Questions about total cost follow the Canadian government’s $7 billion purchase of a first block of 16 F-35 warplanes
Ottawa Citizen journalist David Pugliese writes: “The leak by federal government officials that National Defence has received approval to buy 16 stealth fighter jets is raising questions about what this purchase will ultimately cost taxpayers.”
Pugliese compares this price tag with the CAD $8.5 billion Switzerland recently paid for its 36 F-35s, as well as the CAD $12 billion Germany paid for 35 F-35s and the CAD $15 billion Finland paid for 64 F-35s.
He adds: “The offices of Defence Minister Anita Anand and Procurement Minister Helena Jaczek have not answered questions about the discrepancies.”
His article further quotes Alan Williams, the former procurement chief at National Defence, who says: “It is distressing to read information being made public regarding billion-dollar procurements that is so opaque and piecemeal rather than being transparent and comprehensive. Even if the jets are being purchased in batches, why not announce the total expected cost to acquire, maintain and operate the 88 jets? (It) makes it appear the government is hiding the truth from Canadians.”
In contrast, Lee Berthiaume at the Canadian Press is reporting: “Experts are warning against drawing conclusions on whether Canada is getting a good deal for the F-35, given the large startup costs associated with buying and fielding a new fighter jet, which include much-needed upgrades to the Air Force’s physical and digital infrastructure.”
The article notes that the announced purchase price of $7 billion for 16 F-35s “works out to about $450 million per plane, which is about four times more than the publicly reported cost of the aircraft [though that] total includes weapons and spare parts, new facilities to house and maintain the fighter jets and upgrades to the military’s computer networks.”
$525 million for housing fighter jets
In August 2020, a Department of National Defence media release stated that the Minister had “announced a $9.2-million contract award to EllisDon Construction Services Inc., of Edmonton, Alta., for the design of a new fighter jet facility at 4 Wing Cold Lake, one of two main operating bases for Canada’s future fighter aircraft.”
Then in October 2020, the Department also announced “a $12.1-million contract award to EllisDon-EBC Inc. Joint Venture of Ottawa for the design of a new fighter jet facility at 3 Wing Bagotville”, the other operating base for the fighter jets.
Defence Construction Canada has noted: “The total value of the contract [to build the hangars] is approximately $525 million—$272 million for a 34,500 square metre facility in Cold Lake and $253 million for a 22,000 square metre facility in Bagotville.”
Construction at Cold Lake appeared to be underway in July 2022.
The point, despite the argumentation in the Canadian Press, is that the total cost of this purchase has not been disclosed by the Canadian government.
While the government has said the cost to purchase 88 fighter jets would be between $15 billion to $19 billion, the No Fighter Jet coalition has argued that is akin to purchasing a car without also calculating the cost of gas, maintenance, insurance, repairs, parking, etc. It’s not an accurate representation of the actual costs and budget commitment.
The coalition produced this report two years ago that says the actual cost of the fighter jet acquisition is closer to $76.8 billion over a 30 year period.
As of May 2022, Canada had already paid an estimated CAD $916.91 million into the development of the warplane. (At the time of the No Fighter Jet coalition report, the figure was $689 million).
Why no PBO study yet?
In October 2020, the Office of Parliamentary Budget Officer (PBO) indicated: “We are planning to cost the new fighter jet, but were waiting until the Government choses a model. It is challenging to independently cost multiple different weapon platforms when the precise operating specifications haven’t been nailed down.”
It is our understanding that this evaluation could begin in January when the Canadian government is expected to make its formal announcement about the purchase of the warplanes. It has also been our understanding that a PBO report generally takes between 3 to 6 months to produce.
We remain concerned about the total cost and many other unanswered questions related to Canada’s acquisition of these warplanes.