cost for purchase and maintenance for the duration of the jets' 36-year lifespan. Harper's government has struggled to satisfy critics, including Auditor General Michael Ferguson.
Ferguson said the government's costing of the program had "several things missing."
He also said in his April 3 report Harper's department didn't exercise due diligence in choosing the F-35 to replace the aging CF-18, wasn't forthcoming with Parliament about the jets' true estimated cost and made key decisions without required approvals or proper documentation.
Since that damning report, Harper's government has been busy with damage control.
The proposed shake-up in the armed forces' command structure is designed to cut costs and streamline the 68,000-strong force.
The cuts, aimed at cooling tempers in Parliament, contrast with continuing military spending in Afghanistan and elsewhere and reports that Canada spent seven times the estimated figure helping NATO topple Moammar Gadhafi in Libya.
Newly released National Defense documents indicated Canada's Libya mission cost $350 million, seven times the cost admitted by Defense Minister Peter MacKay.
Canada pulled out of its Kandahar base in December but Canadian troops are still in Afghanistan on training duty. Canada's involvement in the project cost the lives of 157 Canadian troops and more than $11 billion.
As with the F-35 controversy, Harper's response has been to restructure, rename and rebrand areas under scrutiny in other parts of the armed forces.
A new Joint Operations Command will bring together various units of the Canadian army under one command that will supervise all operations in Canada and abroad.
"Transformation is built on some hard-learned lessons from a period of unrelenting operational pace," MacKay said.
He said the shake-up "will give the (Canadian forces) the agility to adapt as the future security environment dictates at the best cost to Canadian taxpayers."
MacKay said the reorganization will "result in a 25 percent reduction in national-level command and control overhead, and it will make more efficient use of administrative resources," the statement added.
Chief of the Defense Staff Gen. Walter Natynczyk said the new command structure will lead to a leaner but more efficient organization but "with the same excellence in operational support to all of our people, at home and abroad."
Earlier the navy announced similar cuts by bringing together five naval schools.
The defense cutbacks mean less earnings for defense suppliers within Canada and abroad. Estimates of the full impact of the reduced spending aren't known.