The Defence Budget [superthread]

[FSTO]

The Super Hornet in RAAF service is not a replacement for the "legacy Hornet". It is an interim measure to bridge the gap between the retirement of the F-111 and the (much delayed) arrival of the F-35. In other words, the Super Hornet is an temporary F-111 replacement.

I think the point of his comment is that Australia appears (from up here anyway) to get more out of their defence dollars then Canada does.

 

[Gunner98]

And re: Spain:  I suspect they still have universal conscription, which saves a lot of money on your personnel budget.  As well, our pay scales compare favourably with any army in the world.

Suspect is like a shot in the dark, fact is Spain ended conscription in 2001 after 230 years- http://www.telegraph.co.uk/news/worldnews/europe/spain/1332085/Conscription-ends-in-Spain-after-230-years.html

 

[aesop081]

I think the point of his comment is that Australia appears (from up here anyway) to get more out of their defence dollars then Canada does.

I gathered that, but have we lost the ability to make a point using facts ?

 

[Kirkhill]

Every sensible country maintains just enough military power to meet their national vital interests, at home and abroad.

......

Canada tries to maintain just enough military power, at the lowest possible cost, to buy us 'seats' at various international tables.

........

A few days ago I came across this entry in the Quebec History Encyclopedia.  I believe it demonstrates how much that attitude is bred in the bone of our "administering classes".  Hugh Allan was one of the Allan Steamship family and part of that set of Anglo-Scots Montrealers that Quebecers love to hate but were the driving force behind Canada.  Note the number of directorships and clubs on his resume.  It worked for those men at a personal level and was perceived to be the key at the professional and international level.

Just an aside.


WRT the budget and specifically the F-35:

What happens to the budget estimates on F-35 costs if we make the following assumptions:

Buy a limited number of air frames (original capital cost)
Lease engines supplied and maintained by OEM (Operations & Maintenance Budget)
Buy training services on an ongoing basis from the US (Personnel Management Budget - reverse of the BCATP and the NATO Hawk Plan at Moose Jaw)
Fund expeditionary activities (like Afghanistan and Libya) out of general revenues as extraordinary expenditures rather than the Defence Budget.

Fund DND to purchase training and maintenance to support and sustain minimal standing obligations (standing patrols, observation posts and quick reaction forces).  Ensure that there is retained a step-up ability to surge a "suitable, credible, politically acceptable, sufficient" field force or two.

With that model in mind I believe that the Government could credibly claim that they can field, for example, 65 F-35s and maintain a couple of 4 ship QRFs indefinitely on a very modest budget. 

The fly in the ointment is that after that minimal obligation has been met then the operating budget will determine how much or how little training time and "engine" time can be purchased in a given year.  On the plus side; moving the expeditionary costs off the annual estimates for the Department could both result in the Department getting what it needs when it needs it (with the politically astute necessity of supporting the troops) while at the same time taking some of the heat off the Department by maintaining a smaller standing budget.

I don't trust politicians any more than I trust bureaucrats or salesmen - or for that matter pimps, panderers, proselytizers or the press - but it occurs to me that there are always many ways to skin cats.  And the politicians, bureaucrats and salesmen of the world are very astute when it comes to finding ways to modify assumptions so as to find the single method that will result in the least pain ..... to them.  The yowling of the cat is a secondary matter.

 

[Nemo888]

I can't believe the Conservatives are cutting 10% of DND staff (2100) and 15%(5% per year for 3 years) of Contractors. I can't reprint it here becasue that journalist is banned from the site.  The only thing that comforts me is that if DND is getting axed like this departments they don't like will be cubicle ghost towns.

So much for priority hiring though. Won't be many places to go soon.

 

[aesop081]

I can't believe

Why ? What did you expect them to do ?

 

[FoverF]

I gathered that, but have we lost the ability to make a point using facts ?

Whether the Super Hornets will be temporary or not remains to be seen.

But you are correct, the Super Hornets are not intended as replacement of the legacy Hornets, they are the replacement of the F-111.

Which is what I should have said in the first place, because in addition to being more accurate it also better supports my point, as it illustrates yet another capability gap (operating different fast-jet types in complimentary roles).

 

[Edward Campbell]

From another page:

So the PBO can't do basic arithmetic and make a $1 billion addition error, they conclude canceling a multi-billion dollar second engine cost will increase the program costs and  they invent some truly, truly, bizarre  estimating methodology for  future aircraft costs based on the weight of an aircraft and people still take Kevin Page/the CBO seriously?


Wonder how Page figured out how much 8 million lines of software code weighs?

Parliamentary Budget Officer Kevin Page's estimates have, finally, been scrutinized in this article, reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/politics/double-vision-flahertys-fiscal-forecasts-win-out-over-watchdogs/article2182950/

Double vision: Flaherty’s fiscal forecasts win out over watchdog’s

BILL CURRY
OTTAWA— Globe and Mail Update

Published Wednesday, Sep. 28, 2011

Parliamentary Budget Officer Kevin Page releases his latest forecast Thursday challenging the Conservatives’ deficit numbers, but a review of his record to date reveals his estimates are less accurate than the government’s.

Mr. Page’s Thursday report – which is expected to expand on the PBO's concern that Ottawa faces a long term deficit due largely to demographics – comes in advance of Finance Minister Jim Flaherty’s fall economic update, which has not yet been scheduled.

Since his March 2008 appointment as Canada’s first Parliamentary Budget Officer, Mr. Page’s numbers have been at odds with government estimates over everything from fighter jets to infrastructure spending, and most recently the deficit.

Now, after three years of prognosticating since Mr. Page’s arrival on the national scene, it is possible to look back and see which side has the better track record when it comes to Ottawa’s bottom line.

An analysis by The Globe and Mail reveals the edge goes to the government. Reports from Finance and the PBO since Mr. Page’s appointment show that in 15 comparable forecasts, the government beat the PBO nine times. The PBO forecasts were more accurate four times and there were two ties.

Measured another way, the Finance Ministry comes out slightly ahead with an average forecasting error – the difference between the projected surplus or deficit and the final number – of $12.6-billion, compared to $13.2-billion for the PBO.

Deficit forecasts are particularly important now amid growing warnings the world economy will slip back into recession. Deficit targets are also being used as justification to cut government spending – Mr. Flaherty has vowed his Conservative government will erase the nation’s $29.6-billion deficit by the 2014-15 fiscal year – without major public-service layoffs or cuts to health and social transfers to the provinces.

Mr. Page, meanwhile, warns that Canada faces a permanent, long-term structural deficit unless Ottawa cuts deeper than planned or raises taxes to cover the costs of Canada’s aging population.

Some independent economists told the House of Commons finance committee Monday that Mr. Flaherty may have to push back that target if the economic growth continues to slow.

Finance and PBO each released two reports at the onset of the recession in late 2008 and 2009 that are the source of their most dramatic forecasting errors. Finance’s 2008 fall update for 2009-10 proved to be off by $49.7-billion. A similarly timed report by PBO – its first forecast – was off by an even greater amount, $51.7-billion.

But the accuracy of the forecasts from both sides has improved since the peak of the recession.

Both Finance and PBO were provided with the opportunity to review the Globe and Mail’s comparison and provide input and comment.

“We will let the chart speak for itself, which I think it does well,” Chisholm Pothier, Mr. Flaherty’s spokesman, said in an e-mail.

Mr. Pothier pointed out that private-sector economists and the International Monetary Fund were also caught off-guard by the depths of the global recession and its impact on government bottom lines around the world.

For his part, Mr. Page noted that the differences are minor and based on a very small sample of three years.

“All told, the difference between Finance and PBO forecasts (on average) is very small,” he said in an e-mail. “I think it should be kept in mind that PBO provides its forecasts and analysis essentially with a full-time staff of three people, whereas Finance has an entire branch that is responsible for preparing budgets and updates.”

The Conservatives created the PBO, but the government has since faced questions about the level of funding provided and its willingness to hand over government spending data.

Finance Canada says the department has 10 full-time employees who work on fiscal analysis and forecasting, but only five of those work solely on fiscal forecasts.

Until this June, the PBO and Finance both relied on the same average of private-sector forecasters for assumptions regarding the strength of economic growth. That means any differences of opinion were focused on the impact of fiscal decisions like government spending or restraint.

In June, PBO announced that it will produce its own forecasts for economic growth and will no longer rely on the private-sector average.

The last time Ottawa erased the deficit in the mid-1990s, some accused Liberal finance minister Paul Martin of using excessively dire deficit projections to justify painful spending cuts to health, education and employment insurance. The ultimately inaccurate forecasts also set the stage for the government to later boast of beating its own targets.

One of the economists critical of the Martin approach, Jim Stanford of the Canadian Auto Workers, sees this tactic playing out again with the Conservatives.

“The billions in spending cuts that Mr. Flaherty is considering are, in my view, wrong and I think he too has painted the fiscal outlook darker than it is to try to justify those planned cuts,” he said.

Yet Mr. Stanford acknowledges his theory doesn’t explain why the PBO – an independent body – warns Ottawa won’t meet its deficit targets.

“I think the PBO folks are too bleak about the deficit numbers, too – especially their claim that we have a ‘structural” deficit,’ which I do not accept,” Mr. Stanford said.

Methodology

To compare the forecasting record of Finance and the PBO, The Globe and Mail based its calculations on seven reports per organization covering the period of November, 2008, to June, 2011. These reports were chosen because they could each be paired with a comparable forecast released around the same time, based on the same public information.

The forecast covers three years, but only the first two years are measured against final numbers. The final deficit number for 2010-11 have not yet been announced. For that year, the forecasts are measured against the latest deficit estimate in the June budget.

Now this comparison is, admittedly, of budget deficits rather than F-35 costs but it indicates that, compared to the Government of Canada, Page errs, fairly consistently, on the pessimistic side. There is no reason to believe that his analyses of e.g. fighter planes does not suffer from the same pessimistic bias.

 

[Haletown]

Well said.

Page is a very political operative. He realizes his survival requires him to be government negative so the Opposition will protect him. 

In short, he is a bog standard career bureaucrat well versed in playing the Ottawa game.

That F-35 report was ludicrous, it plumbed new depths of totally inept analysis.  Projecting future costs based on historical aircraft weights . . .

 

[Oldgateboatdriver]

Well, here's my suggestion for deficit cutting: Get rid of the PBO - or should we call him by his real designation OOBO (Official Opposition Budget Officer).

Let's face it, it is the Government's job to prepare and present a budget to  Parliament and the Official Opposition's job to analyze and criticize the government for any error therein before the whole Parliament votes on the said budget. The Official Opposition already has a "research" budget to hire all the so called advisors and experts it may need to carry out its function. Why should we, as taxpayer, then pay on top of that for an allegedly neutral officer of Parliament to provide equally allegedly "impartial"  analysis of the government's budget, when such analysis can only serve the opposition?

 

[Edward Campbell]

Well, here's my suggestion for deficit cutting: Get rid of the PBO - or should we call him by his real designation OOBO (Official Opposition Budget Officer).

Let's face it, it is the Government's job to prepare and present a budget to  Parliament and the Official Opposition's job to analyze and criticize the government for any error therein before the whole Parliament votes on the said budget. The Official Opposition already has a "research" budget to hire all the so called advisors and experts it may need to carry out its function. Why should we, as taxpayer, then pay on top of that for an allegedly neutral officer of Parliament to provide equally allegedly "impartial"  analysis of the government's budget, when such analysis can only serve the opposition?

I disagree.

I think we need a bigger, better PBO. I think the PBO is in the right place - subordinate to the Librarian of Parliament, but so should be several other parliamentary officers, but not, of course, the Auditor General of Canada who needs a separate level of independence from everyone, including Parliament.

The Librarian of Parliament needs to be able to serve committees (HoC and Senate) and the committees of the whole with staff and expert, unbiased advice that is equally as expert as that provided to the government of the day by the civil service but is free from direction from anyone except the Librarian her (or him) self.

Parties - those with 12 or more seats in the HoC and or n senators should be allocated resources (money) to hire expert, partisan staff to advise committee members - there are a lot of parliamentary committees so there need to be a lot of these partisan staffers. They, partisan parliamentary staffers, would lessen the opposition's dependence on outside lobbyists and special interest groups like the Rideau Institute because MPs would have more, better information at hand.

That's hundreds of new people - mostly lawyers and economists - costing many, many tens of millions of dollars, but I think 'better' governance is worth the expense.

My  :2c:

 

[Edward Campbell]

After being caught being less accurate than Jim Flahery and the Finance Department ...

... PBO Kevin Page makes a misstep according to this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/politics/ottawa-notebook/kevin-page-event-raises-eyebrows-and-sends-liberals-scrambling/article2197689/

Kevin Page event raises eyebrows – and sends Liberals scrambling

BILL CURRY
Ottawa— Globe and Mail Update

Posted on Tuesday, October 11, 2011

A federal Young Liberal organization is scrapping plans to receive political donations at an event Tuesday evening featuring Parliamentary Budget Officer Kevin Page.

Just hours before the event in Nanaimo, B.C., the lead organizer told The Globe and Mail money raised at the door would go the Vancouver Island University Young Liberals. The organizer also said receipts would be offered to those wishing to claim a political donation for tax purposes.

But after The Globe asked Mr. Page to comment on the optics of his appearance at an event that would be raising money for the Liberal Party, the Parliamentary Budget Officer said he would refuse to appear unless he was assured any profits would go to charity. He said he was told the event was non-partisan and that he would be contacting the organizer.

Minutes later The Globe received an email from the organizer explaining that plans had changed.

“We just now decided to clear the air and to wash away any misunderstandings or misconceptions,” wrote Mike McDowall, who is organizing the event and who is also vice-president of the federal Liberal association for Nanaimo-Alberni. “All the proceeds will go to pay for costs and any other profits raised will go to a local Nanaimo food bank.”

Chisholm Pothier, a spokesman for Finance Minister Jim Flaherty, described Mr. Page’s planned appearance at the event as “deeply disappointing” and said it calls into question the neutrality of his position. “One would think he would know better,” he said in an email.

The event in Nanaimo was promoted on the website of the federal Liberal Party.

Advance tickets were $5 for students and $10 for adults. It was billed as a non-partisan event and there was no mention of raising money for the Young Liberals.

Yet when The Globe first contacted Mr. McDowall Tuesday, he explained that money raised at the door would go the Young Liberals on campus.

“Technically the money will be going to the VIU Young Liberals, part of their financial assets,” he said when asked about what would happen to the money raised at the event. “We are giving the option for people to sign off if they want to get a tax donation... We’ll be mentioning that.”

The Parliamentary Budget Office is non-partisan and staffed by public servants. Its reports challenging the federal government’s financial numbers have at times created tension between Conservatives and the office.

When asked by The Globe about the optics of appearing at a Liberal-organized event, Mr. Page said there was never any mention of partisan fundraising.

“If there are any surplus funds (after cover for [the] hall or technology support or coffee) I will request it go to a local charity or I will not speak,” he wrote.

Local NDP MP Jean Crowder said she and other New Democrats would be attending the event. While she did not expect the organizers would make a large profit, she said it would be “problematic” for Mr. Page if money did go to the Liberals.

This is amazing. Page is a smart guy ... how could he be so careless? Or is he flying his (new? old?) partisan Liberal colours before he departs?

 

[dapaterson]

Smells to me like a Liberal shenanigan; I don't think Mr Page would pull a stunt like that.

...not that young political staffers ever make mistakes...  :

 

[GAP]

He may be a bent Liberal or not, but you can't fault him for his vast experience in immediate backpedalling once he was confronted with it.....

 

[Edward Campbell]

There's a bit of minor and, I'm sure, unintentional humour on the Globe and Mail web site. It shows/says:

Kevin Page event raises eyebrows – and sends Liberals scrambling
  GLOBE SURVEY Double vision: Flaherty’s fiscal forecasts win out over watchdog’s
  DEMOGRAPHICS Find $46-billion to pay for aging population, budget watchdog says
  PROFILE Kevin Page: Bean-counter with a backbone


Which, more or less, says:

Kevin Page event raises eyebrows – and sends Liberals scrambling
  GLOBE SURVEY Double vision: Page is not very good at guessing about finances
  DEMOGRAPHICS Page, who isn't very good a forecasting, forecasts a need for $46-billion for something or other
  PROFILE Kevin Page: Bean-counter may not be very good, but he stands up for himself and defends his mistakes

 

[Haletown]

and I wonder who paid for his airline to Nanaimo + living expenses for this little gig.

It would be too funny if it turns out he hitched a ride on a Challenger  :nod:

 

[OldSolduer]

and I wonder who paid for his airline to Nanaimo + living expenses for this little gig.

It would be too funny if it turns out he hitched a ride on a Challenger  :nod:

I was just thinking that.  >

 

[a_majoor]

While it is important that Parliament have non partisan officers to carry out the various background activities, I am not exactly feeling confident for two reasons:

1. What happens when a "non partisan" organizations becomes overtly partisan like Elections Canada?

2. What is the value of these organizations when they can be and are often ignored (like the Auditor General)?

As most regular readers know, my answer isn't to pay for "better" government, but rather take out the shears and have less government altogether. A government with fewer powers and a smaller footprint on our lives will automatically have less abilty to meddle in our affairs, commit colossal blunders or carry out crony capitalism.

 

[Edward Campbell]

Although he doesn't specifically mention DND, Kevin Lynch, former professional head of our Dept of Finance and former Clerk of the Privy Council, gives some counsel on how to reduce spending and be more productive, at the same time, in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/opinions/opinion/stimulus-austerity-we-can-have-both/article2220167/

Stimulus. Austerity. We can have both

KEVIN LYNCH
From Tuesday's Globe and Mail

Published Tuesday, Nov. 01, 2011

The reality of fiscal restraint is descending on all governments and, despite Canada’s past prowess, complacency is a risk. Let’s not let tangential debates about whether the fiscal books should be balanced in 2014 or 2015, or whether taxes are too high or too low, distract policy-makers and the public from the core job at hand: putting Canada on a sustainable fiscal footing and doing so in a way that makes government more productive and innovative rather than simply doing less of the status quo.

The fiscal challenges facing Canada should not be underestimated, particularly in a number of provinces led by Ontario. The global recovery will be longer, slower and more volatile than expected, and these reduced growth prospects will negatively affect Canadian tax revenues and increase social safety net spending. In facing such a worsened economic reality, we are no different than any other OECD country; where we should be different is how we respond fiscally.

In much worse fiscal circumstances in 1995, government did not just cut spending, it realized it had to innovate in how to deliver government differently and more productively. This required “cuts and investments,” new thinking about how to deliver government services to Canadians, and the willingness to make difficult choices.

At Industry Canada, where spending reductions were more than 40 per cent of the departmental budget, the reduction target was actually exceeded in order to reinvest in innovative ways of serving clients: shifting from subsidies to strategic information delivered electronically; new low-cost, high-impact initiatives such as Schoolnet to connect all Canadian schools to the Internet; reinvestment in university research through new models such as the Canada Foundation for Innovation and the Canada Research Chairs; and modernizing framework policies to encourage growth rather than subsidies to finance it.

The challenge today is somewhat different than then – namely, how do we maintain our relatively strong fiscal position in a difficult global environment?

Governments have to use the necessity of fiscal restraint as an opportunity to make government more efficient, more effective and more relevant, not just lower cost. They should avoid simplistic across-the-board cuts to government operations, which typically starve capital and investments in innovation and are too often viewed as a painless source of deficit reduction.

The federal government is right to look for savings in its program spending, and to do so in targeted ways. It is also right to avoid the false debate between stimulus on the one hand and austerity on the other – in a sound fiscal framework, you can and should have both. This requires innovation in policy-making that is responsive and responsible.

Sustainable fiscal balance requires transparently eliminating or reducing programs with commensurate reductions in budgets and employment, and eliminating inefficient or outdated tax expenditures. Government should consider modernizing its “back office” by simplifying and automating administrative processes to reduce staffing levels and costs. While shifting to a smaller, more information-technology-enabled government work force, they should avoid the mistake of the 1990s and continue the recruitment of talented young Canadians to ensure a high quality and innovative public service.

While the fiscal reality will be smaller government, the objective should be more innovative, flexible public services. Why shouldn’t we have the option of “online government” in the same way we take online banking for granted? Why can’t we reduce the red tape and regulatory burden of government, particularly on small business, not by diminishing regulatory standards but by taking a taxpayer-centric approach to government rather than a departmental approach to taxpayers?

Why are we so hesitant to embrace public-private partnerships that mobilize private capital, are financed through user-pay models rather than direct tax dollars, and can set whatever level of auditable service standards the public deems appropriate? Why not consider an overhaul of our framework policies from competition policy to intellectual property to investment to trade to immigration and others as a low-cost, high-return way to improve Canada’s long-term growth prospects? Why is government not a risk-sharing partner in the market launch of innovative new goods and services by Canadian firms through its purchasing policies?

But our fiscal challenges run deeper and longer term. Governments need to address the fiscal dilemma posed by declining productivity growth and aging demographics. These produce the double fiscal wallop of lower revenue growth than we’ve experienced for decades and higher spending pressures for health, pensions and other demographically related spending.

Squaring this circle of sustainable fiscal balance comes back to increasing innovation and productivity performance to rebuild our sustainable growth and adjusting our entitlement programs to the growth economy we will have. Ultimately, fiscal balance and growth must go hand in hand.

Kevin Lynch is vice-chair of BMO Financial Group.

It is my impression, based upon what I read here and what I hear at periodic luncheons in the Mess, that DND, including the CF, could do with a lot of streamlining involving both better (and smaller) "back office"* operations and fewer people managing (outdated? duplicate?) programmes.

Spending growth, which DND needs, and spending growth beyond that promised in the Canada First Defence Strategy, which Canada needs, requires that we, Canadians, "rebuild our sustainable growth" and recognize that we must and, I believe can have fiscal balance (austerity) in tandem with growth (stimulus).


__________
* The large HQs here in Canada and the people, processes, procedures, IT and communications that serve them. The "front office" is the lower level, operational, formations and HQs that employ forces at home and abroad.

 

[Edward Campbell]

More on the defence budget in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/news/politics/canadas-military-seeks-a-strategy-to-fit-2011-budget-realities/article2223432/

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

CAMPBELL CLARK | Columnist profile
From Thursday's Globe and Mail

Last updated Thursday, Nov. 03, 2011

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.

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.

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

The Canada First Defence Strategy promises to cut defence spending when measured as a percentage of (likely/projected) GDP by about 2035, and now there is a perceived requirement to cut further.