The Parliamentary Budget Officer (PBO) has released a new report on the Department of National Defence’s planned capital spending under its defence policy, Strong, Secure, Engaged (SSE). The initial capital budget in 2017-18 was estimated at $164 billion over a 20-year period.
The PBO has been tracking planned and actual capital expenditures under SSE since 2018. The PBO found that the total capital envelope has increased by $51.5 billion, rising from $163.3 billion as assessed in the last report in 2022 to $214.8 billion. Most of this new spending is scheduled for the 2030s and is attributable to the Government’s announced modernization of facilities and capabilities associated with NORAD.
Compared to the spending profile presented in the 2022 PBO report, expenditures have shifted more towards the latter half of the 20-year period under study (2017-18 to 2036-37), with an estimated 62 per cent of overall spending to occur in the last 10 years of the SSE, compared with 50 per cent in the 2022 PBO report.
“According to our estimates, we find that the capital envelope for SSE now stands at $214.8 billion” explains Yves Giroux, PBO. “In addition, since a lot of the new spending occurs in the latter half of the 20-year period we studied (2017-18 through 2036-37), the effects of inflation may result in additional appropriations being needed to maintain the original spending power.”