Canada fighters to cost billions more - watchdog

VANCOUVER (Reuters) - Canada’s planned purchase of 65 fighter jets will cost billions more than government has projected, according to a report released on Thursday amid speculation the country will soon face an election.

Canada's Defence Minister Peter MacKay (R) and Industry Minister Tony Clement walk in front of a F-35 Joint Strike Fighter during a news conference in Ottawa July 16, 2010. REUTERS/Chris Wattie

Opposition parties seized on Parliamentary Budget Officer Kevin Page’s report, saying it was evidence the Conservative government was misleading voters about the multibillion-dollar deal with Lockheed Martin Corp.

The watchdog’s report came a day after the Conservatives were reprimanded for refusing to release financial details of planned prison construction projects that the opposition also says will cost much more than the government maintains.

The budget office estimates it will cost C$29.3 billion to build and maintain the 65 F-35 jets over the next 30 years, a significantly higher tag than C$16 billion to C$18 billion the government has forecast.

The planes are expected to cost C$9 billion to build, but the budget office said after reviewing historical information it determined the cost of maintaining the aircraft will be much higher than the government has publicly estimated.

The military said Page’s use of historical data produced inaccurate results and added he had estimated maintenance costs over too long a period.

“We stand by our estimates ... (our) data reflects detailed and sensitive work over 10 years,” Defense Department procurement official Dan Ross told reporters.

The government said in July it planned to buy the aircraft, developed under the Joint Strike Fighter program.

The F-35s will replace Canada’s CF-18s, which are due to end their working lives in about 2020. The first of the new aircraft would be delivered in 2016.

The main opposition Liberal Party said Page’s report showed the government’s cost claims were “bogus,” and they renewed calls to cancel the Lockheed deal and put the fighter jet contract out to competitive bids.

“This is an unconscionable amount of money. The Conservatives have once again misled Canadians about the real cost of their agenda,” said the Liberals’ Dominic Leblanc.

Prime Minister Stephen Harper downplayed the report, saying he was “not going to get into the lengthy debate on the numbers” and the F-35s were the only acceptable option to replace the CF-18s before they become too old to maintain.

Page said because Canada has not signed a contract to buy the planes, it is not under any legal obligation to pursue the deal if it does not want to.

The Conservative government is scheduled to present its budget on March 22, and the country could be pushed into a spring election if the legislation is voted down.

The Conservatives hold only a minority of seats in the House of Commons and need the support of at least one of the three opposition parties to help pass legislation. The budget bill is always considered a matter of confidence, and its defeat would immediately trigger an election.

Additional reporting by Allan Dowd