F-35 price tag still climbing?

The probable price tag for the F-35 fighters the Harper government insists on buying continues to climb.

The government has continued to maintain despite all evidence that Canada will pay no more than $16 billion to own and operate the proposed fleet of 65 F-35s, but outside estimates have run as high as $30 billion over the life of the program.

Now, with reports from the U.S. indicating that the Pentagon will delay its own purchases of the F-35 by at least 179 aircraft over the next five years (David Pugliese & Lee Berthiaume, “U.S. Cuts to the F-35 Program? No Real Problem For Canada, Says Julian Fantino,” Postmedia News, 26 January 2012), it is likely that the per plane purchase cost of the aircraft will rise even higher:

Canada’s plan to purchase up to 65 of the jets is based on a very specific timetable, and a slower ramp-up in production could force a tough decision between paying more per plane or extending the life of the country’s CF-18s.

And the F-35 cost spiral is far from over. Deeper cuts could yet come in U.S. purchase plans for the aircraft. There is no prospect of the U.S. actually pulling the plug on the F-35, but the number of aircraft purchased could decline significantly, and the pace of purchases could be slowed even more than recently announced. Either change would likely result in additional increases in the per plane cost of the aircraft.

Similar increases could also occur if other potential purchasers of the aircraft, many of which are under intense pressure to reduce their overall government spending, also reduce or cancel their F-35 buys.

The Harper government is also determined to reduce government spending. But it is not yet clear how much effect such reductions will have on military and security spending. A Canadian Centre for Policy Alternatives study, The Cuts behind the Curtain, estimates that

60,000 and 70,000 jobs could disappear across the country as departments implement the nearly $8 billion in spending cuts the Conservatives have introduced in three different cost-saving initiatives since coming to power…. the capital region will be the hardest hit. At the most extreme, the region could see more than 22,000 jobs disappear by 2014-15, driving unemployment to 9.2 per cent, the study says. The report says the most likely scenario is about 11,000 lost jobs in the region. (David Pugliese, “Canadian Forces and RCMP Rank-and-File Spared the Job Losses That Will Affect Thousands of Government Workers, New Study NotesDefence Watch, Ottawa Citizen blog, 23 January 2012)

However, while many public service jobs will be cut, “security” jobs may be relatively unaffected. The Canadian Centre for Policy Alternatives study found that although civilian employees of the Department of National Defence were facing cuts, the Canadian Forces, the RCMP, and the “national security establishment” (consisting of Correctional Service Canada, the Canadian Security Intelligence Service, the Canada Border Services Agency, Public Safety Canada, and the Department of Justice) would not be impacted significantly by job cuts. According to the study, Correctional Service Canada actually intends to create 5,500 new full-time positions between 2010-11 and 2013-14.

Photo by Robert Plaskota

Tags: Canada, Canadian Centre for Policy Alternatives, Canadian military spending, Department of National Defence, F-35, Joint Strike Fighter, United States