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When auditor general Michael Ferguson looked at the F35 purchase three years ago, he found “significant weaknesses in the decision-making process” at the Department of National Defence.

Now we know how significant. A new study by the Macdonald Laurier Institute and the Conference of Defence Associations Institute suggests that nearly one-quarter of the money Parliament allocates for defence procurement in any given year remains unspent.

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Since 2007-08, exceptional delays in the defence capital program means an average of 23% of available money — $7.2 billion — was not spent as intended. Dave Perry, the report’s author, said the problem is “historically unprecedented” — the historical average, dating back to 1973, is 2%.

The problem with not spending the money is that changes in costing procedures mean that purchasing power is eroded by inflation, which runs at around 7% for military gear. Mr. Perry estimates that buying power is being reduced by 20-25% over the project life of multi-billion-dollar procurement projects. He pointed to a recent report by the Parliamentary Budget Officer that suggested delays in the Arctic Offshore Patrol Ship procurement could result in one fewer ship per year of delay.

Mr. Perry’s report, entitled “Putting the ‘Armed’ Back into the Canadian Armed Forces,” delves into the institutional malaise that caused the F35 fiasco.

He pointed out that Canada is not alone in facing procurement challenges. But past policy decisions have created a dysfunctional system that has failed to replace the aging Sea King helicopters 30 years after they were first scheduled for the scrapyard.