Michael Ignatieff says a Liberal government would cancel the Conservatives' multibillion-dollar purchase of F-35 fighter jets and hold an open competition to replace Canada’s CF-18s.

An F-35 Joint Strike Fighter is seen in the hangar before an announcement by Defence Minister Peter MacKay in Ottawa earlier this month. (Adrian Wyld/Canadian Press)

Speaking to reporters in Ottawa on Wednesday, the Liberal leader said Auditor General Sheila Fraser's report this week slamming the Conservative government's handling of two purchases of military helicopters is a "wake-up call" to Parliament and to Canadians.

"We need to clean up this whole process," Ignatieff said outside his party's weekly caucus meeting.

"The process is going to get worse and worse and worse, with more waste of taxpayers' money, unless we get a truly competitive bid. That’s essentially what the auditor general says and we agree with her."

The fighters come with an estimated price tag of $14 billion to $16 billion and would replace Canada's fleet of CF-18s that recently underwent a $2.6-billion upgrade. The CF-18s are expected to reach the end of their operational life by 2020.

But Ignatieff said that cost estimates for the F-35s have risen exponentially in recent years, much like the $11-billion price tag for the new Sikorsky Cyclone and Chinook helicopters that were the subject of the scathing report by Fraser on Tuesday.

"They were sent out to buy a Chevrolet and they brought back a Ferrari," he said. "And they still don't have the keys to the Ferrari."

Ignatieff also insisted there would be no penalties accrued under the accord for the F-35 purchase if it were cancelled.

Prime Minister Stephen Harper's government has defended the sole-sourced purchase of up to 65 F-35 stealth fighter jets from U.S. company Lockheed Martin, arguing they are the only fifth-generation fighter jets on the market and are the best aircraft available for Canada's military.

Jobs, spinoffs threatened: PM

During Wednesday's question period, Ignatieff and NDP Leader Jack Layton accused the Conservatives of making the same mistakes with the F-35 contract as the ones Fraser was condemning in the Chinook purchase.

The prime minister, in turn, said the opposition "coalition" was playing politics with the lives of the men and women of the Canadian Forces, as well as Canadian aerospace jobs over a process started by the Liberals.

As for the helicopter purchases, Harper said the government will implement Fraser's recommendations, but placed the blame on a previous Liberal government that cancelled a contract 17 years ago and "paid a billion dollars to get no helicopters at all."

"We will not make the same mistake when it comes to replacing the CF-18s," Harper told the House.

"We’re going to buy the best equipment for the Canadian Forces, and we’ve already got work going to the aviation sector across the country that the coalition will put in jeopardy and this government will not."

A previous Liberal government signed a memorandum of understanding with Lockheed Martin to develop the F-35 Joint Strike Fighter, but that did not commit Canada to buy the aircraft.

Industry Minister Tony Clement said scrapping the deal would threaten up to $12 billion in industrial opportunities for Canadian aerospace suppliers and any "pointless" politicizing of the issue is "exactly the opposite of what industry needs right now."

"To do what Michael Ignatieff and the Liberal Party and his allies want to do could in fact jeopardize every job and every potential job related already to the F-35 purchase," Clement said Wednesday in a speech to the Aerospace Industries Association of Canada conference in Ottawa.

"To date, our government has invested approximately $168 million in the JSF program, resulting in more than $350 million in contracts awarded to Canadian companies, research laboratories and universities."

From Cadillacs to Ferraris

Harper's Conservatives have also responded to Ignatieff's criticism of the F-35 by pointing to the taxpayer cost of a previous fiasco involving a past Liberal government's cancellation of military equipment contracts.

In 1992, Prime Minister Brian Mulroney's Conservatives announced they would spend $4.8 billion to buy 50 state-of-the-art EH-101 helicopters from European Helicopter Industries Ltd to replace Canada's aging fleet of Sea Kings.

But during the 1993 federal election, Liberal Leader Jean Chrétien and his Liberals attacked the Tory plan as wasteful, calling the EH-101 a "Cadillac" helicopter. When the Liberals won and Chrétien became prime minister, one of his first acts was to scrap the Tory deal, an act that cost the Canadian government nearly $500 million in cancellation fees.

The first of the Sikorsky Cyclone CH-148 helicopters purchased by the Liberal government of Paul Martin to replace the Sea Kings is now scheduled to be delivered in 2012, four years after the original deadline set in the 2004 purchase agreement.