$18 billion, $30 billion … what’s a few zeros among politicians, eh? I don’t know about you, but in these post-recession penny pinching times, an extra zero or two makes a big difference when I’m trying to balance the household budget. Did you know that the ‘eco’ in economics comes from the Greek word for ‘household,’ and the ‘nomic’ means management? An economist is a household manager. I wonder how many of them keep that in mind when they calculate the cost of something against the benefit to the country. In these times, numbers are not a game.
Take the F-35, Jet Strike Fighter. The Harper Government says buying 65 for the military will cost you and me $17.6 billion including basic maintenance over 30 years. The Parliamentary Budget Officer (PBO), Kevin Page, says they will cost us $29.3 billion – more than $450 million per plane. Both collections of zeros would buy a lot of health care or non-profit housing or public education.
But the government’s estimate doesn’t come with research. It’s rather like trying to balance your household budget without knowing how much chicken thighs cost at the IGA, or how much fuel it will take to heat your house next year, or whether that new car you have your eye on has all the features you need.
Page’s report on the cost of the F-35 makes interesting reading. It’s a story of unproven technology, of huge cost over-runs, of delays and engine malfunctions. About the time the PBO released its report, the entire fleet of F-35 demo aircraft was grounded after one suffered a dual generator failure and oil leak during a test flight. The US military has long wanted to drop development of an alternative engine, but Senators say no because relying on a single source for estimates, let alone development, will drive up costs and lock in design flaws. It’s rather like ordering your brand new car, sight unseen, from GM without checking out Ford or Toyota or Hyundai.
Kevin Page’s report does come with research but he was obliged to seek sources other than our government. Here, it’s important to remember that the PBO is an officer of Parliament. It is his duty to report to all Canadians his analyses of the state of the nation’s finances and of the government’s cost estimates. It hasn’t helped that the Harper Government cut his budget from $2.8 million to $1.8 million. And they’ve refused to give him information he needs to do his work. That’s one of the things that, by definition, puts governments in contempt of Parliament.
The government did show him the Statement of Requirements for the F-35 but that’s not public information and, as far as I know, not even MPs have sent them. Not knowing how the government is defining Canada’s needs makes assessing the F-35s a bit of a guessing game – rather like not knowing if you’ll be using your new car to drive to work or bushwhacking on the back roads.
I can see how the F-35’s stealth capability and relatively short range (it won’t make it from one end of the Arctic to the other without expensive in-air refuelling) might be the perfect jet fighter for say, Israel or American adventures in the Middle East. But for Canada? We don’t know for sure, because the Statement of Requirements is not public. And that breeds the suspicion that they were written with what the Americans had in mind, not with what Canada needed.
There is some justification for that suspicion and the PBO’s report alludes to it. Canada joined the Joint Strike Fighter program – a multinational project to develop the F-35 – in 2002. We have paid $135 million in participation fees already and have recently signed on for more. There’s no obligation to buy the thing in the end, but the US and the US builder, Lockheed Martin, are pushing. With that investment and that pressure, the temptation is to define Canada’s requirements in terms of the F-35’s specifications.
The Harper Government has no cost estimates from other fighter jet manufacturers (Boeing’s versatile Super Hornet, for example) and is relying entirely on one source – Lockheed Martin. And that, says Kevin Page, could add 20% to the cost. In addition, the government’s estimates of industrial and regional benefits (Canadian firms bidding on F-35 contracts) fall below Industry Canada’s own 1:1 standard where one dollar spent by Canada generates one dollar in Canada. I’m reminded of Conrad Black’s non-compete schemes.
In the absence of critical data from the Harper Government, the PBO looked at industry reports and estimates. They’re easy to find – just Google ‘F-35’ and up will pop links to dozens of articles. The nature of the reporting is balanced and well-researched. And accessible – it’s difficult to believe the folks at our Department of National Defence were not aware of these reports when they were putting together their own cost-benefit analyses.
So, from those reports comes a quick reality check (and a bit of a scoop). A few days after the release of the PBO’s report, the Pentagon revealed that Israel will purchase 19 F-35s (including basic maintenance and initial training) for $2.75 billion. The price tag, per plane, is over $144 million – just about where Kevin Page puts the cost for Canada.
All this fuss and I’m still not sure why Canada needs fighter jets in the first place. I mean, I’d like a new car, but I don’t need one. I don’t know about you, but if I managed my household this way, I’d be in serious trouble, and I don’t mean just financially.
David McLaren writes and researches from Neyaashiinigamiing on the Bruce Peninsula in Ontario.
Take the F-35, Jet Strike Fighter. The Harper Government says buying 65 for the military will cost you and me $17.6 billion including basic maintenance over 30 years. The Parliamentary Budget Officer (PBO), Kevin Page, says they will cost us $29.3 billion – more than $450 million per plane. Both collections of zeros would buy a lot of health care or non-profit housing or public education.
But the government’s estimate doesn’t come with research. It’s rather like trying to balance your household budget without knowing how much chicken thighs cost at the IGA, or how much fuel it will take to heat your house next year, or whether that new car you have your eye on has all the features you need.
Page’s report on the cost of the F-35 makes interesting reading. It’s a story of unproven technology, of huge cost over-runs, of delays and engine malfunctions. About the time the PBO released its report, the entire fleet of F-35 demo aircraft was grounded after one suffered a dual generator failure and oil leak during a test flight. The US military has long wanted to drop development of an alternative engine, but Senators say no because relying on a single source for estimates, let alone development, will drive up costs and lock in design flaws. It’s rather like ordering your brand new car, sight unseen, from GM without checking out Ford or Toyota or Hyundai.
Kevin Page’s report does come with research but he was obliged to seek sources other than our government. Here, it’s important to remember that the PBO is an officer of Parliament. It is his duty to report to all Canadians his analyses of the state of the nation’s finances and of the government’s cost estimates. It hasn’t helped that the Harper Government cut his budget from $2.8 million to $1.8 million. And they’ve refused to give him information he needs to do his work. That’s one of the things that, by definition, puts governments in contempt of Parliament.
The government did show him the Statement of Requirements for the F-35 but that’s not public information and, as far as I know, not even MPs have sent them. Not knowing how the government is defining Canada’s needs makes assessing the F-35s a bit of a guessing game – rather like not knowing if you’ll be using your new car to drive to work or bushwhacking on the back roads.
I can see how the F-35’s stealth capability and relatively short range (it won’t make it from one end of the Arctic to the other without expensive in-air refuelling) might be the perfect jet fighter for say, Israel or American adventures in the Middle East. But for Canada? We don’t know for sure, because the Statement of Requirements is not public. And that breeds the suspicion that they were written with what the Americans had in mind, not with what Canada needed.
There is some justification for that suspicion and the PBO’s report alludes to it. Canada joined the Joint Strike Fighter program – a multinational project to develop the F-35 – in 2002. We have paid $135 million in participation fees already and have recently signed on for more. There’s no obligation to buy the thing in the end, but the US and the US builder, Lockheed Martin, are pushing. With that investment and that pressure, the temptation is to define Canada’s requirements in terms of the F-35’s specifications.
The Harper Government has no cost estimates from other fighter jet manufacturers (Boeing’s versatile Super Hornet, for example) and is relying entirely on one source – Lockheed Martin. And that, says Kevin Page, could add 20% to the cost. In addition, the government’s estimates of industrial and regional benefits (Canadian firms bidding on F-35 contracts) fall below Industry Canada’s own 1:1 standard where one dollar spent by Canada generates one dollar in Canada. I’m reminded of Conrad Black’s non-compete schemes.
In the absence of critical data from the Harper Government, the PBO looked at industry reports and estimates. They’re easy to find – just Google ‘F-35’ and up will pop links to dozens of articles. The nature of the reporting is balanced and well-researched. And accessible – it’s difficult to believe the folks at our Department of National Defence were not aware of these reports when they were putting together their own cost-benefit analyses.
So, from those reports comes a quick reality check (and a bit of a scoop). A few days after the release of the PBO’s report, the Pentagon revealed that Israel will purchase 19 F-35s (including basic maintenance and initial training) for $2.75 billion. The price tag, per plane, is over $144 million – just about where Kevin Page puts the cost for Canada.
All this fuss and I’m still not sure why Canada needs fighter jets in the first place. I mean, I’d like a new car, but I don’t need one. I don’t know about you, but if I managed my household this way, I’d be in serious trouble, and I don’t mean just financially.
David McLaren writes and researches from Neyaashiinigamiing on the Bruce Peninsula in Ontario.
March 29, 2011
© David McLaren
© David McLaren
Update:
On March 24, 2011, CBC’s As It Happens interviewed Winslow Wheeler, a former Washington defence analyst and currently the Director of the Straus Military Reform Project at the Center for Defense Information in Washington DC. He pegs the current cost of the F-35 to Canada at $155 million without gas, training or maintenance. Apparently the sky’s the limit cost was one of the things that brought down the government of the Netherlands. Here’s the link to the audio file: http://www.cbc.ca/video/news/audioplayer.html?clipid=1856775279
On March 24, 2011, CBC’s As It Happens interviewed Winslow Wheeler, a former Washington defence analyst and currently the Director of the Straus Military Reform Project at the Center for Defense Information in Washington DC. He pegs the current cost of the F-35 to Canada at $155 million without gas, training or maintenance. Apparently the sky’s the limit cost was one of the things that brought down the government of the Netherlands. Here’s the link to the audio file: http://www.cbc.ca/video/news/audioplayer.html?clipid=1856775279
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