Government of Canada Main Estimates 2024-25 - Potential Impact on Digital Transformation
A brief look at the Government of Canada's Main Estimates 2024-25
The Trudeau government’s handling of defence has increasingly come under domestic and international pressure, particularly for the consistent refusal to spend 2% of Canada’s GDP on defence, as agreed by all NATO members.
As a result, it is no surprise that people are excited (or dreading?) to read a government financial estimates document. On 29 February 2024, the Government of Canada’s 2024-2025 Main Estimates was tabled in the House of Commons.
To start off with, there is good news! The Department of National Defence (DND) has found $851 million in savings to be reallocated across DND and Canadian Armed Forces (CAF). In addition, estimates show that DND/CAF will receive an additional $300 million.
The bad part is where most of that $851 million in savings is coming from:
$174 million from Sustainable Bases, Information Technology Systems and Infrastructure
What the Media Missed
Most, if not all, of the media, including Murray Brewster of CBC News focused on the $174 million reduction to “infrastructure and bases.” They missed that the $174 million reduction is to “Sustainable Bases, Information Technology Systems and Infrastructure.” The Government of Canada and Department of National Defence treat many information technology as infrastructure, which is both a good and bad thing. While information technology infrastructure, such as the physical fiber optics, data centers, should be treated as critical infrastructure of the CAF, but the downside is that it often leaves DND to threat information technology as a buy and forget asset that just exists in the background.
What capabilities and assets are considered information technology systems versus others? I have yet to find a clear breakdown, but this $174 million hit potential risks harming the CAF’s ability to achieve digital modernization. We can spend all day discussing what the CAF needs to be fit for purpose; people in academia literally do this over multiple days and still don’t have much to show for it. However, we can all agree that the CAF’s digital capabilities are far below where they need to be. It is a common story to hear about the shock of new recruits who find how far behind the CAF is in terms of its technology use and capabilities.
So What?
In the end, DND/CAF is left with $851 million in savings that will be reallocated and an additional $300 million from the Government. Although there is a risk a lot of this may impact IT infrastructure, I am waiting for April 16 for the budget to see how these funds will be spent. There is a major internal push to stand up an initial pan-domain capability, which means a lot of major IT spending including in cloud-based networking, data analytics, and AI/ML. There is a likelihood that much of this reallocation will go towards pan-domain and digital transformation activities, but there is a lot we do not know.
There remains a lot to be determined, but it is currently with Prime Minister Trudeau, Deputy Prime Minister Freeland and their cabinet to make the decisions. They will be advised on how to do so by the Chief of the Defence Staff, but there is a lot in the air related to the Defence Policy Update and the actual government direction to the military. Statements by the new Minister of Defence Blair alluded to changes in the Defence Policy Update, but this has only made analyst more pessimistic.
The CAF is moving ahead with pan-domain no matter what, but its ability to do so effectively will be based on the Government of Canada ensuring the CAF’s digital transformation gets the funding it needs and provides policy support to procure the capabilities required.