April 21, 2015 / 10:56 PM / in 2 years

UPDATE 1-Canada budget offers little new cash for extra security needs

(Recasts, adds reaction)

By David Ljunggren

OTTAWA, April 21 (Reuters) - Canada's Conservative government pledged little new immediate cash in its budget on Tuesday for security agencies already hard-pressed to cope with an increased focus on thwarting domestic attacks.

The government, seeking re-election this year, delivered a budget that promises a slim surplus despite the oil price crash, while offering goodies to seniors and reducing taxes for small businesses.

The killings of two uniformed soldiers by Muslim converts in separate attacks in Canada last October prompted the government to introduce a bill giving the Canadian Security Intelligence (CSIS) sweeping new powers.

The spy agency had already made clear it could not fulfill all its existing duties without more resources. At the same time, the Royal Canadian Mounted Police (RCMP) said it too needed extra help to track terror suspects.

But Finance Minister Joe Oliver came up with just C$18 million in new money for counter-terrorism operations in 2015-16 and that must be shared between CSIS, the RCMP and the border services agency.

"For a government that has said (counter-terrorism) is a major concern, that might be considered a bit light," said Thomas Mulcair, leader of the official opposition New Democrats.

Wesley Wark, a University of Ottawa professor and one of Canada's leading security experts, was more direct, branding the C$18 million as "a pittance and a disgrace".

Oliver, faced with falling revenues after an oil price slump, said he would invest a total of C$292.6 million over five years in counter-terrorism. But almost 60 percent of the funds will be spent in the last two years.

The RCMP has taken hundreds of officers from task forces fighting tax evasion and organized crime and transferred them to the anti-terror effort, a process it says is not sustainable.

Asked how C$18 million could be enough, Oliver said Ottawa was providing money for both foreign and domestic intelligence.

Ray Boisvert, a former CSIS director-general of intelligence, said the proposed funding was "of measurable value", given other fiscal priorities.

But he added: "These additional funds will certainly not resolve all of the challenges, nor completely fill all of the critical gaps."

As part of the fight against what Oliver called "jihadi terrorists", Canada in March said it would extend for a year its military mission against the Islamic State.

The number of Canadians leaving to join militant groups in Iraq and Syria such as Islamic State has increased 50 percent in the past few months, a senior security official said on Monday.

Oliver promised up to C$360.3 million to fund the extension, a sum which a spokesman for Defence Minister Jason Kenney said would be enough. Kenney had initially said the cost would be C$406 million.

He also said that to meet the multiple demands on the armed forces, Ottawa planned to increase the military budget by 3.0 percent a year starting in 2017-18. This would provide the Defense Ministry with an extra C$11.8 billion over 10 years.

$1=$1.22 Canadian Additional reporting by Mike De Souza, editing by G Crosse

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