Thank you, Mr. Chair.
It is indeed an expensive business and the numbers are big. We actually manage a supply line coming out of the Canada First defence strategy that spans 20 years. When we look at our procurements, we look at them in the context of that timeline. The fact that in many cases we're talking about leading-edge technology means it takes a long time to develop and a long time to build. We have very long lead times. I'll speak to two complexities associated with that.
First is foreign exchange. We do our best to estimate the costs of materiel that might be delivered five or seven years hence. We make assumptions about what exchange rates will be, because we spend as much as $2 billion to $3 billion a year in transactions denominated in U.S. dollars. To give you an example of the complexity, this summer, over a three-month period, the Canadian dollar appreciated about 13% against the U.S.