CDA Institute Research Fellow Chuck Davies and Research Manager and Senior Editor David McDonough provide a brief summary of the security and defence-related funding commitments in the 2016 federal budget.

The 2016 Federal budget is primarily focused on setting new paths in economic and social development. It has relatively little to say about the government’s defence and security agenda, although some of the technology and innovation initiatives have the potential to affect defence industrial capabilities. The budget says rather more about veteran’s benefits. Here is a brief summary:


Defence Policy Review. Not surprisingly, the 2016 budget makes very few references to defence, given the government’s announced intention to undertake a review of defence policy. We can expect to see more in the 2017 budget if the defence review follows the announced schedule.

Capital Funding Deferral. The budget pushes back $3.716B in capital funding from the five-year period 2015/16 to 2020/21 out to unspecified future years.

Infrastructure Renewal. Under the umbrella of the budget commitment to a wide range of infrastructure funding, the budget provides $200.5M to DND over two years beginning in 2016–17 for infrastructure projects. These will include:

  • $77.1M to support readiness, including repair and construction of ranges, airfield infrastructure and naval jetties;
  • $67.4M to support the Reserve Force, including armoury repairs and maintenance;
  • $50.0M to support military personnel and military families, including upgrading and building new military housing; and
  • $6.0M for projects to support northern operations, including airfield ramp reconstruction and upgrades to fire suppression systems.

Budget Escalator. The budget did not announce any change in the previous government’s commitment to increase the annual escalator for the defence budget from 2% a year to 3% starting in fiscal year 2017/18 (the Liberal Party also committed to this in its election platform). However, the results of the defence policy review can be expected to inform a decision on this in the 2017 budget.

Canada in the World:

Renewal of Peace and Security Programs. The budget plans on allocating up to $586.5M over three years beginning in 2016–17 to renew key peace and security programs. These funds will come from unallocated International Assistance Envelope. Programs affected will include:

  • $450M for the Global Peace and Security Fund, which will involve initiatives designed to promote pluralism;
  • $106.5M for the International Police Peacekeeping and Peace Operations Program; and
  • $30M for the Counter-Terrorism Capacity Building Program Sahel Envelope.

Programs in the Middle East. The Government has committed $1.6 billion over three years, starting in 2016–17, towards security assistance for Iraq, Syria, Jordan and Lebanon. This includes:

  • $306M in 2016–17 for Canada’s training mission to support local security forces against the Islamic State, as part of the Global Coalition to Counter ISIL;
  • $270M over three years in resilience and development programming; and
  • $145M over three years towards counter-terrorism, stabilization and chemical, biological, radiological and nuclear security programming.

Space, Science and Technology:

Space. The budget includes up to $379 million over eight years beginning in 2017–18 to extend Canada’s participation in the International Space Station until 2024. It also continues current funding levels for other space initiatives.

Science & Technology. Funding to Granting Councils will be increased by $95 million per year, starting in 2016–17, on top of the new funding provided in the 2015 budget. This is not defence-specific funding but will be accessible for defence-related technology development.

National Security:

Cyber Security. The budget includes $77.4M over five years beginning in 2016–17 to improve the security of government networks and information technology systems.
Counter-Terrorism. The budget includes $35M over five years, beginning in 2016-17 with an initial earmark of $10M, to establish an Office of the Community Outreach and Counter-radicalization Coordinator.

Canadian Coast Guard. Through the provision of $23.6M over five years on a cash basis, the Kitsilano Coast Guard facility will be reopened with an enhanced marine emergency response capability.

Infrastructure Renewal. As part of the government’s infrastructure renewal commitment, the budget will provide at least $128 million over two years on a cash basis, starting in 2016–17, to rehabilitate, construct, or modernize physical infrastructure used by the Royal Canadian Mounted Police, Canadian Security Intelligence Service, and the Canada Border Services Agency.


Veterans Affairs Budget. The budget adds $78.1M over five years beginning in 2016. This will pay for:
• The reopening of 10 Veterans Affairs Canada (VAC) offices and the establishment of a new one in Surrey, BC;
• An expansion of outreach initiatives to veterans in the North through local partners; and
• The hiring of additional case workers to reduce case load ratios to no more than 25:1.

Veterans’ Benefits. The budget announced a number of enhancements to benefits, including:

  • Increasing the Disability Award maximum limit to $360,000 as of 2017;
  • Further expanding access to higher levels of the Permanent Impairment Allowance and renaming it the Career Impact Allowance to better reflect the intent of the program;
  • Increasing the Earnings Loss Benefit to provide income replacement of 90% of salary for eligible injured veterans. The 2% cap on indexation of the benefit will be removed and it will be indexed with inflation. Also, the minimum benefit will now be based on the senior private salary level rather than the basic corporal level.
  • Over the next year, the government will work with the veterans’ community to examine ways to streamline and simplify the support programs delivered by VAC and DND.

Last Post Fund. The budget increases the estate exemption for the Last Post Fund from around $12,000 to approximately $35,000, and adds an annual cost of living adjustment to the estate exemption going forward.
Commemoration. The Community War Memorial Program will be merged with the Commemorative Partnership Program, the scope of which will be expanded to allow funding for the building of new community war memorials. The application process for funding will be streamlined, however the budget does not add any new money.

Invictus Games. The budget reallocates $4M million over two years beginning in 2015–16, and adds new funding of $6M in 2016–17, to support the organization of the Games.

Colonel Charles Davies (Ret’d) is a CDA Institute Research Fellow and a former Logistics officer who served for four years as the strategic planning director for the Material Group of the Department of National Defence and three years as the senior director responsible for material acquisition and support policy in the department. Dr. David McDonough is the Research Manager and Senior Editor at the CDA Institute and is a Research Fellow at the Centre for Foreign Policy Studies at Dalhousie University. (Image courtesy of Reuters.)

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