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Defence Minister Peter MacKay, right, and Industry Minister Tony Clement walk past a mock-up of the F-35 Joint Strike Fighter after announcing the Conservative government's plan to purchase 65 of the stealth jets in Ottawa on July 16, 2010. (Adrian Wyld/The Canadian Press)
Defence Minister Peter MacKay, right, and Industry Minister Tony Clement walk past a mock-up of the F-35 Joint Strike Fighter after announcing the Conservative government's plan to purchase 65 of the stealth jets in Ottawa on July 16, 2010. (Adrian Wyld/The Canadian Press)

Tories seek alternatives to F-35 jet as cost soars to more than $40-billion Add to ...

The Harper government is going shopping for alternatives to the controversial F-35 Lightning fighter jet in the most significant demonstration yet that it is prepared to walk away from its first choice for a new warplane.

In an attempt to head off public skepticism that Ottawa’s “options analysis” is something less than a rigorous rethink of which jet is best, the government is enlisting four independent monitors to vet the process.

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They will include retired Lieutenant-General Charles Bouchard, who led the NATO mission in Libya, and University of Ottawa professor Philippe Lagassé, an outspoken critic of the jet procurement.

The Conservatives, who have been heavily criticized for selecting the F-35 without due regard for price and availability, are launching this effort to repair their credibility as stewards of public money by releasing new estimates that indicate the full lifetime costs of the F-35s have surpassed all previous forecasts and now exceed $40-billion.

The Conservatives announced in July, 2010, they had decided to buy the F-35 without any competition, and for more than a year and a half, described the jet purchase as a $9-billion acquisition. But in April, 2012, Auditor-General John Ferguson revealed it would cost $25-billion for the first 20 years alone.

To demonstrate that they are restarting the procurement process from scratch, Canadian officials will collect information from other plane manufacturers, including U.S.-based Boeing, maker of the Super-Hornet, and the consortium behind the Eurofighter Typhoon. They may also contact Sweden’s Saab, manufacturer of the Gripen, and France’s Dassault, maker of the Rafale.

Next week, the government will start this process by releasing National Defence’s updated cost estimates for buying 65 F-35 fighters, and an independent review by KPMG of the forecast price for keeping the jets flying for their full lifespan. The planes are expected to last 36 years, and they should be costed as such, the Auditor-General suggested in his April report.

Sources say the full price of ownership for the F-35 would add up to more than $40-billion when all costs, including fuel and upgrades, are included – or more than $1-billion a year over the F-35s’ lifespan.

This price, however, will not include the cost of extra planes to be bought for spare parts. The Auditor-General suggested in April that Canada would need 14 extra F-35s over 36 years, but sources say Ottawa believes it will more likely require only seven to 10 extra planes.

The government aims to complete this reappraisal of what the fighter aircraft market can offer Canada as expeditiously as possible in 2013. The government is requesting answers to questions, including: what kind of plane does Canada need? How long can Ottawa keep its aging CF-18s keep flying? Which jet makers can meet Canada’s budget and requirements in a timely fashion? Do other jets need to be purchased as a stop-gap? Is the best plane still the F-35?

The terms of reference for this options analysis, which will also be released next week, say Ottawa will “review and assess fighter aircraft currently in production and scheduled for production.” This will include the F-35.

The process will be vetted on a regular basis by the panel, which will also include former Communications Security Establishment chief Keith Coulter and former federal comptroller-general Rod Monette.

Government sources say Ottawa has not decided whether to call for competitive bids to supply a plane and will await the results of the options analysis.

It is apparent the Conservatives have little appetite for making a decision on a warplane right now – during a period of restraint when program spending is being cut – and government sources say the Tories could wait until after the next election, expected in 2015, before committing to a jet.

Separately, on Monday night, the Harper government poured cold water on a media report that a cabinet committee has quietly decided against buying the F-35. “Cabinet has not taken a decision on the F-35,” Andrew MacDougall, director of communications for the Prime Minister said. The story is “inaccurate on a number of points,” he said.

Canada has signed no contract to buy F-35s, and while it has signalled to Lockheed Martin, the manufacturer, that it wants 65, it has no obligation to buy them. It did sign a memorandum of understanding in 2006 that set the terms by which a country would buy the aircraft and also enabled domestic companies to compete for supply contracts for the plane.

Follow on Twitter: @stevenchase

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