Conservatives promise to ‘protect’ defence spending from deficit battle

The Conservatives have pledged to “protect” the budget of the Department of National Defence even as they work to eliminate the federal deficit.

In their election platform, the Tories said they would find $5 billion in savings by cutting operational expenses, but were not clear on precisely what that meant, other than to say it would not affect services to Canadians. 

The Liberals, through their two-year-old defence policy, committed to increase defence spending by 70 per cent to $32 billion annually by 2024-25 — a program that would unfold at precisely the same time a potential Conservative government intends to cut expenditures.​​

The Liberals have also set in motion plans to buy two of the military’s biggest-ticket items — new fighter jets and navy frigates.

Conservative leader Andrew Scheer said Wednesday his party would stick with those purchases, but would be more efficient.

A US Air Force F-35A is one-of-three competitors in the bid to replace Canada’s CF-18s. (Murray Brewster/CBC News)

“We are committed to the funding allocated to the Department of National Defence,” he said during a campaign stop in in southwestern Ontario. “We will not do what the Liberals did, which is waste hundreds of millions of dollars stopping and starting the procurement process.”

The Conservatives have pledged to depoliticize the process of buying military equipment and have complained about the Liberal government’s delivery timelines and decisions, including the plan to purchase used Australian F-18s to supplement the existing fighter jet force until a decision is made on brand-new warplanes. 

Says money wasted

“They have wasted so much money when it comes to procurement,” Scheer said, adding that Conservatives would “protect the budgets of National Defence [and] we’re going to ensure that the money that’s allocated to National Defence is spent wisely.”

At least two experts wonder how the Conservatives can live up to that pledge in light of the fact the Defence Department is the single biggest discretionary expense on the federal balance sheet and the last two times Conservatives — or Liberals — tried to balance the budget, military spending took major hits.

Under the government of former prime minister Stephen Harper, the defence budget was cut by $2.1 billion annually and the department racked up sizeable chunks of lapsed spending, money that was appropriated by Parliament, but not spent. 

The reduction took place after the Afghan war and the department faced concurrent spending cuts through the Conservative strategy review and deficit reduction action plan.

An artist’s rendering of the British Type 26 frigate, which has been submitted for consideration as the replacement for Canada’s patrol frigates. (BAE Systems Inc./Lockheed Martin Canada)

Both Liberal and Conservative governments in the 1990s cut defence spending and postponed buying new equipment, most notably new maritime helicopters, which only came into service in the last few years

Defence spending an obvious target

“Balancing a federal budget without looking at defence spending is extraordinarily difficult, to impossible,” said Dave Perry, an analyst and expert in defence spending at the Canadian Global Affairs Institute. “Defence spending accounts for one-fifth of the federal budget.”

And even if the Conservatives did look for savings, a change to the accounting structure at Defence leaves little room for them to recoup much money by cancelling or postponing equipment purchases.

Reducing the size of the military or the civil service was something previous governments did, but Perry said those kinds of cuts “take two years or more” to make their way through the system.

Kevin Page, the former parliamentary budget officer and CEO of the Institute of Fiscal Studies and Democracy, said much of what all of the parties are proposing — and their ability to deliver — is contingent on the kind of Parliament that is elected on Monday. 

In a minority government scenario, the Conservatives might find themselves struggling to deliver savings outside of the Defence Department, he suggested. 

Would need majority

“If elected, I would assume the Conservatives would need a majority government to push through the savings on direct program spending – infrastructure, wage bills, other operations, corporate and development assistance,” Page said. 

The Liberal record on defence spending is up for debate.

An internal DND slide presentation, obtained by CBC News, lays out projections for the department going to up to the 2036-37 fiscal year.

Faced with extraordinary pressure from the Trump administration to meet NATO’s goal of earmarking two per cent of gross domestic product for military spending, the Liberal government committed to a 70 per cent increase by 2024-25.

The Feb. 25, 2019 slide presentation shows that spending will peak in 2026-27 and begin to fall again in the preceding decade.

The document also shows that, for two years running, the Liberals have not spent as much as they planned on new equipment. While $12.7 billion was set aside in their plan between 2017-19 for new military gear, the Trudeau government only asked Parliament for permission to spend $8.34 billion — leaving $4.4 billion still in the treasury.

The slide presentation said part of the reason is that some existing projects came in under budget, but in one-third of the instances the spending delay was because the Defence Department — or the federal government in general — could not get the projects organized. 

 

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