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March 5, 2019

Canada’s acquisition of used F-18s to cost higher than DND estimate

The total lifecycle cost of the 18 used F-18 fighter jets being acquired by Canada from Australia is higher than the figure estimated by the Canadian Department of National Defence (DND).

The total lifecycle cost of the 18 used F-18 fighter jets being acquired by Canada from Australia is higher than the figure estimated by the Canadian Department of National Defence (DND).

In a fiscal analysis of the Interim F-18 aircraft, the Parliamentary Budget Officer (PBO) has estimated the total lifecycle cost of the fighter jets at C$1.09bn ($819.52m), which is 22% higher than the DND’s estimate.

The difference is largely due to costs in the operations and sustainment phase. According to the PBO, costs required to undertake life extension and upgrade are about C$120m ($90.22m) higher than DND’s estimate.

Canada signed a deal in November to purchase 18 second-hand legacy F/A-18 Hornets from Australia. The cost estimate of the operations and sustainment phase is related to three categories, including maintenance and munitions, upgrades, and fuel usage.

In response to the assessment of the PBO, the DND explained that the difference in the cost estimate was due to the non-inclusion of its contingency in the calculations made by the PBO.

“The RCAF will use the F-18s to complement its existing fleet until the procurement of a new generation of fighter jets is completed.”

The DND further stated: “The PBO figures for upgrades of the interim fighter fleet include estimates for CF-18 combat upgrades; we are still producing options for these upgrades.

“While we are confident that our methodology is sound, we will continue to work with the PBO, the auditor general of Canada, and other outside entities as part of our commitment to responsible use of taxpayer dollars.”

According to the DND, the F-18s being purchased are very similar to those currently in service with the Royal Canadian Air Force (RCAF). The acquisition is expected to augment the existing CF-18 fleet.

The RCAF will use the F-18s to complement its existing fleet until the procurement of a new generation of fighter jets is completed.

Last month, Canada received the first two interim aircraft in Cold Lake. Work is underway to modify these aircraft to meet the requirements of the Canadian Armed Forces.

The Australian Air Force plans to phase out its F/A-18 fleet and fully transition to its F-35 Joint Strike Fighter capability by 2023.

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