CDS Announces Departmental Plan Spending Reductions

The Chief of Defence Staff and Department of National Defence Deputy Minister announced the department’s plan for spending reductions from 2024-2025 and beyond.

“Yesterday, the Government of Canada announced its plan to reduce spending and find long-term savings that will ensure key priorities for Canadians are well-supported in the years ahead. As the largest organization in the federal government, Defence has an important role to play in helping to realize this goal,” read the March 4, 2024, message from General Wayne Eyre, Chief of the Defence Staff, and Bill Matthews, National Defence Deputy Minister.

Deputy Minister of National Defence Bill Matthews and the Chief of the Defence Staff General Wayne Eyre.

Overall Refocus $14.1 Billion Over 5 Years

On March 3, 2024, the government announced its aim to refocus $14.1 billion over five years from organizations and $1.3 billion from enterprise crown corporations.

“The Departmental Plan, tabled yesterday in the House of Commons, shows planned spending reductions of $810 million for 2024–25, growing to $908 million per year in 2026–27 and ongoing fiscal years. We will achieve savings from activities that have a history of underspending their approved funding, and from initiatives to be delivered in future years,” read the message.

As the department with one of the largest budgets, the Department of National Defence aims to refocus approximately $2.57 billion over the next three years.

“We are committed to finding ways to make our operations more efficient, and making sure that our dollars are concentrated on achieving our top defence priorities. Some reductions will not have an impact, or immediate impact, on the day-to-day work of the Defence Team,” noted the message

Specific spending was excluded from cuts in the CAF. These items include: salary, operating and deployment/relocation expenditures. Above image: Task Force Latvia Commander, Colonel Jean-Francois Cauden, and Task Force Latvia Sergeant Major, Chief Warrant Officer Rodney Gallant, welcome Canadian Armed Forces soldiers who are deployed on Operation REASSURANCE to Riga, Latvia on July 8, 2021. Image by MCpl Stuart MacNeil, enhanced Forward Presence Battle Group – Latvia Imagery Technician, Canadian Armed Forces Photo.

Excluded Cuts

Specific spending was excluded from cuts in the CAF. These items include: salary, operating and deployment/relocation expenditures. Statutory Expenses, mainly funding related to employee benefit plans totalling approximately $1.7 billion, were also exempt from reduction.

The message stated that the Department of Defence and CAF have worked over the past several months to complete their parts of the government-wide spending review announced in Budget 2023.

“This exercise has driven us to ensure the Defence budget is prudently invested in programs and services that Canadians rely on while ensuring resources are focused where they are needed the most,” read the message.

National Defence planned spending for 2024-2025 by Core Responsibility.

Saving Measures

Like many government departments, refocusing funds in the Department of National Defence and CAF will be in specific areas.

“But in other areas, there will be impacts. Many of you may already be aware, through business planning exercises, of the streamlining and consolidation of training, reductions to travel budgets, reallocation of work, or re-absorption of certain functions into the Defence Team, as professional services costs are reduced.”

To ensure the department hits its mark, it is aiming to make reductions in the following areas:

  • Savings measure 1: Travel
      • Reduce spending on travel by $58,589,937 in 2024-25, and ongoing.
  • Savings measure 2: Professional Services
      • Reduce spending on professional services by $200,000,000 in 2024-25, and ongoing.
  • Savings measure 3: General Operating Funds
      • Reduce general operating expenses by:
      • $354,778,505 in 2024-25,
      • $264,250,000 in 2025-26, and ongoing.
  • Savings Measure 4: Fiscal Framework *Footnote 1
      • Reduce spending to initiatives yet to be started and earmarked in the fiscal framework by
      • $197,080,558 in 2024-25,
      • $185,848,278 in 2025-26,
      • $79,871,095 in 2026-27, and ongoing.
  • Savings Measure 5: Additional Targeted Spending Reductions
      • The previously described measures do not fully meet targeted saving reductions. Further work is therefore currently underway to identify $142,748,785 in 2025-26 and $304,827,968 in 2026-27 (ongoing) to fulfill
      • Department of National Defence targets.
The above graph presents planned spending (voted and statutory expenditures over time.

Planned Budget

“Now, there are more priority-setting exercises to come so that we can provide the Minister of National Defence with additional, more focused spending reduction proposals for fall 2024 to fully meet the target of $908 million per year.”

DND/CAF planned budget after refocus:

  • $30,584,803,954 in 2024-25;
  • $37,535,567,936 in 2025-26; and
  • $32,837,822,883 in 2026-27.‌

Defence Team Thanked

The CDS and Minister closed the message by thanking the Defence Team members for their support as they continued to achieve their mandate and mission readiness.

“Again, our guiding principle throughout this is to minimize the impacts, and to direct Defence spending toward top defence and government priorities, which include increasing military capabilities, achieving our vital recruiting objectives, supporting our people and their families, and building a more modern, viable combat-ready force.

“We will keep you informed of updates as they occur and know that we can count on your continued support in the months ahead,” the message concluded.

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