Vanguard Magazine

18 APRIL/MAY 2019 www.vanguardcanada.com Strong, Secure, Engaged: Year review deFenCe PoLiCY A s Strong, Secure, Engaged approaches its second an- niversary, the Trudeau gov- ernment's record of deliver- ing on its defence policy is a largely positive one. While it isn't spending as much as anticipated on capital (equip- ment and infrastructure), that expenditure line is increasing in inflation adjusted dol- lars, and total defence spending is meeting the policy's expectations. In Strong, Secure, Engaged's first year (2017/2018), overall defence spending actually exceeded the level of spending projected by roughly $2 billion, reaching $23 billion. As a share of GDP, the latest NATO statistics show that translated into 1.4 per cent of GDP, again surpassing the projected share of 1.3 per cent. 1 The higher than anticipated spending came on the back of a nearly $2 billion one-time pension adjustment. But had that pension funding not flowed, defence spending would have ended up almost exactly as outlined in the document. For the second year of the policy, the allocation to DND in the 2018/2019 estimates documents shows the department on a trajectory of once again meeting the overall spending projection outlined in the policy, while falling slightly short of projected spend- ing as a share of GDP. Because of the one-time infusion of pension funding in 2017/2018 that is non-recurring, de- fence spending as a share of GDP is actu- ally slated to decline from the year prior, to 1.23 per cent of GDP, very close to the 1.25 per cent projected in Strong, Secure, Engaged. In short, Trudeau is spending what he said he would on the military as a whole. Below the topline spending data, the Trudeau record when it comes to Capi- tal spending is more complicated. Three trends have emerged, two positive and one negative – albeit predictable. Regard- ing the latter, actual spending on Capi- tal (the money that actually gets spent to acquire equipment or infrastructure) in the policy's first year and the alloca- tion of Capital funding (the money that Parliament gives DND each year, based on the departments spending plan) in its second are both significantly less than projected in the policy. In the first year, $2.5 billion less than projected was spent, and in the second, $2.3 billion less than projected has been allocated. As defence officials have indicated, four broad factors have explained the difference: contingen- cies not being used, project efficiencies, industry non-delivery and problems in- ternal to government. Of these, the first two do not represent problems, per se, as they do not reflect delays in acquiring capability. However, they still contrib- ute to actual Capital expenditures falling short of what had been projected, which is important for Canada's alliance commit- ments. The lesser recognised of the two financial pledges allies made at the NATO summit in Wales was that 20 per cent of allied defence spending would go towards equipment and related R&D. While under Strong, Secure, Engaged, Canada indicated clearly it would never meet the NATO target of spending 2 per cent of GDP on defence, the document had indicated it would quickly reach, and then exceed the 20 per cent target for equipment. Not spending as much as projected in Strong, Secure, Engaged suggested would happen on Capital, even for 'good' reasons, leaves Canada both short of the mark on this NATO spending target, and short of what it communicated it would achieve under the policy. a Two-

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