Auditor says he is not ‘nitpicking’ on F-35 jets
OTTAWA – Auditor-general Michael Ferguson said Thursday he is not nitpicking in calling for the government and Defence Department to disclose all costs associated with the F-35 stealth fighter.
“I don’t believe we were nitpicking in any way,” Ferguson told a parliamentary committee. “What we were saying is there were some important things that were missing.”
Ferguson released a scathing report earlier this month that was highly critical of the way the F-35 file had been handled, particularly the Defence Department’s failure to reveal the fighter would cost Canada at least $25 billion – $10 billion more than it was reporting to Parliament.
The Conservative government later admitted it was aware of the larger price tag weeks before the federal election, but it had done nothing wrong as it had been talking about the plan to purchase and maintain the F-35s over 20 years.
The government said it did not include normal expenses such as pilot salaries, fuel, replacement parts and anticipated upgrades, and repeatedly questioned the need to provide such fulsome details.
“If you went out and bought a new minivan and it was going to
“It’s very important that the right financial assessment is done.”
AUDITOR- GENERAL MICHAEL FERGUSON
cost you $20,000, you wouldn’t calculate the gas, the washer fluid, the oil and give yourself a salary to drive it for the next 20 years,” Defence Minister Peter Mackay said on April 10.
But Ferguson told the House of Commons public accounts committee on Thursday morning that understanding the long-term budgetary implications of any major purchase is essential for Parliament to do its job.
“The important thing in life-cycle costing is to understand, to get a full picture of what those costs are going to be to operate,” the auditor-general said.
Ferguson noted the Defence Department’s own $25-billion estimate was lower than what the stealth fighters will likely cost as it is based on 20 years when the aircraft is expected to be used for at least 35.
“That was where the first discrepancy came in,” he said, later adding, “Even in early phases, there were some specific types of cost estimates that should have been included because they could be predicted.”
Under questioning from Conservative committee members, Ferguson said it was not unusual for an audit of a program that had not yet resulted in any purchase. “It’s a very large financial commitment,” he said. “Therefore it’s very important that the right financial assessment is done.”
The government has repeatedly stated all options are still on the table when it comes to replacing Canada’s aging fleet of CF-18 fighters, but Ferguson said “everything that was happening in this time period (after 2008) was moving more and more toward the eventual purchase of the F-35.”
Ferguson refused to speculate on whether the changes the government had made to the handling of the F-35 program, namely moving it from National Defence to the Public Works Department, would resolve the problems raised in his report.