Budget 2016: Defence Takes a Hit

Written by JDM - CAFDispatch Author
Quotes from Dave Perry supplied by the Huffington Post
Published March 23, 2016

While I will boldly admit, I tend to lean fiscally conservative on a number of issues; I have no issue with running deficits. Especially in times of economic uncertainty, to help our economy, and to create jobs. So the infrastructure spending, first nations, or old age security spending does not bother me. However, it is the indefinite delay in close to $4 billion in defence procurement that does.

During the 2015 Election, the Liberals promised to re-outfit the Canadian Forces; while ensuring "More Bite, less Tail" for its command and operation structure...well not it seems that will not be the case.

In the 2016 Budget announced yesterday on Parliament Hill, the Finance Minister Morneau announced that the re-equipping of the Canadian Armed Forces will be delayed until after the next election. (For those who don't know the Canadian System - that is not until at least 2020 or later)

This delay is post-poining $3.7 Billion in already planned purchases - New Ships for the Navy, New Aircraft for the RCAF, and new vehicles for the entire CAF. However, Minister Morneau insists it’s not a cut to military funding, which the Liberals promised to maintain during the last election. Which in part is true; as they have pledged to maintain the 3% increase annually to keep up with inflation...so really it means no extra money.

The Liberals are not the first government to do this. The Conservatives did the same thing in two previous budgets; defence analyst Dave Perry of the Canadian Gobal Affairs Institute says the cumulative total of postponed defence purchases has now reached $10.4 billion! For the previous government, the postponement had a lot to do with the balancing the budget, Perry indicated.

What is the reasoning behind these dalays? The Liberal promise of a new Canadian Defence Review; or White Paper as they have been called. Morneau said the Liberals need a year to figure out Canada's defence priorities. "In order to make sure we have the funds available at the time when they need those funds, we've reprofiled some in the fiscal framework," he told a news conference prior to tabling the budget in the House of Commons."So, when we need the money, the money will be in the fiscal framework. So, we believe that is the appropriate action to take to ensure our military has the appropriate equipment, the planes and the ships they need."

The political significance of this delay, according to Perry, is that National Defence will be expecting its money at time when the Liberals will likely have to get serious about cutting the deficit, which is projected this year at $29.4 billion, and a plan to have it falling to $14.4 billion by 2020-21.

"They're literally going to have an issue five years from now because that's when the bill arrives," said Perry, who indicated that the military is at the point where it needs concrete guarantees that the money will be spent.

The CAF is facing a huge "rusting-out" issue. The RCN is already without AOR Vessels, and its fleet is aging and is not expected to be replaced before the mid-2020s. The RCAF CF-18's have already had their life expanded twice; and will need to be retired by 2025, unless billions more is spent retrofitting them a third time. The Army is looking for new troop transports as it retires it fleet of LAVs and just finished retrofitting its fleet of Leopart-2 Tanks for the war in Afghanistan.

"I think if I was National Defence, I would hope you'd already have the money in the bank, instead of having to rely on a promise of some year, some time in the future they'll be able to acquire this stuff," concluded Perry. 

All this at a time when the Government plans to redeploy the CAF on UN Peacekeeping missions around the world; where equipment will take on more damage, and require replacements even sooner.