Japan's rising F-35 bill prompts questions for Canada

OTTAWA — Hopes that Canada can still buy 65 F-35s for $9 billion appear to have taken another hit this week after it was revealed that Japan will be paying significantly more than some had expected for each of its stealth fighters.

The Defense Security Co-operation Agency, which handles foreign military sales in the United States, notified Congress on Monday of the "potential sale" of F-35s to Japan.

The Japanese deal, which has not yet been concluded, totals $10 billion for 42 F-35s and associated costs like spare parts, training, tools, testing equipment and logistical support.

This works out to about $238 million per aircraft.

In contrast, Canada had budgeted in July 2010 to spend about $138 million for each of its 65 F-35s, when all associated costs are rolled in.

Japan is not a member of the eight-country consortium that has been involved in developing the F-35 since 1997, which means it was expected to pay more for the stealth fighters than countries like Canada.

A U.S. Defense Department official said the pending deal also includes some additional items that Canada does not need because of the latter's close proximity to contractor Lockheed Martin's production facility in Texas.

But Alan Williams, who was responsible for Defence Department procurement until 2005, said those only accounts for a portion of the difference.

The bottom line, he said, is that the F-35 keeps increasing in price for Canada and other potential customers, and the government should proceed with caution.

"It simply suggests that we too shouldn't commit to buying something until we know what it's going to cost," Williams said.

The Defence Department's top bureaucrat, Robert Fonberg, confirmed to Parliament's public accounts committee on Tuesday that the price for each F-35, without associated costs, had risen from $75 million to more than $85 million. Many critics have argued that even this figure is far too low.

A spokesman for Associate Defence Minister Julian Fantino said in an email that before any decision to purchase a replacement for Canada's aging fleet of CF-18s is made, an independent review of the Defence Department's cost estimates will be made public.

"We have been clear that we have set a budget and we will work within that budget," Chris McCluskey added.

Williams said the government should take careful note of the pending Japanese deal and learn from its experience before moving ahead with its own plans.

"The lesson is look, listen, don't just unilaterally commit to something without surveying the marketplace," he said.

The F-35 will remain in the political spotlight Thursday when Parliamentary Budget Officer Kevin Page appears before a House of Commons committee to discuss his efforts, weeks before the last election, to calculate the cost of purchasing the F-35.

A number of senior bureaucrats from the Defence, Public Works and Industry departments will also return to continue explaining their organizations' roles in the controversial fighter jet project.

Original Article
Source: canada.com
Author: Lee Berthiaume and Jeff Davis