Baloney Meter: Has spending on National Defence really grown 38 per cent?

OTTAWA - "Since 2006, we've increased the National Defence expenditure from $14.5 billion to $20.1 billion in the fiscal year just ended. That represents a 38 per cent increase." — Defence Minister Jason Kenney, May 27, in a speech to defence contractors in Ottawa.

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Last week, the defence minister extolled the virtues of what he called the government's positive record of increasing defence spending during his keynote address to 900 delegates attending the annual convention of the Canadian Association of Defence and Security Industries.

But has military spending really increased to the extent the minister claims?

Spoiler alert: The Canadian Press Baloney Meter is a dispassionate examination of political statements, culminating in a ranking of accuracy on a scale of "no baloney" to "full of baloney" (complete methodology below).

This one earns a rating of "a little baloney." Here's why:

THE FACTS

April's federal budget earmarked $11.8 billion over 10 years for additional defence spending, starting in the 2017-18 fiscal year. That's when National Defence will see a $184-million increase; the new money gradually increases to $2.3 billion by 2026-27.

That commitment, however, follows a concerted Conservative effort to eliminate the deficit and deliver a balanced budget by 2015. Prior to this year's budget, three rounds of cuts reduced spending at National Defence by $2.46-billion per year.

In 2014, the feds postponed $3 billion in planned spending on ships, planes and vehicles that had been scheduled for between 2014 and 2017. Last month's budget did not contain any multi-year projections.

In his speech last week, Kenney also noted that the 2015 budget raised the annual defence escalator from two per cent to three per cent, again beginning in 2017. He said that "represents a cumulative increment of some $12 billion over the course of the subsequent decade."

Kenney's claims come in an election year, which means the Conservatives are sure to position themselves as defenders of the military as a part of a robust foreign policy — one that includes taking part in the campaign to crush the militant group known as the Islamic State of Iraq and the Levant.

Prime Minister Stephen Harper has made similar claims about increased defence spending. In the face of pressure from NATO allies to increase spending because of the ongoing unrest in the Middle East and in eastern Europe, Harper said in September that Canada is spending 27 per cent more on defence.

Technically, Harper wasn't off the mark either. But like Kenney, he omitted a few things. Nor did the prime minister's estimate take into account inflation, which effectively shrank his estimate to seven per cent.

WHAT THE EXPERTS SAY

David Perry, the senior analyst at the Canadian Defence and Foreign Affairs Institute, has been crunching Canada's defence spending numbers for years, and he took issue with Kenney's assertion.

He said there's no accounting for inflation in Kenney's 38 per cent assertion. When the final estimates come out on what the Canadian Forces actually spends for the 2014-15 fiscal year, "I don't believe for a minute they'll reflect $20.1 billion in defence expenditure," he said.

That's mainly because of the logjam in National Defence over big procurement projects, such as the stalled — and very controversial — F-35 stealth fighter jet replacement project.

For the last decade, Perry said the military has never been able to spend its full budget, with at least five per cent — or about $1 billion — going back to the federal treasury each year, a practice known as lapsed funding.

For 2014-15, Perry is predicting an even bigger lapse of 10 per cent — closer to $2 billion.

He said the huge program at National Defence didn't have an approved investment plan until the second quarter of the last fiscal year, so they couldn't move on new spending.

"Defence has got this bizarre problem that it never had before 2006 where they can't use all its money," Perry said.

"To me the far more meaningful metric is: what are you asking the defence department to deliver and how much money does it have relative to that plan?"

In an email, a spokeswoman for Kenney said the capital funds are not lost, but rather are "put forward" to future years when new equipment will be acquired.

Douglas Bland, professor emeritus and former head of the Queen's University defence studies program, said Kenney's numbers may be accurate, but they don't address a core question: has all that extra money improved Canada's military capability?

Bland's answer is no.

"It's not the amount of money that's put on the table, it's how efficient it is in producing Canada's national defence," he said.

All three branches — army, navy, and air force — have seen a decline in their capability.

"The army has a lot of old equipment and fewer numbers," said Bland. The navy, meanwhile, has lost assets, such as its two support ships, HMCS Preserver and Protecteur, while will be taken out of service before their replacements arrive.

"When you look at the state of the navy, for instance, we're not better off. When you look at the air force, many countries are now ordering up or bringing into service the new F-35 from the United States. We're not even on the order paper."

THE VERDICT

Kenney had his facts right when he cited the numbers around increased defence spending, but he omitted some important details that give a much fuller picture.

With the October federal election in the offing, the Conservatives will be positioning themselves as champions of the military. But as Perry and Bland point out, all that increased spending hasn't translated into important new equipment, such as ships and planes.

For that reason, Kenney's statement earns a rating of "a little baloney."

METHODOLOGY

The Baloney Meter is a project of The Canadian Press that examines the level of accuracy in statements made by politicians. Each claim is researched and assigned a rating based on the following scale:

No baloney — the statement is completely accurate

A little baloney — the statement is mostly accurate but more information is required

Some baloney — the statement is partly accurate but important details are missing

A lot of baloney — the statement is mostly inaccurate but contains elements of truth

Full of baloney — the statement is completely inaccurate

SOURCES

Federal Budget 2015. Protecting Canadians (Chapter 4.3) (http://www.budget.gc.ca/2015/docs/plan/ch1-eng.html#_Toc417204092)

Treasury Board of Canada Secretariat. 2015-16 Estimates.(http://www.tbs-sct.gc.ca/ems-sgd/me-bpd/20152016/me-bpd02-eng.asp#toc7-76)

The Canadian Press (http://www.ctvnews.ca/politics/baloney-meter-is-the-harper-government-really-spending-more-on-military-1.2001899)

The Canadian Press (http://www.thecanadianpress.com/english/online/OnlineFullStory.aspx?filename=DOR-MNN-CP.dc52ab65eb49448f998e319bd9f598cc.CPKEY2008111303&newsitemid=32786687&languageid=1)