March 2020 - Defence Budget

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  • The Department of National Defence (DND) is the largest department within the federal government in terms of budget and size. In 2019-20, DND’s budget accounted for approximately 7.3% of the total Main Estimates for Canada.
  • DND funding is comprised of multi-year reference levels approved by Treasury Board each year and accessed through the Parliamentary Estimates process.
  • Canada’s current defence policy − Strong, Secure, Engaged − made a long term (20 year) funding commitment that will allow the Canadian Armed Forces (CAF) to grow its force size and enhance the capabilities required to meet Canada’s defence needs.
  • As a result of the federal election, the Supplementary Estimates may occur later in the year than normal, which would require the Department to cash manage departmental demands until later in the year.


  • The Department receives an appropriation from Parliament on an annual basis. The cash budget is approved initially through the Main Estimates and can be revised up to three times per year through the Supplementary Estimates.
  • This cash appropriation is used to make payments for salaries, operating and maintenance costs, grants and contributions, the purchase of capital equipment, and the construction of real property infrastructure.
  • DND’s Main Estimates 2019-20 are $21.9 billion, comprised of various votes as well as statutory funding (mainly comprised of funding related to employee benefit plans totalling approximately $1.4 billion). The votes are:
    • Vote 1 – Operating Costs ($15.8 billion);
    • Vote 5 – Capital ($3.8 billion);
    • Vote 10 – Grants and Contributions ($200 million);
    • Vote 15 – Payments in respect of the long-term disability and life insurance plan for members of the Canadian Forces ($400 million);
    • Vote 20 – Protecting Canada’s National Security ($2 million);
    • Vote 25 – Renewing Canada’s Middle East Strategy ($199 million);
    • Vote 30 – Supporting Veterans as They Transition to Post-Service Life ($19 million); and,
    • Vote 35 – Reinforcing Canadaʼs Support for Ukraine ($34 million).
  • The largest portion of the budget is allocated to Personnel (37%), Operating (36%) and Capital (17%).
  • Funding sought in fiscal year 2018-19 through the Main Estimates process represented approximately 92% of the Department’s budget with the remaining coming from the Supplementary Estimates, carry forward, and other adjustments. DND leverages the Supplementary Estimates process in order to access funding for CAF military operations and major capital projects as funding requirements are better defined by this point in the year. This also promotes effective financial management of departmental resources in minimizing lapses at year-end.
  • The Capital Investment Fund is the source of funds for the acquisition, construction or betterment of tangible capital assets by the Department. The current defence policy − Strong, Secure, Engaged − facilitates the long-term financial planning of both capital and operating requirements.


  • Due to the election, there is a risk that the Estimates process will not unfold as per the normal budget cycle. Should there not be an opportunity to access in 2019-20, in order to operate within authorities, there is a risk that the department may have to defer or cancel planned spending. This action may impact the execution of departmental priorities.
  • Departments will have the opportunity to request additional funding through the Governor General Special Warrants (GGSW) for urgent payments for the public good, in advance of the next Supplementary Estimates. However, GGSW will only be sought if all other appropriations, including departmental reference levels, have been depleted.

Next Steps

  • Supplementary Estimates 2019-20 are expected to be tabled in Parliament in winter 2020, and the Main Estimates for 2020-21 in spring 2020.

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