According to figures released by NATO in 2016, Canada allocated 0.99% of its Gross Domestic Product (GDP) for defence, marginally increased (the government spent an additional 0.01% of the GDP) when compared to 2015, but significantly decreased compared to 2009, when the North American country spent approximately 1.39% of its GDP on defence. Canada is ranked 24th out of the 28 member states, lying between Hungary (1.01%) and Slovenia (0.94%), lacking way behind the 2% NATO target figure. The 2016 federal budget reaffirms the country’s reluctance to commit a larger amount of funds to defence, as it is primarily focused on setting new paths in economic and social development.
Despite the fact that there is an explicit commitment by the government in the budget document that “the Department of National Defence is in the process of renewing its major equipment, including Canada’s aging fleets of CF-18 fighter aircraft and maritime warships”, further on the document reads that “Budget 2016 proposes to reallocate funding of 3.716 billion Canadian dollars (CAD) for large-scale capital projects from the 2015–16 to 2020–21 period to future years” and that “this is not a reduction in the National Defence’s budget” and that “this will ensure that funding is available for large-scale projects when it is needed”. Moreover, the budget 2016, projects that a total amount of 84.3 billion CAD will be allocated for large-scale capital projects, over the next 30 years, out to year 2044–45. An additional 2.8 billion CAD per year, starting in 2045–46, on an accrual basis, is also projected to be spent on large-scale capital defence projects.
Additionally, the federal budget for 2016 foresees the allocation of an amount up to 379 million CAD, for a period of eight years beginning in 2017–18, to extend Canada’s participation in the International Space Station, until 2024. Furthermore, a budget of 77.4 million CAD, over five years, starting in 2016–17, is foreseen to be used to implement new measures, so as to improve the security of government networks and information technology systems.
Finally, the budget provides an amount totalling 200.5 million CAD over two years beginning in 2016–17, for infrastructure projects. These will include some 77.1 million CAD on projects to support military operations, including investments to repair and construct live-fire ranges, airfields and hangars and naval jetties across Canada.
Canadian authorities are planning to procure a wide range of defence equipment over the coming years. The Canadian Army, is currently implementing the Tank Replacement Project that was initially announced in April 2007. The project will provide the Canadian Forces with both an urgent short-term and a long-term, sustainable replacement for its ageing Leopard 1 C2 Main Battle Tank fleet. The Canadian Forces Leopard 2 fleet of 100 tanks, once repaired, overhauled and upgraded, will provide the Canadian Forces with a sustainable heavy, direct-fire capability until 2035. Under this context, in November 2012, Wajax Power Systems, was awarded a contract valued at 10.16 million CAD for the repair and overhaul of engines for the Leopard 2 family.
Another project which is currently under implementation is that for the procurement of Tactical Armoured Patrol Vehicle (TAPR). This project is part of the family of land combat vehicles, announced in July 2009. As of August 2016, the deliveries of the TAPV have begun. Another project implemented under the family of land combat vehicles umbrella is that of the Light Armoured Vehicle III Upgrade (LAVUP). The project will extend the LAV III fleet operational life up to 2035. In October 2011, General Dynamics Land Systems – Canada (GDLS–C) was awarded a 1.064 billion CAD contract for the implementation phase of the LAVUP project, which is expected to be fully implemented by the end of 2019.
On the other hand, the major program currently being implemented by the Canadian Navy is that of the refit of the Halifax class frigate, known as the Halifax Class Modernization Project (HCMP). Under the project, a Lockheed Martin Canada-led team will complete the refit and modernization of all twelve ships of the class by the end of 2018. The Canadian-built Halifax-class multi-role patrol frigates are considered to be the backbone of the Navy and were commissioned between 1992 and 1996. Another important program for the Canadian Navy, is that for the replacement of the current Joint Support surface fleets of the Royal Canadian Navy and the Canadian Coast Guard. The project is placed under the umbrella of the National Shipbuilding Procurement Strategy. In March 2016, the Vancouver Shipyards Co. Ltd. was awarded a 65.4 million CAD program under which the shipyard was to initiate early discussions with potential suppliers and to purchase material and equipment to build the Offshore Oceanographic Science Vessel (OOSV) and the Joint Support Ships (JSS).
Undoubtedly, the most important future procurement program for the Canadian Air Force, will be the CF-18 fleet replacement program. The North American country is in an urgent need of procuring a fighter aircraft that will replace the CF-18 fighter that has been in service since the early 1980s. Canada is a partner in the F-35 development program, nevertheless, it is not yet sure that it will choose the F-35 to replace the CF-18 fleet. The procurement of a new fighter aircraft has been a source of considerable controversy in public policy circles in Canada for quite a long time. The CF-18 fleet is old and not fully capable of meeting Canada’s North American Aerospace Defence Command (NORAD) and NATO commitments, therefore, the Canadian government is expected to move forward with a decision as soon as possible, keeping all the options open until then.
Additionally, according to the official announcement of the Canadian authorities and after a very long procurement process, the tender for the procurement of a new fleet of Fixed-Wing Search And Rescue aircraft (as a replacement of the CC-115 Buffalo and CC-130H Hercules aircraft, currently in operation with the Canadian Air Force), was awarded to Airbus Defence and Space. In December 2016, the Canadian government announced its decision to procure 16 C-295 aircraft as well as a number of related services, as part of the respective contract.
As in any other domain, cooperation between Canada and the US in the defence sector, is very tight. According to the Stockholm International Peace Research Institute (SIPRI), over the period 2010-16, Canada imported defence equipment from seven different countries. However, taking a closer look at the Canadian defence imports, it is striking that some 78% of the imported defence equipment, was US-made. More on that direction, the US and Canada are the only two non-European members of the NATO alliance, which have further signed several agreements and arrangements that delineate their close military-to-military relationship. One of these agreements is the NORAD, a bi-national military command established in 1958 with a mandate to monitor and defend North American airspace.