F-35 fighter jets would cost $45.8B over 42 years: audit
If Canada were to buy F-35 fighter jets and keep them for 42 years, it would cost the nation $44,820,000,000.
That figure, presented in an independent audit by KPMG on Wednesday, sits in contrast to the $16-billion figure the government first estimated in for total ownership back in 2010, when it first announced its intention to buy 65 jets.
That estimate accounts for $9 billion in acquisition, $435 million in development, $7.3 billion for sustainment and another $9 billion for operations.
That assumption is still based on 65 jets, but senior government sources said that as part of the options analysis the government is undertaking, that number could change.
It also does not account for attrition, or planes the military may lose over that time. The department has estimated that cost at approximately $1 billion, but according a senior government source, it has not been included because the purchase of those planes is a policy decision that has not yet been made. Those costs are, however, included in the annual update. With those, the total comes to $45.8 billion.
The KPMG report also stresses that it found “no significant quantifiable differences in the current estimates provided by National Defence” for the next generation fighter program. KPMG points out that a 20-year estimate using its costing framework would come to approximately $25.8 billion, and that DND’s estimate “presented in 2010” was $25.1 billion.
That $25.1 billion actually didn’t appear in 2010. That number only came out after the auditor general’s spring report that identified a further $10 billion in life-cycle costing that was not included in the government’s original estimate, nor was it provided to the Parliamentary Budget Officer prior to the release of its 2011 cost assessment.
The auditor general’s report also noted that various upgrades would need to be done to the planes over their lifespans, but those costs were “not known when the 2008 and 2010 budgets were established, but have since been estimated to more than CAN$1.2 billion over 20 years.” According to a defence official, it’s now accounted for in the sustainment costs.
If Canada were to buy F-35 fighter jets and keep them for 42 years, it would cost the nation $44,820,000,000.
That figure, presented in an independent audit by KPMG on Wednesday, sits in contrast to the $16-billion figure the government first estimated in for total ownership back in 2010, when it first announced its intention to buy 65 jets.
That estimate accounts for $9 billion in acquisition, $435 million in development, $7.3 billion for sustainment and another $9 billion for operations.
That assumption is still based on 65 jets, but senior government sources said that as part of the options analysis the government is undertaking, that number could change.
It also does not account for attrition, or planes the military may lose over that time. The department has estimated that cost at approximately $1 billion, but according a senior government source, it has not been included because the purchase of those planes is a policy decision that has not yet been made. Those costs are, however, included in the annual update. With those, the total comes to $45.8 billion.
The KPMG report also stresses that it found “no significant quantifiable differences in the current estimates provided by National Defence” for the next generation fighter program. KPMG points out that a 20-year estimate using its costing framework would come to approximately $25.8 billion, and that DND’s estimate “presented in 2010” was $25.1 billion.
That $25.1 billion actually didn’t appear in 2010. That number only came out after the auditor general’s spring report that identified a further $10 billion in life-cycle costing that was not included in the government’s original estimate, nor was it provided to the Parliamentary Budget Officer prior to the release of its 2011 cost assessment.
The auditor general’s report also noted that various upgrades would need to be done to the planes over their lifespans, but those costs were “not known when the 2008 and 2010 budgets were established, but have since been estimated to more than CAN$1.2 billion over 20 years.” According to a defence official, it’s now accounted for in the sustainment costs.
