Billions more for defence, but Canada's military still faces an old budget squeeze
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military → face → squeeze
Operational spending review comes as expenses grow for salaries, equipment
The Canadian military is on the verge of another round of internal belt-tightening, despite an enormous influx of cash from the federal government, CBC News has learned.
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News → come → government
It appears to be a combination of past and current budget initiatives colliding with the expectations and demands associated with the gush of defence spending.
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It → appear → spending
The Department of National Defence has been told to focus its billions of extra dollars on priority areas, including the purchase of much-needed new combat equipment.
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Department → tell → equipment
At the same time, it is still subject to the demand for operations and maintenance reductions announced by the Trudeau government in 2023 and enacted in the 2024 federal budget.
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it → announce → budget
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Those cuts — described at the time as internal reallocation by former defence minister Bill Blair — saw an $810-million reduction in the year they were introduced and planned for $908-million cuts each following year.
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they → give → cuts
A federal official, who spoke on background, said that schedule is unchanged and the previous government's budget directive has not been rescinded.
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directive → speak → background
To that end, the federal Treasury Board Secretariat, which directs day-to-day government spending, is examining defence operational spending with an eye to reducing expenses by 10 per cent, said two confidential sources who were not authorized to speak publicly.
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who → direct → cent
Defence is getting more money overall, just not as much as may have been expected.
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Defence → get → money
Experts warn care needs to be taken with how and where the internal cuts are made and expenses reined in.
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expenses → warn → ?
Military readiness has suffered over the years because of an absence of operations and maintenance funding.
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readiness → suffer → funding
According to the latest federal budget, the current operational readiness of the military overall hovers around 61.3 per cent.
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readiness → accord → cent
A little over three weeks ago, the vice-chief of the defence staff, who manages day-to-day activities within the military, delivered the news that internal savings needed to be found and that the military's aggressive growth plans will also have to be tempered, said a third source, with knowledge of the presentation.
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source → manage → presentation
In 2025, when Prime Minister Mark Carney's government came in, it imposed its own sweeping expenditure review process across the whole of the federal government, but largely exempted the Department of National Defence (DND).
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it → come → Defence
DND has been told to take serious steps to reduce outside consultants, like the rest of the federal government.
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DND → tell → government
As part of meeting Canada's NATO defence spending commitment, tens of billions of fresh dollars have been poured into the military over the last year along with plans to spend more in the coming decade.
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billions → meet → decade
But a lot of that cash is being chewed up by a bevy of promises made by the Liberal government and the wage increase given to members of the Forces.
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lot → chew → Forces
A spokesperson for Finance Minister François-Philippe Champagne said the new government's intention is to protect the Defence Department as much as possible.
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intention → say → Department
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militaries → preppe → Greenland
We have however asked DND, as with every other department, to reorient its spending such that it prioritizes capital expenditures — mechanisms that grow and modernize the [Canadian Armed Forces], improve its readiness in an increasingly dangerous world and render it more competitive — and spends less on operating expenditures," said John Fragos, Champagne's press secretary, in a written statement.
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Fragos → ask → statement
"We want results and our plan to spend less on operations and more on capital expenditure is central to that work and in keeping with our plan to rearm the CAF, grow the economy all while balancing operating expenses by 2027-28.”
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plan → want → 2027
New dollars already earmarked
Dave Perry, president of the Canadian Global Affairs Institute and one of the country's leading experts on defence finances, said in the past when there's been internal belt-tightening it has meant a straight cut, rather than internal reallocation of funds to higher priority areas.
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it → earmark → areas
There's been a lot of fanfare around the enormous increase in defence spending and Perry said that has led to a lot of high expectations within the military about what's possible.
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what → be → military
"I think it's created this impression that there's gazillions of dollars that could be allocated to any number of new initiatives in the near-term window," Perry said.
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Perry → think → window
"And I think that's not really the case."
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that → think → ?
He said he believes there's not nearly as much "available, investable and disposable cash" as people have been led to believe.
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people → say → ?
Defence spending is set to rise from the current $75 billion annually to $95.6 billion by 2030, the Parliamentary Budget Office recently reported.
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Office → set → 2030
Perry said the Defence Department and the military are discovering that much of that cash is already spoken for.
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much → say → cash
Sources say there's also legacy equipment that Defence continues to pay for and plans that have been made which — if stopped — could generate internal savings.
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which → say → savings
One area mentioned was several IT projects that were planned with the thought that the money will come but are now deemed as unaffordable.
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money → mention → thought
HMCS Corner Brook sits in drydock at CFB Esquimalt in B.C. in 2023.
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Brook → sit → 2023
There are also expensive, outdated pieces of equipment with hefty maintenance bills that, if retired, could produce savings.
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that → be → savings
The Victoria-class submarines are an often cited internal example at the Defence Department.
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submarines → cite → Department
It is conceivable, now that the government has initiated the process of replacing the submarines, that some of those projects could be scaled back.
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some → initiate → projects
In 2011, retired lieutenant-general Andrew Leslie was asked to conduct a landmark study of DND that recommended cutting over $1 billion annually by slashing headquarters staff and shifting resources to front-line combat units.
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that → ask → units
It recommended moving or eliminating thousands of civilian and military personnel, primarily concentrated at National Defence Headquarters in Ottawa.
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It → recommend → Ottawa
The report also advocated for streamlining structures, including reducing the number of reservists, cutting back on outside contractors and consultants and reorganizing command levels to maximize efficiency.
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report → advocate → efficiency
Leslie's blunt recommendations faced significant political and bureaucratic resistance.
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recommendations → face → resistance
Only a portion of the sweeping cuts he recommended were implemented.
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he → recommend → cuts
In a recent interview, Leslie said he had one clear, simple message for the Carney government: "If you have to make budget reductions, reduce the Department of National Defence.
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you → say → Defence
…and 8 more, not listed.
The Aporia
