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DND increase pending, but Budget 2015 delivers industry support

The federal government’s April budget may have come with few surprises – many of the details were leaked in the weeks leading up to its release – but it did offer the promise of new money for National Defence.

Since 2009 the Canadian Armed Forces has seen inflation adjusted spending drop by 13 percent, a significant amount that undoubtedly helped the government achieve its goal of a balanced budget for 2015. So the promise of an $11.8 billion increase is a welcome change, even if it is over 10 years and does not begin until 2017-18.

If re-elected this fall, the government proposed to raise the department’s annual budget escalator from 2.5 to 3 percent, meaning a gradual increase to $2.3 billion by 2026-27. Current missions were acknowledged: up to $360.3 million to extend Operation Impact and $7.1 million to support the training mission with the Ukrainian Security Forces. And $23 million over four years was earmarked to upgrade the physical security of CAF bases.

The pledge of an increase that will only take effect in the distant future if the government is returned to office was met with plenty of media criticism – Sahir Jhan, former assistant parliamentary budget officer, observed to the Ottawa Citizen that DND could be “treading water for the next few years.”

But the budget was widely praised by industry associations, which recognized in its many provisions for R&D, small businesses, training, and technology development new opportunities to strengthen the defence, aerospace and security sectors.

“For Canadian companies, the Budget 2015 initiatives are about ensuring that Canadians look after Canadians and that we do this with the best products and services available,” said Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, a vocal proponent of long-term procurement and industrial strategies. “Doing this requires strong and innovative Canadian companies. Collectively these investments will help us better understand what we have to offer at home, on the world stage, and win contracts abroad.”

Among the budget’s notable promises is $2.5 million per year, starting in 2016–17, to support the Defence Analytics Institute, a key pillar of the new defence procurement strategy that would increase the government’s analytical capacity.

Budget 2015 also committed to a number of initiatives to support advanced research, including $30 million over four years for cutting-edge technology development in satellite communications. It pledged $65 million to business and industry associations to help collaboration with post-secondary institutions to develop the workforce of tomorrow. And it contained provisions to encourage trade and investment, including $50 million over five years for a program to share the cost of exploring new export opportunities with small and medium-sized enterprises.

For the Aerospace Industries Association of Canada (AIAC), the extension of Canada’s participation in the International Space Station mission until 2024 and a commitment of $30 million over four years to the support the Canadian Space Agency was “another step as we continue to work with the government on a long-term vision for Canada’s future in space,” said president Jim Quick (pictured).

He also acknowledged a $6 million offer to work with AIAC and provincial and regional stakeholders to create a national supply chain development initiative. “[That] will have a significant long-term impact on the industry’s ability to grow individual companies and help them scale the supply chain faster than they have in the past,” he said.

Author: Vanguard Staff

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