Apparently -- or, at least, one hopes -- now fully recovered from the unexpected medical procedure that forced him to postpone last week's scheduled appearance, Auditor General Michael Ferguson returns
to Public Accounts this morning to face a third round of questions
on his office's less than glowing review of the F-35 procurement process -- at least, for the first hour; during the second, he's expected to turn his attention to the main estimates, which have to be reported back to the House by May 31.
The committee is also set to deal with a motion from NDP MP Lysane Blanchette, which would see the committee study the provisions of the omnibudget bill that opposition parties have described as a "gutting" of the AG's power, although if memory continues to serve, those particular changes -- which would transfer oversight responsibilities to an outside auditor, thus reducing the AG's workload -- was actually based on recommendations from the Office of the Auditor General itself.
Check back at 8:45 am for full coverage!
by Kady O'Malley 5/15/2012 11:32:32 AM
And with that, let me extend my warmest virtual greetings to all the F-35 procurement aficianados out there now awaiting, with the most eager of (re)anticipation, the long-awaited follow-up (re)appearance, wherein our hero -- that would be Auditor General Michael Ferguson, of course -- will respond to the response to his original response to the reaction to his report on those elusive fighter jets that we may or may not be buying.
Given that this is, as noted, his third time on the stand, it's difficult to fathom what new insight or information he could provide; even if he *does*, presumably that would trigger a subsequent reappearance by the deputy minister brigade (or would that be a re-reappearance? I admit I've lost track), thus setting the stage for a seemingly limitless loop of not-quite-contradictory testimony.
by Kady O'Malley 5/15/2012 12:45:32 PM
And we're off! The chair -- David Christopherson, still wielding the gavel despite the near-fisticuffs that broke out during the last public meeting -- reminds us all that Ferguson is back before the committee for a third time, luckily now "in the pink of health" and ready to share his thoughts on both the F-35 procurement process and the main estimates.
With that, he cedes the floor to the witness, who dutifully reads his opening statement into the record -- I'll spare you the scrupulous chronicling of every word thereof, as I have posted the full text below. What strikes me as new, or, at least, newly emphasized in today's remarks: he does acknowledge that, while his office "believes in and supports life-cycle costing," it is not, in fact, required by the Office of the Auditor General (although these costs *are* required by both Treasury Board and National Defence).
He does, however, maintain that Defence "did not include some significant cost elements in its estimate," which are, of course, included in his report.
He's also concerned that the suggestion that full costs -- personnel, operating and maintenance -- are "not important" because, as goes the rationale for that position, they'd rack upregardless of what plane was ultimately chosen to replace the F-18s.
by Kady O'Malley 5/15/2012 12:53:47 PM
And -- questions! Starting with -- oh, sheesh, Andrew Saxton. Is there any reason to believe that his line of questioning will be even the least bit different from his last outing with this witness, or the one before that? (To be fair, one could say that about pretty much every MP at the table.)
Still, I'm not sure why he keeps asking Ferguson to give his preliminary seal of approval to the 7 Point Action! Plan, since the AG has made it pretty clear - three times now, and counting -- that it has not yet reviewed the results of that plan. Saxton pushes the issue, and asks whether the response "adequately addresses" his concerns, but Ferguson sticks to his line: they're "glad" to see the government respond, but haven't yet analysed the substance of that response.
by Kady O'Malley 5/15/2012 12:57:57 PM
The AG finally tosses Saxton a bone, albeit not a meaty one -- he thinks keeping Parliament informed of the cost and process, via regular reports to the House, is a good idea; most crucial, however, would be the "clear understanding of purpose" on the part of those making the decisions. (He says that every time, doesn't he?)
by Kady O'Malley 5/15/2012 12:59:49 PM
With that, it's over to the opposition side of the table, where Malcolm Allen has been patiently awaiting his turn at the microphone. Citing letters -- including that now infamously terse dispatch on the operational requirements, which pretty much amounted to "We want, therefore we operationally require" -- which, as per Allen, appears to have been the basis for the decision by Public Works to give the go-ahead for a sole source process.
Ferguson notes that it was at precisely that juncture that his office identified significant weakness in the system, which sends Allen down a more technical tangent related to the classification of the letter itself, thus allowing it to be included in the report. Ferguson notes that his request was granted, which prompts Allen to thank him for "shining a light" on a document that would otherwise have been kept from the public, and then moves onto the testimony delivered by Defence deputy minister Fonberg. Unfortunately, the question he poses is one that, according to the AG, he simply can't deliver in a short time, and since it's now up -- the time for Allen's first round, that is -- it's back to the government side.
by Kady O'Malley 5/15/2012 1:06:17 PM
Daryl Kramp returns to the line of inquiry launched by Saxton during his opening round -- namely, the challenge of a procurement process with its roots in the development phase. Kramp wonders if there are "other applications" to the "lessons learned" from this audit, and Ferguson assures him that there are several, in fact. "It would have been important to lay out right up front what the ground rules would be," he notes -- this was, after all, fated to be a very different process than your typical procurement initiative. Also, risk management. Kramp has better luck in his effort to get Ferguson to sign off on a pull-quote ready statement, but runs off the rails when he turns it into an attack on those within the precinct who don't want to see Canada get shiny new fighter jets *at all*. The AG, not surprisingly, stays far away from the more shamelessly partisan talking points, and reiterates what he sees as the main point of his report.
by Kady O'Malley 5/15/2012 1:11:46 PM
Speaking of shamelessly partisan talking points, Mathieu Ravignat goes even further in his effort to get Ferguson to respond to his assertion that the Defence department has mounted an attack on his credibility, although once it comes clear that Ferguson won't take the bait, he switches to those life cycle costs provided by the F-35 Fighter Jet Taskforce in DC. Ferguson once again sides with the longer-range estimates -- 30 years versus 20.
Ravignat also wonders whether the AG's work has been hindered by not having access to cabinet material, which prompts a brief, but intense, whispered briefing by his colleague; eventually, Ferguson points out that the office *does* have the power to examine some cabinet memoranda, and, more importantly, in this instance, he felt that all necessary information can be received. (Apparently, the AG can bring the matter to the attention of Parliament if he or she feels thwarted.) Ravignat, however, interprets that as an admission that "certain material was withheld" on cabinet confidence grounds, which was not, Ferguson tells him, what he meant: there were, however, certain analyses and reports that should have been prepared by and for the departments, not left for cabinet memoranda.
by Kady O'Malley 5/15/2012 1:17:58 PM
Back to the government side, where Bev Shipley will, once again and seemingly forever, try and fail to get the AG to Say The Magic Words: "No money was spent." As is always the case, the AG declines to do so; according to his findings, "significant" money has, in fact, been spent. It just hasn't actually resulted in Canada being handed the keys to our very own fighter jet fleet.
by Kady O'Malley 5/15/2012 1:19:58 PM
With admirable patience, Ferguson undertakes to explain, for the nth time, why his office prefers longer life cycle estimates -- longer than 20 years, at least -- since these are, after all, "long-lifed assets," and will, in theory, be flying long past the 20 year cutoff.
by Kady O'Malley 5/15/2012 1:23:07 PM
Hey, look who's back from the convalescent wing of Newfoundland and Labrador: Gerry Byrne, fully -- or, at least, satisfactorily, one assumes -- recovered from a nasty bout of pneumonia, and making up for lost time by questioning Ferguson on Fonberg's claims on those life cycle costs. Has Canada been made aware of the fact that the final costs may not be "a direct one to one ratio" with the CF-18s? This results in a lengthy side consultation between witness in staff, who concurs that there have been studies on this subject in the US that have indicated the cost may be higher; those, the AG says, are questions that *should* be asked, although it's entirely possible that Defence has a "perfectly good" answer for how those additional costs would be offset. Oh, if there's one thing of which I don't think many of us have any remaining doubt, it's that Defence *always* has an answer.
by Kady O'Malley 5/15/2012 1:27:15 PM
I believe Gerry Byrne has now successfully befuddled not only the witness and his committee colleagues, but everyone in the room with his musings on how things *do* change; the AG makes a valiant effort to tie it together into a reiteration of his impassioned belief that life-cycle costing is the way of the future, but acknowledges that in this case, he's not sure whether that should be set by Treasury Board or Defence itself. (Do the rest of us get a vote? Because I'm going with Not Defence in this case.)
by Kady O'Malley 5/15/2012 1:31:25 PM
Sometimes, I wonder whether Joyce Bateman is starting to chafe under the pressure of her apparent role as Deeply Enthusiastic Newbie. She's clearly not quite as -- breathlessly amnesiacal as her questions would suggest. (Seriously, she's asking the AG what his recommendation was, for all the world as though she's never actually bothered to crack open the report currently under review, and attempting to charm him into providing *his* take on the F35 Damage Control Action! Plan (now with *seven points*!).
She then shifts back to those industrial benefits, which may or may not exist, but sadly, runs out of time before she can point out that so many of those benefits can't be made public for national security reasons.
by Kady O'Malley 5/15/2012 1:35:49 PM
Back to the opposition side of the table, where Fonberg's claim that Ferguson somehow "got the math wrong" is finally addressed; the AG maintains that *all* numbers in the relevant section came from the department itself. His office didn't do its own calculations. Lamothe wonders whether, over the course of the audit, the AG was given any documents that indicate other options were "seriously considered," and the needs identified, to which the answer eventually turns out to be yes, although how seriously those other options were considered is unknown.
Allen then takes over, and adopts a more aggressive tone, although one directed at the absent Fonberg and not the witness currently before the committee. (It sounds like the deputy minister may also be appearing again, since the AG, not surprisingly, isn't willing to speculate as to why he wouldn't have been aware of that additional $25 billion in projected costs.
by Kady O'Malley 5/15/2012 1:42:21 PM
After a mesmerizingly meandering preamble picking up on Bateman's curtailed line of questioning on industrial benefits, Jay Aspin eventually -- and I do mean eventually -- rather cautiously offers Ferguson the opportunity to echo his serene confidence that the F-35-related largesse will soon blanket the country. Not surprisingly, the AG does not, although he does praise the efforts by the departments to bring Canadian companies to the table.
by Kady O'Malley 5/15/2012 1:45:04 PM
Ferguson reminds his Conservative questioner that this was *not* a "strict compliance audit," given the exceptional nature of the process, but more of a general review of the due diligence expended. With that, the first round of questions is over. To the main estimates!
Oh, wait: first, to Malcolm Allen, for the anticipated point of order requesting that Fonberg be re-added to the witness list, as well as the other members of the F-35 deputy minister brigade. (He doesn't actually move the motion, as apparently, the chair-imposed moratortium on motions stands, but he wants to make sure that happens.)
by Kady O'Malley 5/15/2012 1:49:42 PM
I know it's hopelessly old-fashioned of me, but I think it's shockingly unparliamentary for MPs to leave the room for mid-meeting hallway scrums especially when it involves missing the witness's opening statement, during which Ferguson -- for indeed, it is (still) he -- will run down his office's operating costs and budgetary requirements. (Don't forget the full life-cycle costing!)
by Kady O'Malley 5/15/2012 1:52:30 PM
According to the latest performance reports, the "impact" of reports has been steady, and the OAG continues to be recognized as a top employer in four "major" awards.
Christopherson eventually intervenes to point out that he's been *trying* to arrange a meeting to discuss the cuts to the office that the AG is just about to address in his remarks, which he hopes that the committee can deal with *today*, once other questions related to the estimates have been asked and answered. Saxton, however, doesn't share the chair's desire for maximum meeting efficiency, and thinks they should stick to the plan - which, in this case, means sticking to the estimates, and not veering back to the October letter in which the proposed changes were outlined. Christopherson notes that he may regret that decision, and notes that he'll just have to keep trying to set up that other meeting.
by Kady O'Malley 5/15/2012 1:57:26 PM