The F-35 Joint Strike Fighter is shown during an Lockheed Martin news conference in Fort Worth, Tex., on July 7, 2006.Ron T. Ennis/The Associated Press
An explosive independent report on the Harper government's controversial purchase of new fighter jets estimates their full cost, including maintenance, could hit $29.3-billion (U.S.).
That's about $12-billion more than what the Tories have been telling Canadians it would cost.
The report by Parliamentary Budget Officer Kevin Page comes at a bad time for the Conservative government, which been dogged by controversy over the acquisition and faces a possible defeat in the weeks ahead.
The budget watchdog's estimate represents the "total ownership cost" of the stealth jets over 30 years of service and is close to 70 per cent higher than the price tag disclosed by the Tories.
His report was independently peer-reviewed by non-partisan experts at the United States Congressional Budget Office, the Australian Strategic Policy Institute, and Queen's University. Opposition Liberals, who've promised to cancel the F-35 contract if they win office, said Mr. Page's report is proof the Tories have been hiding the program's full costs of nearly $30-billion.
"This is an unconscionable amount, and the Harper Conservatives have again misled Canadians and Parliament," Liberal defence critic Dominic LeBlanc said. "To put this in perspective, $30-billion is equivalent to $1,000 for every man, woman and child in Canada, and equals the entire federal government's annual spending on health care." Mr. Page's report is an effort to get at the full price tag for the 65 F-35 Lightning fighter jets the Conservatives have agreed to purchase from Lockheed Martin. The budget watchdog is also warning there is a "risk that costs may increase" further.
The Tories are sole-sourcing the F-35 purchase rather than holding an open competition that considers different bids, insisting they have found the right plane for Canada.
Figures released by the government have suggested the total cost of the planes would be $17.6-billion, which includes about $9-billion to purchase them plus decades of maintenance bills that the Tories say would not exceed the annual costs of maintaining the current CF-18 fighters.
Mr. Page's report estimates the jets will cost nearly $149-million each but over their lifetime will run about $450-million per plane in support and maintenance.
The government has said the per-unit purchase cost of each plane is about $70-million to $75-million per aircraft - although other estimates have pegged them at $91-million each.
Auditor-General Sheila Fraser warned last year that the F-35 acquisition carries a sizable risk of cost overruns and delay.
The opposition Liberals are vowing to cancel the un-tendered deal to buy the Lockheed Martin F-35s if they win office in the next election. Instead, they say, they would hold an open competition to pick Canada's next fighter aircraft.
Mr. Page's office estimates the new planes will cost $9.7-billion to buy and $19.6-billion to maintain and support over three decades.
The budget watchdog's report comes one day after the Commons speaker ruled the Tories may be in contempt of Parliament for withholding fiscal information from MPs including the costs of the F-35 fighters.
"The Conservatives' numbers don't add up, which is why they breached Parliament's privilege and refused to show us detailed cost figures for these stealth fighter jets," Liberal industry critic Marc Garneau said.
Another problem for the Tories is that Mr. Page's estimated costs suggest the Department of National Defence will be unable to afford the F-35 program without sacrificing or reducing another procurement initiative such as the frigates.
In recent months, the Tories have tried to play down mounting concerns over the price tag of the F-35s, insisting publicly through Defence Minister Peter MacKay's office that the new planes will cost little more than CF-18 Hornets purchased three decades ago (although in today's dollars).
The government calculations however only focus on the sticker price and not the full cost of each plane.
The math between the government's price comparison with the CF-18 Hornets works like this. Ottawa says the planes cost $30.7-million when they were purchased in the early 1980s. Factoring in inflation, this translates to $62.3-million in 2016 dollars. By comparison, the average cost to Canada for each F-35 over the 2016-2022 period will be about $74.5-million (U.S.). This is according to Michael Slack, the Defence Department's director of continental materiel co-operation.
The Conservatives said Thursday they are not budging from their cost estimates, which total about $17.6-billion over 30 years.
"Department of National Defence procurement experts stand by their cost projections," Mr. MacKay's director of communications Jay Paxton said.
"We have committed $9-billion to the acquisition of 65 aircraft and $250-million to $300-million over 20 years for in-service support," he said.
"The F-35 is the only jet that can meet the needs of the Air Force, as noted by Mr. Page. Simply put, this is the best plane for the best price and we are confident in our acquisition."
Steven Chase