F-35 Contract is a Bust... Surprised?

Stephen Harper and his Conservatives have fought hard for their coveted F-35 contract, even in spite of inflating costs and warnings from the US congress. Now, without surprise, the Conservatives have been forced to retreat on the purchase of planes that wouldn't even have been equipped to fly! It must be a very painful day to be the Conservative strategist because the party has invested a lot of political capital and a lot of taxpayers' time into this deal. We all know that time is money and Canada's air-force doesn't have forever to wait for new planes and we all know that we can get state of the art planes for a better price than the Conservative offer for the F-35 defects.

On July 17, 2010, Stephen Harper announced he would invest $9 billion into replacing Canada's aging fighter jets and introduced the F-35s, the planes the Americans are currently using. After a bit of research, a small documentary about the planes and it appears the American government wasn't too pleased with their purchase. Among the complaints was inflating costs. Warnings and dissatisfaction south of the border aside  the government carried on.



At this time, opposition was notable as spending for new military equipment was deemed irresponsible in times of economic uncertainty where a government would be dealt with making budget cuts.

Moving ahead, the planes meanwhile started to prove the inflation of cost. The next announcement related to the planes pegged the price at $16 billion which was part of the 2011 election campaign. Meanwhile, the Auditor General Michael Ferguson and Parliamentary Budgetary Officer Kevin Page both estimated costs higher than those, ranging between $25 and $30 billion.

The Conservatives were charged with misleading the House and Canadians. The discrepancy in costs and the secrecy around them led to a non confidence motion in 2011 which for the first time in Canadian history found a government in contempt of Parliament. The resultant election gave the Conservative party a coveted majority and a year later, Defence Minister Peter MacKay finally admitted the government mislead Canadians in April when he announced that there was a $10 billion discrepancy in the price tag.

"Yes, and it was explained to me just that way, that the additional $10 billion was money that you could describe as sunk costs, that is what we're paying our personnel, and the fuel that is currently being expended in CF-18s, jet fuel, maintenance costs, what we are currently spending. So not part of a new acquisition," MacKay said.

“There’s a different interpretation in the all-up costs at arriving at $25-billion,” Mr. MacKay told CTV’s Question Period. “And that information goes back to the year 2010. Those figures are there for all to see.”

Fast forward to now and the cost has soared above the highest of expectations to $40 billion with the reeling Conservative government faced with the prospect of shopping around. One can only be thankful that after two years of pandering and fixing prices that the Conservatives have finally come back to a common sense approach and sources tell CTV that they have decided to bury the F-35 proposal - however one must wonder how badly they'll botch the next proposal to replace Canada's aging CF-18s.

This recent development has dealt a hard blow to Conservative political capital and their image and reputation will take a hit. A procurement process that was riddled with controversy and then shut down, the inflating costs while the government lied them off. The cost became too high to lie off and the Conservatives are now announcing, after 2 years of secrecy, that they want to be transparent.

Conservative MP Michelle Rempel told CTV's Power Play that the Conservatives want to be transparent with the portfolio and “We want to make sure that we get this right and we’re taking it really seriously.” 

This, again, has led to calls for resignation. Liberal Interim Leader Bob Rae told reporters today that MacKay must resign  and he said, "I don't see how the minister of defence could possibly continue in his job. He's basically been a salesman for Lockheed Martin, the manufacturer of the F-35, since he took office."

"The government has misled Canadians consistently ever since the day they indicated this was the plane they were going to buy," Rae said.

"They've never been honest with Canadians about the true cost of the plane, they've never been honest with Canadians about the plan they had going forward and I think step by step every step of the way it's taken either the auditor general, KPMG, or outside forces saying look you're hiding from Canadians the true cost of this enterprise and you're not being honest with Canadians."

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