The Treasury Board told the feds they must reduce government spending by $15.4 billion — a target that may involve a $1 billion cut to the military’s annual budget.
On September 28, Chief of the Defence Staff Gen. Wayne Eyre and deputy defence minister Bill Matthews told the Commons defence committee that such cuts to their department would have devastating impacts on the Canadian Armed Forces (CAF).
“There’s no way that you can take almost a billion dollars out of the defence budget and not have an impact,” said Eyre. “This is something that we’re wrestling with now.”
Matthews estimated a spending reduction of “nearly $900 million and change” that he expects will ramp up over the next four years.
Regardless of how the CAF reallocates their budget, “there will be impact,” he said.
The military’s budget for 2023/24 is projected to be $26.5 billion.
The potential cuts take the federal government away from its “enduring commitment” to NATO of spending 2% of its GDP on defence.
According to NATO’s latest annual report, Canada’s defence spending in 2022 made up 1.3% of its GDP.
Conservative defence critic James Bezan expressed concern on what the cuts would mean for the country’s dwindling confidence in the military’s readiness
“How are we going to deal with the threat environment that we’re in if we’re going to continue to cut rather than invest in our Canadian Armed Forces?” he asked.
Defence Minister Bill Blair told the committee that Canada’s fiscal environment “requires that when we are spending Canadian taxpayers dollars, that we do it carefully and thoughtfully.”
“I’ve always looked upon the expenditure of tax dollars as an investment in creating public value for Canadians,” he added.
In August, Treasury Board President Anita Anand, who previously served as defence minister, said the feds need to reduce overall spending by at least $15.4 billion.
She gave her fellow cabinet ministers until October 2 to decide where the cuts would come from.
Blair suggested the military could find savings by postponing plans to purchase equipment.
“We do know that we have to look very carefully at the expenditures,” he said. “It may actually require some of the investments that we know we have to make […] over a longer period of time in response to the current fiscal situation.”