Bulk of new money slated for troops' pay
but allocation is lower than expected

Jeff Sallot
Parliamentary Bureau
Wednesday, February 17, 2021

Ottawa -- After a decade of post-Cold War budget cuts, defence spending is increasing again, but modestly and with most of the new money earmarked for pay raises and improved benefits for the troops.

The increase falls short of what had been hoped for by the military, which is facing the possibility of taking on a major new peacekeeping mission in Kosovo within weeks and is still trying to get cabinet approval for new maritime helicopters after five years of delay.

Nevertheless, Defence Minister Art Eggleton said the budget is "great news" and will allow him to announce new pay rates and compensation measures next month.

In his budget, Finance Minister Paul Martin provided the Canadian Forces an additional $175-million in each of the next three years to cover what the military calls its quality-of-life improvement package for the 60,000 uniformed personnel. He also restored $150-million in defence cuts made last year.

With these increases, defence spending will reach about $8.7-billion for the fiscal year that begins in April. Defence is one of the largest items in the budget. Yesterday's announcement increases defence spending from 5.4 per cent of total federal spending to 5.7 per cent in the coming fiscal year.

Finance Department officials have told the Canadian Forces to plan on annual budget increases of only 1.5 per cent well into the new decade.

Mr. Eggleton said last night pay and benefits improvements are his highest priority, and he is determined to implement a package recommended by a House of Commons committee last year. Defence officials have costed out that package at $700-million over three years. Mr. Martin's budget would thus leave his cabinet colleague with a $175-million shortfall. But Mr. Eggleton said internal reallocations fill in the gaps.

The House committee travelled the country, hearing horror stories about soldiers lining up at food banks and their families living in substandard military houses with leaky roofs and broken furnaces.

The deadline for the government to respond to the committee's report is not until March 26. That's when the details of new pay rates will be announced.

Mr. Eggleton is trying to squeeze additional money from the federal treasury. He is asking to keep the money from the sale of surplus military assets, such as the bases that have been closed. But the Treasury Board is resisting this idea.

Defence Department sources have said recently that some drastic steps may have to be taken over the next few years to make up for shortfalls, including the possibility of reducing the size of the forces by 5,000 troops over two years or mothballing some of the navy's 12 frigates or selling off some of the air force's 122 CF-18 fighter planes.

But Mr. Eggleton played down these possibilities at this time, but did not rule them out down the road. "There's a lot of planning we have to do in terms of future considerations about what we need in the Canadian Forces," he said.

Ottawa -- The federal government began to suture the fiscal wounds of the people in uniform yesterday with budget increases for the Canadian Forces, the Coast Guard and the RCMP.

Defence officials say the increase in their share of the federal budget will head off possible layoffs of soldiers and allow them to begin looking at new equipment, such as maritime helicopters.

Spending was slashed dramatically at all three uniformed services in the deficit-fighting days of the Liberals' first term of office. Mounties and Coast Guard crews curtailed operations. The Canadian Forces announced a pullout of the Kosovo peacekeeping mission.

But Prime Minister Jean Chr�tien and Finance Minister Paul Martin moved to stop the bleeding yesterday with a promise of more than $2.8-billion cumulative in new spending for the three agencies during the next three fiscal years.

By far the biggest increase will go to the cash-strapped Canadian Forces, which were embarrassed by delays in the East Timor peacekeeping deployment in the fall because of breakdowns of transport planes.

The Department of National Defence will get a cumulative total of $1.7-billion in new money starting with the new fiscal year on April 1 and running to the end of the 2002-2003 fiscal year.

The first instalment will be substantial, an infusion of $546-million in the first year of the three-year budget plan. That will bring annual defence spending up to about $9.5-billion next year.

The growth in military spending will be more modest in each of the two subsequent fiscal years. The defence budget will top out at about $9.6-billion in 2002-2003. That's still below Cold War-era spending levels and the $12-billion annual defence budget the Liberals inherited when they took office in 1993.

The restoration of some of the funds, however, should be enough to allow the Canadian Forces to maintain commitments to North Atlantic Treaty Organization allies and keep troop strength at about 60,000, officials say.

The three-year budget plan means some of the more extreme solutions (to the money crunch) are not on the table any more, a senior Defence official said. The fate of some smaller units, such as the popular Snowbirds aerobatics team, will not be decided until officials have a chance to crunch the numbers later this spring.

A beaming Defence Minister Art Eggleton told reporters the increases mean the Canadian Forces will continue to improve pay and benefits packages and can buy long-awaited maritime helicopters to replace the aging Sea Kings. Upgrading CF-18 fighter planes, Aurora patrol planes and Hercules air transports can also proceed, he added.

Mr. Martin said, "Nobody would begrudge those people [in the military] who have done so much for us the fact that we have increased their funding."

There is still a long way to go if the Canadian Forces are to acquire all of the equipment they need to keep up with their allies, said Howard Mains, the vice-president of the Canadian Defence Industries Association.

Mr. Martin made only passing reference to defence spending in the budget speech in the Commons. Polls and focus groups conducted for the government show little public support for military spending.

The budget plan shows the Department of the Solicitor-General getting a cumulative $811-million in new spending over the next three years. Most of it is earmarked for the RCMP.

The first-year increase will be about $231-million on a base budget of about $2.1-billion for the RCMP.

The Mounties say the cuts of recent years have forced them to curtail a number of their activities, including undercover operations targeting organized crime. Training was also reduced.

Provincial authorities in the eight provinces where the RCMP is the principal police force have also complained to Ottawa about reduction in services.