Defence Minister Peter MacKay checks out the cockpit of the F-35 Joint Strike Fighter in Ottawa on July 16, 2010.Adrian Wyld/The Canadian Press
Stephen Harper's government, on the hot seat over its controversial plan to buy fighter jets without competitive bidding, is making a bold prediction that each plane will cost little more than the CF-18 Hornets purchased three decades ago.
The Conservatives, stung by Auditor-General Sheila Fraser's warning this week that the F-35 acquisition carries a sizable risk of cost overruns and delay, say these new stealth jets will carry a price tag of between $70-million (U.S.) to $75-million each.
"That means, in 2016 dollars, the unit cost of buying new F-35s is only slightly more than the unit cost paid for the CF-18s in the 1980s," said Jay Paxton, director of communications for Defence Minister Peter MacKay.
The Official Opposition Liberals, sensing a political opportunity amid growing concern over the F-35 purchase, significantly ramped up their attack on the procurement Wednesday.
In an attempt to starkly differentiate themselves from the Conservatives, the Liberals are now vowing to cancel the untendered deal to buy the Lockheed Martin F-35s if they win power in the next election. Instead, they say, would hold an open competition .
Liberal Leader Michael Ignatieff said the Auditor-General's revelations this week that the cost of buying new military helicopters doubled to $11-billion under the Defence Department's watch should extinguish any faith in the utility of an untendered deal for the jets.
"We've got the largest military procurement in the history of Canada coming up and if the helicopter story is anything to go by, Canadian taxpayers are going to be fleeced," he said.
Mr. Ignatieff said he's seen per-plane estimates that far outstrip Tory forecasts. He added that he fears the overall project price tag - expected to total $16-billion including support costs - will keep climbing.
"This plane went from a $50-million unit cost in the United States in 2002 to a $91-million unit cost in 2008."
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.), according to Michael Slack, the Defence Department's director of continental materiel co-operation.
Canada is part of a buyers' club together with the U.S. and other allies that have pooled efforts to buy the plane. Mr. Slack couldn't speak to Mr. Ignatieff's contention that the cost has risen to $91-million, but said aircraft estimates produced for the U.S. military can include the research and development costs expended for the F-35.
Mr. MacKay's office said the U.S. government is covering all cost overruns in the research and development of this jet. These increases, which Canada does not have to fund, have exceeded $20-billion over the past decade, Mr. Slack estimated.