Tough choices for defence spending
CAMPBELL CLARK AND JEREMY TOROBIN
Ottawa—
Published Monday, Oct. 25, 2010
Across the country, the 23 Canadian Forces bases and a host of stations, posts, and support units are what connect men and women in uniform to the society they defend. For small towns and rural areas, they are a key driver of the local economy; for regions, part of the community. And for politicians, they're a way of life they're wary of messing with.
Some former military figures argue the Canadian Forces could get by with as few as a dozen bases. But can Stephen Harper's minority government, always facing a nearby election, risk the politics of closing bases such as CFB Borden in Simcoe County, Ont., where former Tory Helena Guergis is running as an independent?
The conundrum is that if Canada's military doesn't cut bases, it will have to trim people, or training, or planes, or ships. All the plans, including expanding the forces and purchasing a shopping list of equipment - fighter jets, navy ships, maritime-surveillance planes and more - can't be paid for with the money now set aside. Operating costs - personnel, training, maintenance, buildings, and bases - will eat away money to replace equipment.
"It's a sure-fire route to obsolescence, irrelevance, and rust-out," says retired Navy Commodore Eric Lerhe, now an analyst critical of the Forces' overhead costs.
After deep cuts in the 1990s when equipment aged and the forces were downsized, Canadians have seen defence spending increase substantially - up 40 per cent since 2004. But hard long-term choices still have to be made. The Forces will have to cut infrastructure and administration. Even so, buying the fighters the air force wants now might mean passing on ships the navy needs later.
Deficit pressures and a slow economy loom. Those who call for vastly increased spending are unlikely to be satisfied. Barring a major public shift, the political reality is we're unlikely to spend much more. Mr. Harper's pro-military Conservatives trimmed spending-increase plans in their 2010 budget.
In 2008, the Conservative government set out its Canada First Defence Strategy with a plan to replace and add fleets of planes and ships and expand the Forces' numbers, with rising defence spending that would total $490-billion over 20 years. But the 2010 budget confirmed not only that the extra sums allocated for deployment to Afghanistan will end in 2011, it cut back base-spending increases by seemingly minor annual amounts that will add up over time. Under current projections, there will be $44-billion less than under the 2008 defence strategy - a shortfall greater than the entire sum of $35-billion the government set aside to replace and upgrade the major fleets of ships, planes and vehicles.
Even with the bigger sums planned in the defence strategy, analysts worried the 12 per cent of funding set aside for all capital spending on equipment was far from the 20 to 25 per cent typically required to update. Now, Canada's military faces the task of cutting operating costs to buy equipment, when half of defence costs are for personnel, and the Forces' numbers are supposed to grow.
"The larger you grow the Canadian Forces, the less equipment they're able to buy, and they already can barely buy the equipment they need," says University of Ottawa defence analyst Philippe Lagassé.
The Canadian Forces have appointed a chief of transformation, Lieutenant-General Andrew Leslie, to trim about $1-billion from overhead and operating costs in the $19-billion base budget and devote it to things that fly, sail, roll, or shoot. But the shortfall means that over time, more than $2-billion a year would have to be trimmed from the plans to pay for all the equipment.
The military will have to become leaner. The 69,000 men and women in the uniforms of the regular force include only 46,000 in its main fighting forces - 22,000 in the army, 14,000 in the air force, 9,000 in the navy, and about 1,000 in the special forces. About 10,000 are in basic training. Another 12,000 are at headquarters, in national commands, recruitment, personnel, information and medical staff, and the defence department also has 28,000 civilian employees.
Gen. Leslie's task includes rationalizing HQ staffs to move uniforms to the deployable forces, but the main fighting forces feasibly can't get smaller.
The defence strategy sets out $140-billion over 20 years for maintenance, spare parts and training - 29 per cent of spending but it's a small increase over the existing sums, so deep cuts will show in an area that the government insists is key to the military's ability to deploy to any operation.
That's why bases, cut in the 1990s, could face the scissors again. The Canada First Defence Strategy calls for infrastructure spending on its bases, stations and 21,000 buildings to total $40-billion over 20 years, 8 per cent of the budget. Mr. Lerhe cites studies showing Australia and the Netherlands field more advanced capabilities with smaller budgets partly because they have much less infrastructure.
The argument that Canada's big geography requires a scattering of bases doesn't mean Ontario needs six, plus stations and support units, he says. The Air Force's 14,000 people don't need 11 bases, and search-and-rescue planes can fly from civilian hangars.
CFB Borden, a century-old facility credited as the air force's birthplace, now hosts a recruiting centre and training schools, but not operating units. Such sprawling bases are expensive to maintain, and could have functions cut, outsourced or merged into other bases, says Gary Garnett, a retired Navy vice-admiral who was heavily involved in the Defence Department's 1990s cost-cutting.
Already, the Forces are "shaving the ice cube," trimming program budgets by 5 or 10 per cent, reducing training and maintenance to buy equipment. Each procurement project gets a haircut: there's now to be two navy supply ships, not three, for $2.6-billion; the plan to buy six to eight Arctic Patrol Ships will be six, with smaller guns, and still might not meet the $3.1-billion budget.
Accounting rules make it alluring to believe it will all fit over time. On the books, equipment such as planes and ships are paid for over their lifespan, so the government will be tempted to delay big purchases to allow more to fit in the 20-year spending plan. But that means more of their costs will weigh on the books afterward. And the crunch is long-term.
The Canada First Defence Strategy calls for buying major equipment fleets that will cost $75-billion to $80-billion over their full life-spans of 30 or 40 years, but many analysts believe the price will exceed $100-billion. F35 fighters alone will likely cost $25-billion over their 40 years; without a set total and no bidding competition, it's not known if another fighter would be substantially cheaper. The navy needs to replace its three destroyers within a decade, and in 20 years will replace the core of its fleet, 12 frigates - at an estimated total cost of more than $40-billion for all 15 ships.
Some choices have been made, because of Afghanistan, or justified by it. Right or wrong, they constitute a decision to fund the army and an expeditionary force: four big C-17 strategic lift planes; smaller Hercules transports; Chinook helicopters; army vehicles and tanks. Some domestic musts will have to come soon, such as maritime-surveillance and search-and-rescue planes. Tough decisions loom.
Will the navy's Arctic Patrol vessels be cut for smaller Coast Guard boats? Can the army skip armoured close-combat vehicles for troops fighting alongside tanks? Can Canada afford F35 stealth fighters, with advantages for evading air defences abroad, or should it choose another fighter if it can guard Canadian airspace for billions less - and if it means preserving the navy's capacity to sail a task force around the world?
Elsewhere, budget pressures are forcing countries such as Germany and Britain to slash military spending. But Canada doesn't have a big army to cut, has made choices to fund an expeditionary force, and has domestic needs to meet - and will have to decide what else gets top dollar.
and there are some worthwile effeciencies to be had if we can get over the attachment to some peices of geography. In any case, the same claim of being a big regional country might be said of Austrailia.
