Defence Budget 2007

Denis Stairs has already introduced some aspects of the recent budget that should cause us some concern. In presenting a slightly more optimistic view of the actual funding levels, I fully support his view that one shouldn't "count on" any of this money or new equipment until one sees firmer figures and an actual defence plan. We indeed have a government with an occasional populist vector and a minority mandate. So I must re-emphasize that much of what I outline below is my estimation of what will occur.

Given that, a detailed review of the 2007 Budget could easily see where the government was spending $60M on environmental allowances and $10 M on operational stress injury clinics. However, trying to find out how much money would be in the defence budget this year was a much more difficult task. The table the budget provided was no help in this:

Table 6.1
Canada First Defence Plan (Budgetary Basis)1

2007-08 2008-09 2009-10 Total

(millions of dollars)

Budget 2006 725 1,000 1,400 3,125
Budget 2007 175 0 -175 0
Canada First defence plan implementation 900 1,000 1,225 3,125

Thankfully, if one had access to Brian MacDonald's excellent pre-budget primer 1, one had a good chance of understanding large parts of the above. Essentially, the first conservative budget, Budget 2006, promised $725M on top of the liberal planned 2007/8 defence levels of $15.8 B for a forecasted 2007/8 Budget of $16.5 B dollars. The table above shows that, in addition to the $725M they promised in 2006, Budget 2007 adds $175M moved forward from 2009/10. So this years defence budget will be approximately $16.7B. The Conservatives have fully kept their promise.

Brian MacDonald also points out that much of this was actually revealed earlier this year in the government's main estimates. These estimates also suggested the 2007/8 Budget would involve some $11.8B in operations and $3.6B in capital expenditures. This pushes capital to a very much needed 21.8 percent of the defence budget. This is also good news.

Assessing what the budget levels will be for 2008 - 2011 is more difficult. However if one remembers the Liberals promised some $10.9 B for those outer three years it can be done. Averaged out, the Liberal defence budget for each of those three years would be some $18.2 B. The table above shows the Conservatives plan to add $1,000M and $1,400M to the first two years. Thus a rough prediction would suggest: [can't remove this space for some reason]Defence Budget 2008/9 - 18.2 +1000M = 19.2 B
Defence Budget 2009/10 - 18.2 +1400M - 175M = 19.42B

Defence Budget 2010/11 involves complete guess work, but I suspect the table above means that year will have a budget $18.2 B + 1.8B = 20 B. In any case, we expect the governments' report of plans and priorities will be issued very soon and confirm much of the above.

These out year predictions are also good news as it suggests the Conservatives are continuing to stick to their 2006 promises, and that they are aiming at stable defence funding. Moreover, this is now allowing capital expenses to reach a very necessary 21% of budget.

The last of the unrestrained good news is that there is now a plan to recapitalize a 10 vessels of Canadian Coast Guard with a $324M investment over 10 years.

The doubtful elements of this budget encompass three issues. The first might involve asking why the government made it so hard to extract these 'good news' defence figures from Monday's budget announcement. A kind interpretation would suggest that they did not wish to dilute the socially progressive tenor of the remaining spending. I will not progress this further other than to suggest a government needs to ensure defence spending is both understood and supported by as large a segment of the population as possible.

The second issue involves the fact that it is not at all clear where the now significant amounts available for capital will be spent. Yet as the "Major Platform Aging Table" at the end of this article shows, recently announced equipment purchases (shown in blue) only replace some 25% of the kit that is now in the red zone of their end of life. This suggest we really do need the details of this "Canada First Defence Plan" relatively quickly. This would have the additional benefit of resolving the reported conflict between at home and expeditionary capabilities that is underway in NDHQ.

The final issue is related, and it has do with transformation. Just prior to the budget the CDS stated we lacked the resources to continue our examination of the Standing Contingency Task Force. This budget makes clear that finances are not the resource problem. I also have difficulty accepting that people are the resource issue. Afghanistan and the Winter Olympics might well take a considerable number of people, but this should not have caused us to stop thinking. The SCF is also the only real element CF transformation I can identify. Here the use of the term "real" is very much meant. For up to now transformation has largely involved the relatively unproductive incantation of six buzzwords and the bureaucratic politics of shuffling officers into and out of three headquarters buildings. Further, the day-to-day contribution of CANADACOM, let alone its transformative value, is increasingly being questioned.

One should not expect a budget announcement to also provide a defence policy. Optimally, the latter should precede the former. However, lacking any policy at all, budget 2007 should signal some form of one is now long overdue. Some clear yearly defence budget levels would also be nice.