Canadians misled by billions on cost of F35s

Auditor-General stops short of finger-pointing, but smoking gun points at government.

OTTAWA, Straight Goods News, April 3, 2012 — Five days after the Conservatives brought down a budget cutting services, pensions and jobs, the Auditor-General has slammed the government for multi-billion-dollar mismanagement of the purchase of fighter jets.

For months, Opposition critics have hammered away at the government over reports of problems with the proposed purchase of 65 F35 stealth fighters. The government has planned to buy them with neither a competitive bidding nor a compelling case that Canada needs or can afford these planes.

Cabinet ministers have questioned the loyalty of critics, with associate defence minister Julian Fantino even telling the House a few weeks back that the naysayers stood against "all things decent and holy." Everything changed today with the report of Auditor General Michael Feruguson, his first.

"The process was inefficient and not managed well," he understated. "Key decisions were made without required approvals or supporting documentation," he said "National Defence did not exercise the diligence that would be necessary for a $25 billion purchase."

He traced how the Department of National Defence (DND) knew, as far back as 2006, that the cost figures they presented to the public — $15 billion — were at least 10 billion dollars less than the true cost. Ferguson said the final cost could possibly be much higher.

"There were certain costs that were missing, the costs of attrition, the costs of upgrades, even that number needed to be refined," he said.

Auditor-General Michael Ferguson reports on the proposed F35 fighter purchase.

Although Ferguson specifically blamed DND staff for understating the costs and stopped short of pointing fingers at politicians, it is impossible to believe the Conservatives were unaware of the problems, said New Democrat MP Matthew Kellway (Beaches-East York) after Ferguson reported.

"We have a system of government that has ministerial accountability," Kellway told a crowded news conference. "The ministers are responsible for what comes from those departments. It's misplaced to put the blame at the feet of the bureaucracy when one looks at the sorry history of the F35 going back many years. To suggest that all of that was the fault of bureaucrats in either the DND or Public Works is not fair or reasonable" In a government known for micromanagement and the placement of political operatives deep within every government department, claims that Cabinet ministers were unaware of the cost overruns rang especially hollow.

Matthew Kellway and Malcolm Allen, NDP respond the the Auditor-General's report

Kellway pointed to radical changes in cost estimates of which Cabinet ministers must have been aware. "To suggest too that financial numbers were released from the department in response to the Parliamentary Budget Officer's estimates that were ten billion dollars shy of an estimate just nine months previous and that the minister was not aware of that is impossible to believe," he said.

"Canadians expect a government that is upfront, but Conservatives deliberately misled Parliament. They should apologize to Canadians."

"The government knew the F35s were going to cost more than anticipated — but they intentionally hid it from Parliament and the public," said the NDP's Christine Moore (Abitibi-Témiscamingue). "This was an outrageous attempt to try and pull the wool over the eyes of Canadians."

In a classic case of blaming the bureaucrats, the Conservatives are taking responsibility for the program away from DND and turning it over to Public Works, which was also involved in the accounting and estimate problems. And, as Christine Moore pointed out, the public works minister in charge of the F35 file was Christian Paradis, himself under suspicion of influence-peddling. "We're talking about tens of billions of dollars in taxpayers money," said NDP leader Tom Mulcair on Monday. "There was never a competitive bidding process… We don't have a single dollar guaranteed in local economic development. And Canada is one of the top aerospace countries in the world."

In the House on Tuesday, Mulcair said "In March, the Parliamentary Budget Officer estimated the cost of the F-35s to be $30 billion. The Conservatives did everything they could to discredit Kevin Page, saying that the planes would cost half that much. However, the Auditor General is proving today that the government knew that the cost of the F-35s was going to be even higher…. The key question for the Prime Minister is how could he allow Parliament to be intentionally misled on the F-35s? Either he knew, and it is unconscionable, or he did not know and it is incompetence. Which is it?"

Liberal leader Bob Rae, who attended a funeral during the day, lated called on Stephen Harper to resign over the matter, which, he pointed out, was the issue over which the Conservatives were cited for Contempt of Parliament last Spring, triggering the 2011 federal election.

© Copyright 2012 Ish Theilheimer and Samantha Bayard, All rights Reserved. Written For: StraightGoods.ca