Not sure if anyone has read this article yet. Its on 'increased' military spending in the Arctic.
Last week, Canada's defence minister announced a "substantially increased investment" in northern military hubs. DND now says there's no new money at all.
cabinradio.ca
Our old friend - accounting - enters into the room, looks around, sizes things up and then walks into the middle of the room drops its pants and takes a nice smelly deuce and then walks out smiling.
DND walks back entirety of minister’s ‘substantial increase’ pledge
Canada’s defence minister last week pledged a “substantially increased investment” in new northern military hubs, suggesting the figure had increased more than ten-fold. But it wasn’t true.
In 2024, the federal government had said $218 million would be available to build those hubs – but only $18 million in the opening five years, a low sum for infrastructure in the North.
Asked by Cabin Radio about the $218 million and the smaller figure for the next five years, Blair replied: “I’ll be announcing a substantially increased investment in the northern operational support hubs today. It’s about $2.67 billion and it’s our intent to move quickly so that could be done over the next five years.”
According to DND, what actually happened is the department decided to switch the type of accounting it was using to get its figures, without telling anyone. (Whether even the minister knew or fully understood this is unclear, based on his statements.)
There are two types of accounting going on here. One is cash-basis accounting and the other is accrual accounting.
Let’s say you receive $20,000 from a particularly nice aunt to make your yard nicer. Your aunt expects you to gradually spend it over 20 years.
Cash-basis accounting would mean entering $20,000 in the column for the year that you got the money. Job done, thanks for coming, the end.
Accrual accounting would be more likely to mean entering $1,000 for each of the 20 years that form the expected life of the yard project. It still equals $20,000, but it’s spread over time.
We could spend a lifetime discussing which system accountants might pick in a given situation and why.
For the purposes of this article:
the federal government picked the accrual system when it first announced the money in April 2024, then magically and silently changed to the cash-basis system last week. When asked about it, the minister responsible said it was an increase instead of explaining the accounting change.
De Casanove said
the federal government switched to the cash-basis figure because $2.67 billion “more accurately captures the broader financial commitment being made to strengthen Arctic infrastructure and operations.”
According to the Library of Parliament, the Canadian government has
used full accrual accounting for its budget since 2003.