Debates of May 7th, 2002

Supply

[Leon Benoit, Canadian Alliance, Lakeland, AB]

It was pretty basic information for which I was asking, Mr. Minister. I will go on. I think I have established that the answer is a $700 million increase in the budget base over the five years. That is a change from the base of one year compared to five years from now, and I believe that is accurate. It is what the Conference of Defence Associations has said and that is the number we come have up with.

Mr. Minister, what is the present shortage in the operations budget of the Canadian forces?

[Art Eggleton, Liberal, York Centre, ON]

The $5 billion is relevant to the full period of time. Therefore, if we take it on a year over year basis, yes, we could rationalize the figure of $700 million.

The shortage the member referred to, shortage in terms of what?

[Leon Benoit, Canadian Alliance, Lakeland, AB]

The auditor general said in her December 2001 report, paragraph 10.11:

In spite of the government's decision to invest around $2.4 billion more in defence from 1999-2000 to 2001-02, departmental plans indicate a budget shortage of $1.3 billion for 2001-02.

Do you agree with the auditor general's assessment?

[Art Eggleton, Liberal, York Centre, ON]

Mr. Chairman, the situation is that there is a challenge in terms of the resources. I said that on many occasions. I could not tell the member the precise figure at this point in time. It is one reason why we are doing a defence review update; to look at all these capabilities and to look at what is affordable.

There is no doubt that we have a larger program right now than for which we have resources. That has been said on many occasions. I cannot quantify it very specifically at this point in time. There have been many different estimates. That is one estimate but that was taken some time ago.

These circumstances change quite frequently, particularly with the additional amount of money that the government provided this year. When it came to the budget in December, $7.7 billion went into security measures and $1.2 billion of that over five years came to the Department of National Defence.

A lot of these changes have been made since the auditor general made her estimate. I will agree, as I said on many occasions, that there are challenges with respect to the resources to this department.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Chairman, I will go back to my question about the budget base because the minister has added some comments. Perhaps I will simplify the question. How much higher is the budget as forecast for the year 2006-07 than it was in 2001-02?

[Art Eggleton, Liberal, York Centre, ON]

It is about $700 million more, but it is estimates to estimates.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Chairman, that is the change. Therefore $700 million will be added to the base over five years.

I want to quote from General Mike Jeffery who is here today. When he was at a conference in Ottawa in February, he was asked “Where is the additional money to cover army operations going to come from”. He replied:

“It's not coming from anywhere“. Like a family where the wife loses her job, he said, we are cutting in order to find what is most important. “We are deficit financing”, he says, and we can't go on like this much longer. “We have too much army for the budget”.

Yet he noted that the effort to organize the army into a lighter, more mobile and high tech force would cost more money to implement than to stay as they were.

I would like to ask the minister about that. General Jeffery said, which was one way of putting it, that it was too much army for the budget. Another way of putting it is that it is too little budget for the army. Which does the minister think better represents the situation?

[Art Eggleton, Liberal, York Centre, ON]

Mr. Chairman, I disagree with what General Jeffery has said. In fact General Jeffery is trying to ensure that the budget for the army is balanced with the programs and services that it will provide. He is presently going through an army in transformation project to bring that about.

As I indicated before, yes, there are resource challenges and there needs to be changes. That is part of why we are doing a defence update. Also at the same time, and even in advance of that, General Jeffery, the commander of the army, is undertaking reforms to bring those matters into balance.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Minister, what is the shortfall in the capital budget over the next five years? I am referring to the actual money that will be available versus the equipment replacement requirements as laid out by our military.

[Art Eggleton, Liberal, York Centre, ON]

I think that is a relevant question, Mr. Chairman, because we are now in a period of time where we are doing a review of the capabilities and review of what kind of program we will provide in the future. The army is going through a transformation. I could not say at this point in time, because we have not made all the determinations as to what we will be doing in the next five years. We are in review of these matters.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Chairman, the auditor general knew in December of 2001. She states in paragraph 10.12:

Our 1998 report...reported that to meet its estimated needs for new equipment over the next five years, the Department would have to almost double its planned spending on equipment, from $6.5 billion to $11 billion.

In response to that chapter, departmental officials said that hard choices may have to be made.

[Art Eggleton, Liberal, York Centre, ON]

Mr. Chairman, I have said on many occasions that hard choices will have to be made. The hon. member is reading historic data, much of which could be very irrelevant as we go through a review process. We have to go through a review process because it has been eight years since the defence policy was put in place through the white paper of 1994. There are a lot of changes that have occurred in that period of time. There are a lot of changes that continue to occur.

There is a resource challenge. I have said on many occasions that we need additional resources, that we need to put our books in balance with our programs and that we need to have our resources equal the program. We are going through the course of doing that now. The army is going through a transformation on an interim basis while we also go through this update of our policy. These are all matters that are attended to now.

He can read a lot of historic data but a lot of it could prove to be irrelevant in the future.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Chairman, I am sure a lot of these ministers would like to run away from their records, but we are talking here about what they have done during their time in government and what this minister has done during his time in government. It is five years. If we do not start from that base of what they have done, how can we possibly move to the future? How can the minister think that he can just say that what they have done does not count at all and that they are now going to move to the future? I am trying to establish what the government has or has not done.

Let us look at the 2001 budget, for example. It was billed as defence and security budget and budgeted for the next two years. In that budget the finance minister, this minister and the government planned to allocate $510 million to the defence budget base. Of that, $210 million was to be assigned to cover costs for Operation Apollo, our operations in Afghanistan. Is that correct?

[Art Eggleton, Liberal, York Centre, ON]

Yes, that is correct.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Chairman, in fact $510 million was allocated to the defence department. Of the $510 million, $300 million was assigned to capital purchases. How is this money most likely to be spent?

Before I get to that question, I had intended to follow up on the last one. The minister said that the $210 million was correct. Is that still on budget? That is what was in the finance minister's budget in December but will it meet the requirements of the increased operations in Afghanistan?

[Art Eggleton, Liberal, York Centre, ON]

Yes, at this point in time that estimate is still holding.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

There has been $300 million assigned to capital purchases. The Conference of Defence Associations reports that much of it would go to cover the cost of the Victoria class submarine program. Is that correct?

[Art Eggleton, Liberal, York Centre, ON]

No, it is not.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

None of this $300 million in capital expenditures that was allocated in the last budget will go to cover the costs of the Victoria class submarine program?

[Art Eggleton, Liberal, York Centre, ON]

I will repeat no, Mr. Chairman, that is not what it was intended for at all. As I have indicated on previous occasions in this House, we will make the repairs to the submarines. The repairs may well be done under warranty. It may not cost us anything additional to do them. That will be determined as we make the repairs and also check out their origin.

The kinds of millions of dollars that the hon. member is alleging is not what we are looking at, at all.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

It will be interesting to see how that shakes out, Mr. Minister.

The Conference of Defence Associations has done an analysis on the defence budget increases. It said there was an allocation of just $300 million for new capital equipment. I would like to read what it said. It said:

--the operational readiness of the Canadian forces would continue to decline mainly as a result of underfunding.

That is a very clear statement.

We also asked General Jeffery, the commander of the army, whether the 2001 defence budget provided sufficient funding for the armed forces and he said “The short answer is no”.

We are at war, Mr. Minister. Why is national defence not a priority of the government? The head of the army said that the increases were not enough.

[Art Eggleton, Liberal, York Centre, ON]

I have answered that already, Mr. Chairman, by saying yes, there are challenges that we are meeting in terms of the army and of the needs of our Canadian forces.

The $310 million though will go for a wide variety of capital purchases that are relevant to the army and relevant to the navy and air force, as well.

I have already indicated that we have increased government spending by some 20% in the last few budgets. The last few budgets have been going up to deal with these measures, whether it is equipment or quality of life measures. We have another $5 billion coming over the next five years.

The government has made a commitment to meet the needs of the Canadian forces. We are going through a review of those needs now, determining what are the capabilities with which we will move forward.

We must come up with a revised policy and plan that is affordable, that can be financed and that gives the resources which our troops need to do the job. That is our commitment.

[Leon Benoit, Canadian Alliance, Lakeland, AB]

Mr. Chairman, $700 million more five years from now does not sound like very much of a commitment.

Officially the defence budget is around $12 billion. Can the minister tell us what portion of the budget is tied to supporting things which are not conventional military spending? Quite a large part of the department funding does not include military spending. The Conference of Defence Associations and others have said that is maybe $2 billion to $3 billion out of that $12 billion budget, probably 30%.

I would like the minister to verify whether he sees that as correct or not, that $2 billion to $3 billion, or roughly 30% of the budget which is non-military.

[Art Eggleton, Liberal, York Centre, ON]

That is not the case at all, Mr. Chairman. There are other items in the budget that are not directly relevant to the Canadian forces. There is the Office of Critical Infrastructure Protection and Emergency Preparedness and the Communications Security Establishment. There are the disaster financial assistance arrangement provisions. They go in year in and year out. When we do the comparison from one year to another, when I say for example a 20% increase, it is the whole thing moving forward and much of it into the Canadian forces directly.

[The Chairman]

Order, please. This concludes the first round. I thank the member for Lakeland and the minister for their co-operation. Hopefully we can stick to the timeframes and get in as many members as possible. I now turn to the government side and give the floor to the Minister of National Defence.