Canadian Defense Minister in Hot Water as Canada Caps F-35 Funding
April 9, 2012 9:59 AM
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MacKay sits in F-35 cockpit
(Source: The Star)
Canada still unsure of F-35 program
The reaction of some Canadian citizens and lawmakers has been mirroring the reaction we've seen in United States over the F-35 program. There's a lot of uproar over continually rising costs of the program and in Canada. There have also been allegations that some government officials knew the cost the program would be significantly more than originally promised, yet said nothing.
Canadian Defense Minister Peter MacKay has recently admitted that he knew the F-35 fighter program could cost as much as $25 billion. That price is billions of dollars more than the Canadian officials have publicly acknowledged. However, MacKay maintains there was never an effort to mislead Canadians on how much the project would cost.
MacKay maintains that the $10 billion difference between what the F-35 program has been officially acknowledged to cost and what the program could really cost is an accounting difference. The cost for Canada to purchase 65 F-35 fighters was originally said to be $15 billion. Some of MacKay's opposition in the Canadian government have gone so far as to request his resignation over the price row.
According to MacKay, the $10 billion difference is money the Canadian government already pays for things like fuel, salaries, and maintenance of the fleet of CF-18 fighters the F-35 replace.
“Yes, and it was explained to me just that way,” MacKay said.
“The additional $10 billion was money that you could describe as sunk costs. What we’re paying our personnel and the fuel that is currently being expended in CF-18s, jet fuel, maintenance costs — what we’re currently spending, so not part of a new acquisition,” MacKay said.
He continues saying that similar accounting methods are used in acquisition of other military hardware.
“I don’t agree that there was a manipulation of information,” MacKay continued. “Of course ministers are responsible for what takes place in their department. I’ve acted in good faith, always with an eye to providing the men and women in uniform with the best equipment that we can possibly get.”
While MacKay fights allegations that he misled Canadian citizens on the price of the F-35, other officials in the Canadian government still maintain that additional oversight of acquisition will be performed. Conservative party Prime Minister Stephen Harper noted last week that Canada has signed no contract to purchase the F-35. That statement hints that Canada could reduce the number of F-35 that purchases. Cuts in proposed
have been talked about in the past.
“The auditor-general has identified a need for greater independence and supervision over some of the activities of the Department of National Defence,” Harper said. “The government will put that supervision in place before we proceed.”
The amount of funds assigned to purchase 65 F-35 aircraft has also been capped. The cap placed on the purchase is C$9 billion, which works out to about $8.9 billion in the US. That funding includes money spent for the acquisition of associated weapons, infrastructure, initial spares, and training simulators.
“Funding will remain frozen and Canada will not purchase new aircraft until further
, oversight and transparency is applied to the process of replacing the Canadian Forces’ aging CF-18 fleet,” Public Works Minister Rona Ambrose said in a statement.
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RE: McKay will be fine...
4/9/2012 2:28:43 PM
The Liberal governments of Chrétien and Martin never committed to any purchase whatsoever. They committed to the development of the JSF project in order to prevent Canadian subcontractors from getting locked out. The government spent $550 million in order to create around $1.1 billion worth of trade that was directly attributable to the program as of FY 2011. They did it to expand trade, create jobs and the thought of potentially acquiring the F-35 in the event that it panned out was a very distant third.
Both Chrétien and Martin were very plain about their intentions before, during and after their involvement with the project. They had intended to put it to not only put it to contest, but to have a "Plan B" in place to handle problems like those that have arisen with the F-35.
The cost of those 65 fighters that the Harper Government had loosely committed to has ballooned from $17 billion to $29 billion with service costs expected to exceed another $35 billion over 20 years. Timelines have slipped and Canada will likely not receive them in time to replace the existing CF-18's. The plane doesn't meet our pilots current mission requirements and the costs mean we will either have to cut our fleet by 50%, raise taxes or slash other spending. So much for their projected image as responsible stewards of the Canadian economy. Worse, there is no plan B because they never put it to contest with conditions. Hell, the DND requirements may as well have read "must rhyme with Jeff Purdy Knive".
As for the lack of control over costs, I don't dispute that. In fact that is what makes the Canadian acquisition of F-35's such a monumental risk. Canada has no control over when they will even receive the planes in the first place. Nor does Canada has any control over when
the F-35 will be able to communicate from over the horizon or otherwise integrate into our military. That stuff is all in the hands of the USA and Boeing.
As for the US DOD's continued stake in the F-35, it doesn't enter into whether Canada should acquire the F-35 at all.
RE: McKay will be fine...
4/11/2012 3:45:20 AM
Well written until.
"As for the US DOD's continued stake in the F-35, it doesn't enter into whether Canada should acquire the F-35 at all."
This is totally NOT true!. The US *needed* Canada to use F35 to extend their perimeter protection as part of NORAD commitments. Without a US made plane, it will cost both governments more money in communications adjustments to ensure full operational seamlessness. But Canada is unlikely to say no to a bullying big brother, or will she ?.
"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton
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