Defence Funding

• Prudent resource management is essential to meet Canada’s defence needs now and into the future.
• National Defence manages a large and complex budget with major equipment and construction initiatives that need funding over many years.
• That is why we introduced a new funding model in 2017 to ensure that projects get the money they need when they need it.
• This means that money can be re-allocated to support priority projects within a given year, or moved forward to support needs in future years.
• The flexibility facilitates the delivery of major projects which require multi-year funding and minimizes our lapses at the end of each fiscal year.
• To mitigate lapses in funding authorized by parliament, National Defence is taking the following actions:
  • Improving its capital funding forecast to ensure that the department does not request more funding authorities from Parliament than required;
  • Funding new projects from surplus in-year funding rather than request additional funding from Parliament;
  • Requesting funding for additional military deployments later in the process to ensure only the required funding authorities are requested (to prevent operating lapse).

• Strong, Secure, Engaged earmarked $6.5 billion dollars for capital investments in 2018-19. National Defence requested $4.2 billion from the fiscal framework. The delta can be explained by the following considerations:
  • 33% of the funds were not requested due to lower contract amounts and contingency funds were not required.
  • 42% of the funds that were not requested were the result of our own internal processes, additional time required to analyze options of some projects, or change capabilities to meet new threats.
  • 25% of the funding not requested is related to delays in delivering goods and/or services by industry.

“This new policy introduces some important changes to how the defence budget is managed to ensure that the Defence team has the flexibility to effectively manage key investments in defence capability.”

• Canada’s commitment to NATO is unwavering.
• Over the past 70 years, we have demonstrated this commitment by contributing to every NATO operation.
• Canada is currently leading a NATO battlegroup in Latvia, the NATO training mission in Iraq, and a NATO maritime task force in the Mediterranean.
• Through Canada’s defence policy, this government committed to increase National Defence spending by 70% over 10 years.
• We will continue to work with our NATO Allies to enhance our collective security and promote peace and stability around the world.

• Canada’s defence spending is forecasted to reach 1.48% of GDP in 2024-25.
• Canada’s spending on capital projects (equipment and infrastructure), as a percentage of overall defence spending, is forecasted to reach approximately 32% in 2024-25. This would exceed NATO’s 20% target for capital spending.
• Canada’s contribution to NATO common-funded budgets also ranks 6th.

“To meet Canada’s defence needs at home and abroad, the Government will grow annual defence spending over the next 10 years from $17.1 billion in 2016-17 to $24.6 billion in 2026-27 on an accrual basis. This translates to a rise in annual defence spending on a cash basis from $18.9 billion in 2016-17 to $32.7 billion in 2026-27, an increase of over 70 percent.”

• Canada’s commitment to NATO is unwavering.
• The Prime Minister recently announced our expended commitment to the NATO Readiness Initiative by increasing our contribution with an additional six fighter aircraft and one frigate.
• Canada’s total commitment to the NATO Readiness Initiative is:
  • 12 CF-18s, one expeditionary air task force, and one maritime patrol aircraft;
  • three frigates, and one submarine; o one mechanized infantry battalion, a mobile hospital, and a platoon for chemical, biological, radiological and nuclear decontamination.
• Canada’s contribution to the NATO Readiness Initiative is another demonstration of Canada’s strong support for NATO and for the collective security of the Alliance.
• This includes leading a NATO battlegroup in Latvia, the NATO training mission in Iraq, and a NATO maritime task force in the Mediterranean.

• The NATO Readiness Initiative (NRI) aims to enhance the readiness of existing national forces.
• The NRI is not about new forces, it is about increasing the readiness of forces that Allies already have.
• Canada has offered to NATO specific Land, Maritime and Air capabilities to be ready to use within 30 days.

• “To succeed in an unpredictable and complex security environment, Defence will: Field an agile,[…] combat-ready military; and, Act as a responsible, value-added partner with NORAD, NATO, and Five-Eyes partners.”
• “At any given time, the Government of Canada can call upon the CAF to undertake missions for the protection of Canada and Canadians and maintenance of international peace and stability. This policy ensures the CAF will be prepared to: […] Lead and/or contribute to international peace operations and stabilization, missions with the United Nations, NATO and other multilateral partners.”