Defence Policy short on short-term funding

KEN POLE  –  Jun 7, 2017

07 Jun 2017

The federal government announced June 7 that it plans to nearly double the Department of National Defence annual budget over the next decade, to $32.7 billion in 2026-2027 from $17.1 billion in the fiscal year just ended. It would begin decreasing at the end of that period as major capital projects are completed.

Detailed in a new Strong, Secure, Engaged policy document, the commitment would still fall short of what some allies – notably the United States and other members of NATO – say should be two per cent of gross domestic product, the government said it is “affordable, achievable and . . . informed by a rigorous, evidence-based analysis.”

Achieving two per cent would require an increase in the annual budget to more than $40 billion, but a senior DND official suggested in a background briefing that the annual budget would amount to at least 1.4 per cent of GDP by 2024-2025.

At the official announcement later, in a downtown Ottawa DND drill hall, Defence Minister Harjit Sajjan told a mixed audience of uniformed and civilian personnel that the commitment reversed “a pattern of decline” in that it would see funding grow by more than $70 billion in 10 years. However, the total did not include unspecified and understandably uncalculable future costs associated with modernizing NORAD.

Flowing from a 14-month review and extensive public consultations which have cost at least $6 million, the policy document sets out specific plans for modernizing all elements of the Canadian Armed Forces and increasing Regular Force personnel by 3,500 to 71,500 and the Reserves by 1,500 to 30,000.

“These investments will provide the necessary flexibility . . . to operate across the spectrum of operations,” the document states, adding that it also would enable the CAF to “leverage new technologies to maintain . . . interoperability with allies and an operational advantage over potential adversaries.”

Among other things, the Royal Canadian Air Force is being promised 88 new fighters through an open competition, an increase from an earlier requirement for 65 aircraft, enabling simultaneous NORAD and NATO deployments. A senior DND official said during a background briefing that the current projected capital cost of that acquisition is $15-19 billion.

The RCAF also would have the resources to replace its Airbus CC-150 Polaris tankers, deHavilland CC-138 Twin Otter utility transport aircraft, and Lockheed Martin CP-140 Aurora intelligence, surveillance and reconnaissance platforms.

Other RCAF commitments include enhanced space-based surveillance capability, upgraded tactical command, communications and navigation systems, more remotely-piloted platforms, modern air-to-air missiles, life extension of its Leonardo CH-139 Cormorant search and rescue helicopters.

The policy also promises to “operationalize” new fixed-wing search and rescue aircraft, a process which could be delayed because the government’s decision to award a contract to Airbus is being challenged in court by the Leonardo group.

Meanwhile, the Royal Canadian Navy is on track to receive a “full complement” of 15 surface combatant replacements for its current frigates and retired destroyers 56-60 billion! as well as two support ships and up to six Arctic Offshore Patrol Ships. It also press on with upgrades to its four Victoria-class diesel-electric submarines.

Naval Task Groups remain the preferred RCN operational core, and would comprise up to four surface combatants and a support vessel, backed “where warranted” by a submarine. “Configured and crewed to provide its own command and control, a Naval Task Group can lead allied or coalition forces for sustained periods anywhere in the world.”

A DND official told FrontLine after the media briefing that the task group approach essentially will work the same way it does now in that the RCN will be able to draw assets from any of its bases to make up the necessary strength.

The Army, in addition to upgrading its fleet of General Dynamics Land Systems light armoured vehicles, will be able to replace its family of armoured combat vehicles and acquired modern logistics vehicles and heavy engineering equipment a light utility trucks.

Other new Army assets expected to flow from the policy include ground-based air defence systems, modernized Improvised Explosive Device Detection and Defeat capabilities, state-of-the art communications hardware, shelters, and equipment for austere environments such as the Arctic.

Special Operations also are up for more money as well as 605 more personnel. They would be equipped with new airborne ISR platforms, armoured sports-utility vehicles and other platforms, modernized command, control and communications systems and computer defence networks and enhanced “next generation” integrated soldier systems.

Focusing on a particularly sensitive issue for the entire CAF community, the policy document provides for what the government describes as “unprecedented support to our people and their families.” This would include physical, psychological and social support from recruitment to retirement and beyond.

“Offering steadfast support . . . not only builds a strong and agile defence organization, but also acknowledges the sacred obligation the government . . . has to our military personnel, veterans and their families,” it adds. “Military families . . . are the strength behind the uniform.
Sajjan pointed out in his speech that Canada has asked “a lot . . . time and again” from its troops. “They delivery every time. And yet, governments have not invested adequately and predictably in their equipment, in their care and their well-being. In an increasingly unpredictable world, we will continue to rely on them in the years ahead. It’s time for government to hold up to its end of the bargain.”

A challenge which continues to face DND is actually spending the money it is allocated, mostly as capital project times are extended beyond their original projected time-line. The policy document acknowledges that problem, noting that “there are, and will continue to be, periods in which Defence does not use all of the funds allocated in a given year.”

DND, which has the largest capital budget of any federal institution, is permitted to carry forward only up to 2.5 per cent of its annual budget to the next fiscal year when this happens. However, the document says, DND has been improving its forecasting models in an attempt to ensure that it doesn’t have to keep going back for parliamentary approval authority.

“Since 2015-2016, the department has closely monitored in-year capital projects to identify slippage and delays earlier in the year,” it says. “During the year, new projects may be approved, which would have new demands for capital funding. In order to reduce the lapse, National Defence will fund these new projects from surplus in-year funding rather than request additional funding from Parliament.”

While Sajjan called the policy “the most rigorously costs, fully- and transparently-funded defence policy ever produced in Canada,” he declined to speculate on how the current and future governments would actually pay for its promises, possibly even resorting to budgetary deficits.

– Ken Pole is a contributing editor at FrontLine Defence magazine