Cabinet approved $25 billion for F-35s

The federal cabinet approved the full, eye-popping $25 billion cost of the F-35 stealth fighter in two stages during 2008, auditor general Michael Ferguson told a parliamentary committee on Thursday.

OTTAWA — The federal cabinet approved the full, eye-popping $25 billion cost of the F-35 stealth fighter in two stages during 2008, auditor general Michael Ferguson told a parliamentary committee on Thursday.

Opposition parties said Ferguson’s finding is critical to deciding whether the Harper government was deceived by National Defence and Public Works officials over the full implications of the costly program or if it was a willing participant in what the auditor general said was an effort to hide the full expense from the public.

“The number of $25 billion was established by Defence that included both the purchase and the maintenance cost and the budgets were approved through (the) normal process,” Ferguson said in support of his explosive audit.

He said he couldn’t say “who saw what (and) when” among cabinet — or why in defending against criticism from the parliamentary budget officer in the spring of 2011, government ministers chose to use the lower $14.7 billion figure. Both Treasury Board and National Defence rules require all costs for the lifespan of a major purchase to be included in estimates.

Ferguson said significant costs were left out of the government’s public statements. Defence Minister Peter MacKay has acknowledged he was aware of the differing figures, but both he and Prime Minister Stephen Harper have described using the full life-cycle cost as an accounting difference.

Conservative MPs dug in a new line of defence during Thursday’s House of Commons public accounts committee meeting, painting the numbers in the auditor general’s scathing report as estimates.

Alberta MP Laurie Hawn, a former air force officer, insisted the only solid figure was the $9 billion purchase price, which the government has promised would not be exceeded.

There’s been considerable debate over the purchase price of the aircraft as well as how much the radar-evading jets will cost to be maintained and operated in the future.

“The budgets aren’t approved today,” Hawn said. “Those are estimates going forward.”

It’s unreasonable to try and predict the cost of pilot salaries and fuel three decades into the future, Hawn said.

But Ferguson said the enormous future cost to the treasury was all the more reason to forecast accurately from the outset of the program.

“That is precisely why it’s important for the government to explain, if they’re going to start acquiring these jets, what the potential impact is going to be on budgets into the future. I don’t believe we were nitpicking in anyway. I think what we were saying was that there were some significant elements that were missing.”

New Democrats were not prepared to let the Defence Department off-the-hook entirely for the fudged numbers, but suggested there was a failure of political leadership.

“Minister MacKay has lost control of his department,” said southern Ontario New Democrat Malcolm Allen. “Not only minister MacKay, indeed the ministers of public works. They lost control of this entire file. They allowed a department to simply run amok.”

Ferguson said Public Works officials tried to exercise due diligence by asking for information about the new fighter program, but ultimately ended up rubber stamping the sole-source acquisition.

The Liberals took aim at the gap between assurances from ministers that they accept the auditor general’s report and the written refusal of both Defence and Public Works officials to assume any of the blame.

Ferguson said he’s received letters from the deputy ministers of both departments rejecting his findings and told the committee there’s been no communication from the government which suggested it feels differently.

Under questioning in the House of Commons, Harper said his government’s multi-pronged response, which includes taking the file away from defence officials and better reporting to Parliament, demonstrates it accepts Ferguson’s assessment.

“The government has clearly accepted the conclusions and the government has been quite detailed in the steps it will take to implement those conclusions,” said the prime minister.

But interim Liberal Leader Bob Rae said accepting responsibly in writing would mean acknowledging that Parliament and the public were misled.

“The problem we have is that it doesn’t appear to be anything called ministerial accountability left in the Government of Canada,” said Rae.

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