Canada — Major-General Jon Vance on the cost of Canadian Forces Operations

State­ment made by Major-Gen­er­al Jon Vance on the cost of Cana­di­an Forces Oper­a­tions — Op Mobile Tech­ni­cal Brief­ing of May 11th, 2012.

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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.

Depart­ment of Nation­al Defence, Cana­da