Defence and Security

Background
Canada is one of the 15 top military spending nations in the world, and the sixth largest military spender among the 28 members of NaTo. Our military spending is now higher than it has been in more than 60 years. According to the federal governments latest budget figures, the Department of National Defence spent $21.3 billion in fy201011, and it is budgeted to spend $21.7 billion this year. That level (fy201112) is 6% higher than it was before the beginning of the global recession, 19% higher than at the end of the Cold War, and 42% higher than immediately before the terrorist attacks of September 11, 2001. While the current build-up in spending began in 1999, it is the Canadian participation in the U.S.-led global war on terrorism that has been the primary driving force behind the increases. Adjusted for inflation, Canada has devoted roughly $70 billion to total national security expenditures over and above the amount it would have spent had budgets remained in line with pre-9/11 levels, with military expenditures representing the bulk of that increase.1 This ambitious build-up over the last decade has allowed large military equipment programs to proceed without the department adequately demonstrating their relevance to the essential security of Canadians. On the global stage, worldwide military spending is estimated to have reached Us$1.63 trillion in 2011, continuing the trend of growth for each year in the new millennium.2 Like Canadian military expenditures, global military spending is now higher than it was during the Cold War. Within this, the 28 members of NaTo collectively account for about 70% of world military. Canada is the sixth largest military spender among those 28 countries, trailing only the United States, the United Kingdom, France, Germany, and Italy, all of which have much larger populations and economies.3

A Budget for the Rest of Us: Alternative Federal Budget 2012

159

FIgure 14Post-9/11 Defence Spending Increase ($Mil, 2011 Dollars)

200001

200203

200405

200607

200809

201011

Afghanistan
The Department of National Defences annual Report on Plans and Priorities indicates that the incremental cost of Canadas military operations in Afghanistan during the 10 years from fy200102 to fy201112 has been about $10 billion.4 However, Parliamentary Budget Officer Kevin Pages 2008 Report on the cost of the Afghanistan mission concluded that the actual incremental costs of the mission were even higher than these figures between $5.9 billion and $7.4 billion just for the seven years from fy200102 to fy2007085 (the Report on Plans and Priorities figures showed incremental costs of just $3.6 billion during this period). If the figures for fys 2008 09 through 201112 were similarly underestimated, the incremental costs for the Afghanistan mission are probably closer to $1620 billion to date. Even that figure arguably underestimates the ultimate cost of the Afghanistan mission. Canadas presence in Afghanistan ties up not just the troops actually deployed in the country, but also many thousands of personnel preparing for deployment, recovering from deployment, or supporting the operation from Canada. If Canada had chosen not to participate in the Afghanistan mission, we could have maintained a somewhat smaller armed forces while continuing to participate in other missions, such as peacekeep-

160

Canadian Centre for Policy Alternatives

ing. Depending on the actual personnel level maintained, additional savings, potentially as much as several billion dollars, might have been realized over that period.

Peacekeeping
Even the most ardent supporters of Canadian participation in the Afghanistan war would agree that Canada has borne an excessively high share of the burden of that war. Beyond the cost of the Afghanistan mission in killed and injured soldiers, the cost in money, personnel available to deploy, and other military resources together comprise a large part of the explanation for Canadas currently dismal contribution to UN peacekeeping operations. Even before the Afghanistan war, however, Canada had essentially abandoned any effort to shoulder a reasonable share of the burden of UN peacekeeping operations around the world. During the Cold War, Canada provided about 10% of all UN peacekeeping troops. The huge growth in the number, size, and scope of UN operations after the end of the Cold War made this level of support no longer possible, but Canada continued to provide about 1,000 peacekeepers (and sometimes more than 3,000) well into the 1990s. In 1997, however, Canada began to dramatically reduce its contribution to UN operations. The initial reduction can be explained in large part by the extensive Canadian contribution to the NaTo-led Stabilization Force (sfor) in Bosnia and Herzegovina. sfor was then followed by the 1999 Kosovo war, participation in the NaTo-led Kosovo Force (Kfor), and then the post-9/11 Afghanistan mission. By 2005, only 83 Canadian military personnel were assigned to UN peacekeeping missions. Though the Canadian government promised that year that the Canadian Forces would maintain their contributions to international organizations such as the United Nations, the decline continued unchecked. In 2008, Canada and other governments voted to shut down the UNs Multinational Standby High Readiness Brigade (shirBriG), an innovative rapid-reaction peacekeeping unit that had once been championed by Canada, and the shutdown was completed in June 2009.6 As of 2011, Canada currently contributes a total of 35 military personnel to the cause of UN peacekeeping, and 163 police members. 7 Canadas switch from major supporter of UN peacekeeping to an almost exclusive focus on U.S.-led or NaTo-led coalitions of the willing was not a result of the disappearance of UN missions. Notwithstanding the claim often heard in Canada that UN peacekeeping is dead, the demand for peacekeep-

A Budget for the Rest of Us: Alternative Federal Budget 2012

161

ers has actually grown in recent years. As of October 2011, there are 84,748 UN peacekeeping troops and military observers serving in 16 operations over four continents. Of the 103 military contributors to UN peacekeeping, Canadians are 64th in terms of personnel. Countries such as Peru and Nigeria, with less than a 10th of Canadas GDP, contribute more than 10 times the personnel. The only Canadian contribution that remains substantial is a non-military one: our cash contribution to the UN peacekeeping budget, currently $272 million a year. However, this payment, a legal obligation of our membership in the United Nations, comes out of the budget of Foreign Affairs and International Trade, not National Defence.8 The collapse in Canadian government support for peacekeeping happened parallel to the military budget undergoing a greater than 50% growth. There are not enough Canadian soldiers to both participate in Afghanistanstyle missions and make a significant, ongoing contribution to peacekeeping. An even greater problem may be the strong institutional bias in the Department of National Defence and the broader Canadian defence lobby against UN peacekeeping and in favor of coalition of the willing operations. In the meantime, the overwhelming burden of current UN peacekeeping operations has been transferred to the poorer countries of the world, whose soldiers are normally much less well-equipped, and in some cases also less well-trained. Middle powers such as Canada are not bearing their share of the burden of these operations, and the resulting equipment and training shortfalls threaten to undermine the effectiveness of the operations currently underway. Concurrently with a military shift, Canadian humanitarian aid has been frozen at $5 billion a year. Lester B. Pearson famously challenged developed countries to provide foreign aid to impoverished countries at a rate of 0.7% of GNP. With a stagnant foreign aid budget, Canada continues to fall further behind this goal. By the end of 201213, Canada will have fallen to 0.29% of GDP. Finally, it isnt only the military budget that has exploded in recent years; all departments under the burgeoning National Security Establishment have seen large increases. Foreign affairs has increased by 83% since 9/11 and Security and Public Safety programs are up 186%.9 While the military makes up the lions share of this National Security Establishment, it is not the portion that has grown the most rapidly. In fact, it is Security and Public Safety departments such as Csis, Corrections Canada and Canada Border Security that have grown the most rapidly, almost doubling in cost since September 11, 2001. While debate may remain as to whether those ex-

162

Canadian Centre for Policy Alternatives

penditures were justified during the 2000s, a re-evaluation of what have become significant costs should now begin.

Current Issues
The 201011 fiscal year has seen a number of major events and announcements that will have a significant impact on the level and nature of defence spending in the next year and beyond. Most visible of these was the nowcompleted, NaTo-led incursion into Libya. The transformation from a mandated intervention authorizing the protection of civilians to an active operation with the goal of regime-change was controversial in Canada, as it was among other NaTo members. Canadian involvement in Operation Mobile saw the first use of aerial bombardment by the Canadian Air Force since NaTo operations in Kosovo in the 1990s. It is difficult at this time, with the rebuilding efforts in Libya still in the early stages, to determine the historical legacy that this intervention will leave. The Libyan action, however, does indicate a continued Canadian emphasis on NaTo operations even as the operations in Afghanistan wind down. Additionally, the Canadian government has used the experience as a springboard to call for, and to rationalize, greater military procurement, such as the purchase of the F-35 Stealth Fighter planes. The intended Joint Strike Fighter procurement program estimates that each of the 65 individual F-35s to be purchased will cost between $75 million and $150 million. They are meant to replace CF-18 Hornets that currently serve in the Canadian Air Force, beginning in 2016, and the procurement program is part of similar plans to purchase F-35s in the U.S., Australia, Britain, and elsewhere. The jsf procurement program, however, continues to be fraught with logistical issues. The sole-source contract to be awarded to Lockheed Martin is without any competition among possible alternative aircraft. In addition to the high purchase cost of individual aircraft, the estimated operating costs of the F-35s could bring the total cost of the procurement to as much as $30 billion.10 Beyond the concern related to the procedures and costs associated with this military equipment program is the general question, which was never fully addressed by the government, of whether such aircraft capabilities would significantly add to the security of Canadians. In addition to the continuing developments of the F-35 purchase, this year has seen several other developments in the field of military procurement. On October 19, 2011, it was announced that two shipbuilding contracts,

A Budget for the Rest of Us: Alternative Federal Budget 2012

163

amounting to $33 billion, would be awarded to yards in Halifax and British Columbia. With media focus primarily on the competition for the contracts, important questions as to why the purchase of new Coastguard ships comprised only a fraction of the total procurement, or whether the money could be better spent on domestic infrastructure projects in the current economic climate, went largely unanswered. Similarly, the delay in the much-needed scrapping of Canadas submarine fleet suggests important flaws exist in the current system of monitoring procurement and maintenance.

AFB Actions
The afB resolves to take the following actions for the 201112 fiscal year: Reduce Department of National Defence Spending, with a goal of returning to pre-September 11, 2001 levels. The National Defence Budget must be brought in line with the changed realities that Canada faces in the world, a decade after the events of September 11, 2001. The most prominent threats facing the security of Canadian citizens are economic, rather than military, and an attitude of unlimited military spending only heightens the challenges of high unemployment and large deficits. The Canadian government cannot continue increasing defence funding year by year for another decade, particularly considering the stated goal of achieving a balanced budget. With Canadian involvement in Afghanistan winding down and our commitment to addressing the global financial crisis, an immediate reduction in the defence budget and an eventual return to pre-2001 levels are realistic goals that would set Canada on the path to fiscal responsibility in the field of expenditures. Prior to September 11, 2001, the defence budget was the equivalent of $15.3 billion in todays dollars, $6.4 billion less than this years estimated level. In order to return to pre-2001 levels in the next five years, the afB will undertake an immediate reduction of $1.28 billion in the next fiscal year. This reduction is to continue every year until fy201617. Review planned equipment spending to ensure projects still meet Canadas national defence policy priorities. Given that a major element of defence spending consists of materiel procurement, a review of all major equipment spending programs that are currently in the works is needed to ensure a reversal of the trends of the last

164

Canadian Centre for Policy Alternatives

decade. Many of the current projects have not been subjected to the intense scrutiny faced by other departments and programs in the government. Major Crown Projects such as the F-35 purchase plan, the awarding of naval and Coast Guard contracts, and the future of Canadas submarine fleet would all be subject to this review. By comprehensively assessing whether these major capital expenses are essential to Canadian security, and whether the contract processes are producing the best value for public dollars, important fiscal adjustments can be made in line with current global realities. Increase oversight of Department of National Defence equipment spending by establishing a parliamentary committee or sub-committee responsible for Major Crown Projects. The Auditor General of Canada, the Parliamentary Budget Office, and other fiscal monitoring agencies have repeatedly warned about the dangers of unchecked spending increases in the Department of National Defence, but have had little effect. The lack of transparency and democratic mechanisms affecting the current military procurement regime must be addressed through greater parliamentary oversight. Contracts that must go through a parliamentary committee or sub-committee before receiving approval are significantly more likely to guarantee job offsets, include specific costs, and generally involve a greater degree of open competition for the public dollars involved. Increase Overseas Development Assistance to impoverished countries to approach Lester B. Pearsons goal of 0.7% of GNP over 10 years. Freeze non-defence portions of the National Security Establishment including Canada Border Security, Csis, Corrections Canada, Public Safety and related programs. Simply stopping their significant growth paths will lead to incremental savings of approximately $500 million a year.

Notes
1 David Macdonald, The Cost of 9/11, The Rideau Institute, September 2011. 2 siPri Yearbook 2011, http://www.sipri.org/yearbook/2011/04/04A 3 Financial and Economic Data Relating to NaTo Defence, March 2011, http://www.nato.int/ nato_static/assets/pdf/pdf_2011_03/20110309_PR_CP_2011_027.pdf

A Budget for the Rest of Us: Alternative Federal Budget 2012

165

4 National Defence 201112 Report on Plans and Priorities and earlier editions. Incremental cost as defined by DND is the cost incurred by DND over and above what would have been spent on personnel and equipment if they had not been deployed on a mission. 5 Mathilakath, R., Rajekar, A. and Khan, S. (2008). Fiscal Impact of the Canadian Mission in Afghanistan. Ottawa: Office of the Parliamentary Budget Officer, Oct. 9. The Parliamentary Budget Office figures are larger because they include the estimated cost of capital depreciation due to the war. Certain other costs, such as accelerated procurement of capital and danger pay, were not counted due to a lack of reliable data. The report notes, therefore, that the estimates provided may understate the costs of Canadas mission in Afghanistan. In addition to DND costs, the report looked at the costs to Canada of veterans benefits and of foreign aid to Afghanistan. However, as those costs do not fall under the military budget, they are not cited here. 6 Dorn, Walter and Langille, Peter. (2009). Where have all the Canadian peacekeepers gone? straight.com, August 7. 7 Monthly Summary of Contributors of Military and Police Personnel, http://www.un.org/en/ peacekeeping/contributors. Accessed December 7, 2011. 8 Foreign Affairs and International Trade 201112 Report on Plans and Priorities, Department of Foreign Affairs and International Trade, 2011. 9 Macdonald, David. (2011). The Cost of 9/11. Ottawa: The Rideau Institute. 10 Staples, S. (2010). Pilot Error: Why the F-35 Stealth Fighter Is Wrong for Canada. Ottawa: The Canadian Centre for Policy Alternatives.

166

Canadian Centre for Policy Alternatives