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.

Key Facts

  • 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

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Interim supply

  • 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

Key Facts

  • 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

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