21

Is this government’s defence spending at unprecedented highs?


 

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.


 

Comments are closed.