Friday, April 13, 2012

Poor spending estimates versus spending scandals

The opposition parties would have us believe that the controversial spending estimates for Canada’s eventual purchase of 65 F-35 fighters equates to a real spending scandal, the like of which we saw regularly under the Liberal governments of Jean Chrétien.

Remember the Sponsorship Scandal, or Jane Stewart’s billion-dollar Human Resources Development boondoggle, or the billion dollar cost over-run when implementing the Long-gun Registry to name but three? Those involved real money lost or unaccounted for by government departments under the supervision of Liberal ministers.

In the current dust-up in Ottawa, we have opposition MPs and CTV and CBC news hosts and pundits apparently ignoring the fact that no money has yet been spent to purchase a single jet. Yes, the estimates seem questionable. But no money has been wasted or misappropriated.

When the Liberals started the process to replace our aging fleet of jet fighters, they determined there were no better fighters to be had than the F-35s. We and our allies had forecasted our future needs—up to 30 years out, apparently—and come to the conclusion Lockheed Martin could be contracted to develop and build a fighter to meet most of those needs. That plane became the F-35 Lightning II.

We, the public, will not likely be told all the details of what we and our allies considered to be future military needs. For example, it would be embarrassing to our government if it were made public that it saw a military threat from China in future decades, and saw some of the F-35’s capabilities as crucial in any response we and our allies might want to make against China’s aggressive behaviour in, say, the South China Sea. For national security reasons there is a limit to the transparency we can have in military procurement.

So this is almost certainly the jet fighter that is best for us going forward, and the actual cost per plane will not likely be the deciding factor—the total number of planes will be adjusted to keep our budget onside.

But here’s what does bother me about this affair: Auditor General Michael Ferguson, in his recent report, presents evidence that the government knew the costs were $10-billion higher than the figure it gave to the public. In his 2011 report, Parliamentary Budget Officer Kevin Page also disagreed with the government’s public estimate.

So we seem to have deliberate obfuscation on the part of one or more senior minister. And that’s unacceptable.

© 2012 Russell G. Campbell



  1. What a shame that analyses such as this are not seen in the MSM.
    But of course we all know why.


  2. You know what?...
    I recall early in the Sponsorship Scandal, it was revealed the Chretien gov't had set up a number of "foundations" that apparently contained large amounts of public money.(bilions?) These foundations were "priveleged" or"secret" and beyond the scrutiny of Parliament or the AG. I wonder what became of that. And, why, to this damn day, are no Liberals in jail?

  3. Another manufactured faux scandal. No doubt there will be many more when this one, like all the previous attempts, bites the dust.

  4. The damning thing I see, which you hint at, is that MacKay was minister when Sheila Fraser's 2010 critique of copter purchase made identical recommendations for costing to that of Ferguson. At that 2010 AG report, DoD and MacKay accepted those 2010 recommendations. Therefore MacKay either was incompetent or deliberately misleading us when he said this accounting method is new. No it isn't, you agreed to what Ferguson wants in 2010!

    This really shocked me, and I can't support MacKay any more. I feel horrible to say that, but the facts don't lie.

    Am I missing something here?

  5. how can something be a spending scandal when the money hasen't even been spent. also I don't think it was a poor estimate I just think the auditor general don't understand you don't put the price of hiring pilots and the price of fuel in it we are suppose to be paying for the jets alone but the price of pilots and fuel especially that is seprate. I don't go and buy a car at the car which includes the price of fuel when I buy it or when I buy a house it don't quote the price of hydro electricity or utilities when I buy a house.

  6. "Auditor General Michael Ferguson, in his recent report, presents evidence that the government knew the costs were $10-billion higher than the figure it gave to the public. In his 2011 report, Parliamentary Budget Officer Kevin Page also disagreed with the government’s public estimate."

    From what I understood, that extra cost although known by the government ministers and DND bureaucrats were not considered actual purchase cost but where operating cost for the planes during their life time. And after all this whole exercise is based on the Procurement/Purchase of the F35 Joint StrikeFighter: what do we pay Lockheed Martin? I am sure that LockheedMartin are not going to be doing the maintenance and providing the salaries of pilots.

  7. Both Page and the auditor general are SHIT DISTURBERS..They both knew the extra cost was for fuel,salaries ,maintenance etc.But they have to get in on the front page headlines and confuse people.Where do we get these idiots from.They are as bad as the MSM when they know the figures are correct ,but try to make the Government look bad.And why some blogging Tories do not know this fact has me scratching my head also.

  8. The helicopter deal from hell not reported by the lame brained media

    1. Thanks for the link, P---edoff. Anyone interested in the sorry state of Canadian military procurement should read this cautionary tale.

  9. I have difficulty understanding the need to include cost of pilots, fuel etc. These costs are there no matter what they buy. The only way they are not there is if we do not buy anything and stop flying what we already have. Were they Liberals expected to cost out the unending costs of the second-hand submarines they bought? I'm sure they grossly underestimated those cost considering one or the other or both have been in dry dock being repaired since they were fist obtained. How about the cost estimates in keeping the Sea Kings flying after Chretien cancelled the purchase of their replacements? Were the Liberals chastised for underestimated those costs?

  10. Comparing apples to oranges. By the time this is over we will also have comparisons to peaches, low fat yogurt, lawn furniture and tropical vacations. Just picking random accounting methodologies to characterize a program isn't providing any actual information to decide on the merits of the program.

    What DND, in the person of the Minister, Associate Minister and Deputy Minister need to do is get out there and start explaining to the public what the military need and why. A good selling job and an informed debate on defense matters in general are needed both to get the opposition back to substantive issues but also to get the public to become aware of what, exactly, DND wants $30 billion of our tax dollars for.