Canadian Manufacturing

Documents show Canada would gain from committing to F-35

A Lockheed Martin executive publicly threatened that existing contracts signed by Canadian companies would likely not be renewed if the federal government went in another direction

OTTAWA—Canada’s aerospace industry could be in line for more benefits than previously estimated if the Harper government decides to buy the oft-maligned F-35.

Documents tabled late Tuesday project that Canadian businesses could land as much as $9.9 billion in contracts to make and maintain parts for Lockheed Martin’s stealth fighter.

The last estimate, tabled in the summer, pegged the potential industrial benefits at $9.4 billion.

The vast majority of that figure—$8.2 billion—would accrue throughout the projected life of the program under the 32 contacts already signed with the U.S. defence giant, which gives companies from participating nations premium access to the work.

Industry Minister James Moore, who oversees the industrial benefits, sounded bullish even though the future of the program is in doubt.

“Canada’s involvement as a partner in the Joint Strike Fighter Program (JSF) creates significant opportunities for the aerospace and defence industry,” Moore said in a statement accompanying the documents.

“As we move forward on replacing Canada’s fighter jets, our government is not only continuing our proven record of standing with our Forces, we are also making direct investments in the Canadian economy and creating skilled jobs for Canadian workers.”

It has been a year since the Harper government put the program on hold and began looking at aircraft other than the F-35, which has been plagued with cost-overruns and delays.

The government has taken every opportunity to underscore that it has not made a decision and Moore’s statement says the estimate is being given to Parliament in the interest of transparency.

A few months ago, a Lockheed Martin executive warned publicly that existing contracts signed by Canadian companies would likely not be renewed if the federal government went in another direction.

The auditor general blasted the plan to buy 65 radar-evading jets in his spring 2012 report, accusing National Defence and Public Works of not doing their homework and hiding the full cost.

The Conservatives went back to drawing board, ordering a series of independent evaluations, including one that estimated the full 42-year cost of ownership would be an eye-popping $44.6 billion.

The government has initially told the public the program would cost the treasury $16 billion over 20 years, but both the auditor general and the parliamentary budget officer said that figure did not include operations and sustainment costs—something taxpayers deserved to know ahead of time.

The purchase had been a political lightning rod since former defence minister Peter MacKay first signaled the country’s intention to go with the F-35 in the summer of 2010.

Among the measures the government mandated was a review of other potential replacement aircraft for the existing fleet of CF-18s.

A panel of independent experts is wading through technical and financial submissions. It is unclear when the Harper government will decide which route is optimal.

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