Defence Budget 2012

The Federal Budget will be tabled in just a few hours and, by most accounts, a major part of the expected cuts will be borne by the Department of Defence. The end of combat operations in Afghanistan seems like as good a reason as any to reduce defence spending from nearly $22B.  But, down to what level will it fall is the key question?  The secondary question is will any specific capabilities fall as a result of reductions?

CBC New published a report, entitled “8 things to watch for in today’s federal budget,” that only ranked defence as the third issue (behind Old Age Security and Research and Development).  That does not mean it will be third in terms of reductions, only that the media and public perception of importance will rank it that way.

I talk to a lot of people about defence issues on a daily basis and the two that consistently raise public ire are the F-35 fighter acquisition and the ongoing problems with the Victoria-class submarines.  There has been very little in the way of public pronouncement on defence policy to justify either expense.  If either weapon system is central to the sovereignty and security of Canada, both the government and the military have done a poor job of communicating that need to the public.  Even in a ‘garrison town’ like Halifax, polling data [conducted by MQO Research] showed that 84% of people were ‘happy’ with the military presence here, but 62% were of the opinion that Canada should participate in ‘peacekeeping missions sanctioned by the United Nations’ and only 30% were in favour of supporting combat missions sanctioned by the UN.  It would be a safe bet that support will be even lower outside of Halifax and beyond.  Military capabilities related to combat operations would not find widespread support in the public, so fighter and submarines would fall into that risk group.

An article by Mathew Fisher in the 23 March edition of the Ottawa Citizen, entitled “Defence cuts will focus on costs – not policy,” says that the government’s options will be to cut between 5 and 10% from a budget of $22B.  However, that is only part of the formula.  The Strategic Review examined cuts of these proportions, and the general trend in information reaching me is that it will be 10%.  Another round of reductions, being called the Deficit Reduction Action Plan, is also looking for between 5 and 10% on top of the cuts under the Strategic Review.   This is the program that some senior federal ministers hinted would require ‘large departments to cut more than 10%’.  The combined effect of these two measures is the source of ‘doomsday’ rumours emanating from NDHQ.  So, how much would that amount to?

Using the $21.293B from the 2011-2012 Defence Estimate (see Brian MacDonald’s analysis here) a low end estimate of 5% (SR) + 5% (DRAP) results in a reduction of $2.08B, a medium end estimate of 7.5% + 10% gives a reduction of $3.57B, and a high end of 10% + 12.5% results in a loss of $4.52B.  While the Defence Department may be ‘guardedly optimistic’ they can absorb a cut of between 5 and 7%, what I am hearing is that the reduction will be much more significant.

Fisher’s article singles out the Victoria-class submarines as a specific potential target for the government’s reduction process. He claims that there are “grave concerns at National Defence headquarters that the budget may deep six these ex-Royal Navy boats.”  Even if they survive the budget, Fisher suggests, “they could still get torpedoed in the near future unless the navy can suddenly do a much better job of controlling costs and improving their woeful performance.”

From the polling data and the public’s reaction to the long and confusing history of the submarine program, it would be an ‘easy kill’ if the government did go after them, even in Halifax.