OTTAWA - Industry Canada is dampening expectations of how much the aerospace industry could reap from the troubled F-35 program, chopping more than US$2 billion off the Harper government's estimate.
A senior official told a House of Commons committee Thursday that Canadian companies can bid on as much as US$9.85 billion in production contracts for U.S.-built stealth fighter.
"This is the estimated slice of the pie, if you like, for Canada," said Simon Kennedy, an associate deputy minister.
He was responding to questions from the public accounts committee amid concern the windfall has been overstated.
The Conservatives have long trumpeted the estimated US$12 billion the country expects to gain in contracts for Canadian aerospace firms. Industry access to the program was often cited as a reason for not considering alternative aircraft.
Almost 75 per cent of the revised figure is expected be gobbled up by the 70 companies that have already signed agreements with manufacturer Lockheed Martin, as long as their contracts are renewed throughout the nearly five decades the fighter is expected to be in production and operation, Kennedy said.
"We think Canadian companies have done very well to date," he said, referring to the US$435 million in production and research agreements already on the books.
Canada's auditor general, who issued a scathing report on the F-35 procurement, has been concerned the database used to establish the government's estimate was run by the prime contractor. Defence Department projections for industrial benefits have been all over the map in the last six years, ranging from US$5.2 billion to US$14.7 billion.
Michael Ferguson's report also noted that prior to signing on to the program, senior decision-makers were warned "that industrial benefits could not be guaranteed under the (joint strike fighter) program."
New Democrat MP David Christopherson underscored that point. "It is not exclusive bidding by us. There is a competition," he said.
The auditor general also said the rationale to cabinet for the numbers was unclear.
"We found briefing materials prepared by departments for decision-makers and ministers did not explain the basis for the projections, or the consequent limitations involved in on those projections for decision-makers," said Ferguson's April 3 report, which set off a political fire storm.
"Moreover, in the majority of cases, only the most optimistic scenario was put forward, rather than a range of potential benefits that reflected inherent uncertainties in the projections."
FIIn this file photo taken on July 14, 2011 and released by U.S. Air Force, a USAF F-35 Lightning II joint strike fighter (JSF) aircraft soars over Destin, Fla., before landing at its new home at Eglin Air Force Base. Japan selected the Lockheed Martin F-35 stealth fighter Tuesday, Dec. 20, 2011, to replace aging jets in its air force and bolster its defense capability amid regional uncertainty. (AP Photo/U.S. Air Force, Staff Sgt. Joely Santiago)
A F-35 Lightning II sits on stage during the United Kingdom F-35 Lightning II delivery ceremony on July 19, 2012 at Lockheed Martin Corporation in Fort Worth, Texas. The ceremony marked the first international delivery of an F-35 Joint Strike Fighter to a partner nation. (Photo by Tom Pennington/Getty Images)
(Photo by Brendan Smialowski/Getty Images)
Plane models stand outside the Lockheed Martin Corporation during the United Kingdom F-35 Lightning II Delivery Ceremony on July 19, 2012 in Fort Worth, Texas. The ceremony marked the first international delivery of an F-35 Joint Strike Fighter to a partner nation. (Photo by Tom Pennington/Getty Images)
The F-35 Joint Strike Fighter jet sits in front the entrance of the Asian Aerospace 2004 show in Singapore 24 February 2004. The Asia Pacific offers one of the world's strongest prospects for defence-related spending, US aerospace giant Lockheed Martin said Tuesday as it expressed confidence in remaining a major supplier to the region's governments (AFP PHOTO/ROSLAN RAHMAN)
(AFP PHOTO/CARL DE SOUZA)
A Lockheed Martin's F-35 Lighning II fighter jet sits on the tarmac for static display at the Singapore Airshow in Singapore on February 12, 2012. Boeing's much-delayed 787 Dreamliner is set to star at the Singapore Airshow this week where companies touting private jets and defence hardware to the Asian market will also be out in force. (ROSLAN RAHMAN/AFP/Getty Images)
(ROSLAN RAHMAN/AFP/Getty Images)
On Feb. 16, 2012, the first external weapons test mission was flown by an F-35A conventional takeoff and landing (CTOL) aircraft at Edwards Air Force Base, Calif. The F-35A is designed to carry up to 18000 pounds on 10 weapon stations featuring four weapon stations inside two weapon bays, for maximum stealth capability, and an additional three weapon stations on each wing.
IN AIR, NAVAL AIR STATION PATUXENT RIVER, MD - FEBRUARY 11: (EDITORS NOTE: Image has been received by U.S. Military prior to transmission) In this image released by the U.S. Navy courtesy of Lockheed Martin, the U.S. Navy variant of the F-35 Joint Strike Fighter, the F-35C, conducts a test flight February 11, 2011 over the Chesapeake Bay. Lt. Cmdr. Eric 'Magic' Buus flew the F-35C for two hours, checking instruments that will measure structural loads on the airframe during flight maneuvers. The F-35C is distinct from the F-35A and F-35B variants with larger wing surfaces and reinforced landing gear for greater control when operating in the demanding carrier take-off and landing environment. (Photo by U.S. Navy photo courtesy Lockheed Martin via Getty Images)
Courtesy: NAVAIR/JSF Program/Lockheed Martin
Highlights of F-35 flight testing at NAS Patuxent River, Md., NAS Fort Worth Joint Reserve Base, and Edwards AFB, Calif.
The first night flight in the history of the Lockheed Martin F-35 program was completed on Jan. 19, 2012 in the skies above Edwards Air Force Base, Calif. Piloted by Lockheed Martin Test Pilot Mark Ward, AF-6, an F-35A conventional takeoff and landing (CTOL) variant, launched at 5:05 pm PST and landed after sunset at 6:22 pm
An F-35 test pilot talks about airstart testing at Edwards AFB, Calif., in early 2012.