On Friday, Stephen Harper said: “The contract we signed shelters us from any increase in those kinds of costs, so we’re very confident of our cost estimates.”
Stephen Harper knows very well that Canada has not yet signed a contract to buy the F-35s, so we’re not protected from cost overruns. Yet he’s intentionally deceiving Canadians by pretending that the 2002 development memorandum will protect us.
Reality:
Stephen Harper was referring to the 2002 Memorandum of Understanding (MOU) that committed Canada to pay a share of the F-35 development costs. This is not a contract to purchase the F-35, which is not expected to be signed until 2013.
The MOU does not protect Canada from rising procurement costs, only development costs which represent a small fraction of the acquisition total.
Canada has committed a fixed amount of $150 million (CAD) to the development of the F-35. This represents only 0.5% of the total $30 billion (CAD) which the Parliamentary Budget Officer estimates Canada will have to pay over the long-term for the F-35s.
Page 5 of the United States Government Accountability Office report released this week indicates that the estimated average per unit procurement cost for all three variants of F-35 has increased from $69 million in 2001 to $133 million (USD) in 2010. The MOU does not protect Canada from these procurement cost increases.
Mike Sullivan, a Director in the U.S. Government Accountability Office, recently told CBC that the $75 million (CAD) per fighter jet estimate frequently cited by the Conservatives is “not a number that I am familiar with at all.” A report from Canada’s Parliamentary Budget Office also confirms that, “a figure of $75 million does not match other data points in the public domain.”
Mr. Sullivan estimates that for the F-35 A variant Canada will pay “somewhere between $110 and $115 million” (USD) per fighter jet.
Last week, US defence expert Winslow Wheeler confirmed that this F-35 purchase price does not include the cost of jet engines or weapons systems.
While Stephen Harper continues to deliberately deceive Canadians about the rising procurement costs of the F-35, our allies who are signatories to the same MOU have been open and transparent about their rising procurement costs.
For instance, on December 2 2010, the Dutch Defence Minister wrote to every member of the legislature explaining that the United States Ambassador had informed him F-35 procurement costs had increased by 20% over the past year. Holland’s average unit procurement cost estimate for the F-35 is now $121 million (USD).
This chart shows just how out of whack the Conservatives’ cost estimates are compared to others:
| Who | Cost | Date | What it covers |
| Stephen Harper | $75 million per plane (CAD) | Never changes | ‘A’ variant only. Includes upgrades and overhaul |
| Holland | $121 million per plane (USD) | Dec 2010 | Average of all three variants |
| United States Government Accountability Office | $115 million per plane (USD) | Mar 2011 | ‘A’ variant only |
| Mike Sullivan of the U.S. Government Accountability Office | $133 million per plane (USD) | Mar 2011 | Average of all three variants |
| Parliamentary Budget Officer | $128 million per plane (CAD) | Mar 2011 | ‘A’ variant only. Not including upgrades and overhaul |
| United States Department of Defence | $156 million per plane (USD) | Feb 2011 | Budgeted amount for each plane manufactured in 2012 |
