By The Canadian Press - Monday, February 25, 2013 - 0 Comments
OTTAWA – “There’s no place like home” could become the battle cry of the…
OTTAWA – “There’s no place like home” could become the battle cry of the Canadian military as spending on overseas operations is forecast to take a steep dive.
Internal Defence Department reports show total spending on foreign deployments could to drop to just $5 million in the 2014-15 fiscal year from the current, anticipated $476 million.
The figures are contained in June 1, 2012, financial report by the department’s assistant deputy minister of finance and obtained by The Canadian Press under the Access to Information Act.
Finance Minister Jim Flaherty says the budget will be balanced by 2015.
The records show that by then, the Harper government expects it will no longer be paying for the tear-down and clean-up of the Kandahar combat mission, nor the Afghan training mission in Kabul, which is set to end early next year.
More significantly, it has not budgeted for any new operations, including a renewal of the current peacekeeping missions, nor has a contingency fund been set aside.
By Murray Brewster - Monday, September 3, 2012 at 12:35 PM - 0 Comments
OTTAWA – Sheila Fynes couldn’t sleep most nights this summer, wondering whether she made…
OTTAWA – Sheila Fynes couldn’t sleep most nights this summer, wondering whether she made the right decision in allowing a public inquiry to view a 34-minute military police video of her son’s lifeless body hanging from a chin-up bar in his barracks.
The graphic, disturbing images of Cpl. Stuart Langridge, were never released to the news media, but the commission investigating the military’s handling of his suicide played it in public, as part of a series of hearings last spring.
His mother and stepfather, Shaun Fynes, wrestled with the question of showing the video almost up until the day it was played.
“There are times when I think I’ve shared the most personal thing about Stuart’s life and I hope, … I hope it wasn’t for nothing,” said Sheila Fynes in an interview with The Canadian Press from her Victoria home.
Langridge hanged himself on March 15, 2008, and his body was left in place for four hours while investigators documented and searched through everything in the room.
The video sometimes zoomed in on his head and face. Federal lawyers representing the Defence Department argued in advance that if the video were to be shown, it would have to be in its entirety.
Sheila Fynes said that “at first, we said: No, we don’t want anybody ever to see that.”
“But then (after) discussions with our lawyer (and) between ourselves, we decided there would be no better way for the chair to understand our allegation of the total disrespect shown to Stuart in his death, than for him to see it.”
After a pause, she added: “Was it the right decision? It keeps me awake at night.”
Neither Sheila Fynes nor her husband were present when the video was played for the commission.
The Military Police Complaints Commission hearing into the Afghan vet’s death resumes Wednesday, with testimony from Shaun Fynes.
In the coming weeks, the commission will put under the microscope not only the Defence Department’s handling of the Langridge case, but also how it copes with soldiers suffering from mental illness and post-traumatic stress.
The inquiry also poses a political problem for the Harper government with Defence Minister Peter MacKay’s refusal to hand over some internal documents to the military watchdog. That decision echoes a bruising fight with the commission previously over records relating to the treatment of Afghan prisoners.
The Defence Department refutes the claim Langridge suffered from post-traumatic stress disorder, or PTSD, following a stint in Afghanistan. The doctor who made the diagnosis is soon to testify, along with military police investigators that are the subject of the complaint.
Members of the National Investigative Service are accused of conducting an inadequate, biased investigation aimed at exonerating the Canadian Forces.
Sheila Fynes says the coming set of hearings “will get to the heart of the matter.”
Thus far, testimony from the military contends that Langridge, who also served a tour in Bosnia, was a troubled young man with an addiction to alcohol and cocaine. One expert witness traced the problems as far back as Sheila Fynes’ divorce from her son’s father.
The military withheld Langridge’s suicide note from his family for 14 months, something for which it has apologized.
Yet a jumble of contradictions and missteps were exposed in testimony last spring.
At first, it was claimed Langridge had been under a “suicide watch” prior to his death. But a fellow soldier who attended him refused to describe it that way, saying it was only “a watch.”
Witnesses also testified that the military consulted the family about the formulation of policy for dealing with loved ones, something Sheila Fynes angrily denies.
“What has surprised me the most is the levels Justice (department) lawyers have gone to try and paint a very damning picture of our son. And some of the things that have been said by witnesses are so contradictory, and some of the things are just plain, flat-out, vile lies,” she said.
Just as the hearings recessed in June, complaints commission chair Glenn Stannard asked for partial access to documents that relate to the Langridge case but were written after military police investigators had been in touch with Defence Department lawyers.
MacKay, in a terse response, refused the plea and told the chairman not to talk to contact him again directly, but instead go through Justice Department lawyers.
That has galvanized one veterans group, which released a letter to MacKay demanding he waive solicitor-client privilege.
“I was quite disillusioned when reading your letter of response, Minister MacKay, not only from a sense of empathy for the Fynes family but to those military policemen who have been accused, our brothers in arms who have been subject to great stress and long-term concerns about potential disciplinary-career consequences,” wrote Mike Blais, president of Canadian Veterans Advocacy.
“You have an obligation to those that serve, sir, an obligation to accord to those who have been accused the opportunity to defend themselves with the full truth.”
By macleans.ca - Monday, August 27, 2012 at 9:43 AM - 0 Comments
OTTAWA – Lt.-Gen. Thomas Lawson has been named as Canada’s next new chief of the defence staff, the country’s top military post.
OTTAWA – Lt.-Gen. Thomas Lawson has been named as Canada’s next new chief of the defence staff, the country’s top military post.
Prime Minister Stephen Harper says Lawson, the current deputy commander of NORAD — the North American Aerospace Defense Command — will formally succeed Gen. Walt Natynczyk within weeks.
Lawson is a former commander of the Royal Military College.
Natynczyk has held the chief’s job since July 2008, but there have been recent signs — an overheated rumour mill in Ottawa and public remarks from Harper that sounded like a farewell — suggesting his tenure was at an end.
“Let me use this opportunity in front of so many of your people here to thank you and congratulate you on over four years of fine service as chief of the defence staff of Canada,” Harper said last week during a speech to Canadian Forces troops.
Lawson graduated from the military college in 1979 and also commanded an air squadron and Canadian Forces Base Trenton during his career.
He flew both the CF-104 Starfighter and the CF-18 fighter jets as well as the Challenger executive jet during his flying career.
He holds bachelor’s and master’s degrees in electrical engineering, as well as a master’s degree in public administration.
His career included flying jobs as well as staff work at senior levels.
In 2009, he was promoted major general and made assistant chief of the air staff. In July 2011, he was promoted to his current rank and appointed deputy commander at Norad.
By Aaron Wherry - Friday, July 20, 2012 at 11:24 AM - 0 Comments
Intergovernmental Affairs Minister Peter Penashue is upset that a search-and-rescue helicopter was used by members of a squadron to go on a fishing trip.
Labrador MP and provincial cabinet minister Peter Penashue says he’s disappointed that the Department of National Defence permitted a military helicopter to be used for a fishing trip in Labrador. ”I think that it sends the wrong message,” said Penashue. “But at the same time I recognize that we hadn’t put anyone at risk.” “It doesn’t help the image, particularly with what we just went through with search and rescue on Labrador.”
By Aaron Wherry - Wednesday, July 18, 2012 at 9:45 AM - 0 Comments
The Defence Department had received government approval in 2009 to move forward with the $430 million purchase of 1,500 off-the-shelf medium-sized trucks. But in subsequent years department and military officials began adding more capabilities to what they wanted in the vehicles, bumping the estimated cost to between $730 million and $800 million. And in an unprecedented move DND officials continued on with the acquisition without going back to Treasury Board for approval to cover the extra $300 million to $370 million in costs, according to industry, military and government representatives.
When Treasury Board and Conservative government officials discovered what was happening they intervened, shutting down the project last week just minutes before bidding was to close. The decision to take such action was aimed at avoiding another publicly embarrassing military procurement for the Conservatives.
By Aaron Wherry - Wednesday, June 20, 2012 at 10:56 AM - 0 Comments
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.
By Aaron Wherry - Tuesday, June 5, 2012 at 12:09 PM - 0 Comments
Laura Payton obtains correspondence related to the Defence Minister’s helicopter ride.
An email from Col. Jeff Tasseron, one of Natynczyk’s senior advisers, describes a phone call he got from MacKay’s chief of staff, John MacDonell, about Reid’s support. Describing the phone call as “odd,” Tasseron says MacDonell wanted to make sure there was no retribution against Reid for defending MacKay.
“He [MacDonell] also made sure I understood that they were dissatisfied that this individual only came out on his own recognizance, rather than as part of a concerted plan to defend the minister,” Tasseron wrote to Natynczyk. ”He is clearly of the opinion that their own office’s handling of this was fine, and that it has been our lacklustre defence that has been the real problem,” Tasseron said in the email.
See previously: The Department of Peter MacKay Defence
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.
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.
By Aaron Wherry - Thursday, May 10, 2012 at 9:20 AM - 0 Comments
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.”
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.
By Aaron Wherry - Thursday, May 3, 2012 at 1:44 PM - 0 Comments
Parliamentary Budget Officer Kevin Page draws a conclusion.
“Over the past few weeks, it has become clear that the Department of National Defence provided the PBO with figures that did not include all operating costs,” Page told members of the public accounts committee. “The PBO understood that it had been provided with full life-cycle costs from DND as required.”
… Page was asked whether he believed the government had withheld information so Canadians would not know the full cost of the aircraft. “Yes,” he replied.
The Deputy Minister of Defence suggested today that Mr. Page did not include operating costs in his report. This seems to be the same issue that resulted in some confusion last month. As noted then, the PBO report on the F-35 does specify operating costs (see page nine).
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.
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?
By Aaron Wherry - Monday, April 30, 2012 at 9:25 AM - 0 Comments
Kevin Pages throws a quote on the F-35 fire.
Page told host Evan Solomon what bothered his office was that one set of books was available inside DND, while another “for communication purposes” was presented publicly, in which he said the government was “low-balling” the numbers. ”You do get the sense there were different books being kept,” he told Solomon.
Meanwhile, another major defence procurement is being restarted.
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.
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.
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…
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.
By Aaron Wherry - Thursday, April 19, 2012 at 11:00 AM - 0 Comments
The House doesn’t reconvene until Monday, but the public accounts committee will meet this afternoon to, presumably, launch its study of the F-35 procurement. The committee won’t hear from witnesses today, but might settle on a list of witnesses it wishes to hear from. The Liberals have identified ten individuals they’d like to hear from:
Michael Ferguson, Auditor General of Canada
Kevin Page, Parliamentary Budget Officer
Dan Ross, Assistant Deputy Minister (Materiel)
LGen J.P.A. Deschamps, Chief of the Air Staff
Michael J. Slack, F-35 Project Manager, Director of Continental Materiel Cooperation
Col D.C. Burt, Director, New Generation Fighter Capability
Tom Ring, Assistant Deputy Minister, Acquisitions Branch
Johanne Provencher, Director General, Defence and Major Projects Directorate
Richard Dicerni, Deputy Minister, Industry
Craig Morris, Deputy Director, F-35 Industrial Participation
By Aaron Wherry - Monday, April 16, 2012 at 1:23 PM - 0 Comments
Tabatha Southey finds ten ways that Peter MacKay’s minivan analogy fails to explain the government’s accounting.
If the people who hired me to buy them a minivan were working with a finite budget and asked me to follow the written procedure they use in these situations. Supposing they said to me, “Please determine for us as best as possible the true cost of minivan ownership. Not the price, but the cost. Do it the way you promised you would, after that kerfuffle with those Cyclone and Chinook helicopters you picked up for us a few years back.” I would do that. Because I wouldn’t want to be fired, which is eventually (okay, after only four hours) what happened at the Pita Pocket.
Nonetheless, here is another attempt to explain military procurement as analogous to the purchase of a new family vehicle, this time to lecture the auditor general about what he should have been looking at.
To this day, Canadians have not been shown a clearly stated set of requirements for the CF-18 replacement. Instead, they have been told that Canada needs the only “fifth-generation” aircraft available — a requirement which, as the Auditor-General points out, is not an operational one. The government has failed to tell us what mission capabilities it expects from the CF-18 replacement. It has failed to hold on open competition in order to select the best aircraft possible based on performance, cost, availability and industrial benefits. Finally, it has failed to accept any accountability whatsoever.
The CBC has colour-coded charts (including an estimate that the 30-year cost of the F-35 could be $33.19 billion).
By Aaron Wherry - Monday, April 16, 2012 at 8:30 AM - 0 Comments
“Other numbers cited, obviously have to do not just with the acquisition of the F-35 but operations of the F-35,” he said. ”There’s more than one number, there’s more than one cost depending on what you’re counting. These things have all been well known for some time. But in terms of our numbers, I’ve been very clear.”
The PBO wrote in its report that a “rough” cost for the overhaul and upgrade for a single plane was “estimated at US$ 30.38 million +/- US$ 5 million per aircraft,” bringing the total overhaul costs over 30 years to that $3.9 billion. Going off the PBO’s analysis, calculating the costs of the program over 20 years rather than 30 would eliminate having to account for the second predicted overhaul of the fleet (which, according to the graph, would take a few years to complete).
With a 20-year projection, at least half the overhaul costs (those made at, or after, the 20-year mark) are discounted, along with whatever further costs incurred afterward up to (as the AG suggested) 36 years. So, the overall price comes down.
By Aaron Wherry - Friday, April 13, 2012 at 10:48 AM - 0 Comments
Colin Horgan reviews how the public costing of the F-35 failed to meet the government’s own guidelines. Andrew Coyne explains how the Defence Minister’s explanations don’t match the Department of National Defence’s previous promises. And Laura Payton goes to the videotape.
At 9:50, MacKay refers to “signing the contract now” to bid on $12 billion in future contracts. As the government has recently made clear, and contrary to what Prime Minister Stephen Harper had said before, there is no contract.
Around 10:00, Evan asks what the in-service costs will be. MacKay says it’s difficult to nail down those costs, when we now know DND had internal estimates.
By Aaron Wherry - Tuesday, April 10, 2012 at 6:42 PM - 0 Comments
The Defence Minister explains the difference between $25 billion and $15 billion.
“The $10-billion that he has described as not being disclosed was what you pay our current pilots, the gas that you put in the current fleet of CF-18s … if you went out and bought a new mini-van and it was going to cost you $20,000 you wouldn’t calculate the gas, the washer fluid, the oil and give yourself a salary to drive it for the next 15 to 20 years.”
“Now that’s part of the new calculation now,” he said.
The “new calculation” reflects an estimate that the Department of National Defence calculated two years ago. And a calculation that seems to match Treasury Board guidelines. But, again, the Auditor General’s concerns about costing for the F-35 extend beyond that to the “life-cycle costing.”
We have a number of observations regarding the life-cycle costing for the F-35. First, costs have not been fully presented in relation to the life of the aircraft. The estimated life expectancy of the F-35 is about 8,000 flying hours, or about 36 years based on predicted usage. National Defence plans to operate the fleet for at least that long. It is able to estimate costs over 36 years. We recognize that long-term estimates are highly sensitive to assumptions about future costs as well as to currency exchange rates. However, in presenting costs to government decision makers and to Parliament, National Defence estimated life-cycle costs over 20 years. This practice understates operating, personnel, and sustainment costs, as well as some capital costs, because the time period is shorter than the aircraft’s estimated life expectancy. The JSF Program Office provided National Defence with projected sustainment costs over 36 years.
This, again, is what Alan Williams considers the “known distortion.”