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Evidence of meeting #42 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

Kevin Page  Parliamentary Budget Officer, Library of Parliament
Sahir Khan  Assistant Parliamentary Budget Officer, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
Peter Weltman  Senior Director, Expenditure and Revenue Analysis, Office of the Parliamentary Budget Officer, Library of Parliament
Michelle d'Auray  Secretary of the Treasury Board of Canada, Treasury Board Secretariat
Robert Fonberg  Deputy Minister, Department of National Defence
Dan Ross  Assistant Deputy Minister, Materiel, Department of National Defence
François Guimont  Deputy Minister, Deputy Receiver General for Canada, Department of Public Works and Government Services
André Deschamps  Commander, Royal Canadian Air Force, Department of National Defence
Simon Kennedy  Senior Associate Deputy Minister, Department of Industry
Kevin Lindsey  Assistant Deputy Minister, Chief Financial Officer, Finance and Corporate Services, Department of National Defence
Tom Ring  Assistant Deputy Minister, Acquisitions Branch, Department of Public Works and Government Services

10:35 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

I think it's fair to say that based on how we communicated all of these things going back eight years, we communicated exactly the same way, with acquisition costs and 20 years' worth of sustainment costs.

10:35 a.m.

NDP

Malcolm Allen NDP Welland, ON

So you would have told him that $25 billion was acquisition sustainment or operating life cycle, whatever terminology you were using. You would have told him that was that number and you would have said the $15 billion was simply acquisition and sustainment. Is that what you're telling me?

10:35 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

The decision-making process and the documents that were involved included the full 20-year life cycle costs, which included acquisition, sustainment for 20 years, and operating for 20 years.

As we have done in the past, and if I could, I would just read an excerpt from one of our—

10:35 a.m.

NDP

Malcolm Allen NDP Welland, ON

No, that's okay, I don't think you need to. Thank you, Mr. Fonberg. You can just reference it for us. We'll go to it.

Lieutenant-Colonel Deschamps, when it comes to our other NATO partners, primarily Britain and France, are they buying the F-35?

10:35 a.m.

LGen André Deschamps

All I can say is that within the nine-nation partnership right now, the United Kingdom is part of that nine-nation group. France is not. France has not indicated its intent to procure the F-35.

10:35 a.m.

NDP

Malcolm Allen NDP Welland, ON

My apologies, sir. Lieutenant-General.

10:35 a.m.

LGen André Deschamps

That's okay, sir.

10:35 a.m.

NDP

Malcolm Allen NDP Welland, ON

You can tell I was never in the forces, obviously. I didn't get the ranks right.

My apologies to you, sir.

10:35 a.m.

LGen André Deschamps

No problem.

10:35 a.m.

NDP

Malcolm Allen NDP Welland, ON

I'll try not to make the mistake again.

So you were saying that the U.K. is in, but are they purchasing?

10:35 a.m.

LGen André Deschamps

As we've seen reported recently, much like Canada, the United Kingdom will make a decision of acquisition at the appropriate time for their budgets and government.

10:35 a.m.

NDP

Malcolm Allen NDP Welland, ON

Fair enough.

I'm sharing a limited amount of time. Let me pass it to Madam Duncan.

10:35 a.m.

NDP

The Chair NDP David Christopherson

You have over a minute.

10:35 a.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

Thank you.

My question is to the Deputy Minister of Public Works. My concern is more a broad one rather than the specifics of the matter of the F-35.

The Auditor General was very clear in his determination that Public Works did not demonstrate due diligence in its oversight role in this matter, and the department has challenged that finding, as reported in the Auditor General's report. Do you continue to hold the view that you can rely on such short-circuited procedures as applied here, or would you follow in future, as the Auditor General has recommended, Treasury Board rules and the principles of good management and due diligence?

10:35 a.m.

Deputy Minister, Deputy Receiver General for Canada, Department of Public Works and Government Services

François Guimont

Thank you for the question.

I explained this Tuesday, when I was before the committee, that when the Auditor General came before the committee he stated, and I quoted him, that some due diligence had been applied by Public Works. I also explained that the reason we had a disagreement had to do with the fact that “did not demonstrate”, under recommendation 2.81, is an absolute, and I am comfortable with the fact that he has recognized that some due diligence has been applied. This, to me, was the position that we took with him in the course of the interaction we had with his office.

Now, in all fairness, this is a unique procurement process, no question about that. In retrospect, we collectively--but I'll speak for myself--if we were to look back, a different frame would have been put in place to carry out our responsibilities. And I would—

10:40 a.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

If I might intervene, Mr. Guimont—

10:40 a.m.

NDP

The Chair NDP David Christopherson

Madam Duncan, time has expired.

Over to Madam Bateman, who now has the floor.

10:40 a.m.

Conservative

Joyce Bateman Conservative Winnipeg South Centre, MB

Thank you very much, Mr. Chair.

Mr. Fonberg, you were discussing the three kinds of costs, and my colleague Mr. Allen wasn't able to allow you to finish. I think it would be very useful to this committee if you could table the facts and the details of the composition of the costs for all the members of this committee.

What I'm hearing very clearly is that your analysis, right from the start, has included acquisition costs and sustainment costs for 20 years. Then you, as we did here, heard from the Auditor General, who is now suggesting that we also include operating costs. If you could table with this committee for our report the composition of those, that would be helpful.

Thank you, Mr. Chair.

I have a few quick questions, short questions, but I want to understand. Have we purchased any fighter aircraft to replace the fleet of CF-18s yet?

10:40 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

No, we haven't.

10:40 a.m.

Conservative

Joyce Bateman Conservative Winnipeg South Centre, MB

Okay, thank you, sir.

Have we paid out any money for an airplane, or actually placed a procurement order?

10:40 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

We have placed no procurement order and have spent no money on acquisition. We continue to be part of the MOU and we pay into the development costs.

10:40 a.m.

Conservative

Joyce Bateman Conservative Winnipeg South Centre, MB

Excellent.

I'm glad, sir, that you mentioned the MOU, because I have a few questions. First, when did we first join the joint strike fighter program? Would you be kind enough to explain what the joint project office is, who runs it, and what it does?

10:40 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

That's a good question. It's a very structured governance approach. I would ask Mr. Ross to speak to that question. He's intimately involved with the office.

To clarify, in 1997, when we joined the program, it was not called the joint strike fighter....

Was it called the joint strike fighter program?

10:40 a.m.

Assistant Deputy Minister, Materiel, Department of National Defence

Dan Ross

It was called the joint air capability technology project.

10:40 a.m.

Deputy Minister, Department of National Defence

Robert Fonberg

Could you speak to the...?