Thursday, March 10, 2011

PBO smoke and mirrors on F-35 costs. The Opposition pounces on it.

The PBO (Parliamentary Budget Officer) announced today that:
"The total cost of the Conservative government's plan to purchase 65 F-35 fighter jets over 30 years is close to $29.3 billion — billions more than previously estimated, according to Parliament's budget watchdog." (CBC)

and as expected the opposition is all over the 'discrepency'. One small problem though, the PBO estimate is for 30 years, while the estimate from the government was for 20 years.

Government estimate: A spokesman for the minister said national defence experts "stand by their cost projections." Jay Paxton said the government has committed $9 billion to acquire the planes and $250 to $300 million annually over a 20-year period to support the planes.

(page 8 PBO report in PDF)
During the same period, the average weight of jet fighter aircraft has increased by about 0.5% per year. Given this, the cost of fighter aircraft has increased 4% per year in real terms since 1950—doubling roughly every 18 years.
Relying on these historical trends and applicable cost drivers, the PBO was able to forecast a total ownership cost of approximately US$ 29.3 billion for the 65 aircraft over a 30-year period

 So given that inflation and other cost over-runs are likely to occur it is only logical that the cost estimate for 30 years would be at least 1/3 more than the 20 year estimate, no?

Leave it to the opposition and the CBC to leave that little bit of information out.

Update: More shenanigans perhaps.

The PBO is claiming that they took into account the 20 vs 30 yr difference yet uses a total 17.6 billion in its comparisons, (when the estimates for 20yrs have been publicly stated at up to 18 billion) and the PBO looks to be using a lowball 6 billion estimate as the cost of acquisition when it has been stated to be 9 billion dollars. ( all above estimates available on page 6 of PBO report itself)

If the PBO did take into account for the extra 10 yrs why would the number be the same as what the DND is estimating as the cost for 20 years, and why did they choose to use only 6 billion for the acquisition cost?


wilson said...

Like Milliken, Kevin Page is leaving his govt position with a wee parting gift to his party.

CanadianSense said...

I am impressed how Kevin Page is ignored when his reports back the government but becomes the gold standard when he disagrees.

On Global Summits he agreed other governments did not disclose full amounts.

On budget/deficit estimates his reports have been off.

The government's own projections are going to be beaten as the economy picks up faster than predicted.

Anonymous said...

PM Harper just answered questions from the Liberal media today... he was giving an extension to cancer research. No question on that from the media. The PM said.."This jet was started by the opposition...we followed it up.... it is the best and only jet available. It doesn't take effect till 2017.The Govt. gave their prices to the opposition, it wasn't good enough. The Govt. will go back and look at it and see what more they can do...but as far as the rulings, you win some and you lose some...thats politics.
On a question on elections, PM Harper said...I will leave that up to you guys to write about, I am interested in the economy for Canadians , not a job for myself."
The PM showed his class in compareson to the rabbitt frothing foaming Coalition of loser, I am listening to in QP.

Anonymous said...

Opposition isnt the only one pouncing.I support the F-35 purchase.Heres the estimate by the parlimentary budget officer-

Now here's the cost of keeping all govt MP's in office-

It works out to 950 million dollars over 30 years to maintain the F35 and 500 million dollars to maintain govt MP's each year.No offense but id rather spend money on the fighter jets!

Ronald said...

Financing the F35 could be done for no extra cost to the country if we just transfer the
$1.3B, we waste on the CBC every year, to the military. We don't need the CBC- We need a strong and well equiped Air Force.

Brett said...

I concur Ronald. Apart from HNIC, I have absolutely no use for the CBC. As they said on AirFarce..."Sell it to the Japanese".

Brett said...

An furthermore: In my view, with Kevin Page's interview today on CTV NN on this subject, he crossed the line from being a non-partisan officer of parliament to partisan hack for the opposition.

wilson said...

AA ,
on Solomon, Page used the U.S. numbers which included R&D,
CPC rep said:
other countries do NOT pay.
Page used the wrong numbers.

Jeff Norquay just bluntly said Page doesn't know what he is doing!

You will have to check it out when Solomon goes on video,
it was during the first hour of session.

Anonymous said...

John Ivison on CBC P&P just did a spilling of the CBC beans... he said.."Kevin Page just got his report from the "US BUDGET OFFICE."
Did Iggy the American get some American buddy to help out the Canadian budget officer to come to his aid? Too funny.Sort of like the Liberal Elections Canada guy?
The economy is why the Conservatives are In and the Coalition are OUT. I hope CBC is out next with their "Kill Him Kill Him DEAD" star Scott Reid against the Prime Minister of Canada written in the G&M.

Anonymous said...

This may have nothing to do with it, Ardvark, but I still wonder ...

The F-35 is not just one kind of plane.
"The F-35 is being built in three different main versions to suit various combat missions. A fourth variant, the F-35I is an export version for Israel. ..."

So, the question is which variant of the plane is Canada buying, and could that account for the discrepancy in costs, i.e. Canada's versus the US's.
-- Gabby in QC

Anonymous said...

Another point, Ardvark:
The opposition usually points to other countries cutting back on their purchase of this plane, yet here are some recent reports that contradict that:
Security Industry
Turkey ups order for troubled F-35
Published: Jan. 26, 2011 at 11:59 AM
Security Industry
Israel 'needs F-35 to stay on top'
Published: Jan. 31, 2011 at 3:05 PM
Security Industry
U.S. may sell stealth fighters to India
Published: Feb. 1, 2011 at 9:26 AM

So, it doesn't look like there is less interest in the F-35s. Quite the contrary.
-- Gabby in QC

Ardvark said...

If my update numbers are correct IE the low ball 6 billion acquisition cost and claiming that he converted the current 18 billion DND estimate to over 30 years,( apples to apples) than yes, he doesn't know what he is doing. And that is leaving out using US numbers and plane variants,somehow I don't think we are buying the STOVL version.

Thanks for all the comments and added information. I have an idea for another post on the F-35 that I should have up early next week.

Brett said...


To answer your question, we are buying the A variant vice the B variant which is a short take-off, vertical landing variant (STOVL), which is only being considered for the US Marines to replace their Harriers.

Anonymous said...

Thanks, Brett @ 5:40:00 PM.

That's what the opposition seems to forget, that we're not buying the exact same variant the US is buying. But then, that's the opposition's schtick: mislead and misinform.
-- Gabby in QC

Anonymous said...

So, Iggy calls for a no fly zone over Libya but doesn't want to give our military the modern fighters needed to undertake such a mission (with NATO).

Today, Sarkozy called for NATO to not only enforce a no fly zone but to strike against high profile targets in Libya. However, in reading the US press today apparently the US Pentagon dismissed the idea as impractical. First, NATO would have to have at least 150 advanced fighters based in Malta to carry out the mission and that NATO countries taken together could not come up with that number (Canada only has a handful of F-18s based in Italy that it could contribute).

Second, the Pentagon claims that Libya has a robust and sophisticated ground mobile air defence system which could do serious damage to the Euro jets and F-18s that NATO would deploy. They claim only the United States' F-22s and stealth fighters have sufficient defence systems capable of carrying out such a mission without the danger of being shot down. This proves that if Canada wants to be a credible contributor to NATO we need to upgrade to the F-35s (not some off the shelf inferior Euro jet) and increase the number of fighters in service.

If NATO can't even gain air superiority over Libya with their existing fighters, we are in deep trouble!

Sean M said...

Red Kev, is a liar and a cheat, which doesn't come as any surprise because he's a Librano. I can't think of a single instance when Red Kev has been right about anything. What a scum bag.

Anonymous said...

I already posted this informative link at The Iceman's blog, who also did a blog post on Kevin Page's F-35 cost estimates.

I recommend you read the comments also, for more information.

I realize Kevin Page has an important role to play, but it was my understanding that he was to report to Parliament, especially to committees overseeing such expenditures.

Instead the guy has become a media wh#re. I'm sorry, but there's no other word for him.
-- Gabby in QC