The Canadian defense budget will increase only 1.7% for FY01-02, an increase of about $125 million. (Another $260 million has been added to the budget for special one-time programs such as peacekeeping costs.) Some 18.8% of the budget is allocated to buying capital items (buildings, major new weapons, etc.); the military wants this to climb to 23% in five years. For the first time in Canadian history, the Defense Ministry was allowed to keep unspent money from last year ($37 million) and add it to the next year's budget.--Stephen V Cole