Budget

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.

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.

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.

Over the past several months, your organizations have done the initial rigorous work to complete our part 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.

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.

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The federal government has spent $4.8 billion so far on the new warships it hopes will be built starting in two years.

But National Defence has now acknowledged it doesn’t fully know the cost of maintaining and supporting the ships that will replace the navy’s Halifax-class frigates.

The new figures presented to the House of Commons provide a limited window into some of the spending so far on the Canadian Surface Combatant or CSC project. Two months ago, the parliamentary budget officer estimated the total cost of the CSC would be more than $300 billion.

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In response to a request by the House of Commons Standing Committee on Government Operations and Estimates (OGGO), this report presents a cost analysis of the Canadian Surface Combatants (CSC) program, including estimates for the Development, Acquisition, Operations and Sustainment, and Disposal phases of the fleet’s life cycle.

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