By Ken Pole | February 12, 2014 Estimated reading time 2 minutes, 36 seconds.
Ongoing delays in several major Royal Canadian Air Force capital programs are understood to be a factor in the federal government’s decision, unveiled in its Feb. 11 budget, to defer more than $3.1 billion in planned Department of National Defence (DND) spending to the 2016-2017 period.
Although not mentioned by Finance Minister Jim Flaherty in his budget speech to the House of Commons, the postponement, which was outlined broadly in the main budget document, evidently is designed to “ensure funding for . . . planned procurements in future years.”
A government spokesman in the media lockup before the budget was tabled in the House told Canadian Skies on a background basis that the decision “reflects DND planning” on several major procurements, including new fighters, maritime helicopters, and fixed-wing search and rescue aircraft.
The immediate impact on DND is a key element of the government’s determination to eliminate the annual deficit and possibly show a surplus early in the 2015-2016 fiscal year. The budget included a $3 billion contingency fund, which means the government is technically already in a surplus position, but Flaherty said during the media lockup that he prefers to wait for a “clean” surplus next year.
He also insisted that the Conservatives are not backing away from their long-term support for the military. Even so, DND will have $592 million carved from its budget in 2013-2014, followed by $575 million in 2014-2015, $900 million in 2015-2016 and $1,075 million in 2016-2016. The total of $3,142 million over four years represents nearly 34 per cent of the government’s overall spending cuts in that period; the rest would come from various minor tax tweaks as well as “managing compensation costs” in the public service.
Despite the immediate fallout for major capital programs, the government said it is “taking action to ensure that its defence spending supports high-quality jobs and business opportunities in Canada.” The core of that action is the updated procurement strategy, unveiled a few days before the budget by Public Works & Government Services Minister Diane Finley, whereby DND’s role in major purchases is being diluted.
