May 11, 2012
Good afternoon.
Thank you for joining us this afternoon.
My name is Major General Jon Vance. I am the Director of Staff of the Strategic Joint Staff.
I am here today to provide you with some context surrounding how the Department manages and reports costs of our operational missions, specifically OP MOBILE – Canada’s contribution to protecting Libyan civilians last year.
In general terms, before the Department undertakes any contingency operation - regardless of size, scope or duration - a detailed cost estimate is prepared.
This includes preparing a financial cost estimate of the anticipated incremental costs to DND for the conduct of the mission. Such cost estimates are required so that Senior Leadership and the Government are aware of the potential cost and impact of a mission and therefore can make informed decisions regarding the stewardship of resources.
As planning for a new mission matures, and as the operational scenario becomes clearer, the cost estimate is updated. It is prudent to re-cost the mission when the concept of operations changes or the operational tempo changes by a significant amount.
As you are all no doubt well aware, planning only takes you so far. As the operation itself unfolds, the requirements - and thus the costs - change. We adapt to those circumstances and adjust the plans and the estimates as needed..
With respect to the costs of Op Mobile, Canada's mission in Libya, I can state with complete confidence that the Department has been utterly transparent with Canadians, members of the media and Parliament as to the costs of the mission as it evolved.
We provided regular updates to Canadians and Parliament about mission costs as the operation unfolded.
This included costs of the mission to date, as well as estimates of future incremental costs.
The Minister responded to questions in the House of Commons.
Senior officers and officials provided this information in appearances before Parliamentary committees.
And the Department responded to questions from the media.
When reporting costs of missions - as was the case in Afghanistan - the Department of National Defence uses incremental costs.
Incremental cost is the cost for personnel and equipment that would not have been incurred if there was no CF operation.
Specifically, incremental cost includes the additional cost to deploy troops and equipment, provide ongoing maintenance and support during the applicable operation and any operation specific training required for the operation.
As of January 31st 2012, the total incremental expenditures incurred for OP MOBILE are estimated to be $103.6 million. This figure includes costs for:
- Allowances for personnel deployed ($7.4 million);
- Accommodations, food and transportation ($38.4 million);
- Ship operating costs: fuel, spare parts, port fees, garbage collection ($16.8 million);
- Ammunition consumed ($34.6 million);
- Rental of vehicles ($3.0 million); and
- Satellite communication ($3.4 million)
Recent reports have suggested that the cost of Op MOBILE as reported publicly in our Report on Plans and Priorities has increased to $350 million without the knowledge of those responsible for the fiscal management of Defence.
This is wrong.
As I mentioned earlier, the incremental cost of Op MOBILE was $103.6 million. This is the formal record of additional expense to DND and Canadians for conducting the mission. All other figures, including the “full cost” figure of $347.5M include money that would have been spent whether the mission was performed or not. This includes costs of salaries, depreciation of equipment, command and control and so on. Full costs were reported in the RPP as is our responsibility.
Bottom Line: $63M estimated from Mar 11 to Sep 11; $106M estimated from Sep to Dec11. Actual incremental costs for the operation: $103.6M (we came in under estimates). Full costs, properly reported in the RPP: $347.5M. All statements made that updated the public while the operations were ongoing or as expenses were being incurred were accurate to the day they were updated and as reflected in the actual expenses versus estimates.
In conclusion, I trust that the above information provides both you as members of the media and Canadians with a more complete picture of the costs of our mission in Libya.
I also want to reassure Canadians that the Department has been transparent with Canadians in how it estimates, funds and reports mission costs.
