Defence Minister Peter MacKay says he was aware two years ago that it would cost closer to $25 billion to buy a new fleet of F-35 stealth fighter jets.
That's about $10 billion more than the nearly $15 billion the government has maintained would be the price of the 65 radar-evading aircraft.
MacKay was asked on CTV's Question Period whether he was aware of the higher internal number. He said the higher number takes into account the ongoing cost of pilots' salaries and other costs associated with operating the current fleet of CF-18 jet fighters.
"Yes, and it was explained to me just that way, that the additional $10 billion was money that you could describe as sunk costs, that is what we're paying our personnel, and the fuel that is currently being expended in CF-18s, jet fuel, maintenance costs, what we are currently spending. So not part of a new acquisition," MacKay said.
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Auditor General Michael Ferguson issued a scathing report this past week that slammed the military for keeping Parliament in the dark on the true cost of the procurement. He pegged the eventual cost of the project at $25 billion.
Ferguson also suggested to reporters that cabinet ministers would have known the true cost of buying the new planes was much higher than the numbers they were using publicly.
The Conservative government has faced heated attacks from the opposition, including calls for ministerial resignations.
But MacKay, speaking Sunday from his Nova Scotia riding, said the $10-billion discrepancy comes down to an accounting difference. The minister insisted it was not a deliberate attempt to conceal the total pricetag of the jets.
"There's a different interpretation in the all-up costs," he said. "But the way acquisitions have always been done is to key in on the actual costs of new equipment, and that is the way that this number was arrived at."
MacKay also dismissed a suggestion that he should resign over the matter.
"This money has not been spent. No money is missing," he said.
Tories 'can't paper this over'
Opposition MPs appearing on the same program rejected MacKay's explanation of the higher figure. NDP critic Jack Harris accused the government of deliberately misleading Canadians on the true cost of the project, including during last year's federal election campaign.
"They can't paper this over. This is going to haunt them," said Harris.
Liberal MP Ralph Goodale echoed that criticism.
"There's no way Mr. MacKay can explain this away," said Goodale.
"And quite frankly this buck doesn't stop with Mr. MacKay. This issue is for the prime minister. It is the prime minister who knew every minute detail of this file."