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?