Evidence of meeting #40 for Public Accounts in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was thank.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Michael Ferguson  Auditor General of Canada, Office of the Auditor General of Canada
  • John Reed  Principal, Office of the Auditor General of Canada
  • Jerome Berthelette  Assistant Auditor General, Office of the Auditor General of Canada

10:10 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

Thank you.

Again, we identified that for acquisition, the government approved $9 billion for acquisition.

10:10 a.m.

Conservative

Laurie Hawn Edmonton Centre, AB

Thank you.

I want to talk about sustainment now, and the fact that it is estimates. We're going to fly the CF-18 for 40 years, plus or minus. Do we know what that's going to cost, precisely, until we get to the end of that?

10:10 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

Certainly costs going into the future need to be estimates and have to be estimates.

10:10 a.m.

Conservative

Laurie Hawn Edmonton Centre, AB

Thank you.

Can we estimate today with any kind of accuracy what the cost of fuel is going to be in 2030, 2040, 2050?

10:10 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

Certainly any costs looking into the future have to be estimates based on the best information known today.

10:10 a.m.

Conservative

Laurie Hawn Edmonton Centre, AB

The same thing goes with salaries. The same thing goes with missions. When we bought the CF-18, we bought it to do some missions in general terms—NORAD, NATO, and so on. We didn't know when we bought the airplane that we'd be operating them in the liberation of Kuwait or that we'd be doing a bombing campaign in Kosovo, or helping out in Libya. These are the kinds of things we can't predict. Those change estimates into reality as the program unfolds.

My point is that all of these preliminary estimates will in fact change for a wide variety of reasons. Is that fair to say?

10:10 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

Certainly, again, looking at costs into the future is an estimate process. That's why it's important not only to provide estimates but to provide things like ranges and sensitivity analysis around those estimates and to prepare risk mitigation strategies, in case those types of estimates are not accurate.

So it's an estimate process, but whenever you're using an estimate process you also have to use other tools, such as sensitivity around the amounts, and...such as risk mitigation strategies.

10:10 a.m.

Conservative

Laurie Hawn Edmonton Centre, AB

I couldn't agree more. When we throw out there that somehow $25 billion is somehow a hard, solid number, I suggest that is not being accurate with the Canadian public.

10:10 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

The $25 billion number that we used was the amount of the two budget amounts that were approved, $9 billion and $16 billion. So we used that on the basis that those were amounts that were actually approved, rather than using a number of our own estimate.

April 26th, 2012 / 10:10 a.m.

Conservative

Laurie Hawn Edmonton Centre, AB

Okay. I would suggest to you, Mr. Ferguson, that as we're buying the airplanes year by year, we're not buying them like we bought the CF-18, where we bought 130 airplanes in one contract, one time, one price. We and the other eight partners are going to be buying the airplanes year by year. One year we might buy ten, somebody else might buy six, and so on. That total number, whatever it is, then gets negotiated with Lockheed Martin or whoever the contractor is. Then the next year we do another one.

That's when those budgets specific to that year actually get approved to buy the airplane. The budgets aren't approved today. Those are estimates going forward. The budgets will be approved when the time comes. Is that not accurate?

10:15 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

Again, in terms of the Department of National Defence having approved budget numbers, they had the numbers of $9 billion and $16 billion. Obviously those estimates, those numbers, have to go through the appropriations process on an annual basis to get final approval.

10:15 a.m.

Conservative

Laurie Hawn Edmonton Centre, AB

So no signatures have been given to actually expend those dollars, and won't happen until that year.

10:15 a.m.

Auditor General of Canada, Office of the Auditor General of Canada

Michael Ferguson

And that's precisely why it's important for the government to explain, if they are going to start acquiring these jets, what the potential impact is going to be on budgets into the future, because that will have very much an impact on what has to be approved by Parliament in those future years.

So the very fact that each year Parliament has to vote on the amount that's going to be spent, either for acquisition or for operating costs, is why it is critical that full life cycle costing and information be provided, so that people understand that future impact.

10:15 a.m.

NDP

The Chair David Christopherson

Mr. Hawn, your time has expired.

Moving on, Monsieur Ravignat, you have the floor, sir.

10:15 a.m.

NDP

Mathieu Ravignat Pontiac, QC

Thank you, Mr. Chair.

I agree. Mr. Reed, the list of names you used for chapter 6 in 2010 would be extremely helpful since the same names come up in this situation. Could you please provide us with that list?