F-35 program facing skyrocketing costs, pilot shortage and infrastructure deficit: AG report

Canada's plan to buy 88 U.S.-built F-35 fighter jets is facing significant challenges, including skyrocketing costs, a shortage of trained pilots and a lack of critical infrastructure, according to a new report from Auditor General Karen Hogan.

The audit for the F-35 program is part of Hogan's spring audits, released Tuesday, which also found contracts awarded to GC Strategies for the ArriveCan app and other services regularly did not follow proper processes or deliver value for money. 

In December 2022, the Liberal government announced it had signed a deal to buy 88 F-35 fighter jets from the United States to replace Canada's aging CF-18 Hornet fleet.

Hogan's audit of the F-35 program focused on whether National Defence's plan to acquire the jets was on schedule and on budget, finding significant challenges on both fronts.

"This is a large, multi-year project that requires active and ongoing management of risks and costs to ensure that the CF-35 fleet can be brought into service on time," Hogan said in a statement.

According to the report, the cost of the F-35 program has risen to $27.7 billion — up from the $19 billion National Defence announced in 2023. That's without factoring in the costs for essential infrastructure upgrades and advanced weapons purchases.

Securing critical infrastructure, such as operating bases, and weapons, such as missiles for the aircraft, will cost at least an additional $5.5 billion, the audit said.

Part of the reason for the increased base costs of the program was that National Defence used outdated cost estimates when it announced the deal, but global factors are also to blame.

"We found that an important part of the increase in the department's updated cost estimates of $27.7 billion was caused by global factors, specifically: rising inflation; fluctuations in foreign exchange rates and heightened global demand for munitions."

The audit also said "unforeseen infrastructure complexities" significantly impacted National Defence's cost estimates.

According to the audit, the construction and outfitting of the fighter squadron's main operating bases in Cold Lake, Alta., and Bagotville, Que., are more than three years behind schedule.

The original plan was to have these bases up and running when Canada started receiving its first delivery of F-35s in 2028, but that date has now been pushed back to 2031.

Construction was delayed after National Defence determined that the design needed to be reworked to accommodate specific requirements of the F-35, it said.

With the fighter squadron's main operating bases unfit for service, National Defence was forced to develop an interim operations plan that involved using movable facilities and renovating existing facilities.