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The Defence Budget [superthread]

ARMY_101 said:
Estimated spent in 2012-2013: $20,678,142,610
Main estimates for 2013-2014: $17,985,310,381
= $2.69 billion reduction

... Not bad.
Just to contextualize a bit, the "Estimated spent" is the final, year-end tally - (almost) always higher than the Main Estimate. For comparison, the Main Estimate going into 2012-13 was $19,799,128,095, so this year's Main Estimate is only $1.8B less (a reduction of about 9%).

And budget cuts allocated by component:

- "Land readiness" (CA): 6.9%
- "Joint readiness" (CJOC, et al): 7.3%
- "Maritime readiness" (RCN): 10.6%
- "Aerospace readiness" (RCAF): 9.6%
 
hamiltongs said:
Just to contextualize a bit, the "Estimated spent" is the final, year-end tally - (almost) always higher than the Main Estimate. For comparison, the Main Estimate going into 2012-13 was $19,799,128,095, so this year's Main Estimate is only $1.8B less (a reduction of about 9%).

And budget cuts allocated by component:

- "Land readiness" (CA): 6.9%
- "Joint readiness" (CJOC, et al): 7.3%
- "Maritime readiness" (RCN): 10.6%
- "Aerospace readiness" (RCAF): 9.6%

What about all the ADMs, CMP, and all the other L1s not considered Army, Navy, or Air Force?  Are they covered under "Support" and internal services?
 
ARMY_101 said:
What about all the ADMs, CMP, and all the other L1s not considered Army, Navy, or Air Force?  Are they covered under "Support" and internal services?
I suspect some of what they do gets rolled into "Joint and Common" (which is bigger than either the RCN or the RCAF, so it's got to be more than just CJOC), but there are a lot of other line items in the Main Estimate they could fall under. These four lines above only account for just over half the total Defence budget.
 
The Program Activity Architecture (PAA) describes the activities of Defence, and is what is used for the attributions of costs.  All done at an extremely high level; units & formations aren't asked or tasked to contribute to it.
 
dapaterson said:
The Program Activity Architecture (PAA) describes the activities of Defence, and is what is used for the attributions of costs.  All done at an extremely high level; units & formations aren't asked or tasked to contribute to it.
True - not everything the RCAF does is "Aerospace Readiness", and not all "Aerospace Readiness" is done by the RCAF alone... but it's a handy thumb-guide to how things will likely break down L1-wise, since we don't really get to see the breakdown by formation. For example, Comd RCN has been quoted in the media as saying he expects an 11% cut to his budget this year: that corresponds quite closely to the 10.5% cut to "Maritime Readiness" in the PAA.
 
Did I read page II-37 of the Main Estimate correctly, that the CBC, after all its vilification of the Conservative Government was actually only cut 0.9%?

12-13  $1,074,319,060
13-14  $1,064,769,960
cut      $      -9,550,000

-9,550,000 ÷ 1,074,319,060 x 100 = -0.889%


Poor CBC...  :'(
 
Federal government accused of deficit slashing by stealth as defence spending $2.3B below budgeted amount
Murray Brewster
National Post
11 July 2013


OTTAWA — New figures from the parliamentary budget office show National Defence hasn’t spent billions of dollars set aside for it during the last budget year in a continuing trend that’s being described as deficit slashing by stealth.

The data on quarterly expenditures in the federal government show that by the end of the last fiscal year in March, the department had spent $2.3 billion less than what was allocated by Parliament.

That’s more than 10% of the annual defence appropriation, which also happens to be the single biggest discretionary line item in the federal budget.

The figures for previous years show that $9.6 billion has gone unspent in defence since the 2006-07 budget year — a trend defence officials have blamed on late equipment projects and an inefficient bureaucracy.

A former commander of the army says this calls for an explanation from the Harper government.

“I am not aware of any other Western armed forces, who are all going through budget reductions, underspending by such a dramatic amount over such a relatively long period of time,” said retired lieutenant-general Andrew Leslie.

He said the spending pattern is either a matter of managerial incompetence or a deliberate policy.

“If it is deliberate, the government of Canada needs to explain why.”

Some of the unspent funds, mostly earmarked for equipment, can be moved to other budgets in an exercise known as re-profiling, but a university expert in defence spending say the continuing pattern makes him wonder if the aim is deliberate.

Dave Perry, of Carleton University and the Conference of Defence Associations, says if it was simply a matter of a faulty process, a government committed to ending inefficiency would have fixed it.  “I really cannot conceive of how this is could not be considered a major problem and why they couldn’t, over the span of three years, address this,” he said.

Perry said he doesn’t believe “that this is entirely accidental” and he’s heard of plans and projects being delayed as a way to make DND’s books look better and make an even greater contribution to deficit reduction

The effect on operations and equipment is magnified by the government’s parallel deficit-fighting plans, which aim to cut baseline appropriations.

Leslie said the effect is like absorbing three big budget cuts all at once. He pointed to Senate testimony from the current army commander and former head of the navy, who both said their operations budgets have taken major hits.  Ultimately, the military’s ability to quickly respond to emergencies and mount sustained operations is affected, he said.

National Defence isn’t alone in not spending what Parliament gives it. The budget office numbers show the federal government as a whole only spends about 90% of what is appropriated.  The RCMP, Transport Canada and Natural Resources and Aboriginal Affairs had a tougher time spending their budgets last year, according to the data.  But the size of the defence numbers and the consistency of the problem make the department stick out.

The numbers released this week are not final, officials at the budget office acknowledged. The federal government will present a final tally on revenue and spending later this year when the public accounts are tabled in Parliament.
 
LGen Peter Devlin makes some candid remarks about the current budgetary situation in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Montreal Gazette:

http://www.montrealgazette.com/news/Hardwon+lessons+Afghan+life+support+outgoing+army/8658566/story.html
images

Hard-won lessons of Afghan war on 'life support,' outgoing army commander warns

BY MURRAY BREWSTER, THE CANADIAN PRESS

JULY 14, 2013

OTTAWA - Budget restraint and under-spending at National Defence have left some of the army's hard-won capabilities from the Afghan war on "life support," says the outgoing commander of the Canadian Army.

The federal government needs to recognize that intelligence operators are as much a part of today's front line as soldiers and tanks, said Lt.-Gen. Peter Devlin, whose three-year tenure as Canada's top soldier comes to an end Thursday.

"I am unusually proud that there is an army that has been reloaded and I've spent an incredible amount of energy and effort to pay respect to the lessons that were learned with blood in Afghanistan," Devlin said in an interview with The Canadian Press.

Much of Devlin's 35-year career in the military was spent in the field in Afghanistan, as well as in Iraq as an exchange officer with the U.S. Army.

But the transition from the front line to Ottawa's political trench warfare can be daunting, and Devlin's candid — but tactful — assessments of the effect of budget-slashing at National Defence have been like fingernails on a chalkboard to a government that's staked much of its reputation on embracing the military.

Before a Senate committee last December, Devlin revealed the army's baseline budget had been cut by 22 per cent and warned there was little fat to cut throughout the organization — a view that did not sit well in political circles.

It has been a scramble to maintain not only training, but elements Devlin described as the "softer skills" essential to fighting modern wars, such as intelligence, surveillance and expertise in countering improvised explosive devices.

"Some of them, to be quite frank, are on life support," he said. "Some are important; others we have had to make rough choices."

Each of those elements figured prominently in the hit-and-run war against the Taliban, and yet the army has found itself redirecting soldiers from infantry, armoured and artillery regiments in order to maintain the necessary intelligence capability.

The ranks of troops who conduct information and electronic warfare — more important than ever on the modern-day battlefield — are stretched thin, Devlin said. "The definition of what soldiers are considered the pointy end of the stick is much broader now, and I would argue that the intelligence analyst is a pointy-ended soldier today."

The army is pushing it, he said, but has "just enough" door gunners for training to man the new CH-47F Chinook helicopters, which began arriving last month.

Equipment such as surveillance balloons and electronics towers, used to keep 24-hour watch over the battlefield, are instead packed up in storage and used sparingly for training because of shrinking budgets, he added.

"If our training scenarios are not rich enough to keep those skills honed at the level they should be, it will mean we will take extra time, extra training and extra resources to bring them up to an appropriate level to represent Canada professionally — the way Canada needs to be represented — domestically or internationally."

A series of internal briefings, released to The Canadian Press over the last year, echo Devlin's concerns, including one memo that warns of possible "degradation," particularly in intelligence.

“Recent operational experience has reinforced the conviction that deployed land forces ... depend on a sophisticated (human intelligence) network that draws from all sources,” said the April 8, 2011, briefing, obtained under the Access to Information Act.

The army found itself hobbled at the beginning of the Kandahar mission in 2005, by the absence of that sophisticated ground network of sources, and by its lack of experience in interrogating prisoners.

Defence analysts have been warning for months that while the army has been able to maintain training at the highest level for quick reaction units, which are designed to deploy in a crisis, its ability to mount a sustained operation similar to the one in Afghanistan has been compromised by cuts to training and readiness.

Devlin's comments come just days after the parliamentary budget office revealed that National Defence had under-spent its budget by as much as $2.3 billion last year — bringing the cumulative total of unused funds to $9.6 billion since 2006.

The department claims some of that cash is the result of government belt-tightening in the form of strategic review and deficit reduction, which combined could carve as much as 13 per cent a year out of the defence budget.

When asked last week, the department refused to provide detailed figures. But Stephen O'Connor, the associate deputy minister of financial services, told CTV on Friday that the figures for under-spending last year were not as bad as the budget office made it seem.

O'Connor estimated the number at slightly less than $1.5 billion. "That's still a large number, we understand that, but there are reasons behind that number," he said.


Two points:

    1. LGen Devlin "warned there was little fat to cut throughout the organization," but the point is that there still is "fat." There was when we were doing slash and burn exercises in NDHQ in the 1980s and 1990s
        and there is now. If anyone says that there is no HQ fat left to cut then I guarantee that person is either not a veteran of NDHQ or has another agenda - and yes, I am talking about Gen Lawson; and

    2. "Stephen O'Connor, the associate deputy minister of financial services, told CTV ... the number [the unspent money] [is] slightly less than $1.5 billion. "That's still a large number, we understand that, but there
        are reasons behind that number.""  There are, indeed, reasons, good, proper and legal reasons behind that and the number is manageble and can and should be programmed because it happens year after year after year.

 
MCG said:
Federal government accused of deficit slashing by stealth as defence spending $2.3B below budgeted amount ....
E.R. Campbell said:
.... "Stephen O'Connor, the associate deputy minister of financial services, told CTV ... the number [the unspent money] [is] slightly less than $1.5 billion. "That's still a large number, we understand that, but there are reasons behind that number.""  There are, indeed, reasons, good, proper and legal reasons behind that and the number is manageble and can and should be programmed because it happens year after year after year.
The Info-machine responds....
Recent reports in the media are providing a misleading impression of how the Department of National Defence manages its spending.  This statement is being issued to clarify matters:

Based on current departmental financial information, our unused appropriations in 2012-13 will be less than $1.5 billion. The final 2012-13 spending levels will be reported to Parliament later this year as per normal.  It is important to note, however, that the vast majority of the amount of unused appropriations was beyond the department's control.

For example, these unused appropriations were associated with:

    Requirements to lapse authorities associated with decisions that flowed from the deficit reduction action plan which were announced after the Main Estimates were tabled.
    rescheduling of a payment to a foreign government from 2012-13 to 2013-14, as required by accounting rules;   
    a change in the timing of payments required from a judicial decision as the decision was not taken until early April 2013, pushing the funds into the 2013-14 fiscal year; and
    revised cash flow schedules for capital equipment and infrastructure projects.

Defence procurement tends to be complex and lengthy, involving a number of stakeholders.  Spending forecasts are based on plans but these plans are dependent on a number of assumptions and considerations ....
 
Part of the budget problem is jumping through all of the hoops to actually be allowed to spend the money. Frankly I think if a proposal/contract/project is 2/3rds the way along, the money should automatically carry over to the next fiscal. I lost count how projects have hit my desk come March and then have to tell them they need a CEAA review or First nation consultation before we could issue a permit and the funding agencies refusing to guarantee to carry over the money, despite their holding onto it till the last minute and causing the crisis in the first place.
 
Colin P said:
Part of the budget problem is jumping through all of the hoops to actually be allowed to spend the money. Frankly I think if a proposal/contract/project is 2/3rds the way along, the money should automatically carry over to the next fiscal. I lost count how projects have hit my desk come March and then have to tell them they need a CEAA review or First nation consultation before we could issue a permit and the funding agencies refusing to guarantee to carry over the money, despite their holding onto it till the last minute and causing the crisis in the first place.

This x a zillion!
In the name of accountability -  the powers that be have put in so many oversights and reports for expenditures it is amazing that we are able to even buy fuel! Coupled with the risk avoidance mentality that permeates at the decision making level we have this massive road block to getting major purchases completed.
 
FSTO said:
This x a zillion!
In the name of accountability -  the powers that be have put in so many oversights and reports for expenditures it is amazing that we are able to even buy fuel! Coupled with the risk avoidance mentality that permeates at the decision making level we have this massive road block to getting major purchases completed.

Is this some of the fat we could trim?
 
a change in the timing of payments required from a judicial decision as the decision was not taken until early April 2013, pushing the funds into the 2013-14 fiscal year;

Is this the Envoy/RoyalLepage/IRP decision?
 
E.R. Campbell said:
Look, folks: we have had budget cuts before ~ worse than these (in proportion). We survived. It wasn't always easy but, sometimes, we took good, hard looks at what we did and how we did things and we decided to be more efficient. We never cut the Ceremonial Guard, nor the Snowbirds, nor saluting cannons. We are not popular in this country, notwithstanding yellow ribbons and red T-shirts; polling puts us, consistently, near the bottom of most Canadians' list of spending priorities. Balancing the budget in Canada is nearly akin to rugby in New Zealand, plus it's good policy. DND always does a full and more than fair share when budget cuts are needed, we always survive. We will this time, too.

That's my perspective from 35+ years in uniform during the past 50+ years.


There is an interesting article in today's Globe and Mail about newly released documents from Britain's National Archives. The report refers, specifically, to a briefing note prepared for Prime Minister Margrert Thatcher for a 1983 trip to Canada. It warns her about Prime Minister Pierre Trudeau's "unsound personal views on East/West problems and the strategic balance.” It also added that “the Canadians are a people of the extreme centre. They have not been averse to the quiet life offered by Trudeau nor keen to spend more money on defence or effort abroad.”

Nothing has changed in 30 years, in fact, nothing has changed in 60 years, since the end of the Korean War: Canadians do not like to spend money on defence and they do not like sending the CF overseas. It is the way it always has been and I can see nothing that suggests it will change in my lifetime or yours (which is, I hope, much longer).

Get used to skrimping and saving and to doing more with less ~ some of us did it for 35 years.


Edit: spelling  :-[
 
E.R. Campbell said:
There is an interesting article in today's Globe and Mail about newly released documents from Britain's National Archives. The report refers, specifically, to a briefing not prepared for Prime Minister Margrert Thatcher for a 1983 trip to Canada. It warns her about Prime Minister Pierre Trudeau's "unsound personal views on East/West problems and the strategic balance.” It also added that “the Canadians are a people of the extreme centre. They have not been averse to the quiet life offered by Trudeau nor keen to spend more money on defence or effort abroad.”

Nothing has changed in 30 years, in fact, nothing has changed in 60 years, since the end of the Korean War: Canadians do not like to spend money on defence and they do not like sending the CF overseas. It is the way it always has been and I can see nothing that suggests it will change in my lifetime or yours (which is, I hope, much longer).

Get used to skrimping and saving and to doing more with less ~ some of us did it for 35 years.

Spot on. It is my hope however, that the public sees fit to properly fund our wounded warriors which they have done so in the past but appear to be reneging on at the present time.
 
E.R. Campbell said:
There is an interesting article in today's Globe and Mail about newly released documents from Britain's National Archives. The report refers, specifically, to a briefing not prepared for Prime Minister Margrert Thatcher for a 1983 trip to Canada. It warns her about Prime Minister Pierre Trudeau's "unsound personal views on East/West problems and the strategic balance.” It also added that “the Canadians are a people of the extreme centre. They have not been averse to the quiet life offered by Trudeau nor keen to spend more money on defence or effort abroad.”

Nothing has changed in 30 years, in fact, nothing has changed in 60 years, since the end of the Korean War: Canadians do not like to spend money on defence and they do not like sending the CF overseas. It is the way it always has been and I can see nothing that suggests it will change in my lifetime or yours (which is, I hope, much longer).

Get used to skrimping and saving and to doing more with less ~ some of us did it for 35 years.

I totally agree, the Canadian population only likes to see us when we are doing aid to civil power stuff/disaster relief.  And they still don't want the price to be very high :-/  This is just a fact of life and many politicians, especially liberals, but not limited to them, have taken advantage of this.

Jon
 
Jed said:
Spot on. It is my hope however, that the public sees fit to properly fund our wounded warriors which they have do so in the past but appear to be reneging on at the present time.

That's because of the great selling job when they brought it in. I listened for, but found zero dissent when it came in. Everybody was willing to give it a chance because of the $250,000 number was being thrown out, etc. etc..

nobody read the small print. ::)
 
Similar to the sales job they did when they brought in the new pension for the Reg and the Res force (while confusing it with CRA Compulsory Retirement Age changes). And this was pushed by our own people.

Enough to bring out the cynic in me.  ;D
 
Strong. Proud. Ready?
Stephen Harper has championed stronger defence. But impending cuts will take a toll on unreformed armed forces with more tail than teeth

The Economist
Aug 3rd 2013


BOTH Rob Nicholson and Peter MacKay looked cheery enough as they shared a laugh after swapping the defence and justice portfolios in a cabinet shuffle last month. But only Mr MacKay, the new justice minister, had good reason to smile. He inherits a department where most of the Conservative government’s law-and-order agenda has already been implemented while leaving one where difficult spending cuts lie ahead. It is Mr Nicholson, widely seen as a capable politician, who must now choose what to cut while also wrestling with problems over orders for new fighter jets and ships. His appointment follows those of new commanders for all three armed forces. So a new team is in charge of Canada’s defence—a subject especially close to the heart of Stephen Harper, the prime minister.

Canada is hardly alone in trying to trim its defence budget. Most of its allies, including the United States, Britain, France and Germany, are also trying to do the same with less. But since he took office in 2006 Mr Harper has made support for the armed forces a personal trademark. He has used it to differentiate his government from its Liberal predecessors, which ushered in what both the generals and the prime minister call “the decade of darkness”, when funding was cut as part of a successful effort to eliminate the budget deficit in the 1990s.

The Conservatives set out to reverse what they claimed was neglect of the armed forces, pouring money into troops and equipment. Defence spending had already started to rise again in the last few years of Liberal government; but in the first two years of a Conservative one it shot up to C$19.2 billion ($17.1 billion) in 2008-09 from C$15.7 billion in 2006-07. To existing orders for support vehicles, search-and-rescue helicopters and howitzers, the Conservatives added plans to buy F-35 fighter jets for the air force, support ships and Arctic patrol vessels for the navy, plus a polar icebreaker for the Coast Guard, and some transport helicopters. The opposition parties called the 2008 “Canada First” defence strategy more of a shopping list than a policy document.

The Conservatives have also worked to change the image of the Canadian armed forces from peacekeepers (a Liberal idea) to fighters. They celebrated military milestones. The government spent C$28m to mark the bicentenary of the War of 1812 between what was then a group of British colonies and the United States. Red Fridays, when Canadians wear red to support the troops, won political support. The image makeover was helped by the fact that Canadian forces were fighting in Afghanistan and were led by a charismatic and outspoken chief of the defence staff, General Rick Hillier.

Circumstances have changed. General Hillier has retired. Canada is no longer fighting in Afghanistan, although 950 trainers will remain until next year as part of the international effort to create an Afghan army. Money is tight. The federal budget slipped back into deficit in 2008-09 and the government’s determination to return to surplus before the next election in 2015 means even a favoured department like defence is not being spared. It lost just over C$2 billion in the first two rounds of government-wide spending cuts and looks likely to lose as much again as the 2015 deadline looms. The “Canada First” strategy is unaffordable and there are mutterings about a new decade of darkness.

That need not happen. Mr Nicholson could rootle out a 2011 report on military reform commissioned by the government, which spells out how the ministry could save money yet still invest in future needs such as cyber-security and enhanced Arctic capabilities. Its main recommendation was to cut the bloated bureaucracy at headquarters, which swelled during the years of plenty, and send officers back into the field. It also recommended reducing the amount spent on consultants, contractors and professional services, which rose 54% to C$2.7 billion a year during the six-year period of review (and jumped to C$3.2 billion the following year). Canada’s forces need to trim the “tail” so they can invest in the “teeth”, says Lieutenant-General Andrew Leslie, the report’s author.

But the defence department has done almost the opposite. It has cut money for operations and maintenance, reducing readiness, while preserving the number of full-time troops at about 68,000 and proceeding with the procurement programme, albeit with a slight delay. Such a strategy only makes sense if full funding is restored quickly, according to David Perry, a defence analyst, in a paper for the Canadian Defence and Foreign Affairs Institute, a think-tank. Otherwise, the armed forces risk being fully equipped and, on paper, fully staffed but unable to deploy troops. Lieut-General Leslie says the navy is already short of 900 active-duty sailors while “expensively trained naval operators are sailing their desks up and down the corridors in Ottawa”.

Mr Nicholson has given no sign that he will dust off the Leslie report. Still, the wholesale clean-out at the top of the department has prompted speculation that Mr Harper himself has decided to take charge. That could be a good thing, says Jack Harris, the defence spokesman for the opposition New Democratic Party, as the prime minister has said in the past he wants troops in the field rather than at their desks. Mr Harris urges a white paper laying out a new defence strategy to replace the outdated “Canada First” policy.

With less cash, officials have fallen back on cheaper ways of reviving past military glory. Two years ago the navy and air force inserted the word “royal” into their official names. The army plans to revert to historical titles for privates, who now become sappers, bombardiers, fusiliers or troopers depending on their function. A fortnight ago the army adopted a new badge and a new tagline: Strong. Proud. Ready. Canadians would not argue with the first two. But some think the third is now in doubt.
http://www.economist.com/news/americas/21582526-stephen-harper-has-championed-stronger-defence-impending-cuts-will-take-toll
 
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