Regardless of how wedded any government is to the military, there is no conceivable way to exempt it from a major departmental program spending cut.Sean Kilpatrick/The Canadian Press
Stephen Harper is the most pro-military prime minister since the Second World War. His government has pumped more money into the Canadian Forces than any of its predecessors. That's the conventional wisdom.
Consequently, many people were a little puzzled at last week's budget, when Mr. Harper's rock-ribbed administration announced a $2.5-billion cut to defence funding increases the Conservatives had committed to four years ago. This money, considered essential by the Department of National Defence, had been effectively banked to rectify acute equipment rust problems, especially in the navy. Some senior defence officials had even started referring to the funding commitments as a "contract" with the military.
So why did the government turn on its ally? The answer is straightforward, and is based on both arithmetic and politics.
First, let's dispense with some well-worn mythology. Mr. Harper's government never was the largest financial supporter of the military, not by a long shot. That distinction goes to the short-lived government of Paul Martin - the same Paul Martin who slashed and burned the defence budget as finance minister in the mid-1990s. Yet as prime minister, Mr. Martin increased defence funding by $13-billion over five years, the largest financial boost to the military in a generation. This is in contrast to the increase of $5-billion over five years that Mr. Harper's government promised in the 2006 budget.
Now for the arithmetic. The government is running a $50-billion deficit that it wants to eliminate in about five years. A good chunk of that will be accomplished when stimulus spending ends next year. But a fair bit of the red ink - what economists call the "structural deficit" - will remain. The Parliamentary Budget Officer estimates the structural deficit at about $20-billion.
This is the part that is hard to get rid of. The task is made even harder because the government has ruled out cutting transfers to provinces, reducing benefits to citizens or raising taxes. Eliminating the deficit is to be achieved through departmental program spending cuts alone. The $20-billion has to come from a pot of about $80-billion in total departmental program spending.
This is where DND comes to the fore as a matter of pure arithmetic. It is by far the largest and most costly department in the federal government, with a budget that accounts for about one-quarter of that $80-billion in departmental program spending. So regardless of how wedded any government is to the military, there is no conceivable way the Canadian Forces can be exempt from a major cut in a deficit elimination struggle focused entirely on departmental program spending.
Now, for the politics. Governments have paid steep political prices over the years for increasing taxes, cutting benefits and reducing transfers to provinces. Yet no government, Conservative or Liberal, has ever paid a discernible political price for slashing defence spending. It is simply not a priority for most Canadians.
Brian Mulroney's government cut the defence budget by nearly $3-billion in its ill-fated war on the deficit, and paid no political price whatsoever. Jean Chrétien's government virtually emasculated the DND budget, reducing it by one-third during its own deficit crusade, and got off politically scot-free.
While Canadians might be stronger supporters of the military now because of the sacrifices the men and women of the Canadian Forces have made in Afghanistan, it is unlikely that a big cut to a DND budget that approaches $20-billion a year will make any impression on the Canadian public.
In a hierarchy of public interests that includes low taxes, balanced budgets and retention of entitlements, most Canadians place military spending at the very bottom. In fact, there likely hasn't been a public-opinion survey in the history of this country that shows defence cracking into Canadians' top five priorities.
The basic lesson from all this is simple: No government, Conservative or Liberal, is pro-military when it is in a deficit fight. Arithmetic prevents this and politics permits it. That's the way it has been for decades, and that's the way it always will be.
Eugene Lang is co-author of The Unexpected War: Canada in Kandahar . He was a senior economist at Finance Canada and chief of staff to two Liberal defence ministers.