The Liberals' defence policy hits a fiscal wall
The department is facing spending cuts at a time of growing global volatility
There was a revelatory moment on the weekend as Defence Minister Bill Blair attempted to bridge the gap between rhetoric and reality in the Liberal government's spending plans for his department and the Canadian military.
Asked about an anticipated (and long overdue) update to the country's defence policy (supposedly made urgent two years ago by Russia's full-on invasion of Ukraine), Blair acknowledged that the reset is now being viewed through a fiscal lens.
"We said we're going to bring forward a new defence policy update. We've been working through that," Blair told CBC's Rosemary Barton Live on Sunday.
"The current fiscal environment that the country faces itself does require (that) that defence policy update ... recognize (the) fiscal challenges. And so it'll be part of ... our future budget processes."
It's an important statement, in light of today's federal fiscal update. It also brings up a question: has the Trudeau government — which billed itself initially as an "evidence-based" government — viewed its existing defence policy through the lens of affordability?
For several weeks now, Blair has been called upon to defend a $1 billion annual reduction in planned defence spending during a time of geopolitical turmoil — part of the federal government's overall spending reduction plan.
After it initially denied it was cutting defence spending, the government's messaging shifted to focus on fiscal prudence and accountability to taxpayers squeezed by the high cost of living.
The release last week of federal budget estimates and supplementary appropriations effectively put a spike in the claim that the defence spending reductions don't amount to a cut. It also raised questions about whether the goals of the original defence policy are even being met.
What the estimates say, what the minister says
In 2017, the Liberal government estimated it would spend $29.8 billion at National Defence in the current budget year.
The supplementary budget estimates, meanwhile, record a total appropriation of $28.9 billion for defence in the current fiscal year — $500 million of which is destined not for the Canadian Armed Forces but for the Ukrainian military.
When you add up the difference, you find the "almost $1 billion" cut that the country's top military commander warned about — or the "$900 million and change" the deputy defence minister described.
And yet, at the Halifax International Security Forum over the weekend, Blair struck a decidedly hawkish tone in front of a hawkish audience.
"Although we are already investing in major new military capabilities in all domains, again, I will reiterate additional investments are needed and they will occur," he said Friday during his opening remarks. "We know that we need resources to put behind our aspirations."
Later, during a round of media interviews, the minister was a bit more specific.
"We need to spend more on the right things," he told CBC News.
"We need to spend more on munitions. We need to spend more on military platforms, planes, submarines and ships. We need to spend more on the equipment, the resources and the training that the Canadian Armed Forces needs."
The problem with Blair's remarks is how they keep bumping up against reality. Big cash injections to pay for 88 new F-35 fighter jets, new patrol frigates and even MQ-9 Reaper drones are still three to five years down the road.
Those are the "aspirations" Blair was talking about.
What's happening now was spelled out quite clearly in those same recently released federal government estimates. They show the Liberals intend to cut $500 million across government during the current fiscal year — $211.1 million at the Department of National Defence alone.
Today's mini-budget could tell us what the reduction will look like in future years — given that the existing defence policy forecast a spike in appropriations connected to the purchase of big-ticket items, such as the new fighter jets and new naval frigates.
The recent signals from Blair have been unmistakable.
"We may not be able to go as fast as we might have hoped, but we have to continue to move forward," he said.
Some defence analysts question whether any new defence policy could be relevant, given that the goals set out in the 2017 policy document aren't even being met.
Military 'unable' to meet terms of 2017 defence policy
One policy goal of the existing defence plan, Strong, Secure and Engaged, was to require that the military be able to concurrently deliver "two sustained deployments of 500 [to] 1,500 personnel in two different theaters of operation, including one as a lead nation."
In a footnote, the recent estimates said the Canadian military is "currently unable to conduct multiple operations concurrently per the requirements laid out in the 2017 Defence Policy. Readiness of CAF force elements has continued to decrease over the course of the last year, aggravated by decreasing number of personnel and issues with equipment and vehicles."
Some analysts say they believe that even if the federal government hits its overall budget reduction targets, what has been taken away from defence — and what's about to be taken away — won't be coming back, the minister's public assurances notwithstanding.
"Reversing the trend toward deficit reduction would also not guarantee a major boost to defence spending, as numerous other domestic issues ranging from cost-of-living and housing availability to health care and climate change would be major competitors for additional spending," Geordie Jeakins, an analyst specializing in defence and aerospace at the consulting firm Oliver Wyman, wrote in a policy paper posted by the Canadian Global Affairs Institute.
"This is all notwithstanding the possibility of a recession or other external shocks further complicating the fiscal picture."
Jeakins went on to say that the Liberal government's policy goal of "reorienting the CAF's mission to be more assertive would likely be an expensive endeavour.
"The new defence strategy will have to consider carefully if Canada wants to undertake this role and, if so, how it intends to marshal the resources to make it a reality."
It's not likely Tuesday's mini-budget will deliver that kind of blinding clarity. That point was tacitly acknowledged by Blair when, in an interview with CBC News, he described his assurances to the security forum this way:
"I was simply acknowledging to the room that we've got a lot of work to do, and we've got to, first of all, have the funding that we need in order to make those investments," he said.
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