The regular increases in defence spending that Stephen Harper promised to lift the Canadian military from a decade of neglect are over. For the first time, his government is not just slowing growth in military budgets but scaling them back with years of cuts.
It means that by 2014-15, $1.1-billion will be slashed from the roughly $20-billion defence budget – just over 5 per cent. In addition, the government will delay the purchase of $3.5-billion in equipment for seven years, allowing it to trim hundreds of millions of dollars more each year.
For Mr. Harper, a Prime Minister who has centred so much of his political persona around building a Canadian military that's not only able to deploy, but will, the budget marks a reversal. Defence budgets are now going down, and combined with a $1-billion cut to spending growth announced two years ago, the military faces years of scaling back.
The effect of the two rounds of budget trims amount to roughly a 10-per-cent cut from planned spending, more than $2-billion, said David Perry, a defence analyst with the CDA Institute. "This is going to have a really significant impact on their ability to deploy and conduct missions," he said.
The details of what will be cut were not revealed. The budget said the Department of National Defence will do things like streamline its contracting process and centralize its management of property and human resources, but it's not clear what other cuts will be made.
The amount the Defence Department has to trim would be equivalent to chopping the department's entire civilian staff of 29,000, Mr. Perry said. But he said he believes a big chunk will have to be come from what the military terms "readiness" – training to fly planes, operate ships, and conduct operations that prepare the troops to go on missions.
The cuts to the annual budget will get deeper in each of the next three years, starting with a $327-million reduction in the coming year and reaching $1.1-billion by 2014-15.
The government is also backing off its target of increasing the size of the Canadian Forces to a regular force of 70,000 and 30,000 reserves, but the budget committed to maintaining the current, slightly smaller force of 68,000 regulars and 27,000 reserves.
Some savings will come from delaying $3.5-billion in capital spending that had been planned for the next seven years – the money used to buy planes, ships, tanks, trucks, and weapons. The government didn't identify what purchases it would delay, but will book savings of $500-million this year and $1.3-billion next year from pushing off purchases.
If those delayed purchases do go ahead later, the spending will have to be booked in budgets by future governments over a period of years – at a time when, according to the government's defence plans, Ottawa will also be paying for multibillion-dollar purchases of new fighters and ships that will take up big chunks of the defence budget.
Plans to buy the controversial F-35 fighter jets were not affected by the current budget, because costs from the purchase will not show up on government books until at least 2016. The budget said only that the government will buy an "affordable" replacement for the current CF-18 fighter fleet.
In all, the defence budget for the rest of Mr. Harper's term will be billions less than the $21.2-billion spent last year. The cuts won't bring the defence budget back to the level it was at when Mr. Harper took office, Mr. Perry noted, but they will undo a significant part of the increases.
It's not clear, however, precisely how much that defence budget sum will be, because the government refused to provide a figure for the total defence budget in the coming year or future years affected by the budget.
Before the budget, the Defence Department reported in government estimates that it would spend $19.8-billion in the 2012-13 fiscal year, and a spokesman for Defence Minister Peter MacKay said that amount will now be reduced to $19.5-billion.
But because the estimates use a different accounting method from the budget, that figure doesn't include the $500-million the government says it will save that year from delaying capital spending. Based on figures from the previous budgets, the cuts would bring the defence budget to roughly $19-billion, less than it is now, in 2014-15.