Since the end of the Cold War, Canada has remained one of the lowest spenders on defence in NATO in contrast to its larger neighbour to the south. The start of the decade saw Canada spend around US$21.2bn annually on defence. This increased to US$23.1bn the following year, before rising to US$22.5bn in 2012 and US$24.8bn in 2013. This upward trend is predicted to continue for the remainder of the forecast period until 2017.
The steady increase in the defence budget is being underpinned by the so-called Canada First Defence Strategy (CFDS). The CFDS is intended to reverse a significant decline in funding levels which had been experiencing by the Canadian armed forces following the end of the Cold War in the 1990s and into the early part of the 21st century.
It was announced in October 2013 that the Canadian government plans to overhaul its defence procurement processes. It particular, reform efforts to this end will focus on reducing the time it takes for the government to draft new requirements. A separate procurement agency will also be activated to oversee and manage materiel acquisitions. The reforms are taking place against a backdrop of a number of failed procurement initiatives including the government's troubled acquisition of the F-35 Lightning-II Joint Strike Fighter, the planned purchase of new armoured vehicles for the army, the protracted procurement of new army logistics vehicles and the now nine-year late Search and Rescue aircraft that the government has struggled to acquire for the air force. No information has been released as to when these changes could come into effect.
During Q413, Canada performed the following actions regarding procurement:
- In October 2013 it was reported that the Canadian government was having second thoughts regarding the army's Close Combat Vehicle programme. The pressure to cancel the initiative is coming from the Canadian army which is currently having to manage a budget reduction of 22%. A winning bidder for the programme has already been selected, although no official announcement has yet been made to this end.