Evidence of meeting #41 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 cost.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Robert Fonberg  Deputy Minister, Department of National Defence
  • André Deschamps  Commander, Royal Canadian Air Force, Department of National Defence
  • François Guimont  Deputy Minister, Deputy Receiver General for Canada, Department of Public Works and Government Services
  • Simon Kennedy  Senior Associate Deputy Minister, Department of Industry
  • Michelle d'Auray  Secretary of the Treasury Board of Canada, Treasury Board Secretariat
  • Kevin Lindsey  Assistant Deputy Minister, Chief Financial Officer, Finance and Corporate Services, Department of National Defence
  • Dan Ross  Assistant Deputy Minister, Materiel, Department of National Defence
  • Tom Ring  Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

9:20 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

I would have been the deputy minister at the time, yes, sir.

9:20 a.m.

NDP

Malcolm Allen Welland, ON

Did you read the report of the Auditor General, chapter 6, in the fall 2010 report?

9:20 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

I did, indeed.

9:20 a.m.

NDP

Malcolm Allen Welland, ON

Did you make note of the recommendation? It says that we should have full life-cycle costs involved when we bring estimates to government.

9:20 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

Mr. Chairman, we tabled a fairly detailed management action plan—not this time but at that time—in response to that particular recommendation, and we are prepared to talk to the progress we've made in responding to that recommendation.

May 1st, 2012 / 9:20 a.m.

NDP

Malcolm Allen Welland, ON

Rather than talk to the progress, sir, why indeed didn't it happen with the F–35s, if you acknowledge that you didn't do full life-cycle costing for the maritime helicopters and the Chinooks and agreed with the AG that you would do it in future projects? Yet you've now come back to me...and let me quote you, sir, from your statement this morning:

I would note that the approach we took for costing the F–35 is exactly the same approach—and the same 20-year timeframe—that has been taken with all our air asset procurements going back at least to 2004: for the maritime helicopter project, the Chinooks, the Hercules J models, and the new C–17 Globemasters.

In each case, announcements and communications focused only on the costs of acquisition and sustainment; never on operating costs.

Sir, in light of your statement today and that in 2010 you accepted the Auditor General's report—and I'm not going to go back and quote the report from the book I have in front of me from 2010—why didn't you do what you said you would do in 2010 with this project?

9:20 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

Mr. Chairman, just to get the timing and the sequencing right, the costing and the decision documents for cabinet were completed in the spring of 2010 and the Auditor General's report was in the fall of 2010. Our management action plan, which spoke to that recommendation, spoke to timing that would have seen that work completed, I believe, later in 2011. We can update on the timing, but the fact is, the costing we did was seven or eight months before the Auditor General's report in 2010.

9:20 a.m.

NDP

Malcolm Allen Welland, ON

Actually, sir, I beg to differ. The costing you did goes back to the 2008-09 budget, when you said the costing was $25 billion. Clearly in 2008-09 you knew it was $25 billion. In 2010 you came out with a new costing.

How did $25 billion get to $15 billion, sir? In light of the fact that you had asked for $25 billion as a costing estimate, a full life-cycle cost...and kudos for doing it right in 2008-09. So how did you get it so wrong after the fact, when you dropped it to $15 billion from $25 billion?

9:20 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

Mr. Chairman, we actually tried to clarify with the Auditor General his comments about $25 billion in 2008-09. We never had such an estimate. So you'd have to speak to him about where that estimate actually came from.

The fact of the matter—

9:20 a.m.

NDP

Malcolm Allen Welland, ON

Thank you, sir.

I'm interrupting, and I hate to do this to you—you know that—but time is sensitive here.

He takes the number from the budget that your minister put forward to cabinet to ask Parliament to authorize $25 billion; that's where it came from. Are you saying, sir, that you as deputy minister did not require the $25 billion and did not ask for it?

9:20 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

No. What I'm saying is that there was no $25 billion in a decision document in 2008, Mr. Chairman, as far as we can tell. You'd have to ask the Auditor General where that number actually came from. We spoke to his office and told him we would be clarifying that issue.

If you'd like me to go on with regard to the $25 billion to $15 billion...if there's time; I don't know.

9:20 a.m.

NDP

The Chair David Christopherson

It's up to you, Mr. Allen. Do you want him to conclude or do you want to move on?

9:20 a.m.

NDP

Malcolm Allen Welland, ON

What you're telling me, just so I'm clear, is that the department never costed the life-cycle cost of the F-35 in 2008-09, and that the department did not ask in that budget for $25 billion, and that the Auditor General is wrong when he makes that statement in that paragraph?

9:20 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

To the absolute best of my knowledge, that's actually correct, Mr. Chairman.

9:20 a.m.

NDP

Malcolm Allen Welland, ON

So the correct part is that the Auditor General is wrong.