The Canadian F-35 Saga, Fourth Part
Confusion And Cost Overruns
In October 2010, Liberal Party Leader Michael Ignatieff announced that a Liberal government would tear up the F-35 contract. Since that time, the Liberals’ position has been to respect the tender process. Since the government is in the minority, the Liberals are presenting a motion to have the contract broken. A majority of members made up of Conservatives and Bloc members reject the motion.
In November, the Harper government affirms that the choice of the F-35 will generate $12 billion offset for Canadian companies. However, a document from the American government estimated that these spinoffs would rather be from $3.9 billion to $6.3 billion.
The Surprise
The spring 2011 election campaign will have a surprise in store for us during the leaders’ debate in English: Stephen Harper had suggested that Canada has already signed a contract with the American multinational Lockheed Martin. For his part, Gilles Duceppe asks to see this contract. “Mr. Ignatieff tells us he wants to tear up the contract. Mr. Harper tells us he has a contract. But could we see that contract? […] Are there a lot of people in the private sector who would sign a contract without knowing how much it costs? ” In fact, no contract has been signed by Canada for the purchase of the F-35 aircraft.
But this little controversy will not get very far since Stephen Harper is re-elected with a majority government.
Cost Overruns
The 2012 Auditor General’s report looked at the acquisition of the 65 F-35s. It turns out that key decisions were made without the necessary approvals or supporting documentation. Important documents were not submitted in order and key milestones were missed. In short, the process had been sloppy.
In 2012, National Defence released an update on the cost of acquiring the F-35s. The initial estimate then rises from $75 million per unit to $87.4 million. Then in 2013, a new publication by the Parliamentary Budget Officer has the effect of a bomb: the report shows a $700 million increase in the purchase price of these planes. There is also talk of an explosion in maintenance costs of $19.6 billion, for an overall bill of $29.3 billion; or, an 83% cost overrun. The government will try to deny this new data on several occasions. But then Defense Minister Peter Mackay finally admitted that his department needed to start the entire procurement process from scratch.
In September 2013 Lockheed Martin threatened the government if it reversed its decision to procure F-35s.: She says the Canadian aerospace industry could lose up to $10.5 billion in contracts if cancelled. In December 2013, the Conservatives reversed their decision to acquire 65 F-35 fighters. Two and a half years after choosing it, they decide to reconsider the issue of the F-35 after the 2015 elections. click here to watch our most recent video on YouTube
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