PM Offers Military More Money

"There will be some increase, yes, for defence. But by how much? The minister of finance (John Manley) will let you know the night of the budget."

Chretien said he's in a spending mood thanks to the $7.8-billion surplus accumulated so far this fiscal year. And the PM said the defence department has creeped up on his priorities list.

"We have a bit more money now than we expected to have," Chretien said. "We're the only country having a surplus at this moment."

But he warned the Canadian Forces not to expect him to hand over the whole surplus. The PM said the military will have to share it with health-care reform and infrastructure projects.

Defence Minister John McCallum said yesterday he'll continue to lobby for more defence spending. He told defence ministers from other NATO member countries, complaining about the pitiful state of their militaries, to offer up quality instead of quantity.