New fighter jets could cost more than Liberals projected

by Daniel Leblanc and Steven Chase (feat. David Perry)

The Globe and Mail
November 21, 2016

The Liberal Party promised massive savings on the purchase of new fighter jets in the last election, but the recent purchase of Boeing F/A-18 Super Hornets by Kuwait suggests bargains will be hard to find.

The federal government is nearing a decision on the replacement of its fleet of CF-18s, facing pressure to deliver a better deal than the previous, Conservative government had put together.

While straight comparisons are never easy in military procurement, Kuwait’s recent purchase of 40 Super Hornets for $13.5-billion raises questions about Canada’s ability to meet its own financial targets for new fighter jets.

The deal means Kuwait will be paying an average of $335-million per aircraft, a price that includes training, spare parts and engines, weaponry and logistical support.

During the 2015 election campaign, the Liberals said they could acquire their own fleet of Super Hornets at a flyaway price (which does not include training or spare parts) of $65-million per unit; by way of comparison, the Liberals said the Lockheed Martin F-35, which had been favoured by the Conservatives, had a flyaway price of $175-million per aircraft.

Military analyst David Perry said the Kuwaiti deal suggests the Liberals were overly optimistic before they came to power.

“This cements my skepticism about the assumption that some fighter options are horrendously expensive and others are dirt cheap,” said the senior analyst at the Canadian Global Affairs Institute.

The previous government had set aside an envelope of $9-billion to acquire a fleet of 65 fighter jets.

Mr. Perry said it is impossible to determine how much Canada would pay for a fleet of Super Hornets or F-35s today, but the numbers out of Kuwait show “all of these aircraft are expensive.

“Some of them may be relatively more or less costly, but there is no such thing as cheap fighter aircraft.”

The federal government is promising a decision on the final process to replace its CF-18s by the end of the year. The matter will go to cabinet shortly.

“We have a lot of credible information and analysis that were done over the summertime and we’re putting the final touches onto that,” Defence Minister Harjit Sajjan said in an interview.

“At the end of the day, I want to make sure that our men and women have the right type of aircraft and that we have the right benefits as a nation, because we’re making a very big decision here and I want to make sure we get this right,” the minister added.

During the campaign, the Liberals said they would change the requirements for the new fighter jets to place less emphasis on “first-strike stealth capabilities” and greater emphasis on the ability to contribute to the “defence of North America.”

“We will reduce the financial procurement envelope for replacing the CF-18s. Instead of budgeting for the acquisition of 65 F-35s, we will plan to purchase an equal or greater number of lower-priced, but equally effective, replacement aircraft,” they said.

Still, they promised to launch an “open and transparent competition” for new fighter jets, which officials at both Lockheed Martin and Boeing continue to advocate.

Sources said there are three options before the cabinet: launching a competition, buying a new fleet through a sole-source process or acquiring a few aircraft to form an “interim fleet” and finalizing the fleet at a later date.

The Department of National Defence predicts that its fleet of CF-18s will be able to fly into the next decade, with some aircraft due to be retired in 2023; but the Canadian Armed Forces will need a new fleet of fighter jets by 2025.