Is this government’s defence spending at unprecedented highs?

by John Geddes

Politicians so often make grandiose claims, and these are so rarely taken seriously, that testing them against facts might seem a low-yield exercise. Who, you might well ask, really cares? Yet I wonder if Conservative assertions about how no previous federal government has poured so much money into the Canadian Forces might be due for a corrective.

Immigration Minister Jason Kenney—such a key shaper of the Conservative message—boasted recently that “no government in the modern history of Canada has done more to invest in giving the equipment necessary to our men and women in uniform.” A government op-ed piece (under the triple byline of Defence Minister Peter MacKay, Associate Defence Minister Julian Fantino and Veterans Affairs Minister Steven Blaney) stated that the Tories have “increased our investment in our bravest Canadians…to unprecedented levels.”

I’ve asked various government officials to back up those statements. The official response from MacKay’s office is that annual defence spending has risen roughly $6 billion since the Tories took office, and the government has planned for a lot of procurement, including $25 billion for naval ships. True enough, but these points hardly add up to making the historical case. For that we need clear comparisons across at least recent decades.

One key starting point would be to look at what portion of all federal spending is allocated to defence—an indication of how the Forces stack up compared to other political priorities. In 2010-11, defence accounted for 7.9 per cent of all spending. That’s way up from the low ebb of 5.6 per cent in 1996-97, back when the Liberals were cutting wherever they could to eliminate the deficit. But it’s about on par with the 7.8 per cent of 1986-87, the peak of defence spending by Brian Mulroney’s Conservative government.

Looking further back, though, the military’s 7-per-cent-plus slice of the expenditure pie under Harper and Mulroney is measly compared to the 14.4 per cent when Pierre Trudeau came to power in 1968. During the 1970s and early 1980s, Trudeau steadily shrank the military’s share from previous norms—defence devoured 16.3 per cent of the federal budget in 1967—to the single-digit percentages that have prevailed since.

An even broader measure is defence spending as portion of the economy. In 2010-11, defence spending was 1.3 per cent of gross domestic product. That’s well up from the low of 0.9 per cent of GDP plumbed in 2001-02, but a bit below the range of 1.4 to 1.9 per cent that prevailed from 1972-73 to 1994-95. Before then defence spending consistently ran above 2 per cent of GDP. (For both share-of-government and share-of-GDP figures I rely on the finance department’s fiscal reference tables.)

So as a portion of government or of the whole economy, defence spending is not now at record levels for the modern era. Still, Kenney made a more precise claim—of unprecedented investment in “equipment necessary to our men and women in uniform.”

I asked the Department of National Defence for figures showing how its capital spending today stacks up against historical levels. They have not yet provided anything, but I’ll post on anything useful they pass along. Left to my own devices, I thumbed through federal Public Accounts on the shelves of the Library of Parliament for defence spending on machinery and equipment going back to the Mulroney era.

From 1985 to 1996, I found, DND’s annual spending on machinery and equipment crested above $2 billion. That era’s high point of $2.6 billion, set in 1988, would translate into about $4.5 billion in today’s dollars (according to the Bank of Canada’s inflation calculator, an admittedly inexact tool for this purpose, since it’s based on consumer price inflation).

For the past four years, the Harper government’s spending on defence machinery and equipment has been running at well over $3 billion a year. It hit $3.7 billion in 2011. That’s easily higher than the range from 1997 to 2007, when equipment purchases were typically well below $3 billion. However, spending from 1985 to 1989, adjusted for inflation, looks higher to me than the 2011 level.

I asked Craig Stone, director of academics at Canadian Forces College, and a leading expert on military procurement, about all this. Stone sees defence spending following a long cycle, rather than rising and falling with the fortunes of the political parties. After a “huge spending spree” in the 1950s, he said, spending declined into the 1970s, then rose again in the 1980s, fell back down, and is now peaking again.

Stone said a high-water mark for capital spending came (as those Public Accounts numbers suggest) when the Mulroney government was implementing a string of decisions made in the late stages of the Trudeau government to purchase jets, tanks and ships. “In the 1980s, we were buying CF-18s, we were buying Leopard tanks, we were buying new frigates,” he said, although he cautioned that trying to make exact comparison across eras with different ways of costing out procurements is tricky to say the least.

These days Conservatives are again presiding over an upward shift begun under the Liberals they ousted. The 2005 budget—the last of the Chrétien-Martin era—put defence spending on a track to rise steadily over five years to close to $6 billion above 2005 levels, or around  $20 billion a year by 2010. In 2011, six years after that last Liberal budget and five after the Harper government won power, defence spending stood at around $21 billion.

Conservatives might point to their future plans as even more telling than what they’re spending now. Their Canada First Defence Strategy, a very long-term blueprint published in 2008, promised $490 billion in new equipment over two decades.

The exact pace of that spending is uncertain, though. Finance Minister Jim Flaherty’s 2012 budget cut $3.54 billion out of what was to have been spent on military purchases over the next seven years, pushing that spending out into the shadowy future.  “The Canada First Defensive Strategy is over 20 years or more,” Ugurhan Berkok, a policy studies professor and adjunct chair of Queen’s University’s defence management studies program, told me. “Who knows whether we’re going to make good on those promises to the Forces?”

And Berkok observed that the major procurements the Conservatives have pushed forward on decisively—such as buying new Hercules tactical lift planes and Cyclone helicopters—were initiated by the Liberals. So far, he said, the Conservatives haven’t signed a contract for any major purchase beyond those planned by the previous government.

Big projects the Harper government could truly call its own, like the controversial F-35 fighter jets and new naval ships, have yet to be turned into signed contracts. Presumably most of those ambitious plans will proceed, although perhaps at a somewhat slower pace in an age of fiscal caution.

No reasonable observer would dispute that this is a period of renewal for the Canadian military, but it’s hardly one impervious to the pressures of budgetary restraint, and not one that eclipses the spending levels of the 1960s or the 1980s. That context matters. It suggests that what’s going on now is neither as extreme as critics of defence spending might argue, nor as remarkable as the government would have us believe.




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Is this government’s defence spending at unprecedented highs?

  1. Facts. Who cares ? Let’s just keep on saying stuff.

    • Why are you against jobs and prosperity?

      • And don’t forget the military. Even suggesting we may be wrong on our figures means you don’t support the troops.

        • Meanwhile with things like healthcare they tell us the solution is not to just throw more money at it.

  2. Facts. Who cares ? Let’s just carry on saying stuff.

    • Do the department of finance fiscal reference tables not count as legitimate?

  3. Your mistake is in the assumption that, “no government in the modern history of Canada has done more to invest in giving the equipment necessary to our men and women in uniform.”, means actually spending the money. Rather, the telling phrase is ‘done more’. In terms of photo-ops, parades and celebrations, promised expenditures, words spoken, praise for soldiers, vows to help veterans, time wasted on F-35′s, screeches against opponents…, it is correct that no government has done more.

  4. Wonderful exercise. Take two broad statements that don’t define any metrics, then define you’re own metrics and call the two broad statements lies.

    • Which metrics should have been used, person-who-isn’t-Rick?

      • How about military spending compared to our allies? How about accounting for technological improvement? How about accounting for moral support? There’s lots of ways he could massaged the numbers the other way. Person who isn’t Thwim.

        • Oh. So you’re saying he should have just made up metrics that nobody on the face of the earth actually uses to examine military spending now vs history, rather than the common ones such as total dollars and % of GDP, and because of that he’s obviously screwing with the numbers?

          Man, you would have been smarter not to answer. At least then a stupid person might have thought you had a point.

          • Made up metrics?! The numbers are available, they’re not “made up”. The whole point of my argument, which seems to be completely over your head, is that there are alternate metrics that can be used. I know taking the “common ones” is the “common” thing to do. That’s why simple minds like yourself find them easy to comprehend. I’m saying that the truly curious find alternate ways to look at things to get a wider view of a topic.

            I know that intellectual diversity isn’t your thing, so I don’t really care to convince you of anything. If you want to continue forming your “opinions” by reading leftist opinion pieces and without thinking about the actual facts at all, that’s fine by me. I’m not here to prevent you from being an idiot.

          • You mean like the alternate costing of the F 35′s? You are so slick, have you thought about selling used cars?

          • Why on earth should he take alternate metrics though? Unless they spell out specifically that they’re not using the common metrics, that would be the most reasonable assumption to make, and certainly the most reasonable assumption that would be made by anybody listening to their claims. It would certainly be idiotic to suggest that they’re basing their claims on “moral support” without any indications that they were.

            You’re suggesting that believing what the CPC says requires you to be unreasonable and idiotic.

            Actually. You might be on to something there.

    • Kenney made his remarks three weeks ago. Geddes has been on the phone several times since then with officials in MacKay’s and Fantino’s offices seeking *any* real or purported justification for the claim that this government exceeds its predecessors in equipment purchases for the military. As he wrote above, he’s still waiting. Good luck learning how to spell the possessive “your.”

      • Well pardon me Grammar Nazi! I apologize profusely for sullying this intelligent and non-partisan community with my savage affront to the English language. I look forward to you correcting the spelling and grammar errors of everyone in this community over the coming years. (I would say it’s a highly appropriate job for a man of your talents, but I actually like your writing, btw). But I couldn’t help but notice your Twitter feed seems to have some less than complete sentences and misspelled words. Care to offer up an explanation for why you’re constantly butchering the English language in such a public way?

        I was unaware that Geddes had made “several” phone calls over the period of 3 weeks on the issue. That completely justifies his complete lack of balanced research on the subject. Using Google is hard. Making phone calls, I guess, is harder. I mean, that might even work out to 2 phone calls per week, and that’s with only 5 days per week to work with (I understand telephones in Ontario stop working on the weekends)! The man probably deserves a vacation.

        Stephen Harper: “The sky is blue”.
        Geddes: “Researching the subject at 3am last night, I discovered that the sky was not blue. Ipso facto Stephen Harper is a liar.”

  5. A better (and the usual) measure would be as a percentage of GDP, for obvious reasons. Cutting spending in other areas, or increasing spending in other areas, changes the percentage of military vs federal spending, even when military spending has not changed at all.

    • Well, while I always knew you didn’t bother to read what you comment on, it’s nice that you don’t feel the need any longer to even try to hide it.

      Specifically, this part:
      An even broader measure is defence spending as portion of the economy. In 2010-11, defence spending was 1.3 per cent of gross domestic product. That’s well up from the low of 0.9 per cent of GDP plumbed in 2001-02, but a bit below the range of 1.4 to 1.9 per cent that prevailed from 1972-73 to 1994-95. Before then defence spending consistently ran above 2 per cent of GDP. (For both share-of-government and share-of-GDP figures I rely on the finance department’s fiscal reference tables.)So as a portion of government or of the whole economy, defence spending is not now at record levels for the modern era. Still, Kenney made a more precise claim—of unprecedented investment in “equipment necessary to our men and women in uniform.”

  6. still no icebreakers

  7. Personnel costs in DND have been rising as a % of the total budget for years. They are now over 60% and climbing. It’s likely that capital costs and O&M are lower as a % of the budget now than in previous years. In other words we get less bang for the buck.

    Why does it matter? In previous cycles we didn’t have the problems of an aging demographic that will push our health care costs through the roof while the number of working adults drops. We simply don’t have the money to waste on defence even if it turns out we’re spending about what we did in the past.

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