U.S. President Barack Obama's slashing of Pentagon spending – the so-called peace dividend from ending the wars in Afghanistan and Iraq – could jack up Canada's cost for 65 stealthy, deep-strike F-35 warplanes.
By drastically slowing production of the trouble-plagued F-35 – already years late and more-expensive than expected – Mr. Obama's newly-unveiled Pentagon budget should save American taxpayers more than $15-billion over the next five years.
It will also push back hundreds of planned F-35 deliveries, while myriad problems bedeviling the multi-role warplane are sorted out.
For Canada, those delays create a nightmare. Canada's existing and aging CF-18s, already at the end of their useful lives, need to be replaced very soon.
When Prime Minister Stephen Harper's government pledged to buy 65 of the new stealthy F-35s, it claimed it had struck a bargain price of $75-million each because deliveries would come during the 'peak production' years between 2016-2023 when, supposedly, the price per warplane would be less.
Early deliveries were vital because Canada's worn-out F-18s won't last much longer without hugely expensive rebuilding to keep the warplanes, modernization and repairs.
Ottawa's estimate of $16-billion for 65 F-35s has already drawn much derision. An independent Parliamentary estimate pegged each F-35's cost at $128-million. The latest Pentagon estimate is over $150-million per plane. Some of those discrepancies can be attributed to different allocations of cost, weapons and training over the 30-year life of a sophisticated fighter-bomber. But Canada has yet to sign a contract and it may not get a bargain price unless U.S. taxpayers subsidize foreign purchases.
Soaring costs have already prompted other F-35 buyers to postpone, cut or re-consider their purchases. Britain has delayed its decision. Australia has opted to buy some upgraded F-18s, recognizing the F-35 program is much delayed. Italy is expected to cut its purchases by nearly one-third. Turkey has slashed its buy by half. The Netherlands order is on hold.
Defence Minister Peter MacKay dismissed calls for reviews or consideration of alternatives. "All of the hypothetical discussions, and negative discussions, quite frankly, about this program are really just clatter and noise," Mr. MacKay said as recently as last November.
"This program is going ahead."
The latest production delays may force a re-think.
Even in Washington, the long-term viability of the Pentagon's plans to buy more than 2,200 of three variants of the F-35 are in doubt.
With lifetime program costs ranging as high as $1-trillion and futuristic visions of cheaper, more effective, unmanned combat drones quickly becoming flying realities, the F-35s' ballooning costs are a juicy target.
Foreign partners, including Canada, lured initially by the prospect of buying a front-line fighter-bomber at relatively bargain prices by signing up alongside a massive American purchase, are being forced to re-examine their options. Canada will host a meeting of F-35 'partners' – those who opted to buy early – in Washington before a formal review of purchase plans in March.