Question Period Note: CARRY-OVER OF UNSPENT FUNDS (CAPITAL)

• Why is this government failing to spend the funds that it allocated for the Canadian Armed Forces?

• Prudent resource management is essential to meet Canada’s defence needs now and into the future.
• National Defence manages a large and complex budget with major equipment and construction initiatives that need funding over many years.
• That is why we introduced a new funding model in 2017 to ensure that projects get the money they need when they need it.
• This means that money can be re-allocated to support priority projects within a given year, or moved forward to support needs in future years.
• The flexibility facilitates the delivery of major projects which require multi-year funding and minimizes our lapses at the end of each fiscal year.
• To mitigate lapses in funding authorized by parliament, National Defence is taking the following actions:
  • Improving its capital funding forecast to ensure that the department does not request more funding authorities from Parliament than required;
  • Funding new projects from surplus in-year funding rather than request additional funding from Parliament;
  • Requesting funding for additional military deployments later in the process to ensure only the required funding authorities are requested (to prevent operating lapse).

BACKGROUND

• National Defence manages a large and complex budget, with projects that need funding over many years, such as major equipment purchases and building construction projects.
• Despite sound long-term planning, most projects do not advance exactly as planned—some progress faster, others slower, for a variety of operational, logistical, and program reasons.
• Funding not requested is not lost. National Defence has the ability to re-profile funds into future years for major projects, and then access those funds when needed.

RECENT PARLIAMENTARY INTEREST

• In the 42nd Parliament opposition members demonstrated sustained interest in defence spending, particularly as it related to procurement of major projects.

RECENT MEDIA INTEREST

• On December 12, 2019, CTV reported that National Defence failed to spend almost $8 billion in promised defence cash over recent years.

GBA+

• Nil.

INDIGENOUS

• Nil.

Responsible Principals: Assistant Deputy Minister (Finance)

QUICK FACTS:
* Strong, Secure, Engaged earmarked $6.5 billion dollars for capital investments in 2018-19. National Defence requested $4.2 billion from the fiscal framework. The delta can be explained by the following considerations:
* 33% of the funds were not requested due to lower contract amounts and contingency funds were not required.
* 42% of the funds that were not requested were the result of our own internal processes, additional time required to analyze options of some projects, or change capabilities to meet new threats.
* 25% of the funding not requested is related to delays in delivering goods and/or services by industry.