In The Media

Department of National Defence orders cutbacks to save money for missions

by Lee Berthiaume (feat. David Perry)

Times Colonist
March 20, 2017

OTTAWA — Senior defence officials have ordered a curb on non-essential activities across the department, The Canadian Press has learned, as they look to free up millions of dollars for military operations and other more critical tasks.

The result has been a severe cut to activities not directly related to missions or military readiness, including travel and non-mission training, as the department limps to the end of the federal fiscal year on March 31.

The cost-cutting is in addition to the military having already parked large numbers of trucks and support vehicles, docked naval vessels and cut back on flying times for aircraft because of financial pressures.

While the department won't say how much money officials are looking to save, spokesman Dan Le Bouthillier said it is "likely" to be less than one per cent of the overall defence budget.

With a combined operating and capital budget of $19.2 billion in this fiscal year, that would amount to around $190 million.

"We need to remain within the spending authorized by Parliament," Le Bouthillier said in an email.

"To do this, we asked that our organizations identify discretionary spending on activities that don't impact military operations or the department's core business."

Canada's overall defence budget is broken into three main categories, which in 2016-17 were: $14.3 billion for operating expenditure; $3.5 billion for capital expenses such as new equipment and infrastructure; and $1.3 billion in required funding to NATO and other international organizations or programs.

Several insiders told The Canadian Press that the belt-tightening is the result of years of deep cuts followed by minimal increases, even as the military has been called upon to do more and more.

Canada has more military personnel deployed abroad now than at any point since Afghanistan, and would surpass Afghanistan if the Liberals pull the trigger on a new peacekeeping mission in Africa.

It is also expected to dedicate a growing amount of resources toward cyber-security and space.

Yet the $14-billion operating budget remains about $2 billion less now than it did when the combat mission in Afghanistan ended in 2011.

The past year saw the defence department's operating budget increase by about $140 million, even though it was expected to spend $200 million more on international missions.

Previous financial pressures have had a visible impact. The army has idled support vehicles, the navy has left ships in port to reduce maintenance costs and the air force has cut back on flying times.

One insider, speaking like the others on background because he wasn't authorized to comment publicly, compared the new cost-cutting exercise to a search for loose change to pay for rent.

He and others spoke of having to postpone or cancel meetings with foreign counterparts, attendance at international conferences, and even Spring Break courses for cadets.

While some of the activities have been rescheduled until after the new fiscal year starts on April 1, there are fears that will only exacerbate the pain next year unless the department gets more funds.

The military is scheduled to get an extra $550 million to its operating budget thanks to an automatic increase the former Conservative government approved and the governing Liberals have said they will continue.

But defence analyst David Perry of the Canadian Global Affairs Institute says it won't be enough to cover the department's existing shortfalls and emerging costs associated with peacekeeping and cyber-defence.

"The extra money will help mitigate it," he said, "but it's not going to totally address their issues because they've got a number of other funding pressures."

Any extra money on top of that will likely have to wait until later in the year as government sources have indicated Wednesday's budget will not include any significant new cash for the military.

That means any new money is instead expected to be announced in the fall, after the Liberal government releases its new defence policy.

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On today's Global Exchange Podcast, we convene our roster of North American trade experts to discuss the newly signed United States-Mexico-Canada Agreement (USMCA). Join host Colin Robertson in discussion with Eric Miller, Laura Dawson, Sarah Goldfeder, and Larry Herman, as they discuss the pros and cons of the new deal, as well as what happens next.


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