Canada's Afghan mission could cost up to $18.1B

The military mission in Afghanistan could cost a total of $18.1 billion or $1,500 per Canadian household by 2011, according to a government report that also criticized how financial records are being kept.

Canada has spent $7.7 billion to $10.5 billion on costs related to its mission in the past six years, and may spend $13.9 billion to $18.1 billion by the end of the 2010-11 budget year, according to The Fiscal Impact of the Canadian Mission in Afghanistan tabled by parliamentary budget officer Kevin Page on Thursday.

However, a lack of government consistency and transparency has made the figures difficult to estimate, and they likely understate the full costs of the mission, the report says.

The mission began in 2002, and Canada currently has about 2,500 troops in Afghanistan's volatile Kandahar province. So far, 98 Canadians, including one diplomat, have died in the conflict.

The release of the report was agreed upon by all leaders of Canada's major political parties in September, despite concerns that the results could sway the outcome of Tuesday's federal election.

'When we have men and women in uniform, diplomats and development workers who are putting their lives on the line, the government will spend what is necessary to make sure they are safe and successful.' —Prime Minister Stephen Harper

Prime Minister Stephen Harper had previously estimated that the total cost so far would amount to less than $8 billion.

The figures released Thursday are incremental costs — that is, they do not include costs such as salaries that would be incurred by Canada's military anyway, even if it were not in Afghanistan. The cost of military operations, veterans benefits and foreign aid related to the mission were all part of the estimate.

However, Page said certain costs weren't included due to the difficulty of estimating them reliably, and this suggests the figures "may likely understate the costs" of the mission. Such additional costs include danger pay and the need to replace equipment sooner if it is deployed in war rather than peacetime.

Lack of government transparency

Part of the problem was that certain departments, including Foreign Affairs,  did not respond to requests for financial data that would allow a "rigorous bottom-up analysis," the report says. Instead, the report mainly relies on publicly available departmental performance reports for departments such as National Defence and the Canadian International Development Agency. It also uses some assumptions based on the experiences of other countries.

As Page tabled the report, he criticized the government's accounting methods, citing a lack of consistency, transparency and mission-specific cost records by department. He listed these as challenges faced by his team in coming up with estimates.

"To date, Parliament has been provided with only limited information, often after the fact, on these costs, and has not been given estimates on future costs that may be incurred in the support of the veterans of these conflicts," the report says.

Page added that Canada "appears to lag behind the best practices of other jurisdictions in terms of the quality and frequency of war cost reporting to their respective legislatures."

He later said he still hopes to get the full data and do a proper "bottom-up" analysis.

Uncertainty in the figures was attributed to differing assumptions related to the amount of capital employed in Afghanistan and the incidence and severity of injuries. The estimates for the future costs assume that the number of deployed soldiers will remain unchanged.

Annual cost overruns for the mission up until 2006-07 ranged from 29 per cent in 2002-03 to a whopping 310 per cent ($321 million) in 2005-06, based on planned versus actual spending figures.

The report notes that sometimes spending figures differed between the Department of National Defence and the department's finance and corporate services.

'Will spend what is necessary': Harper

Speaking in British Columbia after the report's release, Harper said his government has "been clear that the cost is high" on the Afghanistan mission — and that the "real cost" is the loss of Canadian lives on the ground in that country. 

"We needed to spend more on both the military and non-military sides. We are doing important work there as part of an international effort," Harper told reporters in Richmond, where he was on the campaign trail.

"When we have men and women in uniform, diplomats and development workers who are putting their lives on the line, the government will spend what is necessary to make sure they are safe and successful."

But Harper also said the Page report includes long-term costs that the government believes "don't relate to the day-to-day of the mission."

The Opposition Liberals, who were in power when the Afghan mission began, were quick to point out Thursday that the Conservatives had campaigned before the last election on a promise to be a more transparent and accountable government. Liberal Leader Stéphane Dion said Harper had broken that promise.

"We don't know, year in and year out, what were the problems, how much we've gone over the budgetary framework," Dion told reporters in Halifax.

"I think Canadians are entitled to that information, and they'll get it with me."

Michael Ignatieff, deputy Liberal leader, told CBC News in an interview that Page "had to struggle every step of the way" to get numbers out of the federal government departments involved in the mission.

Questioned about the fact that the previous Liberal government also did not release regular updates on the cost of the mission, Ignatieff replied: "We're in opposition. They're the government. The government is responsible for telling Canadians what this thing is going to cost us."

Surprised by sudden urgency: Emerson

David Emerson, Conservative campaign co-chair and outgoing foreign affairs minister, countered Page's suggestion his department failed to provide information.

"We have been very forthcoming so I'm not quite sure what he's referring to there," Emerson told CBC's Don Newman on Politics.

"I'm sure that information is on its way and will be forthcoming. I think that some people were … surprised by the sudden, I don't know if it was an acceleration, but all of a sudden there was a great urgency to get this report done and out to the public."

NDP foreign affairs critic Paul Dewar, who requested the review, called it "deeply worrying" that Page was unable to get all the information he needed, and he suggested the estimated cost is just the "tip of the iceberg."

Liberal Senator Colin Kenny suggested the "huge amount" is due to Canada's failure to invest enough on an ongoing basis.

"We have the wrong impression that there should be a peace dividend, whereas, in fact, it's like an insurance policy. And if Canadians paid a reasonable amount each year, we wouldn't have this large incremental increase," he told CBC News.

But Kenny, who chairs the standing Senate committee on national security and defence, also accused Harper of not releasing the costs during office and neutering the issue during the election campaign.

"Mr. Harper has consistently not let the figures out. He insists on micromanaging it," Kenny said.