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Prime Minister Stephen Harper makes a health-care announcement in Toronto on March 10, 2011. (MIKE CASSESE/REUTERS)
Prime Minister Stephen Harper makes a health-care announcement in Toronto on March 10, 2011. (MIKE CASSESE/REUTERS)

Tories forced to defend F-35 purchase amid damning report Add to ...

Canadians are being warned that the Harper government is underestimating the lifetime costs of new F-35 fighter jets by more than $12-billion - a third blow to a government already under fire for stonewalling in the Commons.

A new report from Parliamentary Budget Officer Kevin Page, whose post was established by the Conservatives to ensure "truth in budgeting," says the total price tag for the jets is close to $30-billion - nearly 70 per cent more than government estimates.

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For Prime Minister Stephen Harper, Mr. Page's report is the latest bit of bad news in a week filled with it. Speaker Peter Milliken ruled on Wednesday that the government appeared to be in contempt of Parliament for failing to properly provide estimates for the cost of its crime legislation and for misleading Parliament in statements by International Co-operation Minister Bev Oda over funding cuts to an aid group.

Now it is being accused of low-balling the cost of one of the most expensive defence purchases in decades.

In a report released on Thursday that feeds opposition party accusations that the Tories are overspending on military hardware, Mr. Page said the Department of National Defence failed to estimate enough for overhaul and upgrade bills and neglected to project sufficient amounts for maintenance when calculating the cost of the new fighters.

Defence has released costs for 20 years, but Mr. Page said a 30-year life cycle is more realistic given that the current fleet of CF-18 jets is approaching three decades of use.

With the additional costs included, the total price tag of the planes will actually be $29.3-billion at the end of their full life cycle, Mr. Page concluded.

The Liberals have promised to cancel the F-35 contract if they win the next election, and they said on Thursday that Mr. Page's report proves the Tories have been hiding the program's full cost to taxpayers.

"This is an unconscionable amount, and the Harper Conservatives have again misled Canadians and Parliament," Liberal defence critic Dominic LeBlanc said.

That will be a familiar refrain from the opposition. The Conservatives may face a vote by the House confirming that the government and Ms. Oda are in contempt of Parliament just as Finance Minister Jim Flaherty presents his budget on March 22, greatly increasing the likelihood that the opposition parties will topple the government in a confidence vote and force a spring federal election.

A senior Liberal official who spoke on condition of not being named refused to rule out the possibility of defeating the government when Parliament returns after next week's break.

"We are taking this day by day," the official said. "It's a pretty serious matter to be ruled in contempt by the Speaker of the House of Commons."

Further adding to the political volatility, the Bloc Québécois has reversed its position on the fighter-jet purchase and come out in support of holding an open competition to select new planes.

It had previously backed the Harper government's decision to choose the F-35 without competition because it believed the purchase would yield important industrial benefits for Quebec.

But Bloc officials said they changed their minds after reading Mr. Page's latest report.

The budget officer's report was peer-reviewed by non-partisan experts at the U.S. Congressional Budget Office, the Australian Strategic Policy Institute and Queen's University.

The Conservatives said on Thursday they are not budging from their earlier estimates. They have not made full forecasts, but Mr. Page's office said figures released by the government have suggested the total cost of the planes would be $17.6-billion.

"Department of National Defence procurement experts stand by their cost projections," said Jay Paxton, Defence Minister Peter MacKay's director of communications.

Mr. Harper told reporters on Thursday that he refused to "get into a lengthy debate in numbers."

"This is the option that was selected some time ago, because it is the only option available," he said. "…This is the only fighter available that serves the purposes that our air force needs."

As for Mr. Milliken's ruling on two contempt motions earlier this week, he dismissed it as simply part of the cut and thrust of partisan debate.

"Our focus can't become on parliamentary procedure," he told reporters. "Our focus has to be on the big interests of Canadians, and, in my judgment, that is the economy."

The Conservatives are hoping most voters will dismiss the spate of accusations that the government has become autocratic and undemocratic - over everything from possible election-campaign-financing abuses to using taxpayers' money to fund government ads that could be seen as Conservative propaganda - as opposition posturing, and can be persuaded that on the issue that matters, protecting the economic recovery, only the Conservatives can be trusted.

The numbers game

When the Harper cabinet approved the purchase of 65 F-35 fighter jets last year, National Defence said the project would cost $15.92-billion. The number has since risen to $17.6-billion, breaking down as:

$7.3-billion - initial acquisition and logistics costs

$10.3-billion - "sustainment services" for 20 years and upgrades

The government's acquisition numbers come from the Joint Strike Fighter program, led by Lockheed-Martin in the United States in partnership with other allied countries, and an estimate of traditional maintenance costs for fighter jets.

The Parliamentary Budget Officer is evaluating the total project at $29.3-billion, predicting:

$11.4-billion - acquisition cost

$17.9-billion - sustainment costs over 30 years, including $3.9-billion in upgrades (or double National Defence's estimate)

The PBO analyzed historical costs of complicated aircraft and military procurements, which are frequently over budget and require large upgrades over time. In addition, it pointed to ongoing uncertainty in the United States over the state of the development program.



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