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F-35 Purchase Cancelled Amid New Cost Estimates: Report

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The F-35 program may be cancelled after an audit revealed the true cost of the program, according to media reports. | PA

The plan to buy the F-35 fighter jet has faced controversy from the beginning, and now the federal government may just nix the purchase altogether.

The Conservatives, according to The Globe and Mail, will release estimates next week pegging the lifetime cost of the jets at more than $40-billion and announce that the government is considering purchasing another plane.

A separate story from Postmedia reports that the operations committee of cabinet has decided to scrap the purchase completely and that the government is set to report projected costs of more than $30 billion

The Prime Minister's Office is denying the Postmedia report.

Andrew MacDougall, director of communications for the PMO, took to Twitter Thursday night to insist that cabinet has not made a decision on the purchase and that the government will continue with its seven point plan for the plane.


Andrew MacDougall
The story is inaccurate on a number of fronts. The reports from 7 pt plan will be tabled before the House rises.

Andrew MacDougall
To elaborate on my previous tweet, Cabinet has not taken a decision on the F-35. The Government will fulfill its seven point plan.

However, as the Toronto Star's Susan Delacourt pointed out Thursday, MacDougall has publicly denied media reports in the past that turned out to be true. In September, MacDougall denied a Huffington Post Canada report that Omar Khadr was returning to Canada from Guantanamo Bay. He was repatriated later that month.


Susan Delacourt
All respect to , he also said "no decision made" when broke news of Khadr repatriation.

The F-35 program's budget has been a sore spot for Conservatives since launching their bid to replace Canada's aging CF-18 jets. Auditor General Michael Ferguson issued a scathing report last April accusing the Tories of misleading the House of Commons on the cost of the planes. The original price tag was $9 billion, which, if today's reports are accurate, was more than a little bit optimistic.

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Twitter Reacts: F-35 Purchase In Jeopardy?
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More from the Canadian Press:

A government sponsored report — written by the accounting firm KPMG — is widely expected to show that the pricetag of owning 65 stealth fighters could stretch to $40 billion.

Defence sources said next week's KPMG report is expected to present a range of figures for cost ownership, depending on the number of years the Royal Canadian Air Force intends to fly the plane.

The longer it's in-service, the higher the cost.

The report has been in the hands of the government for a week.

One defence source, speaking on the condition of not being named, said the figure the government is watching closely is not the full life-cycle cost, but the pricetag per plane.

Prime Minister Stephen Harper and Defence Minister Peter MacKay are both on-the-record saying the government is willing to spend no more than $9 billion on purchasing aircraft.

The defence official says that is the "red line" and that maintenance and operating costs can be adjusted over the years, depending upon how much each aircraft is flown.

A series of delays and cost overruns have seen the estimated pricetag per jet climb from US $75 million to in the range US $133 million.

The F-35 program has long been a hot button issue in Ottawa with arguments over the cost contributing to a Liberal motion that defeated Harper's minority government in 2011.

The advanced fighter is still largely in development mode and likely won't be fully operational until 2019.

Because a number of countries are involved in the development and purchase, the actual pricetag fluctuates depending on the number of orders Lockheed Martin receives in any given year.

The KPMG report will analyze those numbers and throw in some of the variables unique to Canada's planned purchase, including minor modifications such as the addition of a drogue chute for stopping on icy runways.

The analysis, which the Conservatives ordered in the aftermath of the auditor general's report last spring, will also lay out projected maintenance and operational costs for the lifetime of the aircraft — should Canada choose to proceed with it.

Public Works Minister Rona Ambrose has said that air force's original statement of requirements has been set aside and the secretariat overseeing the CF-18 replacement will conduct a full options analysis.

That review is expected to examine in detail whether a stealth capability is necessary for the country's needs.

It also means that the government will seek input from Lockheed Martin's competitors about whether their aircraft might meet the country's needs.

That analysis is expected to take several months.

The CF-18s — already heading into their fourth decade of service — are due to retired in 2020.

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