Since its public release in June 2008, the Canada First Defence Strategy has provided general strategic guidance to DND, leading to the development of an investment plan to implement the policy.
Throughout, the government has represented the CFDS as a seminal policy document, supported by an unprecedented funding commitment for the re-capitalization of the CF. In reality, the promised provision of two percent growth for inflation can, at best, only be expected to maintain the spending power of the defence budget. The average rate of inflation in Canada for the 20 years ending in 2006 was considered to be 2.6 percent, and it is generally accepted that military procurement costs traditionally outstrip normal inflation levels.
Recently, Budget 2010 diminished the anticipated growth in the defence budget. While there will be no change in planned funding for 2011-12, there will be no increase for 2012-13 and a slower increase for 2013-14. The result will be an annual funding level of about $1 billion less than planned from 2013 on, or a total reduction of about $16 billion over a 20-year period.
While this may be a reasonable course of action in tough economic times, it represents a sizable reduction and necessitates adjustments to the investment plan. These could equate to delaying the implementation of acquisitions, reducing the anticipated scope of capabilities, stretching their introduction out over a longer period, or cancelling initiatives altogether. Whatever choices are made, they are likely to challenge claims made and intentions stated in the CFDS.
Another complication is that many major equipment acquisitions are destined for programmatic gridlock at about the middle of the decade. The planned procurement of a new fighter aircraft, land combat vehicles, and navy vessels are examples of projects which will create an overlapping demand on the funding available at the time. Equally important, inadequate staffing resources could exacerbate the advancement of project approvals and implementation.
Overall then, notwithstanding the positive aspects of the CFDS initiative, its objectives cannot be fully satisfied with the projected funding level for Defence. This reality, and the normal evolution of changing defence requirements over time, argues for the introduction of a formal periodic review mechanism to update the CFDS as operational priorities and budget challenges change. The urgency of an updated CFDS (and a resulting modified investment plan) cannot be overstated.
The strongest argument for urgent action is precipitated by the intended withdrawal of military forces from Afghanistan in 2011, which triggers a host of significant force structure issues. What will be the appetite for deploying a similarly capability in the future? Should the new capabilities introduced as a direct result of the Afghan mission (UAV surveillance, IED countermeasures, increased armour protection, armed helicopters, etc) be retained indefinitely? What will be the future demand for a relatively large number of personnel to deploy to a hostile environment for an extended period? Are we clear on the need to contribute to international missions consistent with our national interests? Will we be able to satisfy domestic needs for military action, to include a renewed emphasis on the Arctic, at the same time as we address expeditionary demands?
More generally, will the military be able to maintain a sufficient breadth and depth of capabilities to respond to whatever contingency may arise? Will increased funding for expenditures such as equipment “reset” be available within the defence budget given other demands for sustainment activities? Will the personnel strength of the CF be appropriate to future needs and well balanced overall?
For the immediate future, without further policy direction DND is left with little option other than to extract the best value for the funding available. Some choices will have to be made to “descope” or delay capability enhancements. Some sustainment activities and “discretionary” expenditures that can be deferred will be put on hold. The overall result will be an increased risk to the ability to respond to future unexpected demands with the capabilities and levels of readiness that have been achievable in recent years.
For the longer term, the CFDS needs to be reviewed to confirm its major elements – requirements versus affordability – and to be modified in response to changing circumstances. Above all, an affordable solution is needed. This need not be a major policy review, but rather a refinement of the existing plan. It is the appropriate and responsible thing to do.
Lieutenant-General (Ret’d) George E. C. Macdonald is a Partner with CFN Consultants and a member of Vanguard’s editorial advisory board. He served as Vice Chief of the Defence Staff and Deputy Commander-in-Chief of NORAD.