OTTAWA — Canada's military is in line for a dramatic overhaul, with Finance Minister Ralph Goodale's announcement of a five-year plan to support $12.8 billion in defence spending.

"In an increasingly uncertain world, Canadians know that we must play our part and shoulder our share," Goodale said in his budget speech.

Although the government is still awaiting its comprehensive international policy review, for which $3.8 billion has been set aside, Goodale said he will take several steps to bolster Canada's military in the meantime.

Key points in the five-year spending plan include:

• $3 billion to deliver on the prime minister's promise of 5,000 new soldiers and 3,000 new reservists;
• $3.2 billion "to strengthen military operations," in terms of training, operational readiness and infrastructure repair; and
• $2.7 billion for the acquisition of new equipment, as well as training facilities for the Joint Task Force 2.

All told, the finance minister said it adds up to an additional $7 billion in new budgetary spending, spread over five years.

"(It's) the largest increase in defence spending in the last 20 years," he said, promising that this "means that we will be able to better meet our responsibilities abroad and protect our people at home.

Examining the budget numbers, Conference of Defence Associations senior analyst Howard Marsh called the federal commitment unexpected and "staggering."

"For 40 years, the priority of the Department of National Defence has been anything but military capabilities," Marsh told CTV.ca. "Today, I see the first signal that the government supports the vision of the Chief of Defence Staff, and is willing to fund it."

In a speech earlier this month, new Chief of Defence Staff Gen. Rick Hillier said Canada has fallen short when it comes to providing appropriate resources to the men and women of the armed services.

According to Marsh, the cash injection answers Hillier's demands. It will not only bolster the military's capacity to respond to natural and man-made disasters around the world, but also bring Canadian defence capacity in line with its renowned capabilities in diplomacy and development.

"Assistance and diplomacy without the force of military to back it up has weakened Canada's credibility in the past, but should not be a problem in the future," Marsh said.

"You have all these military personnel with incredible training and skills, but they don't have the organization or the means to do it," he added, explaining that the new commitment has now changed that.

The budgetary commitment to spend $7 billion a year means the military can now pay off the debt it's accumulated paying for recruitment, infrastructure, and all its other ongoing demands.

"I think the government has finally woken up to the fact that the frequency of natural and man-made disasters that occur worldwide are increasing," Marsh said, noting the pressure the world's growing population is exerting on the physical and political environment.

Hillier's response to the budget was glowing: "I think it's a very good day for the men and women in uniform and it's a good day for our country, and that means it's a good day for all 32 million Canadians," he told reporters.

"We're going to have a Canadian military that is visibly relevant to Canadians and tangibly valuable to them. This is a good day for those men and women in uniform, I'll tell you this."

Military 'hemorrhaging"

Maj.-Gen. (Retired) Lewis MacKenzie had a more pessimistic view.

With the military cancelling programs, including docking ships and grounding aircraft, this year's one-time increase amounts to $500 million, with another $600 million coming next year on a base budget of $13.5 billion.

That's far less than the flat budget increase of $1.5 billion that some lobby groups, senators and members of Parliament have called for in the first year.

MacKenzie said the $500 million first year payment is an inadequate amount "in a year where the military's in serious trouble."

"We've gone from 700 planes to just over 200 in the air force. We've got four destroyers, one's tied up with no crew. We've only got 700 soldiers in a major mission in Afghanistan. All the rest are home now, and we're broke," he told CTV's Lloyd Robertson.

MacKenzie added he would like to have seen at least a $2 billion increase in the first year in order to "stop the hemorrhaging" of Canada's military. He said he's also never seen a budget projection survive for more than two years, although he's "hoping and praying" that this one holds.

Debt relief

Recognizing other international concerns, the budget also reaffirms Canada's promise to support international debt relief -- to the tune of $172 million over five years. International assistance gets a boost too, with an extra $3.4 billion over the same period.

Goodale's budget plan also takes into account the changing demands of domestic security. Among the measures designed to ensure the security of Canadians at home:

• another $1 billion to spend on the implementation of the 2004 National Security Policy;
• $222 million to "enhance the security of the country's marine transportation system"; and
• $433 million to ensure the "efficient delivery" of border services.

Those measures will go some way to ensuring good relations with the leader of the worldwide war on terror, but Marsh believes Canada's southern neighbour will be pleased with Canada's increased military commitment.

Discounting reports that Ottawa and Washington are at significant odds on the subject of ballistic missile defence, the budget plan, Marsh said, virtually duplicates suggestions the U.S. Ambassador to Canada made in a speech just last week.

"So the Americans will be pleased," he said.