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Winnipeg Free Press - PRINT EDITION

F-35 sticker shock renews Tory worry

By: Staff Writer

Posted: 12/8/2012 1:00 AM | Comments: 0

OTTAWA -- The sudden and severe jitters among Conservatives over their stealth-fighter program are due to sticker shock as well as doubts the country's aerospace industry might not reap as many benefits as initially trumpeted, according to government sources.

Skepticism about the future of F-35 program spiked after an independent analysis, written by accounting firm KPMG, determined the full life-cycle cost of the F-35 would be far above $40 billion rather than $16 billion originally set by the Tories.

The eye-popping price tag ballooned after auditors determined a total in-service life of 42 years for the fighter-jet, which is at least a dozen more than both the auditor general and the parliamentary budget officer estimated in their costing.

The longer a plane is flying, the more expensive it becomes to maintain and sources say auditors at KPMG settled on a service life of four decades because that's how long the Canadian military has been keeping aircraft on the flight line.

A companion study due to be released next week at the same time as the KPMG report assessing promised industrial benefits or economic spin-offs from F-35 production may provide further headaches for the government.

When the Harper government first signalled its intention to buy the Lockheed Martin-built F-35 Lightning II, it proclaimed Canadian aerospace companies would benefit by receiving as much as $12 billion in manufacturing or spare parts contracts. Industry Canada quietly rowed those expectations back to US $9.85 billion last spring.

The looming reports and speculation the Harper government was prepared to pull the plug on the program led to heated calls on Friday by the Liberals for Defence Minister Peter MacKay to either resign or be fired.

"The government has consistently misled Canadians about the true cost of this aircraft," said interim Liberal leader Bob Rae. "They've misled Canadians about their degree of oversight and their readiness to deal with this situation."

-- The Canadian Press

Republished from the Winnipeg Free Press print edition December 8, 2012 A23

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