Stephen Harper delivered a clear message to the military Monday as Lawson formally replaced retiring general Walt Natynczyk as top military commander.
"The Forces will also be subject to the same pressures that the uncertainties of the global economy have imposed across our government and around the world," the prime minister said told a gathering of the senior military leadership at the war museum in Ottawa.
"In order to free up resources to carry out work on the ground, administrative expenses have to be reduced."
The speech at the change-of-command ceremony, held amid tanks and war machines of the past, reinforced comments in a letter Harper wrote to Defence Minister Peter MacKay, a copy of which was leaked last week to The Canadian Press.
The prime minister laid down clear markers, telling Lawson that "lessons learned and the capabilities developed in Afghanistan must be retained for future missions yet unknown and, indeed, today unknowable."
That puts the military's top gun in a tight box, something the former fighter pilot acknowledged when pressed by journalists for specifics about what he can cut.
"I would like to say there's very little fat," said Lawson, who suggested savings can be had by winding down overseas missions, such as the current training operation in Afghanistan, due to end in 2014.
"Instead of speaking of fat, what we can speak of is now coming out of those combat missions. Let's bring our platforms and our people back as efficiently as we can, so that we can ensure that any dollars we've got under those resource lines can go to bolstering those military capabilities."
Lawson arrives as the military faces a post-war cash crunch that could see its budget shrink by as much as $2.5 billion a year by 2014. A recent paper prepared for Carleton University's centre for security and defence studies suggested that some of the budget-cutting levers the military has had in the past — such as chopping capabilities, equipment and personnel — are not there this time around, or the impact will be blunted.
National Defence recently combined three headquarters into one and Lawson left the door to open to further amalgamations, saying they have to "look at new and different ways of doing things."
He ruled out cutting the number of full-time members of the Forces, which is set at 70,000, but in reality has been running around that 68,000 mark.
Lawson hinted that in buying new equipment, the military may be forced to scale back the number of ships and aircraft it originally laid out in the Conservatives' marquee defence plan in 2008.
"Some of those numbers we see on the Canada First Defence Strategy on some of the fleets and platforms we're seeking to purchase, there's a range of numbers and it may mean we're at the low end of those ranges," he said.
"We'll have to look at all of those options."
Many big ticket purchases for the navy, including Arctic patrol ships and re-supply vessels, have already been pushed to the 2016-18 time frame. The government has yet to make a decision on the contentious F-35 stealth fighter, despite committing in 2010 to buying 65 of the multi-role jets.
Natynczyk said the military will always face budget challenges, but urged the government to continue to invest in defence.
The ceremony was also attended by Gov. Gen. David Johnston, who wore full military uniform for the occasion.
Natynczyk led the military for over four years through the latter half of the war in Afghanistan and both Johnston and Defence Minister Peter MacKay heaped praise on his work.
The Governor General underlined the importance of the top military post.
"Just as the principle of duty with honour acts as the centre of gravity for the military profession in Canada, so, too is the chief of defence staff the centre of gravity for the men and women who comprise the Canadian Forces," Johnston said.
"Since taking up his role in 2008, Gen. Natynczyk has shown extraordinary leadership, vision and humanity."
"He understands that in addition to leading the Canadian Forces as an institution, the chief of defence staff is also a leader of people — and in this, he grasps an essential truth of the Canadian military."
Natynczyk described it as the "best job in the world."
MacKay said the military will be in good hands with Lawson.
Lawson is a former fighter pilot who has commanded the country's largest air base and held a number of senior staff positions, but never a field command. He's been an articulate defender of the F-35.
Reflecting a time of austerity, the change-of-command ceremony was subdued compared with the 2008 send-off for retired general Rick Hillier, who rode a tank into retirement.
The event for Lawson, which took place under overcast skies amid the threat of an approaching storm, included an honour guard and a 21-gun salute.
Reflecting on his time as chief of staff, Natynczyk said Canadian troops made a difference in Afghanistan and stood their ground in Kandahar.
The military is better for its combat experience, including the mission over Libya, he said.
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