More Canadian defense cuts are in the cards after the government's cancellation of a $2 billion close combat vehicle program, industry analysts and defense media say.

Backing away from the purchase of the close combat vehicles is the first major equipment casualty of ongoing budget reductions, with industry officials expecting other procurement projects to be delayed or cut, Defense News reported.

Industry analysts and military sources cited in Canadian media disagree on the cause, however.

Chief Canadian Defense Staff Gen. Tom Lawson echoed other experts' view that the combat vehicle may be superfluous to Canadian military needs because of recent upgrades to light armored vehicles.

Improvements to the military's intelligence, surveillance and reconnaissance capabilities, and advances in countering improvised explosive devices encountered by Canadian troops on missions abroad, also made the CCV unnecessary, Defense News said.

Industry analysts cited in defense media say while the CCV may indeed be superfluous because of technological advances Canadian government budget cuts are still an overriding factor in its cancellation.

Canada faces bitter recrimination and compensation claims from companies that claim to have spent millions on competing for CCV contracts.

More than 100 of the vehicles were likely to enter Canadian military inventories and competition among BAE Systems, General Dynamics Land Systems and Nexter meant unspecified -- but large -- amounts were reported spent by the rival firms on winning the contract. Original plans called for the purchase of 108 CCVs, most of them by the Canadian army.

Canadian defense spending has already dropped from more than $20 billion in 2011-12 to about $17.9 billion in the 2013-14 cycle, but more cuts may be on the way and some projects may disappear altogether in expected cuts, Defense News reported.

In November, Chief of Defense Staff Gen. Tom Lawson said cuts in defense personnel numbers could not be ruled out. Prime Minister Stephen Harper's government has denied it plans to cut back on the country's 68,000 full-time armed forces members and 27,000 reservists, o.canada.com reported.

Personnel cuts could be on the table when military planners present Harper's Cabinet with options for a new long-term vision for the Canadian armed forces, Lawson said.

Retired Gen. Rick Hillier told CTV in an interview Canadian military numbers would need to be reduced to keep the force lean and efficient.

"If we do this right, we can still have an agile force, we can still have a superbly trained force and we can still have a force capable in this era of threats," Hillier told CTV network. He recommended a reduction of up to 18,000 in Canadian full-time forces -- from 68,000 to 50.000.

Several months into the debate, officials have yet to comment on reported government plans for personnel cuts and remain coy about procurement reductions.

Meanwhile, the Canadian army has eliminated a number of weapon systems and vehicles from its inventory, Defense News reported, citing anti-tank systems, tube-launched missile launchers and wire-guided missiles among weapons affected.

Leopard 1 tanks and variants, older howitzers, landmine detection and flail systems, and 4,500 light assault radios are among inventories removed from service.

The Canadian air force has pulled personnel out of a NATO airborne warning and control system program, and a ground surveillance program.

Officials are also reviewing original spending projections of $60 billion over several years announced in 2008.

Military spending cuts are forcing cadets to recycle and swap used uniforms even during sharp winter months, the (Toronto) Globe and Mail reported.

A $2 million chop to the outfitting budget is part of Harper government plans to ease the federal deficit by 2015, the newspaper said.