September 15, 2010
John Siebert and Kenneth Epps
Presentation to the House of Commons Standing Committee on National Defence by John Siebert and Kenneth Epps, Project Ploughshares
Thank you for the invitation to Project Ploughshares to address the Standing Committee on the proposed purchase by Canada of 65 Joint Strike Fighter F-35 aircraft.
In our view the case has not yet been made for this acquisition. Given the projected cost and complexity of the JSF program, there has been surprisingly little detail made public on the costs, benefits, and especially the anticipated missions of the aircraft. We will focus on the strategic environment and the affordability, industrial benefits and the opportunity costs of the JSF program.
The Canada First Defence Strategy (June 2008) highlights the international circumstances in which security threats emanate to Canada from “failed and failing states, civil wars, and global terrorism.”1 There also are emerging “nuclear capable adversarial states,” pernicious “Islamist militants in key regions,” and “the buildup of conventional forces in Asia Pacific countries.”
On the domestic front, Canada First identifies “possible terrorist attacks,” “human and drug trafficking,” “foreign encroachment on Canada’s natural resources,” and “potential outbreaks of infectious disease.”2
You would be hard pressed to create a credible scenario from these threats where a stealthenabled fifth generation fighter jet is logically part of Canadian Forces’ response.
Canada First (p.8) also focuses on being “a strong, reliable defence partner” and that Canadian Forces “remain interoperable with the US military.” We would argue that Canada can be a good ally and neighbour without purchase of the JSF, and Canadian Forces do not need them to be interoperable with the US military.
The government has emphasized the affordability of the F-35 aircraft; however, US government sources now cite the per unit cost of the JSF at close to twice the initial projected price.
Denmark, Norway, and the Netherlands have postponed their F-35 procurement decisions until the rising production costs stabilize or are guaranteed.
The projected “life-cycle” costs for the Canadian F-35 aircraft – essentially the costs of operation and maintenance – have not been made public by the Department of National Defence. A former senior Canadian defence procurement official has stated these costs may be two to three times the $9 billion cost of acquisition.3
A Globe and Mail report4 based on government documents placed life-cycle costs at $17 billion, meaning that the total program outlay over 20 years would be almost $26 billion.
These figures support our estimate using US government studies5 that the Canadian JSF program cost could total $30 billion over 30 years. Surely these figures redefine the meaning of affordability.6
The Canadian military aerospace industry has fared well in winning program subcontracts yet future Canadian industrial benefits face two major risks. The first is that the projected global market for F-35 aircraft will continue to shrink. Initial global projections have already been revised downward from a high of 6,000 to the current 3,200.
The second risk is the changing nature of US military trade relationships with JSF program partners. For decades Canada has had a unique military trade relationship with the US, easing access of Canadian industry to the US military market. However, recently announced changes to US export controls, combined with growing pressure from JSF partner governments to ensure subcontracts for their industries, will likely alter the comparative advantage the Canadian industry has enjoyed in the US market to date.
The terms of the JSF partnership agreements as they now stand do not obligate US prime contractor Lockheed-Martin to guarantee subcontracts to Canadian industry.
A procurement program that may cost $30-billion over 30 years will inevitably result in “opportunity costs,” both to the equipping of Canadian Forces and to other federal programs which contribute to Canada’s security. What other investments in the Canadian Forces will be passed over to secure stealth technology on fighter jets that will be seldom if ever used for their primary purpose?
As important, Canadian security preparedness involves more than its military capacity. It includes adequate funding for development, democracy promotion, disarmament, and diplomacy. Currently, Canadian government security spending is weighted heavily towards defence, and the JSF program would make this more pronounced. Currently projected expenditures on diplomacy and development are frozen or being reduced.
During the period before Canada must commit to a JSF order there should be a thorough and public exploration of the security threats to be met, and the costs, benefits and consequences of the acquisition of a new generation of fighter aircraft.
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- From “Canada First,” these involve “ethnic and border conflicts,” “resurgent nationalism,” “global criminal networks,” and “unequal access to resources and uneven economic distribution.”
- From “Canada First,” Canadian Forces also need to be equipped to provide “aid to the civil power” in the event of floods, forest fires, hurricanes and earthquakes.
Speaking notes for the Standing Committee on National Defence, September 15, 2010
- Alan Williams, “Open competition needed for Canada’s new fighter aircraft procurement says former senior procurement official,” Defence Watch, Ottawa Citizen, 27 July 2010.
- Daniel Leblanc, “Harper bending to U.S. on sole-source fighter purchase, documents reveal,” The Globe and Mail, 11 June 2010.
- US Government Accountability Office, “Joint Strike Fighter: Additional Costs and Delays Not Meeting Warfighter Requirements on Time,” March 2010, p.13.
- The Norwegian Ministry of Defence has estimated the total cost of a 30 year program to purchase and support 48 JSF aircraft at 145 billion kroner. The equivalent to buy and support 65 Canadian aircraft over 30 years would be $34 billion. “Norway to Buy F-35 at Lowest Cost: Defense Minister,” Defense News, April 12, 2010.