Analysis of trends in spending and human resources

Actual expenditures

Departmental spending trend graph

image of departmental spending trend graph

  1. Total spending for 2015-16, 2016-17 and 2017-18 represents the final spending on a cash basis, as provided in the Public Accounts of Canada.
  2. Planned spending for 2018-19, 2019-20 and 2020-21 as provided in the Departmental Plan 2018-19. Out-year spending is expected to increase to account for SSE implementation.
  3. Spending includes Internal Services.
Description of Figure: Departmental Spending Trend Graph

This bar graph depicts Defence's financial spending trend starting with fiscal year 2015-16.

On the Y-axis are dollars ranging from 0 to 25,000,000,000. On the X-axis is Fiscal Year 2015-16 through 2020-21.

Statutory Financial Spending Trend is:

  • $1,557,575,585 in 2015-16;
  • $1,480,923,172 in 2016-17;
  • $3,441,201,378 in 2017-18;
  • $1,202,283,005 in 2018-19;
  • $1,204,918,358 in 2019-20;  and
  • $1,210,406,097 in 2020-21.

Voted Financial Spending Trend is:

  • $17,108,497,658 in 2015-16;
  • $17,125,230,357 in 2016-17;
  • $19,435,885,343 in 2017-18;
  • $19,175,296,950 in 2018-19;
  • $20,168,500,143 in 2019-20; and
  • $18,846,372,047 in 2020-21.

Total Financial Spending Trend is:

  • $18,666,073,243 in 2015-16;
  • $18,606,153,529 in 2016-17;
  • $22,877,086,721 in 2017-18;
  • $20,377,579,955 in 2018-19;
  • $21,373,418,501 in 2019-20; and
  • $20,056,778,144 in 2020-21. 

Budgetary performance summary for Programs and Internal Services (dollars)

Programs, and Internal Services 2017-2018 Main Estimates 2017-2018 Planned spending 2018-19 Planned spending 2019-20 Planned spending 2017-18 Total authorities available for use 2017-18 Actual spending (authorities used) 2016-17 Actual spending (authorities used) 2015-16 Actual spending (authorities used)
1.0 Defence Combat and Support Operations 1,204,608,692 1,204,608,692 N/A* N/A* 1,799,231,651 1,722,029,393 1,347,953,481 1,360,079,139
2.0 Defence Services and Contributions to Government 431,792,517 431,792,517 N/A* N/A* 483,435,309 490,966,733 412,290,287 453,694,400
3.0 Defence Ready Force Element Production 3,366,635,148 3,366,635,148 N/A* N/A* 4,352,535,094 4,553,169,159 3,455,054,881 3,401,386,557
4.0 Defence Capability Element Production 12,805,778,437 12,826,660,194 N/A* N/A* 15,912,486,736 15,075,983,869 12,448,763,780 12,577,878,081
5.0 Defence Capability Development and Research 395,158,296 395,158,296 N/A* N/A* 479,156,958 540,487,891 448,262,459 424,789,408
Subtotal 18,203,973,090  18,224,854,847 N/A* N/A* 23,026,845,748  22,382,637,044 18,112,324,888 18,217,827,585
Internal Services 458,094,144 458,094,144 N/A* N/A* 551,091,047 494,449,677 493,828,641 448,245,658
Total 18,662,067,234 18,682,948,991 N/A* N/A* 23,577,936,795 22,877,086,721 18,606,153,529 18,666,073,243

Sources: Vice-Chief of the Defence Staff Group / Assistant Deputy Minister (Finance) / Chief Financial Officer Group.

Note: N/A* due to change from PAA to DRF, planning numbers by PAA are no longer produced.

  1. Due to rounding, figures may not add up to totals shown.
  2. Where the actual spending amount is higher than the total authorities, this does not represent an over-expenditure of Parliamentary authorities. Parliamentary authorities are allocated by vote and not by individual programs, sub-programs, and sub-sub programs.
  3. Significant variances in financial resources are explained below and detailed at the sub-sub program level in the supplementary information section in the document entitled “Supporting Information on Lower-Level Programs”. Explanations are provided when the variance is at least 100M or when the difference between the actual and the planned amount is 100%.
Description of Figure: Actual Spending (authorities used) for 2017-18 by Program (dollars)

This pie chart illustrates the Department of National Defence’s spending for Fiscal Year 2017-18, broken down by Program.

The percentages allocated to each section, from largest to smallest, are:

  • 66%, $15,075,983,868 for Defence Capability Element Production;
  • 20%, $4,553,169,159 for Defence Ready Force Element Production;
  • 8%, $1,722,029,393 for Defence Combat and Support Operations;
  • 2%, $494,449,677 for Internal Services;
  • 2%, $540,487,891 for Defence Capability Development and Research; and
  • 2%, $490,966,733 for Defence Services and Contributions to Government.

The difference between planned spending and final spending authorities used for 2017-18 is summarized as follows:

Explanation of Change Change (dollars)
Funding in Statutory related to military Employee Benefit Plans 2,234,430,332
Funding related to military operations overseas 258,481,023
Net adjustments to the spending profile of major capital equipment and infrastructure projects to align financial resources with project acquisition timelines 550,589,485
Funding related to the implementation of Strong, Secure, Engaged (SSE) 435,306,513
Funding related to Collective Bargaining Pay increases 168,161,709
Funding related to CAF pay increases 666,730,226
Total Increases 4,313,699,289
Decreases  
Adjustments to the spending profile of the Interim Auxillary Oiler Replemishment Capability (IAOR) to allign finacial resources with operations (78,001,328)
Net transfers to Other Government Organizations (20,975,705)
Funding related to Grants and Contributions Programs (11,875,099)
Net miscellaneous departmental requirements (8,709,427)
Total Decreases (119,561,559)
Net Change 4,194,137,730

Actual human resources

Human resources summary for Programs and Internal Services (full time equivalents)

Programs
and Internal Services
  2015–16
Actual 
full-time equivalents
2016–17
Actual 
full-time equivalents
2017–18
Planned 
full-time equivalents
2017–18
Actual 
full-time equivalents
2018–19
Planned
full-time equivalents
2019–20
Planned 
full-time equivalents
1.0 Defence Combat and Support Operations Military – Regular Force 5,785 5,670 6,799 6,663 N/A* N/A*
Civilian 688 748 964 802 N/A* N/A*
2.0 Defence Services and Contributions to Government Military – Regular Force 1,444 1,245 1,433 1,327 N/A* N/A*
Civilian 275 245 289 257 N/A* N/A*
3.0 Defence Ready Force Element Production Military – Regular Force 25,735 25,623 24,580 24,953 N/A* N/A*
Civilian 1,507 1,676 3,449 1,794 N/A* N/A*
4.0 Defence Capability Element Production Military – Regular Force 31,712 32,352 32,134 31,945 N/A* N/A*
Civilian 15,624 16,103 15,919 16,353 N/A* N/A*
5.0 Defence Capability Development and Research Military – Regular Force 671 679 1,038 941 N/A* N/A*
Civilian 1,394 1,362 1,410 1,484 N/A* N/A*
Subtotal Military – Regular Force 65,347 65,569 65,984 65,829 N/A* N/A*
Civilian 19,488 20,134 22,031 20,690 N/A* N/A*
Internal Services Subtotal Military – Regular Force 532 527 861 743 N/A* N/A*
Civilian 2,666 2,341 2,254 2,538 N/A* N/A*
Subtotal Military – Regular Force 65,879 66,096 66,845 66,572 N/A* N/A*
Civilian 22,154 22,475 24,285 23,228 N/A* N/A*
Total   88,033 88,571 91,130 89,800 N/A* N/A*

Note: N/A* due to change from PAA to DRF, planning numbers by PAA are no longer produced.

  1. One FTE does not necessarily equal one employee (i.e. two part-time employees may count as one FTE). See Appendix: Definitions.
  2. Regular force personnel strength is measured as the total Regular force population regardless of their status, and therefore includes an average of 1,100 personnel on leave without pay (90 percent related to parental leave), 1,650 personnel on Service Personnel Holding List and Retirement Leave, and 8,000 personnel on basic training and subsidized university training.
  3. Due to rounding, the FTE count at the sub-program and the sub-sub-program levels may not add up to totals shown.

The Regular force personnel strength is currently about 1,300 personnel below its authorized strength of 68,000 +/- 500, due to higher than forecast attrition and other factors. The Institutional timetable that details the annual change to manning levels forecasts re-establishing the Regular force to its authorized strength prior to 2020 (Our current trajectory has us achieving 68,000 +/-500 in FY 2018-19). Under SSE Defence Policy, the Regular force authorized strength will grow from its current 68,000 to 71,500.  This growth will occur over a period of 6 years starting in 2019-20. That carefully balanced rate of increase will continue to fully utilize the CAF’s current training capacity. The Institutional timetable will be closely monitored, with quick implementation of mitigating actions to ensure grow to the new authorized strength.

National Defence’s civilian population increased to 23,228 FTEs, up from 22,475 the previous fiscal year; however, it remains below the planned 24,285 civilian FTEs for 2017-18. The Department is in a transition period and is currently focused on aligning civilian resources with renewed departmental priorities which will help ensure that we have the right people, in the right place, at the right time while respecting human resources and budget allocations.

Human Resources – Reserve force personnel

The Reserve force is a unique and valued component of the CAF. The Primary Reserve is currently below the Government of Canada-directed strength level due to a higher than forecasted attrition and challenges in meeting recruiting quotas. Mitigating actions are underway to improve recruiting success and to reduce voluntary attrition in order to re-establish and expand the Primary Reserve’s strength by 1,500, from a government-authorized 28,500 personnel in 2015, to a directed 30,000 personnel under the SSE defence policy. 

In addition, the CAF Regular force recruiting plan includes the annual component transfer of 800 personnel from the Primary Reserve. The remaining two active sub-components of the Reserve force – the Canadian Rangers and the Cadet Organization Administration and Training Service – were maintained at the current approved total strength targets of 5,000 and 8,000 respectively.

The Reserve force will receive new operational roles and will become further integrated into the total force. Institutionally, a major review of Primary Reserve requirements will continue so as to ensure the allocation and employment of personnel is consistent with Defence priorities, is sustainable and remains within Government of Canada direction.

The following table summarizes National Defence’s total planned and actual human resources for Reserve force personnel for FY 2017-18Footnote xxx.

  Planned Actual Difference
(actual minus planned)
Primary Reserve APS: 27,000 APS: 21,885 APS: (5,115)
ES: 27,000 ES: 25,385 ES: (1,615)
Cadet Organization Administration and Training Service 8,000 7,293 (707)
Canadian Rangers 5,000 5,187 187

Note: In FY 2017-18 a new calculation method was introduced to provide a more accurate number for the total Primary Reserve Strength using the Human Resources Management System. The new calculation method is defined as Effective Strength (ES), replacing the previous calculation method, Average Paid Strength (APS). From the ES total strength, the following are removed 1) all personnel in the process of releasing, 2) personnel who have been flagged as non-effective strength, and 3) personnel who have not been paid (because they had no employment) at least once in the previous six months.

FY 2017-18 will be the last year that the APS calculation will be used and reported on for Primary Reserve Human Resources.

Expenditures by vote

For information on National Defence’s organizational voted and statutory expenditures, consult the Public Accounts of Canada 2017–2018Footnote xxxi.

Total spending by spending area (dollars)

Spending area Total planned spending Total actual spending
Economic affairs N/A N/A
Social affairs 17,211,253,391 20,923,211,050
International affairs 1,013,601,456 1,459,425,994
Government affairs N/A N/A

Government of Canada spending and activities

Information on the alignment of the department of National Defence’ spending with the Government of Canada’s spending and activities is available in the GC InfoBaseFootnote xxxii.

Financial statements and financial statements highlights

Financial statements

The department of National Defence’s financial statements (unaudited) for the year ended 31 March 2018, are available on the departmental websiteFootnote xxxiii.

Financial statements highlights

The financial information presented within this report is intended to serve as a general overview of National Defence’s financial position and operations.

Condensed Statement of Operations (unaudited) for the year ended 31 March 2018 (dollars)

Financial information 2017–18
Planned
results
2017–18
Actual
results
2016–17
Actual
results
(Restated)

Difference

(2017–18 Actual results minus  2017–18 Planned results)

Difference

(2017–18 Actual results minus 2016–17 Actual results)

Total expenses 20,072,635 23,198,555 19,702,635 3,125,920 3,495,920
Total revenues 482,923 433,711 447,826 (49,212) (14,115)
Net cost of operations before government funding and transfers 19,589,712 22,764,844 19,254,809 3,175,132 3,510,035

Note: The Departmental Financial Statement is prepared on an accrual accounting basis in accordance with Treasury Board Accounting Standard 1.2 and includes non-cash transactions.  Financial information provided in other sections of the 2017-18 Departmental Results Report is cash-based (planned and actual spending) and tied to annual Parliamentary Appropriations (Authorities).

Condensed Statement of Financial Position (unaudited) as of 31 March 2018 (dollars)

Financial information 2017-18   2016-17
(Restated)
Difference
(2017-18 minus 2016-17)
Total net liabilities 5,637,246 4,764,797 872,449
Total net financial assets 3,751,515 2,809,657 941,858
Departmental net debt 1,885,731 1,955,140 (69,409)
Total non-financial assets 39,798,192 39,091,965 706,227
Departmental net financial position 5,637,246 4,764,797 872,449
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