Paul Martin’s minority Liberal government is continuing to spend at a rapid rate. Program expenditures increase only 2% in the fiscal year ending March 31, 2006, but that follows a huge increase of 11.8% in fiscal 2005.

The truth is there were so many election promises and other urgent issues the government could only cope by paying for future initiatives this year. Some of the prepayments reach out as far as four years, so the average increase in 2005 and 2006 of 7% somewhat overestimates the actual increase in base-line program spending.

The biggest chunk of new money, $12.8 billion, is for national defence. The Department of National Defence will receive the funds over the next five years, but only $7 billion will be booked in the budget. That’s because capital expenditures are amortized over their useful life, often a longer period.

The monies are fairly evenly divided among four areas: expanding the armed forces by 5,000 regular personnel and 3,000 reserves; providing for operational sustainability; adding new equipment both for replacement and to boost capacity; and “post-defence policy review.” The last item cannot be done until the foreign affairs review is completed, but the government is putting aside $3.8 billion by 2010 for whatever commitments are decided upon.

This funding is considered sufficient to bring the armed forces back to operational sustainability and add to their numbers. Because many of the expenditures are capital, more of the money is booked in years four and five than in the next three fiscal years.

Early learning/child care gets $5 billion by 2010, a figure which matches the share of gasoline tax revenues Ottawa will be handing over to municipalities.

Another key funding area ensures that Canada meets the Kyoto Protocol commitment to reduce greenhouse gas emissions 26%-28% by 2008-2012. The budget provides $3 billion in new monies for this, mostly spread among almost 20 relatively small initiatives.

The one big measure is the Clean Fund, which gets $1 billion over the next five years. It is to use the money to purchase greenhouse emission reductions, with as much as possible bought domestically from companies or individuals who can prove that it has reduced its emissions beyond what regulations require. Assuming a price of $10 per megatonne reduction, a figure frequently suggested as a probable price, then $1 billion would cover about a third of the 240-270 megatonne decline required for Canada.