Federal Budget Preserves Spending

KEN POLE  –  Mar 22, 2016

On a day when the world is reeling from another massive terror attack in Europe, the Liberal government’s first budget includes what it calls a “steadfast” commitment to enhancing security. Budget documents include ensuring that the Canadian Armed Forces have the equipment and personnel required to protect sovereignty and defend North America while also contributing to United Nations peacekeeping efforts and to coalition operations abroad.

“The Canadian Armed Forces will continue to play an important role in the coalition fight against the Islamic State of Iraq and the Levant (ISIL), and in North Atlantic Treaty Organization (NATO) assurance measures in Central and Eastern Europe,” the main budget document states. “Budget 2016 also reaffirms Canada’s contribution to support Ukrainian forces through military training and capacity-building in 2016-17, in coordination with other countries providing similar training assistance.”

Tabled in the House of Commons by Finance Minister Bill Morneau, the document also says that the government will conduct “an open and transparent process to create a new defence strategy that will deliver a modern, more agile and better-equipped military.” This would include improved costing of major procurements.

“Funding to support large-scale capital projects for defence, including the associated operating and sustainment costs, is set aside in the fiscal framework and managed on an accrual basis.”

Total Department of National Defence funding for major capital projects would amount to $84.3 billion out to 2044-45 and $2.8 billion annually thereafter on an accrual basis.

“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.” This is a welcome change that will undoubtedly impact many projects and reduce the billions in lapsed funding that goes unspent every year. 

Morneau’s budget proposes reallocation to “future years” of nearly $3.72 billion for large-scale capital projects current funded through to 2020-21, but stresses that this not represent a reduction in the DND budget. Rather, it would ensure that the funding is available when actually needed. This may benefit numerous platforms that are well past their expected service life and waiting for replacement, such as the aging fleet of Boeing CF-188 Hornet fighters, the Auxiliary Oilers (of which we have none operational), Warships, and other large projects.

As for military personnel and their families, the government reiterated its determination to improve the overall climate, including providing modern living, working and training facilities. This would be underwritten by some $200 million in infrastructure spending, including:

  • $77.1 million on projects designed to support military readiness, including live-fire ranges, airfields and hangars, and naval jetties;
  • $67.4 million on projects to support the Reserves, including repairing and maintaining armouries in Alberta, Ontario, Quebec and Nova Scotia;
  • $50 million four housing construction and upgrades; and
  • $6 million on projects to support northern operations, including investments in airfield ramp reconstruction that is critical to northern search and rescue and upgrades to fire suppression systems that directly support the North American Aerospace Defense Command (NORAD).

Morneau said in his budget speech to the House that the Liberal process to “deliver a modern, more agile and better-equipped military” would including seeking “the input of Canadians, experts, allies and partners, as well as Parliament, on a new defence strategy.”

He also restated the new government’s commitment to improving the lot of veterans who deserved “our gratitude, our respect and our support” for having “dedicated their lives to the defence of their country.”

This would include increased disability awards for service-related injury or illness, the amounts indexed to inflation and aligned with other benefits set out in the government’s New Veterans Charter.

“We will expand access to higher grades of the Permanent Impairment Allowance to better support veterans who have had their career options limited by a service-related illness or injury,” he added. “We will increase the Earnings Loss Benefit to provide income replacement of 90 percent of pre-release salary for injured veterans, and index this benefit so that it keeps pace with inflation.”

The government also continues to reverse the previous Conservative administration’s closures of Veterans Affairs Canada offices across the country and said it would hire more case managers to reduce the client-case worker ratio to no more than 25:1.

Ken Pole