The Liberal government is stripping $8.5 billion out of the equipment budget at National Defence over the near-term — and then promising to put it back and spend it sometime over the next 20 years.
The extraordinary measure is contained in Finance Minister Bill Morneau’s budget, tabled Wednesday in the House of Commons.
The Liberal government at the same time announced an additional $624 million in spending on veterans programs, much of it aimed at helping smooth the transition for ex-soldiers from uniform to civilian life.
But it is the so-called re-profiling of capital expenditures at the Defence Department that may have the biggest political and policy impact on the Liberal government.
It comes at a time when the Trump administration is leaning on allies, including Canada, to put more into their militaries and meet the NATO spending benchmark of two per cent of gross domestic product.
The latest shift of funds from the department’s capital envelope follows a decision in the last federal budget to postpone $3.7 billion in military purchases.
That brings the total amount of deferred spending at National Defence, under the Liberal government, to $12.1 billion.