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Canada's military seeks a strategy to fit 2011 budget realities

This week, for the first time since Stephen Harper took office, there are no Canadian Forces on combat operations overseas.

Now, the military is being thrust into the peacetime battle over budgets. But the map of the battlefield is out of date. The government's 2008 long-term defence strategy still rests on spending budgets which are currently being cut. The strategy needs an update.

With the end of Canada's mission in Libya, which began before six years of combat in Kandahar had ended, the Canadian Forces are quickly packing up kit, with the seven CF-18s and other planes expected back at base by the weekend.

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Defence spending increased, especially for the army, over the years of Afghan combat. But the military no longer has the wartime narrative that grounded public support for spending, and it fears peacetime cuts. Combat operations are winding up amid a European financial crisis that's feeding fears of recession or stagnation. Some had hoped the military would be spared cuts, but they're coming.

In August, before he retired, Lieutenant-General Andrew Leslie, who was given the task of identifying ways to cut $1-billion from the defence budget, recommended a battle of the bulge, cutting thousands of headquarters jobs and 30 per cent of the $2.7-billion spent on professional and services contracts.

The former chief of the defence staff, General Rick Hillier, warned the recommendations would "destroy the Canadian military." His argument didn't seem to be with Lt.-Gen. Leslie's priorities for cuts, but with making big cuts at all.

That argument appears lost. Two budgets have confirmed the Harper government will cut $1-billion a year, about 5 per cent, as of 2013. On top of that, the Defence Department, like all other government departments, is now presenting two options for more cuts, either 5 per cent of its budget(about $1-billion) or 10 per cent, so the government can choose how much more to slash. Defence is unlikely to escape that round of belt-tightening.

Still, there are hints there is some flailing around about how to cut. There's talk of scrapping the navy's second-hand submarines, still not up to snuff after huge spending. A memo on cutting real estate left Defence Minister Peter MacKay juggling the risky question of closing bases.

Gen. Leslie's report led to hand-wringing in the military. The Defence Department identified $1- billion in "savings" months ago, but hasn't said what they are. Mr. MacKay's spokesman, Jay Paxton, said it "identified savings that do not affect the core capabilities or readiness of our military."

Mr. Harper made backing the military a big part of his political identity, increasing spending each year by about $1-billion. His government says its 2008 defence strategy is still the blueprint. But the strategy projected $490-billion in spending over 20 years and budgets have since lopped $44-billion from that, with more likely to come.

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But there's almost a whole navy and air force to buy in the next 20 years, and the job might be botched if future purchases do not fit into current budget plans. The costs can be accounted for over decades, but only so many mortgages can be paid at once. Capital equipment budgets are about $3-billion now; by 2017, new fighters and frigates will each cost $1-billion a year, even if they aren't over budget.

"At some unknown point, you run out of money again," said Queen's University defence expert Douglas Bland. "You could end up with a one-capability armed force. We could end up with a very strong navy and a weak air force, reduced to transportation operations."

Half the defence budget pays people, so numbers must be cut, Mr. Bland said, and some things must be cut in big ways, or spending will creep back. Gen. Leslie, who found administrative jobs grew by 57 per cent since 2004, suggested starting there.

But soon, before the choices shrink, the government's going to have to say how it's going to fit the military it planned for in 2008 into the realities of 2011.

Campbell Clark writes about foreign affairs from Ottawa

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