Ottawa's F-35 jet cost figures way off: U.S. analyst

Canada won't get each of its F-35 jets for anywhere near the government's estimated $75 million pricetag, according to a U.S. defence analyst who weighed in Tuesday on a controversial election issue.
A pre-production model of the F-35 as shown in file photo. (Northrop Grumman/Associated Press)

Canada won't get each of its F-35 jets for anywhere near the government's estimated $75 million pricetag, according to a U.S. defence analyst who weighed in Tuesday on a controversial election issue.

Winslow Wheeler, of the Centre for Defence Information in Washington, told a press conference on Parliament Hill that "nobody on this earth" is going to end up paying $75 million per jet by the time the planes, currently in production, are fully tested and developed. The cost will be more in the neighbourhood of $148 million, he said.

The F-35 purchase, the biggest military procurement in Canada's history, has been an ongoing source of contention and is a key campaign issue. The Conservative government and Parliamentary Budget Officer Kevin Page have conflicting estimates on the program's cost, and the Liberals say if elected, they would pull out of the memorandum of understanding signed by the Conservatives. They say a competitive bid should be held instead to replace the aging CF-18 fighter jet fleet.

"This airplane is nothing to write home about," said Wheeler, who was speaking later Tuesday morning at an event organized by an Ottawa think tank, the Rideau Institute. He cast doubt on the capabilities of the F-35 and said even if they do end up being "as advertised" when it's finally finished, the model is still "a gigantic performance disappointment."

"You're getting an underperforming airplane for a huge amount of money," he said.

Canada is planning to buy 65 stealth fighter jets from Lockheed Martin through the Joint Strike Fighter project, a U.S.-led multinational purchase program that began in 1996.

The government estimates the total cost for buying and operating the new F-35 fleet at $9 billion, based on a per unit cost of $75 million US. Those figures don't match with an analysis done by Page. He recently released a report putting the cost of each F-35 plane at around $148 million.

Wheeler said Page's estimate is "by far and away" the more accurate one.

"Nobody on this earth is going to be buying F-35s in flyable condition at $75 million a copy," said Wheeler. "That's not in the cards."

The planes are still being manufactured and tested, they will have to go back to the factory for a series of upgrades and fixes that will eventually add to the final cost, Wheeler said.

He worked for more than 30 years on Capitol Hill for Republican and Democrat senators and for the U.S. General Accounting Office.

Tories defend estimates

Conservative Leader Stephen Harper and his government have consistently defended their estimates and the decision to buy the F-35 model. The government says Canada needs aircraft with stealth capability to meet its defence requirements and Lockheed Martin's F-35 is the only one that fits the bill.

The Conservatives also argue that the F-35 deal is bringing economic benefits to Canada's aerospace industry and the Liberal plan to back out of it would hurt the industry and mean that more than $278 million already invested in the project would be lost.Laurie Hawn — the Conservative candidate for Edmonton Centre and a retired lieutenant-colonel of the Royal Canadian Air Force — insisted Page's estimate is way off.

"There's a lot of apples-and-oranges comparisons going on," Hawn told Evan Solomon, host of CBC's Power & Politics, on Tuesday.

"The [Unit Procurement Flyaway Cost] in the terms of … our program, that is a fly away airplane. It's got the engines, it's got the guns, it's got the system and so on. The other part of our $9-billion project, which is really the important number, is things like infrastructure and simulators and training … and so on."

Hawn said the inflated estimates include all of those other costs, while the government estimates are for just the airplanes.

He said the cost breakdown for the F-35 deal will be similar to that of the F-18 deal, in which about 60 to 65 per cent of the total project cost was for the airplanes themselves.

He said the $9-billion program acquisition cost accounts for 65 airplanes, plus simulators, training, infrastructure, initial weapons and a contingency.

Hawn also dismissed the criticism that Canada should not be buying an airplane that is still in the development phase.

"Is there risks attached to programs like this?" he said. "Sure there is … but know you know what? If we're gonna have a state-of-the-art airplane that is gonna do us beyond 2050, we need to be starting with the latest technology and it will take time to develop it fully, there's no question, but this is nothing new."

In the JSF program, partner countries are sharing the costs of developing, producing and buying the planes. Wheeler is a critic of the process, advocating instead for the "fly before you buy" approach.

He's pushing for the U.S. government to follow that strategy, a view that supports what the Liberals are calling for with their demand for an open competitive bid to replace the CF-18 fighter jet fleet.

"Compete several procurement-ready prototypes and then make a decision. That's the way some of our most successful airplanes were done," he said. "You have plenty of time to do that, your CF-18s are going to be around for a few more years."

Wheeler said there are plenty of fighter jet models out there and Lockheed Martin should certainly be invited to participate in a competitive bid with its planes.

He recommended that Auditor General Sheila Fraser conduct an audit on the government's decision making on the F-35. "We do that routinely in the United States," he said.

But Wheeler would not go so far as to say that Canada shouldn't buy the F-35s, indicating that it's not his place to say what the government should do.

"As an American, this program should be terminated immediately. It's unaffordable and the performance is unacceptable already. We need to start over and form a competitive fly before you buy selection," he said.

Canada is scheduled to start paying for the planes in 2014, and taking delivery in 2016.