There has been much talk of late of the need to increase substantially the Defence Budget but rarely does one see reference made to actual $ spent. We have seen calls by the Auditor General, the Senate and Commons Committees on Defence, and other informed defence sources all strongly suggesting increased annual spending for defence of $1 to $2 B annually. This may alarm some, but given the credibility of the sources, it indicates the perilous position the Defence department finds itself in when looking at what they anticipate being asked to do in the months and years ahead. One also hears statements such as those made by the Prime Minister who in conversation with CBC's Peter Mansbridge proudly stated that he had given 25 % more funds to Defence over the last three years and feels that monies should be used for other government priorities.

Let's look at the funding provided to DND over the past decade using the government's own figures as published in various publications, notably the Minister of Finance's 2001 Budget Plan, Statistics Canada documentation, Government Estimates for the decade, and DND's "Making Sense Out of Dollars".

Federal Gov't Expenditures as a %
	1992-93	2001-02
Transfers to Individuals ( EI, OAS, etc)	27%	23.9%	(-3.1%)
Interest on Public Debt	25%	22.9%	(-2.1%)
All other Gov't Dep'ts & Crown Corps	24%	32%	(+8%)
Transfers to Other Levels of Gov'ts	16%	13.9%	(-2.1%)
DEFENCE	8%	6.3%	(-1.7%)

How then does this decrease in Defence expenditure percentages equate in real dollars for spending. Again the government documentation provides the answers (all figures in 2001 year $).

	1992-93	2001-02
DEFENCE	$ 13 B	$ 11.39 B

Quite clearly, Defence spending in real dollars has markedly declined over the last decade in terms of real purchasing power. In fact, from the documentation one sees that today's spending levels have a purchasing power roughly equivalent to that of the early 1980s, and well below the funding levels of the early 1990s.

What has this meant? What has been the impact of this funding decline on the Canadian Forces? Most noticeably, of course, has been the significant reduction in personnel over the decade from approximately 80,000 Regular Force personnel in 1992/3 to approximately 58,000 in 2001/2 - an almost 30% reduction in personnel. Yet the services will tell you that the operational tempo has increased during the same period. The bottom line then is that more and more is being asked of fewer and fewer people. If this continues, retention of skilled personnel, already a problem, will become an even graver concern to the forces.

Funding to purchase new and modern equipment has shrunk from approximately 25% of DND's expenditures in 1992/3 to less than 19% today. That is 6% of a budget that in itself has been reduced by 9%. However, translating the 1992-93 expenditures into 2001 dollars and comparing that figure with the 2001-02 expenditures does not reveal the full extent of the loss in DND purchasing power because the Dep't of Finance fiscal inflation percentages involved have traditionally been significantly smaller than the defence procurement inflation figures actually experienced by DND when purchasing.

Conventional wisdom and historical data suggests that an appropriate level of Capital equipment spending is at least 25%. The result of this capital underfunding is that our people are being asked to do more but with ageing and increasingly outdated equipment. Capital equipment spending at the right level is critical to defence forces. Moreover, it must be reliably forecasted and resolutely sustained over a long term; for procuring defence equipment is not like going out to buy a car - constructing ships, acquiring combat aircraft, helicopters or major army equipment, requires at least 5-10 years of assured program funding. What is occurring today with this decline in Capital spending is akin to the "Rust-Out" scenario of the early 1980s and that required a substantial infusion of $ to defence to rectify. It appears we will learn this lesson yet again.

As for Defence receiving 25 % more funding over the last three years, one could argue the 25% figure stated but the reality is that the additional dollars given by the government to defence has gone to paying the bills for unforecast recent operations, such as Afghanistan, or to filling the supply bins and maintaining equipment such that our forces could respond to government commitments and go in harm's way. Sadly, little if any of the additional dollars went to correcting the negative effects of years of decline in defence dollars. As well, and significantly, those additional dollars are not included as part of the "baseline" funding level for the department.

The government of the day's assurances notwithstanding, it is time we Canadians asked ourselves whether the Canadian Forces can continue to meet its mandate to the Canadian people. We may not like the answer.

© Copyright NOAC 2003