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CANADIAN SPENDING PRIORITIES OUTLINED

canadaSpending Priorities: The exact breakdown of the procurement allocation has not been announced, but based on news reports and the Finance

Minister’s speech it appears that the budget would include various initiatives to enhance military and police capability, as well as cyber security within the government and private sector. There appears to be an increased focussed on internal security due to the series of shootings at Parliament Hill in Ottawa in October 2014. Despite what has been proposed in this budget, several members of the opposition as well as journalists have criticised the government for not having allocated sufficient funds for internal security. The argument is that the CAD18 m in the first year would need to be shared between different agencies and would be insufficient.

MPI has used the official press releases and various news reports  that followed to compile a list of major funding priorities for three key areas: the Armed Forces, Internal Security, and Aerospace/Space sectors.

Key funding figures for the Canadian Armed Forces:

  • CAD360.3m for the fight against Islamic State (IS) in Iraq and Syria. • CAD7.1m for the mission to train Ukrainian soldiers.
  • An additional CAD23m over 4 years to enhance the security of military bases and personnel.
  • CAD42m over 5 years for the Trade Commissioner Service to help local companies conduct business in foreign markets.
  • An estimated CAD100 m to enhance and upgrade Canada’s cyber systems and infrastructure.
  • CAD2.5m per year starting in 2016-17 for Industry Canada to increase the analytical capacity needed to support the Defence Procurement Strategy (DPS).

Key funding figures for Internal Security/Homeland defence:

  • The Canadian Security Intelligence Service (CSIS), the

Royal Canadian Mounted Police (RCMP) and the Canada Border

Services Agency will share a total of CAD292.5m over the next 5 years (starting with CAD18 m; increasing to CAD92 m in

2019-20). Funding priorities under Canada’s proposed 2015 defence budget

Finance Minister Joe Oliver presented Canada’s 2015 Federal Budget to parliament on 21 April. As per current plans, the budget will include an increase of CAD11.8bn (USD9.6bn) for defence spending spread over the next 10 years. The raised defence budget would be implemented by an increase to the annual “escalator” in the National Defence budget from the current 2.5% to 3% starting from 2018. This would provide an additional CAD11.8bn over 10 years.

Trend: The announcement to increase the defence budget over the next few years has been welcomed by all sectors of defence and security in Canada. Canadian defence spending has been in a continuous decline over recent years and this has been severely criticised as having created critical weaknesses in the military, police, and intelligence services.

 

The spending cuts kicked in as a result of a deficit reduction plan adopted by the government in 2012-2013. According to Forecast

International, the plan was to save CAD1bn in the first year, CAD2bn in the second year, and CAD4bn per year through 2016/2017.

  • CAD2.5m a year for the Security Intelligence Review

Committee.

  • The Ottawa police, which has jurisdiction including the area around Parliament Hill, is receiving CAD10m over 5 years.
  • CAD36m over 2 years to improve security on Parliament Hill.

Funding and Initiatives for Aerospace and Space Industries:

  • CAD30m for 4 years from 2016 to the Canadian Space

Agency to support research and technology development through the ARTES program at the European Space Agency.

  • Extension of Canada’s participation in the International

Space Station (ISS) mission until

  • A 10-year extension of the Accelerated Capital Cost Allowance for investments in manufacturing and processing machinery and equipment.
  • A reduction in the small business tax rate from 11% to 9% by 2019.
  • A one-time investment of CAD65m to business and industry associations to work with postsecondary institutions to better align curricula with the needs of employers. (Source: MPI – Hawk Information)
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