F-35 reports could be Christmas nightmare for government

Christmas break can't come soon enough for the Canadian government, as it braces for up to three reports about the costs for the F-35 fighter jet. CBCNews.ca will carry a statement by the ministers of defence and public works live at 3:15 p.m. ET.

3 reports of fighter jet cost overruns are due this week

Defence Minister Peter MacKay sits in a model of the F-35 the day the government announced the planned purchase. An independent audit expected to report soaring costs for the fighter jet project is due this week. (Chris Wattie/Reuters)

Christmas break can't come soon enough for the Canadian government, as it braces for up to three reports about the costs for the F-35 fighter jet before the House rises.

The government said Wednesday that Public Works Minister Rona Ambrose and Defence Minister Peter MacKay would provide an update on the "seven-point plan" to replace Canada's fighter jets at 3:15 p.m. ET Wednesday on Parliament Hill. CBCNews.ca will carry the ministers' statement live.

It is expected that an independent audit by accounting firm KPMG will be released at that time. The audit is reported to tally the total costs of the F-35 procurement project to anywhere from $40 billion to $46 billion, a figure almost three times the cost the government touted while shooting down anyone who disagreed, including its own parliamentary budget officer. Kevin Page estimated the cost was closer to $30 billion, calculated over a 30 year life-cycle.

Although the KPMG report uses a much longer life-cycle estimate for the jets (36 years) than the government did (20 years), the significantly higher cost will likely bring on a firestorm of outrage from opposition benches. That is, if it's possible to ratchet up any further the outrage that emanated from the NDP and the Liberals Tuesday, as opposition members flung back at the government seemingly every claim it ever made about the F-35s.

To the government, it might have seemed like being confronted with their own ghosts of Christmas past, as the opposition chided them for underestimating the cost, for warning that if the F-35 project was cancelled taxpayers would be out a billion dollars, and for speculating that without the F-35s lives could possibly be lost.

'The F-35 fiasco'

NDP Leader Thomas Mulcair characterized what his party likes to call "the F-35 fiasco" as an example of public management by the government. "Are they going to public tender, and give it [the contract to replace the aging CF-18s] to the lowest public bidder, yes or no?" he demanded.

The F-35 file is so contentious that it's no longer handled by MacKay, who had become a lightning rod for controversy over the fighter jets. After a scathing report from the auditor general in April, the file was transferred to Ambrose.

Ambrose gamely rose again and again in question period Tuesday to repeat that former auditor general Denis Desautels is heading an independent oversight process about acquiring new planes, and that an "options analysis," meaning an evaluation of planes other than the F-35, is in the works. 

The Public Works takeover of the file spurred the NDP to taunt MacKay, as they asked him repeatedly to stand and answer questions, and accused him of "hiding behind the skirts of the minister of public works."

Spinoff benefits questioned

The second shoe that might drop on the government Wednesday or Thursday is a report from Industry Canada about the benefits that Canadian industry could expect to see from the proposed F-35 purchase. According to The Canadian Press, that report is likely to say that Canadian companies would be lucky to reap $9 billion in contracts.

The F-35 project was supposed to guarantee that the equivalent amount of the planes' costs would be spent in Canada, either through contracts, or through subsidiaries or by placing work somewhere else in the economy.

Expect the opposition to make hay with that report, which Public Works says will be tabled in Parliament this week.

The third report to be tabled before Christmas is from the Department of National Defence about its latest forecasts of the sticker price for each F-35 fighter jet. The government has always insisted the price was $75 million per plane. If that number changes, it will be another miscalculated cost estimate the government will have to defend in the final hours before Christmas break.

Americans moving forward

As Canada makes its way through its seven-point plan to re-examine the entire F-35 project, the U.S. is moving forward with the most costly weapons program in the country's history. 

On Friday, the U.S. Department of Defence will sign a contract with Lockheed-Martin for a fifth group of F-35 jets, according to Reuters.

The Pentagon says the deal is to manufacture 32 F-35s — three for the Marine Corps, seven for the navy and 22 for the air force.