Cost of buying, servicing F-35 fighter jets soars to $40B
The cost of buying and servicing the F-35 stealth fighter jets that Ottawa has been planning to purchase has skyrocketed to about $40 billion, CTV News has learned, as the Conservative government considers alternative aircraft.
A report commissioned by the government, which will be released next week, will kick off a review of the entire jet fighter procurement process and the need to replace Canada’s aging fleet of CF-18 jets.
The report examined the cost of buying, maintaining and operating 65 F-35 jets over a period of 36 years. The soaring price tag has prompted officials to consider purchasing less expensive war aircraft. Options to be examined by an independent panel include the U.S.-made Super Hornet and Swedish-made Gripen, sources say.
The Conservatives’ plan to purchase the F-35 jets has been mired in controversy since a scathing auditor general's report accused both National Defence and Public Works of hiding the true cost of the project.
Ottawa said the program would cost between $14.7 billion and $16 billion, but auditor general Michael Ferguson and Parliamentary Budget Officer Kevin Page disputed those figures.
Ferguson accused the Defence Department of low-balling the estimate by not including operating expenses, and said it would actually cost more than $25 billion, but government officials denied trying to hide anything.
Page had estimated it would cost $29.3 billion to purchase and maintain the jets.
Now, it looks like the cost would exceed both of those estimates.
Alan Williams, a former senior procurement officer with the federal government, said the price of the “complex” jet program has been going up since Ottawa initiated the procurement process.
“We ought to wait until the development is done and the platform is operational,” he told CTV’s Power Play Thursday.
“But we dipped our toes into the water much too early in the program, without knowing the cost or the capability. And that’s why we’re saddled with this situation today.”
Conservative MP Michelle Rempel said the government is committed to being transparent on the issue and following the recommendations of the auditor general’s report in April. She said the report on F-35 costs will be made public soon.
“We want to make sure that we get this right and we’re taking it really seriously,” she told Power Play.
However, NDP defence critic Jack Harris said the “sticker shock is going to make people say this is not something that’s affordable.”
Appropriateness of F-35 for Canada questioned
OTTAWA – Cost uncertainty is central as questions mount as to whether the Canadian government will move ahead with its plan to purchase a fleet of F-35 jets, but some say this was never the right plane for Canada to begin with.
Steven Staples, president of the Rideau Institute, an Ottawa consultancy dealing in matters of defence and foreign affairs, took to Parliament Hill Friday to say the F-35 is just a “model plane” that is not well suited to Canada’s needs.
“We’ve had a number of concerns about the aircraft on cost and performance going back to 2010, and those concerns have not changed in the last few years,” Staples said. “Largely, what we’re seeing with the F-35 (is) it’s a model airplane. It’s not fully completed yet. They’re still piecing this aircraft together.”
Staples said the process for finding jets to replace the aging fleet of CF-18s should involve a “fly-off with real airplanes” to test the equipment before committing to purchase.
He added that with $2.5 billion worth of upgrades to the CF-18s in recent years, they can still be used for “many years to come,” and there is “no hurry” to find a replacement.
He said several “flaws” have emerged as the F-35s get developed, such as complications in being able to give pilots a 360-degree view, which has been a much-heralded feature of these jets.
What’s more, he said F-35s are not the type of plane best suited to Canada’s needs.
“The (F-35) was designed to meet a number of requirements within the U.S., to be able to deliver ordinance and missiles and bombs in the first few hours of an invasion,” Staples said. “That’s why it has the stealth capability in a type of shock-and-awe-type mission.
“I don’t think this is appropriate for what Canada needs for our own continental security, which should be the main focus of the Air Force and its replacement of the CF-18s, and not a kind of first-wave, attack stealth fighter like the F-35 is being billed to be.”
Looking at the 30-year history of the CF-18s, Staples said most of their usage has been in North America, and overseas deployment “is not a very high demand for our aircraft.”
He added: “What are the legitimate threats to Canada right now? Well, they’re not nuclear-armed Russian bombers flying over the Arctic, like the concern was when we bought the CF-18s originally.
“As we know, terrorists are hijacking planes and flying them into buildings. There’s certainly a threat on that; incidents like we had on 9/11 and future possibilities where we have big events, like the Olympics or something like that.
“So we need those kinds of aircrafts that can interdict and protect Canadian cities. You don’t need a stealth fighter to be able to do that. Obviously, you need something that works in the Arctic and the harsh conditions that are there.”
Staples said a clear assessment of Canada’s military needs was a “key step that was missed” in the process that led to the F-35 becoming a favoured aircraft.
Asked by a reporter if there are any other jets that would be more suitable for Canada, Staples did not name any manufacturers or models specifically, but said there are “lots of other planes that other countries are looking at in terms of replacing similar aircrafts to the F-18s. . . . So I think there’s a number of European potential platforms, even American ones, that could offer very competitive proposals to Canada.”
Patrick Gagnon, an Ottawa lobbyist with the Parliamentary Group, who has experience dealing with matters of military procurement, argued that the F-35 isn’t necessarily wrong for Canada, but an open competition – which has not happened – is one way to find out.
“Maybe in the final analysis, if we have a full-blown competition, (the F-35) might come up as the best solution for Canada,” said Gagnon, who added he hasn’t done any work relating to this aircraft.
He noted that Canada is one of a handful of countries that had been working with U.S. manufacturer Lockheed Martin Corp. on the development of F-35s, and all are facing tough choices as expected costs rise on this jet.
Gagnon added that the U.S. is the principle player in this program and its needs are the priority in the F-35’s design.
That said, he added that Canada’s interests are closely aligned with its southern neighbour and it’s a good idea for the two countries to co-operate on a major military purchase like this.
“We’re talking about the whole North American perimeter (as a focus of security) and everything has to work within a Canadian-U.S. context, so obviously any vehicle you choose has to jive with the Americans too,” he said.
Appropriateness of F-35 for Canada questioned
Tories misled Canadians on F-35, opposition MPs charge
Interim Liberal Leader says Defence Minister Peter MacKay should step down
The government has consistently misled Canadians and is continuing to hide the true cost of the F-35 fighter jets being considered to replace the military's aging CF-18s, opposition MPs charged Friday.
"I don't see how the minister of defence [Peter MacKay] can possibly continue in his job," interim Liberal Leader Bob Rae said.
"He's basically been a sales spokesperson for Lockheed Martin, the manufacturers of the F-35 since he took office. He's denigrated and attacked every person in opposition, in the Liberal Party or elsewhere, who has ever raised concerns or questions about this."
The Conservative government says it has not made a decision on the F-35 as a replacement for Canada's CF-18 fighter jets, but it now appears to concede that alternative fighter purchase options will be considered.
The Prime Minister's Office denied a media report Thursday that the F-35 purchase was dead, calling the report "inaccurate on a number of fronts" and promising to update the House of Commons on its seven-point plan to replace the jets before the House rises for the Christmas break at the end of next week.
That plan is now expected to follow through with a real competition and statement of requirements, something that the initial process lacked. Depending on the result of the competition, Canada could follow through with the F-35 purchase, choose another aircraft instead, or buy different planes to suit different needs. A frequently mentioned alternative to the F-35 is the Boeing Super Hornet, a new version of the F-18.
A spokesman for MacKay said he is not resigning and echoed a statement by Public Works Minister Rona Ambrose from the night before.
"Rae's comments are puzzling. Despite speculation the government hasn't announced anything. Our government is continuing to move forward with our seven-point plan. The government will be providing a comprehensive public update before the House rises," Jay Paxton said.
A spokesman for Prime Minister Stephen Harper said on Twitter that MacKay would not be resigning.
"Not going to happen," Andrew MacDougall tweeted to a Liberal staffer. "Full confidence in [Peter MacKay]."
'Completely and totally untrue'
Speaking in Toronto, Rae said all of what the government has said "has been shown to be completely and totally untrue."
"The government has consistently misled Canadians about the true cost of this aircraft. They've misled Canadians about their degree of oversight and their readiness to deal with the situation," he said.
After Auditor General Michael Ferguson questioned the military's figures last April, the Harper government promised to "hit the reset button" on the entire purchase. An "options analysis" would consider the alternative fighter jets that may meet the military's needs.
Part of that process for replacing the aircraft is an audit of the F-35's costs by accounting firm KPMG. The government said Thursday it now has the report and is reviewing it.
CBC News has learned the KPMG report is based on a longer and more realistic life cycle for the next-generation stealth fighter, which would therefore also arrive with a higher price tag than previously reported. The actual cost could be as high as $40 billion.
The cost of the F-35 project was first pegged at $9 billion for 65 planes when it was announced by the government more than two years ago, but a report by the parliamentary budget officer put it at $29.3 billion over 30 years. The federal auditor general put the total cost to buy and maintain the planes at $25 billion.
Public Works took over the process for procuring a CF-18 replacement earlier this year, extending the original deadlines for its work "to get it right."
Conservative MPs defend MacKay
Opposition MPs devoted much of Friday's question period to questions about the F-35, with the Liberals focusing on whether MacKay will step down.
MacKay was in the House of Commons but didn't stand to take any questions, allowing Government House Leader Peter Van Loan and Ambrose's parliamentary secretary, Jacques Gourde, to respond instead.
MacKay paused briefly on his way out of the House to say there had been a lot of speculation over the past 24 hours.
"What I can tell you is we're following the seven-point plan as we have been now for some months and into next week there will be an open and transparent discussion about the next steps that are going to follow in the CF-18 replacement," MacKay said.
MacKay didn't answer when asked whether the cost would be $40 billion.
NDP defence critic Jack Harris said Prime Minister Stephen Harper should take responsibility for having appointed MacKay as minister and for the process to select new fighter jets.
'Process is in a shambles'
"The whole process is in a shambles, quite frankly," Harris told reporters outside the House.
"This is not good enough. We've got enough misleading information out there in front of the public.... They didn't do their due diligence, they didn't have an open, fair and transparent process.
"They've demonstrated their incompetence in a $40-billion-plus contract."
Harris also pointed to the long-running Conservative attacks on anyone who questioned their cost estimate of the F-35, including that of Parliamentary Budget Officer Kevin Page, whose projected cost was confirmed by Ferguson's report.
A statement from Ambrose's office on Thursday said the government will provide "a comprehensive public update" before the House rises.
"We are committed to completing the seven point plan and moving forward with our comprehensive, transparent approach to replacing Canada's aging CF-18 aircraft," the statement said.
The government has long maintained the F-35 was the only plane that met Canada's needs. But last week, Gen. Tom Lawson, chief of the defence staff, told MPs there are other planes with stealth capabilities.
A spokesperson for Lockheed Martin referred questions to the Department of National Defence.
"Lockheed Martin has been a partner with the Canadian Forces for more than 50 years. We continue to look forward to supporting the Canadian government as they work to provide their air force fifth-generation capability for their future security needs," the spokesperson said.