Feds spend­ing less on de­fence

The Expositor (Brantford) - - NATIONAL NEWS - LEE BERTHI­AUME

OT­TAWA — For the sec­ond year in a row, the fed­eral govern­ment is ex­pected to spend bil­lions of dol­lars less on new mil­i­tary equip­ment than promised be­cause of a com­bi­na­tion of good and bad news: cost sav­ings on some projects and de­lays in oth­ers.

The Trudeau govern­ment in 2016 re­leased a new de­fence pol­icy that in­cluded dra­matic in­creases in spend­ing on new air­craft, ships, ar­moured ve­hi­cles and other mil­i­tary equip­ment over the next 20 years.

The in­vest­ments are vi­tal to re­plac­ing the Cana­dian Forces’ fighter jets, ships and var­i­ous other types of ag­ing equip­ment with state-of-the-art kit.

Yet while new bud­get doc­u­ments filed in the House of Com­mons show the Depart­ment of Na­tional De­fence has so far been given au­thor­ity to spend $4 bil­lion this fis­cal year, the pol­icy had pre­dicted to­tal spend­ing of $6.5 bil­lion.

The depart­ment does have un­til March 31 — when the fed­eral govern­ment’s fis­cal year ends — to make up the $2.5-bil­lion dif­fer­ence, but its top civil­ian of­fi­cial, deputy min­is­ter Jody Thomas, ad­mit­ted Thurs­day that a large short­fall is likely.

Part of the rea­son is that the depart­ment ex­pects to save about $700 mil­lion on var­i­ous projects that ended up cost­ing less than planned, Thomas said fol­low­ing a com­mit­tee ap­pear­ance on Par­lia­ment Hill.

“We’ve de­liv­ered things more ef­fi­ciently than was an­tic­i­pated and so we don’t need the money,” she said. “And we can ap­ply it to projects, ei­ther new projects or projects that have a cost over­run.”

But de­lays mov­ing some projects through the mil­i­tary pro­cure­ment sys­tem have also caused their fair share of prob­lems, Thomas said, and the depart­ment is ex­pect­ing to have to put off $1 bil­lion to $1.3 bil­lion in pur­chases it had planned to make this year.

“We’d like to (spend) $6 bil­lion ev­ery year. Can I guar­an­tee to you that we’re go­ing to do that? No, there’s slow­downs in projects, there’s slow­downs with sup­pli­ers, there’s changes in scope. Things change,” she said.

“I’m hop­ing to get it be­low $1 bil­lion. I’m not com­mit­ting to get­ting it to be­low $1 bil­lion . ... We’re driv­ing projects to get it as low as pos­si­ble and spend funds ef­fi­ciently and ef­fec­tively. We’re not wast­ing money.”

The govern­ment spent $2.3 bil­lion less than planned last year. That was also largely be­cause of de­lays in projects such as the govern­ment’s multi­bil­lion-dol­lar plan to buy new war­ships, though also be­cause some things ended up cost­ing less than ex­pected.

The govern­ment does de­serve credit for hav­ing in­creased in­vest­ments in equip­ment to lev­els not seen since the height of the war in Afghanistan in 2010 and 2011, said de­fence an­a­lyst David Perry of the Cana­dian Global Af­fairs In­sti­tute.

“And if they can ac­tu­ally move as much as the deputy (min­is­ter) was say­ing, and they only leave $1 bil­lion on the ta­ble, that will be the best year in the last sev­eral decades,” said Perry, who has pre­vi­ously warned that de­lays in the pro­cure­ment sys­tem could de­rail the de­fence pol­icy.

“But there are a bunch of im­pacts from not be­ing able to spend money on sched­ule. One is you don’t have the ac­tual gear to do what you want. And project bud­gets lose pur­chas­ing power when money is not spent on sched­ule. So it’s not good to have de­lays.”

GETTY IM­AGES FILES

Crew mem­bers are seen on­board the Royal Cana­dian Navy Hal­i­fax-class frigate, HMCS Ot­tawa in 2017. For the sec­ond year in a row, the fed­eral govern­ment is on track to spend less on mil­i­tary equip­ment than promised

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