Mr. Chairman, thank you very much.
On the question of whether the air force has too much funding, that's a trick question.
I'll deal with accrual accounting.
As we went through the Canada First defence strategy on the modernization of all of the major fleets, I think the general view was that the army, navy, and air force came out exactly where they needed to come out after a very strong and tough internal discussion, and then a discussion that we had, obviously, with our political masters over a number of months.
Accrual accounting is simply the recognition that long-lived assets ought to be matched up with the rate of consumption of those assets, so you fund them over time. What we record as an expenditure, year after year, on a 40-year asset, for example, for the navy, $26 billion for frigates, is on the order of $60 million or $70 million per year because that is what it costs you to actually run that piece of equipment. The notion that we would build the fleet over whatever it will be, a 10-year period, and expense the whole thing makes no sense from an accounting perspective. Accrual accounting simply reflects that for a long-lived asset, you need to have a way to account for it that fits with the actual life.
Going forward, all of our major fleets will be expensed on an accrual basis, including the aviation assets that we're buying, as well as the naval assets, and in fact the army assets that we're buying.
Thank you, Mr. Chairman.