BUDGET

F-35 Program Weighs Impact of Canadian Pullout

12/1/2015
By Jon Harper
Canada’s anticipated withdrawal from the multinational joint strike fighter program could drive up the cost of the aircraft for U.S. taxpayers, said the officer managing the project.

Ottawa was slated to buy 65 F-35s. But the Liberal Party, which won the recent parliamentary election, promised to pull out of the program.

“The primary mission of our fighter aircraft should remain the defense of North America, not stealth first-strike capability,” the party’s platform said. “We will reduce the procurement budget for replacing [CF-18 fighters currently in the inventory] and will instead purchase one of the many, lower-priced options that better match Canada’s defense needs.”

Prime Minister Justin Trudeau has vowed to follow through on that pledge.

United States Air Force Lt. Gen. Christopher Bogdan, program executive officer for the F-35, told U.S. lawmakers that a reduction of 65 aircraft from the “production flow” would likely increase the price of the F-35A variant by approximately $1 million per plane. The Defense Department plans to buy more than 2,400 joint strike fighters in the coming decades.

There would be other negative consequences if Canada withdraws because partner nations are expected to pay some of the upcoming sustainment and modernization bills, Bogdan said.

“Canada’s share of that cost was 2.1 percent,” he said at a recent congressional hearing. “If Canada is no longer in the program, that 2.1 percent cost of future sustainment and follow-on modernization will have to be spread among the other partners and the other U.S. services.”
There is also an industrial base issue that needs to be resolved, Bogdan noted, because Canadian companies have been building pieces and parts for the F-35 program.

“We do not have a set rule as to what happens to that industrial participation if a partner reduces airplanes, adds airplanes or even leaves the program,” he said. “It is my opinion that the remaining partners and our industry partners are going to have a discussion about what to do.”

As of press time, Canada has not officially withdrawn from the program, according to Joe DellaVedova, a spokesman for the F-35 joint program office.

There is no financial penalty for partner nations that pull out, aside from paying any resulting contract modification or termination costs, he said in an email.

Lawrence Korb, a defense analyst at the Center for America Progress, believes the new government in Ottawa will follow through with its exit plan, even if Canadian industry or the U.S. government opposes the move.

“There will be pressure [to stay in the program] but I think they’re going to go ahead … because their military likes the F/A-18,” he said. “They can get it at a lower price” than the F-35.

Although Canada’s departure could be costly for the Defense Department, the expected price bump for the F-35 would be a small fraction of the approximately $400 billion that the Pentagon is expected to spend on development and procurement of the aircraft.

Photo Credit: Air Force

Topics: Aviation, Defense Department, DOD Budget, International

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