CSE 2016-17 budget will be more than four times larger than pre-9/11

The Main Estimates for fiscal year 2016-2017, which were tabled in parliament on Tuesday, February 23rd, show that the Communications Security Establishment budget is projected to be $583,624,818 in the coming year.

[Update 5 November 2016: See updated figures here.]

CSE's budget has been growing more or less continuously since 9/11. The agency's projected 2001-02 budget was $100.2 million, or about $135 million in today's dollars. (Much more was actually spent that year, but the boost from the projected level was the result of post-9/11 increases.)

The projected 2016-17 budget is thus a stunning 5.8 times larger than the pre-9/11 budget—4.3 times larger after accounting for inflation.

CSE's much increased post-9/11 focus on counter-terrorism and support to military operations undoubtedly accounts for a lot of the growth since 2001, but the agency's dramatic shift during the same period away from old-style SIGINT operations towards "mastering the Internet" and conducting computer network exploitation operations probably accounts for an even larger part of the increase.

The projected 2016-17 budget is $45.4 million higher than the $538,201,730 budget projected in the 2015-16 Main Estimates. The increase is explained as the net result of a $14.1 million reduction in accommodation costs and a $59.5 million increase in funding "to address cyber threats and advancements in information technology."

As in many years, however, the 2015-16 Main Estimate figure is not a very reliable guide to the agency's actual budget this year.

CSE's budget authorities were topped up several times during the year: $18,081,548 was added in the Supplementary Estimates (B) as a carry-forward from the previous year's operating budget; an additional $3,078,449 was added to cover various paylist requirements; another $20,000,000 was added for paylist requirements in the Supplementary Estimates (C); and the Supplementary Estimates (C) also added a $4,421,325 transfer from Public Works and Government Services, additional appropriations of $31,353,885 to "preserve Canadaʼs foreign intelligence capabilities" (buy more supercomputers?) and $2,989,797 for cyber security initiatives, plus an additional statutory appropriation of $648,400. All told, these additional cash infusions total $80,573,404, boosting CSE's proposed 2015-16 budget authorities to $618,775,134.

It is likely that not all of that money will be spent by the end of the fiscal year. Indeed, if I'm reading this document correctly, $4,218,262 is already considered frozen and cannot be spent. There may well be other spending shortfalls. Nonetheless, it looks like CSE may be on track to spend well over $600 million in FY 2015-16.

Going back to the Main Estimate numbers, most of this year's $45.4 million Main-Estimate-to-Main-Estimate increase, 72% of it, is going to the SIGINT side of the house. The remaining 28% will go to the other side, the IT Security program. Interestingly, the proportion of the overall CSE budget currently accounted for by the SIGINT and IT Security programs is also 72 and 28% respectively.

Cyber security has been much in the news in recent years, with high-profile penetrations of IT systems discovered in the NRC, the Privy Council Office, and other locations. But so far there is no evidence of an increase in the relative emphasis on cyber security within CSE.

Here is the breakdown from previous years:

2015-16: 73/27 (SIGINT/IT Security)
2014-15: 71/29
2013-14: 68/32
2012-13: 70/30

As these numbers show, despite increasing concern about Canada's vulnerability to cyberattacks and cyberespionage, CSE's SIGINT program has been growing faster than its IT Security program. However, as I noted last year, such numbers are likely to fluctuate quite significantly from year to year as capital spending related to specific projects starts and stops, so it is probably too early to draw conclusions about any long-term trends.

Further coverage:

- Alex Boutilier, "Canada’s spies expecting a budget boost," Toronto Star, 23 February 2016.