Military spending cut?

The headlines after last week’s federal budget trumpeted major cuts in the Department of National Defence’s budget. Substantial reductions in DND’s civilian employment are expected in the wake of the budget, and other spending is likely to be delayed.

But how significant the overall reduction in military spending will be remains to be seen.

The budget documents report that DND’s operating budget will be reduced by $318.8 million from its planned level in the coming year, and that the cuts will increase to $692.4 million below planned in FY 2013-14 and $1106.1 million below planned by FY 2014-15.

A significant portion of these cuts is likely to be accounted for by the cost savings associated with the winding down and eventual end of Canada’s operations in Afghanistan, however.

The budget documents also report that there will be additional reductions in DND’s capital (equipment) spending, including a $400 million cut this year.

The government insists, however, that this spending is not being cancelled. Instead, it is being postponed to future years — in large part because DND has been unable to ramp up its capital spending as fast as its capital budget has been growing in recent years.

It remains to be seen whether the postponed money does indeed reappear in future budgets, but it will have to do so unless the government significantly trims back the equipment ambitions it outlined in its “Canada First Defence Strategy”, which was never going to be affordable even under the original spending plan (cough, F-35, cough!).

Further complicating matters is the fact that all of these “cuts” are being applied to planned spending levels — and the government is still planning over the long run to increase DND spending by an average of about $500 million a year (mostly to counter expected inflation).

Just to add one more level of confusion to the picture, cuts to the coming two years’ spending that were announced in previous budgets will also be kicking in.

Taken together, the combined cuts make it certain that DND’s bottom line budget will indeed decline over the next couple of years (barring major new military interventions or other unexpected boosts to the budget).

But how much that decline will be is almost anyone’s guess at this point.

The picture for the new fiscal year will become clearer when the DND Report on Plans and Priorities, the most detailed part of the annual Estimates documents, is released. But that isn’t scheduled until the end of June.

For the moment, the most that can be said is that DND appears to be facing a significant dip in the long-term upward trajectory of its budget.

Photo credit: DND

Tags: Budget, Canada First Defence Strategy, Canadian military spending, Military spending