$3.7Billion In Spending Delayed: Helicopters, Arctic Patrol Ships Targeted By Defence Budget Freeze

21 April 2016

Some of the Canadian military’s top equipment programs already underway — including projects to buy maritime helicopters and Arctic patrol vessels — will have their funding delayed as the Defence Department tries to deal with the Liberal government’s first budget.

Released in late March, the budget delays $3.7 billion in spending on equipment until 2021 or later.

But details provided to Postmedia by the department outline how even key military equipment programs just getting underway are not spared the funding freeze. Money is being withheld from programs that include:

•    Arctic offshore patrol ships ($173 million withheld)
•    •Future fighter aircraft (CF-18 replacement; $109 million withheld)
•    Cyclone maritime helicopter ($90 million withheld)
•    Halifax Class modernization and frigate life extension ($71.1 million withheld)
•    Integrated soldier system project ($39.4 million withheld).

Another $2.6 billion in equipment funding — not yet earmarked for specific gear — will be withheld until 2021 or beyond.

It is unclear how some of the programs — such as the Cyclone helicopters now being delivered — might be affected by the removal of funding. In addition, construction has already begun on the Arctic offshore patrol ships; the first ship is to be in the water by 2018.

Defence sources have suggested the government could account for the $3.7 billion by delaying or cutting back on buying spare parts or other equipment for the ongoing projects, or delaying the arrival of some of the equipment.

Defence analyst Martin Shadwick said he was surprised active programs were being targeted. He noted that the Cyclones are supposed to be replacing the Air Force’s aging Sea King helicopters, a contract originally signed under Liberal prime minister Paul Martin in 2004.

“One possibility is that the Sea Kings will have to keep flying longer,” said Shadwick, who teaches strategic studies at York University in Toronto. “Or maybe systems that were supposed to be added to the aircraft won’t be.”

In some cases, the equipment projects are relatively new. In late July, the Conservative government announced that it had awarded an initial contract to Quebec-based Rheinmetall Canada Inc. to provide gear for the integrated soldier system project. That project aims to outfit soldiers with improved communications and computer equipment that can be worn on the battlefield.

Defence sources say the budget decision could affect later portions of the project.

In other cases, such as the recently upgraded Halifax Class frigates, the Canadian Navy had planned a series of follow-on enhancements to keep the ships sailing until they can be replaced starting sometime after 2026.

During the election the Liberals promised to immediately launch a project to buy replacement aircraft for the CF-18s.

But the CF-18 fighter replacement project is one of the areas in which spending is being delayed, indicating that it won’t move as quickly as the Liberals originally claimed, said Shadwick.

Finance Minister Bill Morneau has insisted that moving the funding to a later date does not mean the defence budget is being cut.

The Liberal government recently launched a review of the country’s defence priorities, one expected to be ready sometime in early 2017.

Meantime, government officials say the department won’t be in a position to spend the $3.7 billion until well into the future.

“In order to make sure we have the funds available at the time when they need those funds, we’ve reprofiled some in the fiscal framework,” Morneau told journalists after he tabled the budget. “So, when we need the money, the money will be in the fiscal framework. So, we believe that is the appropriate action to take to ensure our military has the appropriate equipment, the planes and the ships they need.”

Some analysts, however, have voiced concern the $3.7 billion won’t be returned to the department.

Ashley Lemire, a DND spokeswoman, said in an email, “Some major projects experienced delays in their original timelines, which resulted in funds needing to be moved forward to future years.”

“The $3.7 billion in capital investment space represents only a shift in funding and there is no directed budget cut to the defence budget, as the funds will be left in the reserve to be requested in future years, when required,” she said.


Source : nationalpost.com