Breaking Rank: A Citizens' Review of Canada's Military Spending
Economic Note Series 07/02
Motivation
The Polaris Institute, a public interest research organization based in Ottawa, released a study recently (Dec 11, 2002) on Canada's military spending. The author of the study is Mr. Steve Staples, Director of the Polaris Institute's Project on the Corporate-Security State. This note provides a summary and a critique of the study.
The Report
Mr. Staples' main theme is that Canada's military spending is already high and any increases will not improve the citizens' security. In addition, the department should spend its budget wisely and re-direct capital funds that are being wasted on â Å“unnecessary military equipment and capabilitiesâ ?. The author also argues that the 1994 White Paper â Å“is woefully outdated and mired in Cold War thinkingâ ? and a public review of the defence and foreign policy is required. Mr. Staples also suggests that there is a link between defence spending and economic globalization since trade related contentions are creating conditions for â Å“conflict and generating the demand for the military protection of economic interestsâ ?.
To make his case, Mr. Staples looks at six premises that argue against increased defence spending:
1. Defence spending is currently high
2. The current defence policy is geared for war
3. Traditional U.N. peacekeeping is abandoned by DND
4. Globalization is creating terrorism and the military protects globalization
5. There is mismanagement and waste in DND
6. Defence lobby groups are the main drivers .
In subsequent paragraphs these themes are elaborated upon and critiqued.
Defence Spending
Mr. Staples skilfully uses DND's own convoluted argument that in terms of actual dollar spending Canada ranks 6 th in NATO and avoids the less flattering defence as a proportion of GDP (ranks Canada second to last). The author believes that â Å“ Canada's military spending as a percentage of GDP is used by members of the defence lobby to make Canada's military spending seem very low in order to build an argument for more military spending â ?. Unfortunately, for an alliance such as NATO, the best measure of members' defence contribution is â Å“ability to payâ ? and this is approximated by defence budget as a proportion of a country's income, or GDP.
Mr. Staples also believes the actual expenditure gross of revenues is a better measure of defence burden than the main estimates or expenditures net of revenue. From the â Å“cost to governmentâ ? or â Å“delivery of defence capabilityâ ? point of review, the expenditures gross of revenue measure may distort the reality as the revenues are cost recovery for services provided to other government departments or foreign military. In addition, the budget figures include portfolios and expenses that are not related to the core defence activity. Examples include the Communication Security Establishment and funds earmarked for disaster aid to provinces. Discussing the budget cuts of the mid 1990s, Mr. Staples opined that despite the reduction in the 1990s, the current spending is 19% greater than 1980-81 defence expenditures in real terms. This is just another play with numbers, one can also say the current level is about 18% below the levels of 1990-91 (before the budget cuts started). Alternatively, one can also point out that during the same period Canada's GDP (income or tax base) grew by 70% in real terms.
Defence Policy
The 1994 White paper is outdated according to the author and public debate on a new foreign and defence policy is suggested. Despite the fact that the White Paper was written after the Cold War, the author believed that the call for â Å“Multi-purpose combat capable forceâ ? seemed to suggest old and unrealistic vision.
Peacekeeping
Looking at current Canadian Forces deployments the author lamented, â Å“ The Canadian Forces were deployed in Afghanistan to fight a ground war under U.S. command. This is a stark departure from the lightly armed peacekeeping role Canada proudly played in trouble spots like Cyprus for many yearsâ ?. Regrettably, the study failed to realize that traditional peacekeeping operations like Cyprus are no longer the norm, but the exception as collapsed states, ethnic cleansing and humanitarian interventions dominate the current largely hostile environment.
Globalization
Mr. Staples believes globalization and military expenditures are linked. He believes that â Å“Canada's international trade policy supports the expansion of trade liberalization and deregulation through free trade agreements. Canada plays a leading role in the World Trade Organization and Canada's foreign policy is increasingly dominated by the trade agenda. This means that the government could easily define the defence of Canada's national economic security as the defence of globalization itself. Likewise, nations, organizations, and even individuals who challenge the unimpeded expansion of economic globalization could thus be seen as national security threatsâ ?. This intricate conspiracy theory is difficult to verify, as it is neither grounded on solid empirical research nor on a logical and rigorous strategic analysis.
Mismanagement, Waste and the Powerful Defence Lobby
The issue on mismanagement draws heavily on the Auditor General's report on government finances including DND. In particular , cost over-runs and questionable contracting practices on capital projects such as NATO Flight Training Program, Patrol Frigates, MHP, Submarine Capability Life Extension (SCLE) Project, The Very Long-Range Communication System (VLRCS), and JSF. These are well known facts that the department has or is responding to formally.
The Canadian defence industrial base is small and mostly a niche player. Only Bombardier, CAE and the Diesel Division of General Motors make it the top 100 defence industries in the World. Most importantly, these companies do not rely heavily on DND procurement. The notion of a powerful defence lobby is a bit of a stretch.
