Cost of F-35 fleet could reach $126 billion, report finds

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OTTAWA – A report on the cost of F-35s has just been released by the Rideau Institute and the Canadian Centre for Policy Alternatives.

“The Plane That Ate the Canadian Military” was written by University of British Columbia political science professor Michael Byers.

The cost of F-35s first became an issue in July 2010 when the Harper gov­ernment announced it would purchase 65 of the aircraft for $9 billion, with $7 billion in maintenance costbringing the total cost to $16 billion. After highly critical reports from the Parliamentary Budget Office in 2011 and the Auditor General in 2012, the Harper government now anticipates a total project cost of $45.69 billion.

In his new report, Professor Byers explains that even that $45.69 billion figure is low, because it is based on the operating cost of CF-18s rather than the ac­tual operating cost of F-35s.

Nor does the $45.69 billion include a number of other actual costs associated with F-35s, such as adding drag chutes to the aircraft and modifying Canada’s mid-air refuelling fleet.

Once the actual operating cost of F-35s and these other actual costs are taken into account, the total project cost rises to $56.674 billion – which is $11 billion higher than the cost presently acknowledged by the Harper government.

In the second part of his report, Professor Byers explains that the Harper government has also ignored the considerable “cost risks and uncertainty” associated with a fleet of F-35s – risks that are amplified by the developmental character and the unusually high operat­ing and sustainment costs of these aircraft.

Once all the actual costs and “cost risks and uncer­tainty” are taken into account, a fleet of F-35s could cost $126 billion – which is $81 billion higher than the cost presently acknowledged by the Harper government.

As Professor Byers says: “An additional $81 billion in unplanned cost could destroy the Canadian military, which would be forced to carry most of that cost through reduced expenditures on other equipment, maintenance, infrastructure, salaries and training.”

Even small changes to the exchange rate, interest rate, or price of aviation fuel could result in tens of billions of dollars in unplanned costs.

“A careful analysis of life-cycle cost raises serious questions about the wisdom and financial feasibility of an F-35 procurement, as well as the Harper government’s lack of attention to substantial financial risks.”

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