Analysis of trends in spending and human resources

Actual expenditures

Departmental spending trend graph

Description of Figure: Departmental Spending Trend 

This bar graph depicts Defence's financial spending trend starting with fiscal year 2016-17.

On the Y-axis are dollars ranging from 0 to 25,000,000,000. On the X-axis is Fiscal Year 2016-2017 through 2021-2022.

Statutory Financial Spending Trend is:

  • $1,480,923,171 in 2016-17;
  • $3,441,201,378 in 2017-18;
  • $1,596,143,199 in 2018-19;
  • $1,422,457,019 in 2019-20;  
  • $1,261,292,603 in 2020-21; and
  • $1,260,745,925 in 2021-22. 

Voted Financial Spending Trend is:

  • $17,125,230,358 in 2016-17;
  • $19,435,885,343 in 2017-18;
  • $20,019,798,793 in 2018-19;
  • $20,442,399,000 in 2019-20; 
  • $21,439,888,359 in 2020-21; and
  • $20,545,031,698 in 2021-22.

Total Financial Spending Trend is:

  • $18,606,153,529 in 2016-17;
  • $22,877,086,721 in 2017-18;
  • $21,615,941,912 in 2018-19;
  • $21,864,856,019 in 2019-20; 
  • $22,701,180,962 in 2020-21; and
  • $21,805,777,623 in 2021-22.

Budgetary planning summary for Core Responsibilities and Internal Services (dollars)

Core
Responsibilities
and Internal
Services
2018–19
Main
Estimates

2018–19
Planned
spending

2019–20
Planned
spending

2020–21
Planned
spending

2018–19
Total
authorities
available for
use

2018–19
Actual
spending
(authorities
used)
2017–18
Actual
spending
(authorities
used)
2016–17
Actual
spending
(authorities
used)
Operations
752,722,921 752,722,921 1,032,239,527 1,055,048,696 1,213,674,330 1,424,919,741 1,372,428,482 852,760,671
Ready Forces
8,854,401,407 8,854,401,407 9,672,587,363 9,666,787,230 9,355,074,160 9,506,982,585 10,331,831,988 8,211,267,450
Defence Team
2,840,676,739 2,840,676,739 3,330,329,750 3,393,776,924 2,961,010,457 2,779,583,406 3,424,068,331 2,648,137,615
Future Force Design
788,242,040 788,242,040 941,793,597 968,845,882 819,936,267 845,573,026 894,647,455 738,965,956
Procurement of Capabilities
3,135,903,543 3,135,903,543 3,135,440,658 3,894,676,602 3,505,268,703 3,069,157,738 2,992,354,792 2,387,252,795
Sustainable Bases, Information Technology Systems and Infrastructure
3,373,341,311 3,373,341,311 3,150,877,104 3,099,221,622 3,530,195,652 3,219,172,782 3,237,004,066 3,132,838,103
Subtotal 19,745,287,961 19,745,287,961 21,263,267,999 22,078,356,956 21,385,159,569 20,845,389,278 22,252,335,114 17,971,222,590
Internal Services 632,291,994 632,291,994 601,588,020 622,824,006 720,549,684 770,552,634 624,751,607 634,930,939
Total 20,377,579,955 20,377,579,955 21,864,856,019 22,701,180,962 22,105,709,253 21,615,941,912 22,877,086,721 18,606,153,529
Sources: Vice-Chief of the Defence Staff Group / Assistant Deputy Minister (Finance) / Chief Financial Officer Group.

Notes:

Due to rounding, figures may not add up to totals shown.

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 core responsibility and program.

Significant variances in financial resources are explained below and detailed at the core responsibility and 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%.

2018–19 Budgetary actual gross spending summary (dollars)

Core Responsibilities
and Internal Services
2018–19
Actual gross spending
2018–19
Actual gross spending
for specified purpose
accounts
2018–19
Actual revenues netted
against expenditures
2018–19
Actual net spending
(authorities used)
Operations
1,529,913,282 N/A 104,993,541 1,424,919,741
Ready Forces
9,539,109,684 N/A 32,127,099 9,506,982,585
Defence Team
2,832,131,496 N/A 52,548,090 2,779,583,406
Future Force Design
845,846,274 N/A 273,248 845,573,026
Procurement of Capabilities
3,069,270,048 N/A 112,310 3,069,157,738
Sustainable Bases, Information Technology Systems and Infrastructure
3,394,166,107 N/A 174,993,325 3,219,172,782
Subtotal 21,210,436,891 N/A 365,047,613 20,845,389,278
Internal Services 785,956,754 N/A 15,404,120 770,552,634
Total 21,996,393,645 N/A 380,451,733 21,615,941,912

Note: Due to rounding, figures may not add up to totals shown.

Description of Figure: Departmental Spending for 2018-19 by Core Responsibility (Dollars)

Description of Figure: Actual Spending (authorities used) for 2017-18 by Program (dollars)
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 2018-19, broken down by Core Responsibility.

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

  • 44%, $9,506,982,585 for Ready Forces;
  • 15%, $3,219,172,782 for Sustainable Bases, Information Technology Systems and Infrastructure;
  • 14%, $3,069,157,738 for Procurement of Capabilities;
  • 13%, $2,779,583,406 for Defence Team;
  • 7%, $1,424,919,741 for Operations;
  • 4%, $845,573,026 for Future Force Design; and
  • 3%, $770,552,634 for Internal Services

Actual human resources

The Regular Force has seen an increase in strength and is now approximately 500 personnel below the authorized strength of 68,000. Recruitment and retention efforts have ensured that we remain on track to re-establish the Regular Force to its establishment strength by 2020. Under Strong, Secure, Engaged (SSE): Canada’s 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 six years starting in FY 2019-20. That carefully balanced rate of increase will continue to fully utilize the Canadian Armed Forces (CAF) current training capacity. The Institutional timetable will be closely monitored, with quick implementation of mitigating actions to ensure growth to the new authorized strength.

National Defence’s civilian population increased to 24,564 full-time equivalents (FTE)’s, up from 23,228 from the previous FY 2017-18 and above the planned 23,971 civilian FTE’s for FY 2018-19. This increased capacity helps ensure that we have the right people, in the right place, at the right time while respecting human resources and budget allocations. The department is in a state of growth and is focused on aligning civilian resources to fulfill renewed departmental priorities such as addressing compensation issues and supporting SSE.

Human resources summary for Core Responsibilities and Internal Services (full-time equivalents)

Core Responsibilities and Internal Services
2016–17
Actual
full-time

equivalents
2017–18
Actual 
full-time

equivalents

2018–19
Planned
full-time
equivalents

2018–19
Actual
full-time
equivalents

2019–20
Planned 
full-time

equivalents
2020–21
Planned 
full-time

equivalents
Operations N/A N/A 2,477 4,884 2,492.60 2,508.08
Ready Forces N/A N/A 44,055 45,566 44,339.40 44,623.63
Defence Team N/A N/A 19,184 20,123 19,304.50 19,425.39
Future Force Design  N/A
N/A
3,268 2,421 3,280.45 3,292.89
Procurement of Capabilities N/A
N/A
2,317 2,420 2,322.73
2,328.53
Sustainable Bases, Information Technology Systems and Infrastructure
N/A
N/A
16,424 13,209 16,482.70 16,541.16
Subtotal
N/A
N/A
87,725 88,623 88,222.38 88,719.68
Internal Services N/A
N/A
3,246 3,347 3,248.62 3,251.32
Total N/A
N/A
90,971 91,970 91,471.00 91,971.00

Note: The actual numbers for FY's 2016-17 and 2017-18 cannot be reported, as the reporting mechanism changed from the Program Alignment Architecture to the Departmental Results Framework in FY 2018-19.

Human resources – Reserve Force Personnel

The Reserve Force is a unique and valued component of the CAF. It is divided into four distinct sub-components:

  • Primary Reserve;
  • Cadet Organization Administration and Training Service;
  • Canadian Rangers; and
  • Supplementary Reserve (Strategic Reserve).

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, while the Supplementary Reserve had 6,264 members listed as of 31 March 2019.

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.

In January 2019, the Canadian Army promulgated a three-year plan in the form of a Master Implementation Directive to enhance and expand the Canadian Rangers in select communities through the establishment of patrols — or additional sections within existing patrols — and to improve functional capabilities through Canadian Rangers Patrol Groups headquarters growth. During FY 2018-19, Canadian Rangers patrols grew from 180 to 186 and as of 31 March 2019, the total strength of the Canadian Rangers is 5,231: a 2% increase since 31 March 2018.

The following table summarizes the Department of National Defence and the Canadian Armed Forces total planned human and actual human resources for Reserve Force Personnel for FY 2018-19.

  Planned 2018-19 Actual 2018-19 Difference (acutal minus planned)
Primary Reserve 28,500 23,128 (5,372)
Cadet Organization Administration and Training Service 8,000 7,136 (864)
Canadian Rangers 5,000 5,231 231

Note: The Average Paid Strength (APS) is used to report the strength of the Primary Reserve in the Departmental Results Report as per the guidance and Methodology for counting the Primary Reserve, dated 06 March 2017, directing that the APS will continue to be used to report to Government while other metrics are used internally to CAF. To enhance accuracy in reporting the Primary Reserve strength and capabilities, a harmonized methodology is deemed necessary. To do so, a One CAF establishment model will set the appropriate framework required to increase efficiency and effectiveness of measuring the Primary Reserve output (Trained Effective Strength) in support to the SSE defence policy.

Expenditures by vote

For information on the Department of National Defence and the Canadian Armed Forces’ organizational voted and statutory expenditures, consult the Public Accounts of Canada 2018–2019Footnote ciii.

Government of Canada spending and activities

Information on the alignment of the Department of National Defence and the Canadian Armed Forces’ spending with the Government of Canada’s spending and activities is available in the GC InfoBaseFootnote civ.

Financial statements and financial statements highlights

Financial statements

The Department of National Defence and the Canadian Armed Forces’ financial statements (unaudited) for the year ended 31 March 31, 2019 are available on the departmental websiteFootnote cv.

Financial statements highlights

Condensed Statement of Operations (unaudited) for the year ended 31 March 2019 (dollars)

Financial information 2018–19 Planned results 2018–19 Actual results 2017–18 Actual results (Restated) Difference (2018–19 Actual results minus 2018–19 Planned results) Difference (2018–19 Actual results minus 2017–18 Actual results)
Total expenses 21,392,063 23,147,615 23,273,630 1,755,552 (126,015)
Total revenues 486,235 410,375 433,711 (75,860) (23,336)
Net cost of operations before government funding and transfers 20,905,828 22,737,240 22,839,919 1,831,412 (102,679)

Note: Further details of 2018-19 Planned results and associated notes are available in the Future-oriented Statement of Operations (Unaudited) from the 2018–19 Departmental Plan (DP)Footnote cvi.

The Statement of operations provides the net cost of department’s operations for the year ended 31 March 2019.

Overall the department’s total expenses and total revenues were fairly consistent with the previous fiscal year resulting in the Net cost of operations before government funding and transfers being reduced by 0.45%.

The increase of $1.8 billion between the Planned results and the Actual results is due to the forecasted expenditures not being included in planned results due to the unpredictable nature of certain expenses.

Throughout FY 2018-19, the department continued to support its operations including its investments and implementation of its defence policy, Strong, Secure, Engaged.

Condensed Statement of Financial Position (unaudited) as of 31 March 2019 (dollars)

Financial information 2018–19 2017–18 (Restated) Difference (2018–19 minus 2017–18)
Total net liabilities 5,898,555 5,637,246 261,309
Total net financial assets 3,190,607 3,751,515 (560,908)
Departmental net debt 2,707,948 1,885,731 822,217
Total non-financial assets 40,043,543 39,555,383 488,160
Departmental net financial position 37,335,595 37,669,652 (334,057)

The Statement of Financial Position provides the balances of the Department’s assets, liabilities and net financial position as of 31 March 2019.

Overall, from FY 2017-18 to 2018-19, the department remained relatively stable. The Departmental net financial position decreased by $334 million which is relatively a small percentage change (-0.89%).

 

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