There has been much talk in Ottawa about looming defence cutbacks. Massive in scale, it is rumored they will require major force structure changes and result in significantly less capable armed forces. These cuts, it is feared, will leave military forces unable to play the same role in the international sphere that they have to date, and will require substantial strategic recalculation.
Unfortunately, most of these discussions have focused on the financial challenges facing the American military. In appearances by senior Canadian officials before Parliamentary committees, for example, the staggering prospect of slashing hundreds of billions of dollars from the Pentagon’s budget have been lamented. In comparison, the common narrative seems to be that scaling back the Canadian military will be achieved by relatively light efficiency reforms and back office reorganizations that will allow DND to do “more with less.” Indeed, we are led to believe that Canada’s cutbacks are being structured in such a way that a loonie’s worth of reduction will not lead to an equivalent loss of output.
The reality, however, is that Canada is cutting its military more than the Americans, in proportional terms. The current Pentagon plan calls for a mere one percent nominal reduction in defence spending. Even the much feared prospect of budget sequestration, which takes effect in January 2013 unless Congress acts to avoid it, will see only a one year reduction of 11 percent. Thus, even under the worst case scenario, the American military will effectively only see a return to 2007 spending levels. Afterward, DOD’s baseline budget will rise with inflation.
The Canadian Forces, on the other hand, are facing significantly more fiscal pain. The combined impact of the Strategic Review and Deficit Reduction Action Plan will see $2.1 billion removed from DND’s budget line – roughly 11 percent in nominal terms.
Even this total, equal to the worst case scenario south of the border, does not reflect the full extent of the challenge at NDHQ. Budget 2010 froze operating budgets and stopped compensating departments for the impact of negotiated wage increases. The net impact to DND is the equivalent of almost another $1 billion in cuts, since the department will need to offset these measures by reallocating funds internally. Thus, the full scope of the cutback is roughly $3 billion, or close to 15 percent of the base budget.
Furthermore, the way the cuts are structured, effectively exempting Regular Force military personnel and the capital acquisition program from the reductions, means that the operations and maintenance account will bear the brunt. The result? The CF will retain most of its force structure, although the capital plan will slip significantly.
To achieve this, the rest of the defence workforce, civil servants, full-time reservists and contractors will see thousands of positions slashed, and the remaining troops will be kept at a lower level of readiness. At the same time, the dollars that would otherwise maintain and operate new equipment will be scaled back sharply, jeopardizing the military’s ability to operate its fleets, and the delays in planned acquisitions means that procurement budgets will rapidly depreciate.
Both of these impacts suggest that the CF may quickly become hollow, as readiness suffers at the expense of retaining a larger force structure than the government seems willing to keep operationally funded.
In the midst of all this, the military is also attempting to transform, although the full details of this process have not been publically released. So far, DND has announced that it is redirecting resources to new threat areas, including space and cyber. To realize this change, the department appears to be following the Leslie Report’s recommendations to slim down headquarters. The most publically prominent of these moves so far is combining the operational commands under a single three star force employer, the Canadian Joint Operations Command (CJOC). It, along with the rest of the Level 1 organizations in the National Capital Region, are attempting to downsize 25 percent of their Regular Force members. The newly freed up troops will be used to staff the CF’s emerging priorities – a requirement Leslie estimated to be 3,500 personnel overall.
It remains to be seen how much disruptive change the department chooses to take on, i.e., how far will transformation go? With a requirement to cut so much money, the organization will be hard pressed to substantially reorganize at the same time.
At present, the next CDS is facing a significant readiness deficit. The questions that remain to be answered are 1) how much of a reorganizational challenge will he face? And 2) have we seen the last of the budget cuts? While we do not yet know the government’s full intent, there are worrying signs that we may well be headed for another decade of darkness.
David Perry is a PhD Candidate in Political Science at Carleton University, a defence analyst with the Conference of Defence Associations Institute, and a member of the Advisory Council for the CDFAI Strategic Studies Working Group.
