F-35 Faces Possible Dogfight With Auditor General

March 19, 2012 Updated: October 1, 2015
Visitors take a closer look at a Lockheed Martin F-35 fighter jet at the Singapore Airshow 2010 in Singapore on February 2, 2010. Canada's participation in the Joint Strike Fighter program could be challenged by an upcoming report by Auditor General Michael Ferguson. (Roslan Rahman/AFP/Getty Images)

The Conservatives’ staunch support for the F-35 Joint Strike Fighter program has started to waver, and could take some hard blows in the pending release of the Auditor General’s Spring Report.

For new AG Michael Ferguson, it may be his first real challenge to the government line and if he comes down hard on the JSF program it could be the hardest hit yet for Canada’s participation in the beleaguered program.

The Tories had maintained unequivocal support for the F-35 up until last week.

Although the preceding Liberal government had initially joined the program, it fell on the Tories to defend Canada’s planned purchase of 65 fighter jets—even as cost estimates soared to $150 million from an original price tag of $75 million per plane.

While countries around the world scaled back their participation, or voiced concerns about the final bill for the jets, Harper and his defence officials stood behind the program as the only option for Canada’s men and women in uniform.

But fractures began to appear in Canada’s commitment to the F-35 last week when the Conservatives opened the door to purchasing something other than the fifth-generation stealth fighter.

Until then the Tories had deflected reports of cost overruns by saying the late delivery date Canada was planning for its F-35s would protect against cost overruns seen early in the production process.

Just weeks before, Associate Defence Minister Julian Fantino, the government’s chief defender of the F-35, had described the plane as “the best and only aircraft that meets the needs of Canada’s armed forces.”

Now he is emphasizing that Canada has not yet signed a contract to purchase the fighter jets. When Fantino appeared before Parliament’s defence committee on March 13, he testified that the government had not ruled out backing out from the program.

The government, and Canada’s own defence contractors, had argued it was key Canada stay in the program to get a piece of the pie as contracts were parcelled out to participating countries. Canada has received $300 million worth of contracts so far, says the government.

The AG’s looming report may explain the change in tactics. Although Parliamentary Budget Officer (PBO) Kevin Page already issued a report suggesting the government’s estimates were far under par, his voice doesn’t have the same authority as the Auditor General, the independent watchdog that scrutinizes government spending.

Ferguson’s report will be released April 3 with a portion dedicated to scrutinizing whether the government did its due diligence in participating in the program and deciding to purchase the F-35s.

Canada’s Department of National Defence maintains that the average unit acquisition cost of the F-35 will be $75 million, including upgrades and overhaul—the price Lockheed Martin first touted in 2001.

The PBO forecasted that the average unit acquisition cost of the F-35 will be approximately US$128 million—excluding upgrades and overhaul. Meanwhile, notes the report, the U.S. Department of Defense’s 2012 Budget Estimates puts fly-away unit cost at US$151 million.

If Ferguson confirms those figures, it will prove near impossible for the government not to respond.

Until now Defence Minister Peter MacKay has pledged Canada will stay within its $9 billion budget for the program. With a minimum of 65 jets needed to make the fleet sustainable, that budget will be impossible to keep if costs change substantially.

The government maintained as late as last Friday they are still committed to the program.

Though Ferguson is new to his job, his predecessor, Sheila Fraser, had brought the role of the Auditor General to new heights and proved an unassailable critic of government misspending. While Ferguson doesn’t have her stature, his office still carries considerable weight.