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Defence Minister Peter MacKay has forcefully rejected a Senate analysis that says the Conservative government's defence plan won't deliver real spending increases to the military.

MacKay told Â鶹´«Ã½net on Wednesday that Sen. Colin Kenny, head of the Senate Security and Defence committee, has "a profound misunderstanding of what the Canadian government is doing vis a vis the Canadian Forces."

He accused Kenny of being "wilfully blind and misleading" in the report.

The committee's report claims the Conservative government's defence policy will not live up to its own promise of stable funding for the military.

Kenny told Newsnet earlier that inflation predicted by the Bank of Canada means the military is already losing ground.

The government has budgeted for a 1.5 per cent increase annually until 2011, and then two per cent after that. The Bank of Canada is saying that inflation could rise to four per cent annually.

"This is a silly policy that's being announced. It's inflexible. It won't provide the funds that we need to equip our troops and provide them with the wherewithal to carry on and protect Canada," Kenny said.

Canada First

In May, Harper announced that spending on the military would increase to $30 billion annually over the next 20 years under the government's Canada First defence policy.

"We have put or committed already more than $50 billion to the Canadian Forces," MacKay said. "This is for new equipment. This is for tanks, tactical and strategic aircraft, helicopters, trucks, ships."

The government has also moved to raise pay for Forces members, he said.

"We've put forward an unprecedented commitment, both financial and moral, for the Canadian Forces," MacKay said.

Kenny said Canada currently spends about $18 billion per year, or 1.2 per cent of GDP, but that number should be $35 billion, which would represent about two per cent of GDP.

Canada hasn't spent at that level since Pierre Trudeau, he said.

When they testified before the Senate in June, Gen. Walter Natynczyk -- now Canada's chief of defence staff -- and other top military leaders said the government had guaranteed the military the type of sustained funding needed for growth.

"Their job is to present the government's position," Kenny said, adding that generals and admirals must testify as though the defence minister was sitting right beside them.

The generals and admirals said what the policy is. "They didn't say what their professional opinions were," Kenny said.

"We can do the math, and we've done the math on our end, and it doesn't work out," he said.

The military should be getting the inflation rate plus a fixed percentage, he said.

Since the government won't be doing that, "we're going to see aircraft grounded, we're going to see ships that can't sail ... and we're going to see no increase in the size of our armed forces," Kenny said.

The government has backed off its promises to increase the size of the Forces, and "that's because they don't have the money," he said.

Afghanistan

Canada is committed to having combat troops in Afghanistan until 2011, the country's biggest overseas deployment in decades.

In a commentary published last week, Brian MacDonald -- senior defence analyst with the Conference of Defence Associations, a defence lobby group -- saw good news in the fact that the Afghan mission and other overseas operations will be funded separately from the overall military budget.

As a result, the Afghan effort won't siphon off moneys intended to help rebuild the overall Forces, he said.

However, MacDonald worried that over time, the level of funding relative to GDP could still fall over a 20-year time period.

He calculated that if GDP growth plus inflation averaged 5.1 per cent over a 20-year period, defence spending to GDP would fall to about 0.8 per cent.

It is currently 1.2 per cent.

Still, the Conservative plan, which builds on spending increases initiated under the Paul Martin Liberals, show there is a bi-partisan realization that the cutbacks of the deficit-fighting 1990s went too far, MacDonald said.