Canada's military is about to get a spending overhaul. Defence Minister John McCallum says he wants to move quickly to reform the military on the advice of a report released Wednesday.

McCallum says the Department of National Defence has identified $85 million in administrative efficiencies that can be achieved by 2005-06. They've also found another $43 million in savings from improving the way the Department manages equipment and supplies. The changes will add up to more than $128 million in savings.

More savings could come from speeding up the replacement of aging Sea King helicopters and upgrading the fleet of Hercules transport planes.

The saved money would be reinvested in "combat capability." That means more equipment, and possibly more soldiers, but fewer people at national defence headquarters.

"The report recommends that as we move from an era of managing cuts to an era of embracing change, we have to shift from a decision-making structure which is more strategic, less transactional, more top-down, less bottom up," McCallum told reporters Wednesday.

"It's my hope to be able to accelerate the implementation of that plan," he said.

"As for any concrete decisions, those have not been made yet and they will have to wait for a decision by the government."

The report was conducted by a small committee of four outsiders called the Advisory Committee on Administrative Efficiency. McCallum asked them to help find as much as $200 million in savings within the department.

The Globe and Mail reports that next week, McCallum will seek cabinet approval for $600 million for new vehicles and land forces.

McCallum faced harsh criticism when two Canadian soldiers were killed in a landmine accident in Afghanistan earlier this month. The troops were travelling in an unprotected Iltis jeep.

The Opposition calls McCallum's promises to cut spending too little, too late, and suspects a Liberal attempt at damage control.

"It's come out after a tragedy that obviously revealed how underequipped our troops are in theatre, and only a couple of months before an election," remarked Alliance MP Jay Hill.

McCallum has suggested he supports a new focus on the army, at the expense of the navy and air force. In an interview with The Globe, McCallum said the army is essential if Canada wants to maintain its presence overseas.

"When Canada wants to project itself overseas, the army is critical. I'm not saying the (air force and the navy) are not important, but the army is critical for the projecting of our values overseas."

Currently, there are 20,000 soldiers participating in international missions, down from a high of 50,000 in the 1960s.