Cabinet knew F-35's cost: auditor

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Lee Berthiaume – April 6, 2012

Canada's auditor general dropped a bombshell Thursday when he said the Conservative government would have known before the last election that the F-35 fighter jet program would cost at least $10 billion more than what National Defence was telling Parliament and the public.

Auditor General Michael Ferguson refused to say whether the government allowed Canadians to be misled, but his comments have thrown more fuel onto a fire that has already seen the opposition call for House Speaker Andrew Scheer to launch an investigation.

The issue goes back to March 2011 when Parliamentary Budget Officer Kevin Page released a major report weeks before the last federal election that estimated the F-35 would cost taxpayers nearly $30 billion. The Defence Department responded by telling Parliament - and Canadians - that the stealth fighter would actually cost even less than the $16 billion budgeted for the program, putting the figure at $14.7 billion.

But the military did not include a number of important costs in its response, and during the course of his own study, Ferguson found the Defence Department had actually estimated as far back as June 2010 that the total cost would be at least $25 billion.

Most of the attention since Ferguson's report was released Tuesday has been on the bureaucrats responsible for the F-35 file.

But the auditor general told reporters Thursday that the Conservative government would have known about the $10-billion discrepancy when National Defence put forward the $14.7-billion figure in March 2011 because they were essential for long-term budget planning.

"I can't speak to sort of an exact date," Ferguson said. "(But) at the point in time, to respond to the Parliamentary Budget Office's office, it's my understanding that the government had that number."

The auditor general, who was appointed by Prime Minister Stephen Harper in November, could not say exactly who would have known the military's true cost estimates.

But he was clear that by "government," he was referring to the executive, namely cabinet and other members of the Conservative government, not the bureaucracy.

"That $25-billion number was something, I think, that at that time was known to government. It would have been primarily members of the executive, yes."

The auditor general refused to say whether the government had intentionally withheld information or misled Parliament, only that it missed an opportunity to present its real cost estimates when responding to the parliamentary budget officer's report in March 2011.

"I'm not trying to put any sort of value judgment on it," Ferguson said. "What I'm saying is that was their opportunity to come forward with their information and they didn't use that."

Harper and other cabinet ministers refused to answer questions in the House on Thursday about when they knew the Defence Department had estimated the F-35 would cost $25 billion.

Instead, they noted that the government had responded to Ferguson's report by moving the file out of National Defence's hands and promising annual reports to Parliament to ensure adequate transparency and oversight.

"The government is following the auditor general's recommendations and will, of course, ensure that this purchase, when it is eventually done, is done in accordance with taxpayers' needs and with the military's needs," Harper said.

Ferguson expressed cautious optimism.

"It is critical to make sure that that process is handled well from here on in," he told members of Parliament's public accounts committee on Thursday. "At first glance, they seem to be steps in the right direction."

Opposition parties, however, said Ferguson's assertions were particularly troubling, especially if the government was intentionally lowballing the stealth fighter's cost in advance of and during the last federal election.

"It's rare in politics in Canada and elsewhere to have a government that has so intentionally given false information," said NDP leader Thomas Mulcair. "The Conservative government gave the Canadian Parliament false information about the cost of the F-35 as never before been seen."

"If they did, then we have a real problem because then that means that they were effectively misleading Parliament for many, many, many months," said interim Liberal leader Bob Rae. "Misleading the people of Canada throughout the last election."

Meanwhile, Rae asked Speaker Andrew Scheer on Thursday to investigate whether the government may have broken parliamentary rules by saying it accepted the conclusions of Ferguson's scathing report when officials at the Defence and Public Works departments had not.

"These two versions of reality cannot both be true," Rae said. "One must be a falsehood."

Government House leader Peter Van Loan said it is possible for the government to take one position and bureaucrats to take another.

"The position of the government is not the position taken by the officials in those departments," he said.

Original article on Ottawa Citizen website