Transparency and full-cost accounting lacking in the purchase of replacement CF-18 fighter jets and new warplanes to come

A CF-18 at the 4 Wing/Canadian Forces Base Cold Lake. The construction of that base displaced Dene Su’lene’ peoples from their traditional territories. This past August, the Canadian government announced a $9.2 million infrastructure upgrade to the base to support the new fighter jets to be stationed at this base.

The Canadian government intends to award a contract in 2022 to one of three companies to build a new fleet of fighter jets to replace the current fleet of CF-18s. That fleet cost $4 billion to purchase in 1982 and $2.6 billion to upgrade in 2010.

The first delivery of the new warplanes would come in the mid 2020s and the full fleet of 88 planes would be delivered by the early 2030s (likely 2032).

As an interim measure, the Canadian government approved in November 2018 the purchase of 18 second-hand Australian F-18s.

The Department of National Defence had indicated the cost of buying and upgrading these warplanes would be $895.5 million.

In June 2018, Ottawa Citizen reporter David Pugliese reported Canada might actually buy 25 Australian fighter jets, but that: “The Liberal government has set aside up to $500 million for the project and that would cover the seven added jets”

By February 2019, after the approval of the purchase, Parliamentary Budget Officer Yves Giroux reported that the actual cost of buying, upgrading and flying the fighter jets until 2032 would cost between $1.09 billion and $1.15 billion.

Lee Berthiaume of the Canadian Press then reported in January 2020 the figure of $3 billion to purchase the 18 fighter jets and extend the life of the current fleet.

Berthiaume further reported at that time that an additional $800 million is to be spent on new weapons, sensors and defensive systems.

By June of this year, Pugliese had reported: “The U.S. government has cleared the way for Canada to buy more than $1 billion worth of new missiles and related equipment for the Royal Canadian Air Force’s CF-18 fighter jet fleet.”

The first Australian fighter jet was delivered in February 2019 and the final aircraft is expected to be delivered in December of next year.

Now, CBC reporter Murray Brewster reports that only three of the seven F-18 fighter jets have been integrated into the air force and the Department of National Defence says key upgrades to as much as one-third of the current fleet will take up to five years.

Brewster adds that this cost and delay has prompted Selkirk, Manitoba Member of Parliament James Bezan, the Conservative defence critic, to say it would make more sense to accelerate the purchase of the new fighter jets.

The cost of new fighter jets

In contrast, a peace coalition opposed to the purchase of the new fighter jets has called for a full-cost accounting of the new warplanes.

The Government of Canada says the acquisition of the new aircraft, associated equipment and setup to enable entry into service will cost $15-19 billion.

But there is every indication the actual cost will be billions more.

In 2011, CBC reporter Meagan Fitzpatrick reported that while the Canadian government said the purchase cost of 65 F-35s would be $9 billion, the Parliamentary Budget Officer pegged the purchase price and sustainment costs at $29.3 billion over 30 years.

Despite the scale of the purchase, no official calculation has been made public on the full, lifecycle cost of the 88 new warplanes, but it is a certainty that the actual cost (when operations, sustainment, disposal and contingency acquisition costs are considered) would be billions more than the sticker price.

The Parliamentary Budget Office currently does not plan to cost the new fighter jet until the Canadian governments chooses among the three contenders: the Boeing F/A-18 Super Hornet; the Lockheed Martin F-35 Lightning II; and the Saab Gripen.

But the Canadian government has not given a specific date of when it will shortlist one of the contenders or if that decision will be made public.

Public Services and Procurement Canada has only said: “The initial evaluation of proposals is anticipated to be completed by spring 2021, at which point Canada may choose to enter into dialogue with two or more compliant bidders and request revised proposals.”

We also do not know if it will be a matter of days, weeks or months before the selection of the fighter jet and the signing of the contract.

Nor do we know where the Parliamentary Budget Office full-cost calculation of the chosen warplane would fit into that timeline.

The lack of transparency and answers to these fundamental questions about costs is a matter of great concern and should be addressed.