F-35 purchase could cost Canada $71-billion under worst-case scenario: report

http://www.hilltimes.com/news/news/2013/08/29/f-35-purchase-could-cost-canada-$71-billion-under-worst-case-scenario/35778

The whole thing demonstrates how risky and frankly, for a government, reckless to throw so many eggs into this basket of one plane that hasn’t even been determined is suitable for Canada’s needs,' says NDP MP Jack Harris.

F-35 purchase could cost Canada $71-billion under worst-case scenario: report
By TIM NAUMETZ |
Published: Thursday, 08/29/2013 9:20 pm EDT

PARLIAMENT HILL—A worst-case scenario of cost risks in a Department of National Defence report on a possible acquisition of 65 Lockheed Martin F-35 stealth fighter jets estimates the airplanes could cost Canada up to $71-billion through acquisition, sustainment and operations over 36 years.

The costs, $25-billion more than the current National Defence estimate, are contained in a section of the department’s latest report to Parliament on the F-35 that outlines “cost risk and uncertainty” and is intended to provide a range of effects on the cost of buying and operating a fleet of stealth attack planes if factors such as inflation, the exchange rate between the Canadian and U.S. dollar, the cost of fuel and the rate of aircraft to be produced by Lockheed Martin fluctuates either higher or lower than the estimates that are behind the current National Defence figures.

If Lockheed Martin expectations of more efficiency through continued production and economies of scale as it makes and sells an expected 3,100 jets are even just three per cent less than expected, the extra cost to Canada would be $6.1-billion over a current acquisition calendar which has the 65 aircraft being delivered over a seven-year period beginning in 2017.

That timeline is up in the air after Prime Minister Stephen Harper (Calgary Southwest, Alta.) and his government put the F-35 project on hold last year following a scathing report by Auditor General Michael Ferguson. The government is now engaged in reviewing final cost and industrial benefit submissions from four aircraft manufacturers, including Lockheed Martin and its F-35, as part of an options analysis it promised at the same time it suspended the F-35 plan.