Defence Budget 2012 (II)

Despite the worst fears of Chicken Little pundits, the sky did not fall for Canadian defence in the 29 March federal budget. Predicted cuts of 8-10% or more did not materialize, and so it would appear, in the tradition of Trudeau, that many analysts have been gulled by the old ‘bait-and-switch’ tactic, one that seems to have governed the entire budget. Leaked stories about draconian cuts to the public service in general, and to the defence budget in particular, simply did not transpire.

This is not to say that DND and the CF will not suffer cuts, but rather that these were not as far-reaching as many predicted. Defence expenditures will be cut be by nearly $319 million in the coming fiscal year, and by some $1.1 billion in total over the next three years. Reasonably enough, the government justifies these ‘planned savings’ on the basis of: an operational slow-down following the end of Canada’s combat mission in Afghanistan; and in planned improvements in contracting, procurement of support equipment, centralized real property management, and improved personnel management. These cuts are in addition to the already scheduled reductions arising from the 2010 Strategic Review and the 2011 Deficit Reduction Action Plan – amounting to some $1.1 billion this coming fiscal year alone.

The point is, DND and the CF already knew that the bulk of these cuts were coming, and have already been planning to accommodate them. What this budget has done is to set a baseline of 69,000 regular force and 27,000 reservists for the CF, and to defer (ie in bureaucratese, to ‘re-profile’) about $3.54 billion over 7 years in capital spending to preserve the baseline personnel levels. This means capital savings of roughly $500 million per year to sustain the baseline force levels.

Exactly which equipment programs while be ‘adjusted’ remains to be seen, but the Harper government did pledge to continue to purchase new ships via the National Shipbuilding Procurement Strategy, and to acquire “an affordable replacement” – a tantalizing phrase – for the CF-18 fighter fleet.  Of course, the devil really is in the details, and the Canadian public will have to wait, along with the military, to see what scheduled procurement programs are or are not affected over the next seven years.

So, as for the budget as a whole, the tone for defence is one of caution and restraint in a time of economic uncertainty. But this is not a world-ender for DND and the CF. Above all else, defence planners need a sense of priority and stability to do their job, and this is roughly what they got from this budget. The rest of us may lament the abolition of the penny, and worry about Old Age Security savings post-2023, but what is needed now from the government and from DND is a clearer set of guidelines about how they expect the Canadian Forces to operate – and with what equipment – within the fiscal strictures provided by the government.