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Budget 2016: Defence procurement postponed once more

by Nestor Arellano (feat. David Perry)

Vanguard
March 23, 2016

The planned spending of some $3.7 billion for the acquisition of new planes, ships and vehicles for the military has once more been postponed with the announcement yesterday of the Liberal government’s first federal budget.

The apparent lack of discussion of the military’s needs in the 200-page document released by the Liberals which talks about massive spending for many sectors, also sends a negative message to the defence community, according to one industry watcher.

“This is a third of a series of deferment of some of the money ($3.7 billion) set aside for defence spending into the future,” David Perry, senior analyst and fellow at the Canadian Global Affairs Institute in Ottawa, told Vanguard today. “There was a lot of money out there for other departments but not much change for the DND.”

Ottawa plans to spend $29.4 billion this year, $29 billion in 2017, $22.8 billion the following year and $17.7 billion in 2019-2020. The nearly $30 billion deficit for this coming fiscal year is much larger than the $5.6 billion deficit for the current year which straddles the previous Conservative and current Liberal governments.

The Conservative, in two previous budgets, also postponed defence purchases. Now, the total deferred defence purchases have reached $10.4 billion, according to Perry.

There is some new money, though, about $200 million set aside for spending on rehabilitating aging infrastructure, but beyond that, there are no specific on any projects, he said.

Asked how military officials would likely take the 2016 federal budget, he said: “They would basically say it was not a big surprise because we’re in the midst of undertaking a comprehensive policy review that will not be completed until the end of the year. So it wouldn’t really make a lot of sense make any announcements until the review has been done.”

Perry, however, said that the lack of announcement of any new spending for the military was not unexpected.

“Some people will take this as a negative signal because there was not enough discussion about the military’s needs in the budget,” he said. “This lack of discussion leaves some people concerned.”

While military spending was postponed, the federal budget set aside a considerable amount for Canada’s veterans.

The budget called for a total of $5.6 billion in direct payments to veterans and their families over five years.

Disability award for veterans will be increased to $360,000, retroactive to 2006.

Earnings loss benefits to injured vets will go up to 90 per cent of their pre-release salaries.

Nine veterans’ services officers, which were closed by the previous government, will be reopened, and a new one will be built.


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