Defense Market

In a recently released Budget 2010 the Canadian Government announces its intention to restrain overall growth in defense spending. The section of the Budget 2010 titled “Restraining Growth in National Defence Spending” says:

“In recent years, the Government has made major, necessary investments in the country’s military capabilities in support of the Canada First Defence Strategy, the Government’s long-term vision for the Canadian Forces. The Canada First Defence Strategy is a long-term commitment to modernize the Canadian Forces. The strategy sets out key objectives of growing the forces, recapitalizing air, land and naval fleets and other major equipment, restoring infrastructure, and ensuring the Canadian Forces are ready to deploy in the defence of Canada and Canada’s interests both at home and abroad. The Canada First Defence Strategy continues to point the way forward for Canada’s military.

In addition to incremental funding received for deployed operations, National Defence’s annual expenses have increased from $15 billion in 2005–06 to $18 billion in 2008–09. In 2008–09, National Defence spending represented approximately one-fifth of total government direct program spending on an annual basis. These investments have strengthened the Canadian Forces and produced tangible results, as most recently demonstrated by the Afghanistan mission, support for relief efforts in Haiti, and the provision of security at the 2010 Winter Olympics in Vancouver.

The Government remains committed to continuing to build the Canadian Forces into a first-class, modern military. However, as part of measures to restrain the growth in overall government spending and return to
budget balance in the medium term, the Government will slow the rate of previously planned growth in the National Defence budget. Budget 2010 reduces growth in National Defence’s budget by $525 million in 2012–13 and $1 billion annually beginning in 2013–14. Defence spending will continue to grow but more slowly than previously planned.”