Cost of battle tanks double initial estimate, O'Connor reveals

Canada's purchase and long-term support of 100 slightly used Leopard 2A6 battle tanks will be $1.3 billion — roughly double the Conservative government's initial public estimate last month.

Canada's purchase and long-term support of 100 slightly used Leopard 2A6 battle tanks will be $1.3 billion— roughly double the Conservative government's initial public estimate last month.

As he detailed a laundry list of military hardware the Conservative government plans to buy over the next few years, Defence Minister Gordon O'Connor surprised the Commons Thursday by announcing there will be a 20-year, $650-million service contract attached to the tank deal.

"The capital acquistion is $650 million and the support for 20 years is about $650 million; about the same range," he said in reply to an opposition question during debate over Defence Department estimates.

In order to bolster Canada's fighting forces in Afghanistan, O'Connor announced on April 12 that the army was going to borrow 20 modern Leopard 2 tanks from Germany and purchase 100 slightly used tanks of the same variant from the Dutch.

But there was no mention at that time of a support contract, only the purchase of spare parts and cost of modifications.

"The total project cost of the loaned tanks, the acquisition of 100 surplus tanks from the Netherlands, the requisite upgrades and enhancements to this new Leopard 2 fleet, and an initial acquisition of spare parts is $650 million, which will be funded from existing departmental allocations," said a National Defence background paper released at the minister's Quebec City announcement.

Details not available

Details of the proposed long-term maintenance program were not available Thursday night, but a spokeswoman for the minister, Isabelle Bouchard, confirmed the existence of the support plan.

Later, a department official, speaking on background, said the figure released Thursday by O'Connor was only a rough estimate and based on the upkeep costs associated the army's existing Leopard 1 tanks, all of which date from the 1970s.

The official did not explain why the Conservative government broke with its long-standing practice of rolling both the purchase price and long-term support costs into one package.

When other big-ticket equipment purchases were made, such as the $4.7 billion acquisition of 16 heavy-lift Chinook helicopters, the entire program cost was announced at the same time.

New Democrat defence critic Dawn Black accused the Conservatives of deliberately trying to hide the true of cost the tanks.

"They know that Canadians are becoming more and more concerned about the mission in Afghanistan and they're low-balling" the cost pricetag, she said.

"Canadians are concerned about all of the costs of the mission."

The army currently has 17 aging Leopard 1 tanks operating in Afghanistan, but they're not suitable for the hot, dusty climate, where temperatures reach 55 C during the day.

Revised estimate released

Also on Thursday night, O'Connor released a revised estimate on the cost of Canada's current mission to Kandahar.

From February 2006 to February 2009, when the mission is slated to end, it is estimated that $4.3 billion will have been spent by the Defence Department — an increase of $400 million since the last forecast in November.

The increase is attributed to the additional cost of reinforcements, including tanks, which were dispatched to Kandahar last September by the Conservatives.

"We've added a few hundred more soldiers; they cost money," O'Connor said. "There's more machines in there."

The latest estimate does not include the pricetag of all of the new equipment the Defence Department has purchased over the last few months specifically for the mission.