Canada is trying to simultaneously upgrade its aging defence capabilities and to maintain anactive role in NATO and in UN peacekeeping operations. This dilemma has led the government to focus oncontracts to prolong the operational life of military hardware, instead of purchasing expensive newequipment. Although Canada has agreed in principle to begin replacing aging ships, aircraft and militaryequipment with new modern replacements, in practice there are budgetary constraints that make itattractive for the government to seek temporary bridging solutions instead. The new US administration ispressuring NATO countries to begin spending 2.0% of GDP on defence, and Canada has one of the lowestlevels - forecasted at 1.2% in 2017 - in NATO. In these circumstances, Canada is likely to commit stronglyto its overseas deployments rather than increase the defence budget to 2.0%, as this is a cheaper way ofshowing a commitment to NATO than by almost doubling defence expenditure. This means thatoverwhelmingly, the budget will be used to cover operational expenses and recurrent costs, as Canadianforces deploy in the Baltic States and Ukraine, and that new procurements are increasingly being deferred.
The March 2017 budget CAD8.5bn would be deferred from the 2015/16 spending cycle back to 2035-6which would otherwise be allocated to procuring brand new equipment. The budget also stated a newplan to buy second hand 18 F-18 Superhornets to prolong the lifetime service of the CF-18 jet fleet whichis aging. This also likely signals that Canada will try to cancel its order of the Lockheed Martin F-35 jetas the Liberal Prime Minister promised before his election in 2015.These developments suggest that fewnew defence projects beyond those already committed to, will be undertaken.