Defence funding

“Lapsed” funding

Strong, Secure, Engaged fundamentally changed the way National Defence manages its budget.
We request only the resources we need to manage our budget each year.
- These transactions are reviewed by Parliamentarians through the estimates process.
- Capital resources that we do not request, are available to the department in future years.
- This is a critical tool that allows us to manage resources effectively when delivering procurements over multiple years.
This ensures our requirements are as accurate as possible before requesting additional funding.
Regarding Capital funding, we have the flexibility to re-allocate between existing projects or move funds forward to support needs in future years.
- This allows us to respond to project developments like extra time to review options or mitigate delays from industry.
- Finally, we “carry forward” as many unused operating funds as possible as a planned lapse.
- For instance, in 2018-19, Defence was unable to spend $473.4 million.
- I am pleased to report that $390.9 million will be available in future years and the remainder was used to pay for Government-wide initiatives.
While the COVID-19 pandemic presents new challenges, we will continue to ensure that funds requested by National Defence have a meaningful impact on defence priorities.

National Defence public account lapse (difference between funding requested and expenditures):
- $473.4M was lapsed in 2018-2019, of which $390.9M was available for future years.
- $677M was lapsed in 2017-2018, of which $652.9M was available for future years.
This flexible funding model allows National Defence to manage changes in project developments such as:
- lower contract amounts;
- changes in required capabilities to meet new threats;
- additional time needed to analyse options; and,
- delays in the delivery of goods and/or services by industry.

Despite sound long-term planning, most defence procurement projects do not advance exactly as planned—some progress faster, others slower, for a variety of operational, logistical, and program reasons.
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 requesting additional funding from Parliament;
Funding not requested is not lost. National Defence has the ability to re-profile funds into future years for major projects, and then access those funds when needed.

Version 1 – 2020-06-12

As you know, on May 10, 2020, the Government tabled a motion requesting additional interim supply for all federal departments.
These funds will ensure all departments have the funding they need until the full Main Estimates are considered by Parliament in the Fall.
National Defence will use these funds to continue delivering on key defence priorities, including:
- Ensuring the safety and wellness of our Canadian Armed Forces Members and civilian employees;
- Deploying our forces so they can support Canadians in need of assistance amid the COVID-19 pandemic, and in response to natural disasters; and,
- Moving forward with major procurement projects so that our forces are well-equipped for any task.
These investments will help us directly deliver on our commitments in Strong, Secure, Engaged.
While the COVID-19 pandemic presents new challenges, we will continue to ensure that funds requested by National Defence have a meaningful impact on defence priorities.
We also continue to ensure that these funds are being spent with full transparency and accountability to Parliament and to Canadians.
To this end, I look forward to further discussing National

On April 20, 2020, the Government introduced a motion establishing the business of the House in the coming months. This motion:
- Pushed the deadline for approving the Main Estimates to December 10, 2020.
- Provided for the possibility of passing additional interim supply before June 23, 2020.

Version 1 – 2020-06-09