For immediate release
May 11, 2012
(Ottawa) Defence Minister Peter MacKay dramatically underestimated the cost of last year’s Libya intervention, incremental cost figures released with the DND 2012-13 Report on Plans and Priorities show.
In June 2011 Minister MacKay told Canadians that the incremental cost of the Libya mission from March 2011 to the end of September would be approximately $60 million. The mission was eventually extended for one additional month, ending officially on October 31, 2011.
The figures in the government’s Report on Plans and Priorities, published this week, show that the actual incremental cost of the mission was $99.8 million, almost $40 million more than Minister MacKay estimated.
Part of that difference – probably about 15% – can be explained by the one-month mission extension. But even when Minister MacKay’s estimate is increased accordingly, to about $70 million, it still falls $30 million short of the mission’s actual cost.
“The Rideau Institute warned in June 2011 that the mission costs would likely be much higher than Defence Minister Peter MacKay had estimated, suggesting that the actual incremental costs were more likely to be in the $80 to $85 million range,” said Bill Robinson, a defence researcher and senior advisor to the Rideau Institute. “In the end, even that estimate was too low.”
But when also adjusted to account for the one-month mission extension, i.e., to about $92-98 million, the Rideau Institute estimate turns out to have been much closer to the final figure than MacKay’s estimate was.
“As in the F-35 stealth fighter fiasco, it seems that Defence Minister MacKay was low-balling the true costs of the Libya operation at the time,” said Steven Staples, President of the Rideau Institute.
Minister MacKay discussed the Rideau Institute estimate in an exchange with former defence minister John McCallum during a hearing of the Standing Committee on Government Operations and Estimates on June 14, 2011:
McCallum: My next question has to do with the cost of the Libya mission. Again, I’m a strong supporter of that mission, but in terms of cost, I think your number was approximately $60 million for the full six-month period.
MacKay: That would be, yes, the extension, presuming that the vote –
McCallum: But the Rideau Institute and others have said that the true cost is significantly greater than that. What do you include in the cost? Do you include depreciation on the planes or salaries of military people? And what is the per-unit cost of these smart bombs?
MacKay: They’re incremental costs, firstly, so they don’t include such things as depreciation or salaries. That is not normally part of what would be considered incremental costs when it comes to the mission. So the Rideau Institute, as so often is the case, is wrong.
“Actually, the estimates provided by the Rideau Institute were explicitly for incremental costs only, so it was Peter MacKay who was wrong on that point, just as it was Peter MacKay who turned out to be wrong about the actual cost of the mission,” said Bill Robinson.
The Rideau Institute is an independent research, advocacy and consulting group based in Ottawa.
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Bill Robinson, Senior Advisor to the Rideau Institute e. firstname.lastname@example.org
Steven Staples, President of the Rideau Institute e. email@example.com