Thursday, January 18, 2007

Double?

An article a number of CanWest papers this morning - including the front page of the National Post - carries the headline: "Forces want to double budget to $36.6B." Just below that, they mention that the supposed "doubling" wouldn't come until 2025. Buried deeper is the notion that $36.6B in 2025 isn't going to go as far as it does today:

The first option is to gradually increase annual funding to $26.9 billion by 2025. The middle option seeks increases up to $35 billion by 2025, and the third option seeks an annual budget of $36.6 billion by 2025. Mr. Kenny says while those numbers sound impressive, they are not large when inflation and growth in Canada's gross domestic product are taken into account.


Let's quantify what inflation does to the numbers, shall we?

Assuming 2% inflation for the next 19 years, the current defence budget of $15B would have to jump to $21.4B just to keep up. So the cheapest option supposedly put forward by DND represents a true increase of only 25.7% over the next two decades. The middle option corresponds to a 63.6% increase, and the most expensive option is actually a 71.0% augmentation.

More telling is the projection as a percentage of the nation's economy:

Canada now spends about one per cent of its GDP on defence, making it one of the lowest defence spenders in the NATO alliance.

If the federal government adopts the cheapest option and boosts spending to only $26.9 billion, military spending would actually fall to less than one per cent of GDP in 2025, according to the document's projections.

If the most expensive option is selected, defence spending would move to 1.3 per cent of GDP.


Hardly breaking the bank, is it? In fact, I'm with Senator Kenny on this issue:

In October, the Senate committee on national security and defence issued a report saying Canada needed to boost defence spending to at least two per cent of GDP -- or $35 billion in annual funding -- by as early as 2012.

"What's frustrating is that you don't see the Canadian Forces actually functioning well under any of the options now before the cabinet," says Mr. Kenny. "Even if you had the best-case scenario, it wouldn't give us the defence Canada needs or deserves."


I'll be interested in seeing the actual source document (Canada First Defence Strategy) when it becomes available. In fact, if anyone wants to share it with me prior to it becoming more widely available, they're most welcome to...

3 Comments:

Anonymous Anonymous said...

WOW . . double the budget and then it would be half of what it should be.

DND's budget, in addition to doubling, needs a one-time infusion of about $30 Billion to catch up to where it should have been had the country not been infected with 40 years of Trudeauism.

2:19 p.m., January 18, 2007  
Blogger Mark, Ottawa said...

Babbling: Nice post--beat me to it. Once again the media creating a false impression. No wonder it's hard to have defence discussed seriously in this country. Thank goodness for Sen. Kenny.

More here:

'Senate Committee: Conservative defence plans "too timid"'
http://toyoufromfailinghands.blogspot.com/2006/06/senate-committee-conservative-defence.html

Mark
Ottawa

3:17 p.m., January 18, 2007  
Blogger Cameron Campbell said...

That's cool it will be "doubled" (snicker...) 25 years before the 2050 deadline for most of the CPC environmental plan.

In politician years that's like next week some time.

9:43 a.m., January 19, 2007  

Post a Comment

<< Home