In The Media

Feds punt DND procurement cash to 2022, acknowledge delays

by Amanda Connolly (feat. David Perry)

March 22, 2016

The Liberal government gave Department of National Defence the propellor shaft in this year’s budget, punting money earmarked for procurement into the future and essentially acknowledging what defence industry experts have been suggesting — that major projects like the CF-18 replacements and shipbuilding are going to take longer than initially thought.

Through Budget 2016, DND will lose $205 million from its budget this year as part of a plan to move $3.7 billion in funding earmarked for “large-scale capital projects” into the future. Under the current plan, that money will still exist – but it won’t be available to the department until at least 2022. The government says DND will not be in a position to actually spend the money until then, due to delays in planned procurement projects.

“To ensure that funding is available when key capital acquisitions will be made, funding that is not yet allocated to specific projects, or that cannot be spent due to unforeseen delays in planned projects, can be moved forward into future years when it will be needed,” the budget states.

Under the 2008 Canada First Defence Strategy, the former Conservative government committed to replacing the core equipment of the Canadian Forces’ fleets, announcing plans to buy 15 new destroyers and frigates, 10 to 12 maritime patrol aircraft, 17 fixed-wing search and rescue aircraft, 65 F-35 fighter aircraft and a fleet of various land-combat systems and vehicles.

The $39-billion National Shipbuilding Procurement Strategy specifically outlined plans for the government to acquire a range of combat and non-combat vessels – but the program has been plagued by delays and cost increases over the years.

The Liberals promised to invest money to get the program back on track during the 2015 election campaign – specifically pledging to spend on shipbuilding money saved by choosing a less expensive aircraft than the F-35 to replace the CF-18.

However, experts criticized that move and said any savings on the CF-18 replacement would be negligible compared to what DND needs to buy the ships it has planned.

According to senior government officials, the government’s rationale for punting the $3.7 billion is that procurement projects like shipbuilding don’t actually need access to cash until they are ready to start construction.

Dave Perry, senior defence analyst at the CDA Institute, said the same.

“I think in this case it’s pretty clear that it reflects the fact that the procurement system wasn’t going to actually be able to spend that money,” Perry said.

For the vast majority of the projects planned under the $39-billion National Shipbuilding Procurement Strategy – apart from the first Arctic Offshore Patrol Ship, currently being built at Irving Shipyards in Halifax – plans to cut steel are still a long way off.

While specific military projects will not form part of the defence policy review expected by the end of this year, the review will look more broadly at how the government handles procurement and where Canada’s strategic defence priorities lie.

That review is likely a big part of the reason why the budget contained few details on specific plans for the defence portfolio, Perry said.

“If you’re going to actually review defence policy fully and come up with an actual policy document then it kind of makes sense to not have a lot of detail in here,” he said.


In that vein, Budget 2016 also announced that the government will launch a review of Canada’s international aid policy, which officials described as the “non-military side of a defence policy review.”

The review will focus on making sure that Canada’s international aid is focused on poverty reduction. The outcomes of the review will shape how Canada’s international aid spending changes in next year’s budget.

International aid announced in this budget focuses on peace and security, with a total of $586.5 million – which the government says will come from “unallocated International Assistance Envelope resources” – going to three key projects over three years.

The Global Peace and Security Fund will get $450 million to promote pluralism – news that comes amid speculation that funding for the Office of Religious Freedom will not be renewed.

The head of that office, Andrew Bennett, recently announced he was leaving the office to work with the Christian think-tank Cardus. Foreign Affairs Minister Stephane Dion has said the government views religious freedom as a right that must be protected in conjunction with other rights, not on its own.

The International Police Peacekeeping and Peace Operations Program will get $106.5 million and $30 million will go to the Counter-Terrorism Capacity Building Program, specifically in the Sahel region.

Those initiatives fit within the broader strategic initiatives outlined in the government’s humanitarian and aid spending already announced for the anti-ISIS mission, with the bulk of the$1.6 billion three-year total going to things like social services, infrastructure development, education and health care in Iraq, Jordan and Lebanon.

Overall, when it comes to security issues Budget 2016 focuses internationally on providing targeted aid for those on the frontlines of conflict and crises, and domestically on strengthening existing law enforcement and cyber security resources.


While there is no new funding specifically for agencies like CSIS and the CSE, the bulk of money for domestic cyber security will be funnelled through Shared Services.

The former Conservative government created the department in 2012. It is responsible for managing the government’s networks and systems, such as email.

Budget 2016 allocates $77.4 million over five years, starting this year, for Shared Services to update its cyber security network, patch existing problems and make sure government networks are protected from cyber threats, malicious software and unauthorized access.

As well, Shared Services will also get $383.3 million over the next two fiscal years to transform the government’s information technology systems, data centres and communication networks.

That decision comes on the heels of an Auditor General report that suggested Shared Services was having problems maintaining and improving government IT services.

It also follows two reports by CBC News that found Shared Services had jeopardized RCMP operations and the safety of Canadians by being unable to effectively make decisions and failing to communicate those decisions to partner institutions like the RCMP.

The reports also suggested senior DND staff were fed up with Shared Services and its perceived inability to do its job.

Speaking at the Senate national security committee on Monday, CSE chief Greta Bossenmaier told senators that Shared Services is a “key part” of the government’s plan for keeping its cyber systems safe and that more departments needed to get on board with using its services.

She also said that the number of cyber actions aimed against Government of Canada systems had increased over the past few years and that roughly 100 million probes are launched against government systems daily.

The range of actors involved in those actions has also shifted as the threat environment becomes more dynamic, she said.


On that front, the Liberals ticked off an election promise by announcing funding for the creation of an Office of the Community Outreach and Counter-Radicalization Coordinator.

That office will be responsible for coordinating national counter-radicalization initiatives and assessing what works and what doesn’t as various municipalities and provinces implement their own efforts.

The office will get $35 million over five years, with $10 million each year after that.

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