What does Parliament know about what the government is doing? And what does the government know about what the government is doing?

By Aaron Wherry - Tuesday, October 23, 2012 at 1:35 PM - 0 Comments

Jason Fekete reviews the auditor general’s findings.

The report found the Finance Department examined the long-term fiscal sustainability implications of major policy decision only when officials considered it relevant, an approach the auditor general said is reasonable. However, the report also concludes Finance Minister Jim Flaherty was not provided with projections about the long-term financial impact of measures announced in the March 2012 budget until August 2012. “This means that senior management and the Minister of Finance were not informed of the overall impact on the government’s long-term fiscal position until well after they had approved the budget measures,” the report says.

The federal government did not conduct long-term fiscal projections of the impacts of multibillion-dollar major policy decisions such as reducing the GST to five per cent and offering a GST/HST credit to low-income earners, since it did not expect the costs relative to GDP to grow, nor did it examine the long-term fiscal implications of pension income-splitting. Federal officials did, however, examine the long-term fiscal implications of other major measures examined by the auditor, including trimming the annual funding increases in health transfers to the provinces, and increasing the eligibility age for Old Age Security to 67 from 65.

Colin Horgan places this in the context of the Harper government’s standoff with the Parliamentary Budget Officer.

The auditor general on cyber security, veterans and national finance

By Aaron Wherry - Tuesday, October 23, 2012 at 11:32 AM - 0 Comments

The fall report of the Auditor General has been published here. In it, he covers, among other things, cyber security, veterans and the government’s fiscal projections.

While Finance Canada prepared a draft report in 2007 on the long-term fiscal sustainability analyses that the government committed to issuing that year, the analyses were not published; nor has any report on long-term fiscal sustainability been published since then. While long-term fiscal sustainability analyses have been regularly prepared since 2010, they have not been made public. This lack of reporting means that parliamentarians and Canadians do not have all the relevant information to understand the long-term impact of budgets on the federal, provincial, and territorial governments in order to support public debate and to hold the government to account. Many of the countries that are members of the Organisation for Economic Co-operation and Development (OECD) already publish reports on their long-term fiscal positions.

The CBC looks at the cyber security findings. The Canadian Press looks at veterans and savings from changes to Old Age Security.

Idea alert

By Aaron Wherry - Tuesday, September 25, 2012 at 11:36 AM - 0 Comments

Scott Clark and Peter DeVries review the recent trouble with omnibus budget bills and suggest reforms.

First, the Budget Plan needs to be much more explicit on the proposed policy initiatives. The Budget should provide sufficient details and background information on the proposed initiatives for Parliamentary assessment and for a better understanding by the public at large and other interested parties. The Auditor General should be asked to review the adequacy of the information to be provided.

Second, Budget Omnibus Bills should include only proposed tax/revenue changes and issues related to borrowings. The House of Commons Standing Committee on Finance and the Senate Finance Committee should consider these. Third, all proposed spending initiatives should be presented either through the Main Estimates or through separate legislation and submitted to the applicable Parliamentary Committees for review.

Today in transparency

By Aaron Wherry - Tuesday, September 11, 2012 at 3:21 PM - 0 Comments

The auditor general’s office, in order to fulfill an access to information requests, wants to release emails between the AG’s office and several House of Commons committee clerks, but lawyers for the House of Commons are claiming parliamentary privilege and are seeking a court injunction to prevent the release, but the Conservatives say parliamentary privilege doesn’t apply and would support a motion to waive that privilege, but the Liberals say it’s all the government’s fault.

Update 3:46pm. And it was the NDP that filed the initial access to information request.

Checking DND’s math

By Aaron Wherry - Wednesday, June 20, 2012 at 10:56 AM - 0 Comments

From QP yesterday, Rona Ambrose explains why new cost estimates for the F-35 won’t be released for awhile yet.

Mr. Speaker, it is true that the costing figures are available from the joint strike fighter program in the United States, but what we have said is that we want those figures, that would be cost estimates from the Department of National Defence, to be independently validated. The secretariat has asked for more time to do that. It wants to do this comprehensively. It is also looking at independently validating the cost assumptions that the Department of National Defence is using and meeting the recommendation of the Auditor General.

In other news, it’s now been 50 days since I asked Julian Fantino’s office to account for the auditor general’s suggestion that National Defence already had the numbers for a 36-year lifecycle estimate.

The subjective time limit

By Aaron Wherry - Friday, June 15, 2012 at 1:37 PM - 0 Comments

When the Harper government offered its seven-point response to the auditor general’s concerns about the F-35 procurement in April, it included the promise of an update within 60 days.

The Department of National Defence, through the F-35 Secretariat, will provide annual updates to Parliament.  These updates will be tabled within a maximum of 60 days from receipt of annual costing forecasts from the Joint Strike Fighter program office, beginning in 2012.

Defence officials met with the JSF program office in early May. But instead of providing new estimates 60 days from then, the “National Fighter Procurement Secretariat” has now decided that new figures will have to wait until the fall.

The Secretariat has recommended that the first annual update be tabled in Parliament during the fall of 2012. Careful consideration has been given to the sequencing of the work required. The update needs to meet three conditions: it needs to be complete, it needs to provide a full project update and it needs to be independently verified. These conditions cannot be satisfactorily met prior to the fall.

Update 3:48pm. Public Works Minister Rona Ambrose responds to my suggestion that the seven-point plan was now a six-and-a-half point plan.

Secretariat will deliver on all 7 points. Want more time to independently validate DND’s numbers

Still waiting

By Aaron Wherry - Tuesday, June 12, 2012 at 9:00 AM - 0 Comments

A new cost estimate for the F-35 apparently won’t be ready until the fall, in contradiction of point three of the Harper government’s seven-point plan to rectify the procurement.

It’s now been 42 days since I asked Julian Fantino’s office to respond to the auditor general’s suggestion that the defence department already had a 36-year lifecycle costing. Those questions were forwarded to the defence department. I’m still waiting to receive the department’s response.

No need to keep studying the F-35?

By Aaron Wherry - Tuesday, May 29, 2012 at 9:30 AM - 0 Comments

The work of the parliamentary committee studying the F-35 procurement is apparently done. At least so far as the Conservative members of the committee are concerned. Here was Conservative MP Andrew Saxton’s explanation yesterday.

Mr. Speaker, we have heard from the Auditor General three times: once for the report as a whole, once for the beginning of the chapter, and once at the end of the chapter. We have heard from senior government officials at two different sets of meetings that detailed the government’s response. We have heard from the Parliamentary Budget Officer to compare his numbers versus others. The purpose of the committee is to study the Auditor General’s report. We have done that. Let us get on with writing the report.

The public accounts committee met five times to consider the auditor general’s findings, though the first of those meetings was consumed by debating how to proceed with a study. David Pugliese suggests defence officials aren’t pleased with the latest turn of events.

At DND the talk is that the Conservatives have given the opposition MPs another PR windfall on the F-35 file. There has been widespread disbelief that the poor communications strategy has allowed the purchase to become a major political issue. This latest move will not help the situation at all, say NDHQ insiders.

Holding pattern

By Aaron Wherry - Tuesday, May 22, 2012 at 11:09 AM - 0 Comments

On May 1, as previously noted, I sent the following questions to the office of minister of state Julian Fantino.

Last week, the Auditor General suggested that the Department of National Defence possessed a 36-year lifecycle costing for the F-35. See here. Is the auditor general mistaken or does a 36-year lifecycle costing exist? If it does exist, why has it not been made public?

Those questions were then forwarded to the Department of National Defence.

As of this writing, I have yet to receive an answer. As of last Thursday, the defence department was “still working within the approval process” to provide me with a response.

Accounting for the Defence Department

By Aaron Wherry - Friday, May 11, 2012 at 9:30 AM - 0 Comments

The mission in Libya cost significantly more than the Defence Minister once suggested. And the government recently described the purchase of 13 new armoured vehicles as a purchase of transmission parts.

In early April the government awarded a $105-million contract to a German firm, FFG, to build 13 Leopard armoured engineering vehicles for the Canadian Forces. The only information put out by government was a brief and inaccurate notice stating that the company had been awarded a contract to provide “vehicular power transmission components.” The notice also claimed the deal was only for one item. But defence industry sources say the government is misleading the public; the deal is actually for 13 specialized armoured vehicles, and not transmission parts.

In addition, the upcoming issue of the Canadian Naval Review published by Dalhousie University will report that the Defence Department’s Strategic Investment Plan, previously released by the Liberal government, is now considered “a classified document” and cannot be issued to the public. In April, DND informed the Review of the government’s new policy. The investment document outlines a 15-year plan for equipment projects, their budgets and delivery schedules.

In other news, it’s now been nearly 10 days since I asked National Defence for a response to the Auditor General’s suggestion that a 36-year lifecycle costing for the F-35 already exists. As soon as I receive a response, I’ll post it in its entirety.

‘Haven’t made that choice’

By Aaron Wherry - Thursday, May 10, 2012 at 9:20 AM - 0 Comments

Despite various commitments to and demands for a full 36-year lifecycle cost estimate for the F-35, the Globe reports that the Harper government is still debating whether to provide one.

Auditor-General Michael Ferguson’s April 3 report noted the full life of the planes was actually 36 years and called on Ottawa to be more forthcoming about costs. The Conservatives in turn pledged to be more open but are still debating whether to provide cost estimates for the full 36-year lifespan of the F-35 Lightning II – or stick to 20 years. Government officials “haven’t made that choice,” a source familiar with deliberations said.

As noted previously, the Auditor General hasn’t just recommended that the government provide a 36-year estimate, he’s said it is his understanding “that National Defence does have the numbers for 36 years.”

The Commons: A long night of known unknowns

By Aaron Wherry - Thursday, May 10, 2012 at 12:22 AM - 0 Comments

Sean Kilpatrick/CP Images

Less than 10 minutes into the evening, the NDP’s Jack Harris seemed to give up hope.

“I can see what kind of night this is going to be,” he sighed.

Mr. Harris stood here for the purposes of questioning the Minister of Defence and the Associate Minister of Defence, no less than four hours set aside for the purposes of scrutinizing the government’s policies and plans. The ministers in question—Peter MacKay and Julian Fantino—sat along the front row of the government side, each with a large binder of papers in front of them. With the two ministers sat Chris Alexander and Laurie Hawn, parliamentary secretaries present and past, each with their own large binder of papers. And in front of the four Conservatives sat three officials, including the chief of defence staff, at a small table placed in the centre aisle, each official having arrived with a large binder of papers.

With so much paper present, the night had seemed so full of promise. Continue…

Waiting for answers

By Aaron Wherry - Wednesday, May 9, 2012 at 8:30 AM - 0 Comments

The Globe reports that Defence officials made a trip to Washington last week to research the latest cost estimates for the F-35.

The federal government is working to translate this U.S. data into figures that reflect Canada’s purchase plans and hopes to make these public before Parliament rises in June, sources say … The political pledge made in April was that the Conservatives would provide Canadians with an updated estimate for the per-plane costs of the jets within 60 days of receiving forecast information from the Joint Strike Fighter Program office in the United States.

Still to be explained is the auditor general’s suggestion of two weeks ago that the Department of National Defence “does have the numbers for 36 years” and, if that is the case, why those numbers haven’t been made public. I’ve asked the department to explain and will post the response in its entirety as soon as I receive it.

Case dismissed

By Aaron Wherry - Monday, May 7, 2012 at 3:51 PM - 0 Comments

Shortly after QP this afternoon, the Speaker dismissed Bob Rae’s question of privilege for wont of evidence.

The prepared text of the full ruling is below. Continue…

The Commons: The case of the $10-billion typo

By Aaron Wherry - Thursday, May 3, 2012 at 6:22 PM - 0 Comments

The Scene. Megan Leslie sought clarity. The government side, she explained, had retroactively changed a report to Parliament. In the first version of the report, the cabinet had approved the purchase of the F-35. In the second version, the cabinet had not approved the purchase of the F-35. What, she essentially asked, gives?

In response, the Prime Minister offered clarity. Or at least the word “clear.” “Mr. Speaker, again, the government has not signed a contract for the purchase of these aircraft,” he said. “We have been clear,” he added, that the government will wait for the results of further investigation before making a decision.

Ms. Leslie, with the withering tone of her generation, tried to clarify the situation. “Mr. Speaker, the official excuse is it was a typographical error,” she mocked. “The Conservatives want us to believe that someone typed the word ‘definitions’ when they actually meant to type two words ‘options analysis.’ Are there any other typographical errors about the F-35s that the government would like to make the House aware of? For example, when it told Parliament that the plane would cost $14.7 billion but cabinet thought the plane would cost $10 billion more, was that just a typing error?”

“Sarcasm,” moaned a voice from the Conservative side.

The Prime Minister stood and pronounced the matter not just clear, but very clear. Continue…

The F-35 questions that need to be asked

By Aaron Wherry - Thursday, May 3, 2012 at 7:45 AM - 0 Comments

Philippe Lagassé offers some free advice to the opposition.

The key question that must be asked is why the F-35 is the only possible future fighter aircraft for the Canadian Forces, on what grounds the air force makes that claim and based on which defence policies and priorities. The Canadian military lacks many capabilities that larger powers possess; the Canadian Forces are not equipped to meet every possible threat or eventuality. Why was it judged absolutely necessary for the military to have a this particular aircraft and to write a statement of requirements that excluded any alternatives? Why were trade-off considerations and cost-benefit analyses not entertained in this case? How does the defence department explain the Auditor General’s finding that due diligence was not performed when addressing these concerns? And the most important question: did the defence minister or Cabinet allow the department to brush aside its duty to perform this due diligence?

Now, assuming that the F-35 best meets the military’s preferences, why was a competition not held? If the Joint Strike Fighter was without a doubt the superior plane, why not hold a transparent competition that would make this obvious to parliamentarians, stakeholders, and Canadians at large?

The Public Accounts Committee convenes this morning to hear from the Parliamentary Budget Officer and then the same line-up of departmental officials who appeared on Tuesday.

One question that might be raised was asked yesterday by the NDP’s Matthew Kellway during QP. Continue…

The opposition must ask better questions about the F-35

By Philippe Lagassé - Wednesday, May 2, 2012 at 5:20 PM - 0 Comments

Photograph: Office of the Prime Minister of Canada

Philippe Lagassé is assistant professor of Public and International Affairs at the University of Ottawa.

What did members of Parliament learn from Tuesday’s public accounts committee hearing on the F-35 procurement? Mostly that arguing with senior officials about costs and accounting methods is a frustrating experience, one where the opposition is at a disadvantage. Unless New Democrat and Liberal MPs hone their questions regarding the planned sole-source acquisition of new fighter aircraft, they will find that their ability to hold the government to account over the F-35 will soon dissipate. It is time for the opposition parties to ask better questions about the F-35.

Since the Auditor General’s latest report was tabled in early April, opposition parties and pundits have been fixated on his finding that the government excluded $10 billion in operating, personnel, and contingency costs from the stated price of the F-35 acquisition. Although the government was aware of these estimated life-cycle costs, ministers chose to present only the aircraft’s acquisition and sustainment cost when the decision to buy the planes was announced in the summer of 2010. This omission has been upheld as evidence that the Conservative government lied to Parliament and Canadians about the true cost of the planned procurement.

Opposition members hoped that senior executives involved in the F-35 process might be compelled to corroborate this assessment before the public accounts committee. It did not happen.

Continue…

When will the lifecycle cost be explained?

By Aaron Wherry - Tuesday, May 1, 2012 at 1:11 PM - 0 Comments

The full lifecycle cost of the F-35 remains elusive.

DND’s deputy minister, Robert Fonberg, said his department is sticking with its estimated cost of $15-billion for the acquisition and the sustainment over 20 years of the F-35 jets. He insisted that long-term operating costs for the jets, which are still eight years away from delivery, will be “firmed up over time,” but will be similar to those for the existing fleet of CF-18s.

He added that his department was not yet in a position to determine the exact cost of the program over its planned 36-year lifespan, saying that using 20-year scenarios is a well-entrenched position at DND and avoids making risky, long-term predictions. “Life-cycle costing is not a simple issue,” Mr. Fonberg said.

Lifecycle costing is what the Department of National Defence agreed to pursue two years ago in response to a previous report of the auditor general. Lifecycle costing is what Treasury Board guidelines seem to require. “All documents that outline … lifecycle costs” is what the House of Commons demanded in November 2010. And an estimate of what the F-35 will cost over a lifespan of 36 years is what the auditor general suggested last week that the Department of National Defence already had.

Here, from that hearing last week and for the record, is the auditor general’s exchange with Chris Alexander, parliamentary secretary to the Minister of Defence.

Chris Alexander: On life cycle, you described the reasons for selecting 36 years as opposed to the DND previous standard of 20 years. Has the Auditor General’s office in previous audits used this longer life-cycle framework, or was this the first time?

Michael Ferguson: Thank you, Mr. Chair. The 36 years is not our number, not our estimate of the life cycle. It was in fact National Defence’s estimate of the life cycle. Therefore, by definition to apply life cycle costing we felt that it should include the whole 36 years, since that is the estimated life cycle.

Chris Alexander: So in fact National Defence had two life cycle projections—one for 20 years and one for 36 years?

Michael Ferguson: Thank you, Mr. Chair. My understanding is that National Defence does have the numbers for 36 years, but the numbers that have been brought forward for decision-making purposes, and used for example in response to the parliamentary budget office numbers, were based on 20 of those 36 years.

Attempting to demand the truth

By Aaron Wherry - Tuesday, May 1, 2012 at 11:31 AM - 0 Comments

Beyond the matter of the toy shuttles and beneath the daily debate over the F-35 procurement, there is an intriguing dispute playing out in the House.

Nearly a month ago now, Bob Rae rose on a point of privilege and attempted to make the case that the House had been misled on the F-35 file. The Speaker could not find a question of privilege in Mr. Rae’s comments, so the interim Liberal leader tried again the next day.

Mr. Rae’s argument was twofold: first, that while ministers were telling the House that the government accepted the conclusions of the auditor general, two departments of government officially disagree with some of the auditor general’s findings; second, that “if in fact it is true that the government accepts the conclusions of the Auditor General’s report, the Government of Canada is admitting that for a period of 21 months it misled the Parliament of Canada.”

After some quibbling with this from the government side, the House went on break for two weeks.

Upon the resumption of business last week, Peter Van Loan offered a full response from the government. The next morning, Nathan Cullen tabled the NDP’s position. That afternoon, Liberal MP John McKay added ten points of his own. He was then followed by Wayne Easter. Last Thursday, Mr. Rae responded to Mr. Van Loan. Yesterday, Mr. Van Loan responded to Mr. Rae. Though the Speaker is now pleading for the House to leave the matter with him, Mr. McKay has suggested he might have more to add.

What did the cabinet know and why was the F-35 allowed to proceed?

By Aaron Wherry - Tuesday, May 1, 2012 at 8:00 AM - 0 Comments

While a number of department officials—including the deputy minister of defence and the assistant deputy minister for materiel—are set to appear before the Public Accounts Committee this morning, Peter MacKay told a Senate committee yesterday that the federal cabinet approved the decision to release a $15-billion projection for the F-35. And John Ivison reports that the “F-35 Secretariat,” created in the wake of the the auditor general’s report, has been renamed.

And on those notes, Philippe Lagasse has more questions.

So, the other question: why did Cabinet allow DND/CF to avoid due diligence and go ahead with a questionable sole-sourced procurement? Cause, it’s worth repeating that the lack of due diligence was at the heart of the AG’s report…and it promises to be a recurring problem.

Interesting to hear that it will no longer be the ‘F-35 Secretariat’. But will DND/CF be told to write a new, more flexible SOR?

And who has the expertise necessary to keep an eye on the CF if theyre told to re-write the statement of requirements?

Will DND begin to exercise a more robust challenge function?

In case you misunderstood him the first time

By Aaron Wherry - Thursday, April 26, 2012 at 1:33 PM - 0 Comments

The Auditor General appeared before the Public Accounts Committee to explain his findings on the F-35 procurement.

“There were some significant things that were missing from the life-cycle costing in this, for example attrition, for example upgrades, and the fact that these aircraft were going to last for 36 years, not just 20 years,” Mr. Ferguson told MPs. “When we raised the issue of life-cycle costing and the fact that it was not complete, I don’t believe that we were nitpicking in any way. We were saying that there were significant elements that were missing,” he said.

From the “who-knew-what-and-when?” file, there is also this.

Ferguson said it was National Defence that estimated the full life-cycle of the F-35s to be 36 years. ”And therefore by definition, to apply lifecycle costing, we felt it should include the whole 36 years since that is the estimated lifecycle,” he said. Ferguson also said the department has an estimate for what it will cost to use the planes for the full 36-year lifespan. ”But numbers brought forward for decision-making purposes and used, for example, in response to the Parliamentary Budget Office numbers were based on 20 of those 36 years,” he said.

After some disagreement over who specifically to invite, the committee has extended invitations to the deputy ministers at public works, defence and industry and the secretary at the treasury board to appear next Tuesday. Those officials can bring along any other officials they wish to be included.

How about that lifecycle cost?

By Aaron Wherry - Wednesday, April 25, 2012 at 9:00 AM - 0 Comments

The Parliamentary Budget Officer has written to the deputy minister at Defence.

We have received a new request from a parliamentarian under Section 72.9 (d) of the Parliament of Canada Act (Act), requesting the PBO to undertake an update of the life cycle cost estimate of the F-35. Pursuant to the PBO’s statutory authority under Section 79.3 of the Act, I would like to request that DND provide information and documents that provide a full life cycle cost of the F-35 aircraft with life cycle cost being defined in the DND Costing Handbook (Annex I). 

Further we would encourage DND to assume in its analysis, the Average Unit Procurement Cost (AUPC) published by the US Government Accountability Office (GAO), an independent, nonpartisan agency that works for the United States Congress. The last published figure for AUPC is $137 million per aircraft for all variants in GAO’s report on March 20, 2012 (Annex II – Table 1, Page 4).

An official with the GAO has priced the model that the Harper government has sought at somewhere between $100 and $115 million.

The Globe notes that the government has officially changed the status of the F-35 procurement.

The Commons: A simple misunderstanding

By Aaron Wherry - Tuesday, April 24, 2012 at 5:29 PM - 0 Comments

The Scene. Thomas Mulcair had a simple question. And lest the House fail to appreciate the simplicity, he said so explicitly.

“Mr. Speaker,” the opposition leader prefaced, “I want to ask a very simple question of the Prime Minister.”

Specifically and simply, Mr. Mulcair wanted to know whether Mr. Harper thought it acceptable for a minister to knowingly mislead Parliament in the exercise of its functions.

Mr. Harper seemed to seek a word of clarity from Peter Van Loan before rising. “Mr. Speaker,” he said, “I am not certain of the subject of that question, but obviously I expect that ministers tell the truth at all times.”

That much established for the record, Mr. Mulcair moved to his second question. Continue…

The F-35 math gets fuzzier

By Aaron Wherry - Tuesday, April 24, 2012 at 9:30 AM - 0 Comments

The projected training budget may not be sufficient for the F-35.

About $1.3 billion was set aside for training, simulators and other infrastructure under the Harper government’s proposed $9-billion capital purchase of the radar-evading jets. But documents obtained under the Access to Information Act show air force planners have been concerned about the dollar projection.

That’s because it was calculated for the standard Defence Department estimate of 20 years’ of flying, rather than the lifetime of the aircraft, which is estimated at 36 years … The documents suggest taxpayers might have to shell out more training dollars after the 20-year window ends, and they indicate the investment plan comes up “approximately $2 billion short” of the requirement.

The auditor general projected that over the 36-year lifecycle, an additional 14 F-35s would be required to deal with normal attrition.

National Defence did inform the government of the need to consider the requirement for attrition aircraft at a later date. The cost of replacement aircraft is not included in the life-cycle estimate for this project and will be treated as a separate project in the future.

But in a comment to the Hill Times, Julian Fantino’s office sticks to the $9 billion budget for acquisition. Continue…