Madam Chair, I thought I might take a crack at military economics 101, which might be close to the most boring speech ever delivered on the floor of the House of Commons, ever. My hon. colleagues are already agreeing that this might be a boring speech, so I will not be offended, Madam Chair, if you nod off.
However, Madam Chair, before you do hit the snooze button, I would just remind you that over the last six months we have had a very busy minister, a very busy department, and a very active re-engagement with the world. We have refocused our mission on ISIL. We have processed well over 25,000 refugees, in which the Department of National Defence played a significant role. We have launched a consultation on defence policy review for the first time in 20 years. We have provided assistance with the wildfires in Alberta. All of these, in and of themselves, would be significant undertakings, but they were all done by our very capable minister and our very capable department simultaneously.
The first thing we notice when we look at the budget of the Department of National Defence is its size. It is $18.6 billion, which accounts about 6.6% of the entire federal government's revenues, 1% of our national GDP. It sounds like a lot of money, but that is only because it is. Some have described it as a small province. It has its own health care system; it has its own justice system; it has its own unique language; and it has its own culture. In fact, the budget for the Department of National Defence is larger than all of the provinces except four in our country.
Canadians expect a lot from their military; we are just not overly fond of paying for it. However, like any good restaurant meal, somebody has to pick up the cheque. So for $18 billion to $20 billion, we expect a navy, an army, an air force, cybersecurity, assistance to civil authority; we expect the defence of Canadian sovereignty; we expect a North American defence; and we expect participation in expeditionary missions as they arise from time to time; and may I say, a whole lot more.
With more than 90,000 regular forces members and reservists, and another 20,000 civilians, the military could be considered one of the largest companies in Canada. Given all we expect of our men and women, it is essential that they have the resources they need to do the job. That is why this government has maintained the military's budget and will honour all planned budget increases.
Our military seeks to recruit and retain the best people for the job from the beginning of their career to the end of it. Personnel accounts for $7.5 billion of the $13.5 billion in vote 1 under the main estimates, which is what we are talking about tonight—the main estimates. Overall, this is 40% of the entire National Defence budget. Personnel costs account for 40%. Most of it is salaries and other benefits, which are competitive with other western militaries. In fact, Canadian privates and corporals are now among the highest paid in the world, which we should view as a source of pride. It is good business sense. If our men and women can afford to raise a family on a corporal's salary, the military stands a good chance of keeping them around for a long career.
The Canadian Armed Forces also maintains a world-class health care system, education and training, and the exercises to keep members' skills up to date so that they are ready to deliver on any mission they are asked to perform.
Operating expenditures also include some 10,000 contracts for replenishment, maintenance, and upgrading of the military's equipment and facilities. This amounts to $6.2 billion this year alone, and it is included in vote 1. These things run from rifles, pistols, ammunition, uniforms, rations, specialized equipment, and literally, with 10,000 contracts, it goes on and on.
The department also maintains in its infrastructure the bases, wings, and stations where all the work takes place. There are approximately 21,000 buildings covering 2.2 million hectares that the military manages as its collective footprint, which is one-third the size of New Brunswick. All told, personnel costs, small contracts, and maintenance account for $13.8 billion, or 74% of the department's budget, which is all in vote 1.
The next vote is vote 5, which is $3.4 billion in capital expenditures. This is where it gets tricky, because $3.4 billion sounds like a lot of money, but when we are trying to replace jets, ships, labs, helicopters, it does not take too much time to burn through it. If $3.4 billion in cash was the only money that was available to the military, we would be finished by the end of April. This is where the magic of accrual accounting comes in.
If members will notice, the capital expenditures are reduced by $625 million this year. This is largely attributable to several projects winding down from last year's budgetary levels. Infrastructure is down $200 million, land combat vehicles, down $188 million, and the maritime helicopter project is down $172 million.
Some people get bent out of shape when money is not being spent on much-needed equipment. However, when we think about it, would we spend money if there were no helicopters being delivered this year, after having received eight last year? Therefore, not receiving helicopters does not mean that the money will not be spent this year, but for the purposes of these estimates, at this time, in this fiscal year, that is the explanation for that sum of money.
Last year, we received eight helicopters, and this year we may get more, but we do not actually know. However, we are projecting, for the purposes of the estimates, that we will not get any. The plan is still moving forward to replace the Sea King, and the same with the family of land combat vehicles. Most of the work has been done on the $500 million project, so $188 million comes out of those estimates.
If members are not asleep yet, let us move on to another favourite subject called “lapsed spending”. There are good lapses and bad lapses, and occasionally we will all lapse. However, it starts off as money set aside by Parliament in previous years and voted on, just as we are doing tonight.
DND gives its best estimate of capital needs. Parliament says okay, and then there is an accounting at the end of the year. Therefore, in fiscal year 2015-16, DND could not spend all of the money allocated to it. At this point, Treasury Board says that it wants the money back, and then there are some negotiations. Out of the $1.4 billion that was being lapsed, if you will, from the previous government, we have been able to reprofile all of that money, except for $71 million.
I should be speeding up this snoozefest, but I want to get through to the $3.7 billion. My honourable colleagues on the opposite side wish to describe that as a cut, when in fact it is far from a cut. It is actually a reprofiling, because of projects that have not been able to be secured in this fiscal year and future fiscal years. They include the Arctic offshore patrol ship, which is $173 million, and the CF-18 replacement, which is $109 million. It does not make a lot of sense to spend money when the platform for the replacement jet has not been picked. However, I can go on about the maritime helicopter delays, the Halifax-class modernization. Therefore, with that $3.7 billion, those five projects alone account for about $1.1 billion.
I see, Madam Chair, that you are hitting the snooze button. I am regretting that because I am sure you want to get into the joys of lapsing.