Since taking power in 2006, Canada’s Conservative Party has worked hard to portray itself as the party of sound fiscal practice. All of that went up in smoke earlier this month, as an independent audit confirmed that the costs of stealth fighter jets within the national defense budget had ballooned from $16 billion to nearly $46 billion.
In the House of Commons, the Conservative political class had dodged questions about the cost of these jets for about 18 months. Michael Ferguson, Canada’s Auditor General, blasted this fiscal mismanagement in a scathing spring report, blaming officials in the ministry of national defense for the spiraling costs and keeping the facts from ministers. The Parliamentary Budget Officer, Kevin Page, put the price tag of the undisclosed funds at around $30 billion.
The Auditor General’s report did spark some action from the administration of Prime Minister Stephen Harper but the government never acknowledged the costs had run out of control. It froze spending on aircraft procurement and stripped the responsibility for the acquisition of these planes away from the military, handing it instead to a secretariat in the public works department. The military brass was enthralled by fifth-generation F-35 fighter planes, refusing to consider any others. The government, it would seem, never questioned the numbers nor dared to ask the hard questions.
The government could have spared itself some hardship by coming clean on the costs of the plane after a leaked audit report on December 7 hinted of a hefty price tag. But instead, a nervous Peter MacKay, Canada’s defense minister, refused to take responsibility for the bungling of the file when grilled by reporters. A week later, the full audit report was released on December 13 and put the cost and maintenance of 65 F-35 fighter jets at $46 billion over 42 years, and not $16 billion as stated by the Tories. The public was initially told it would cost $9 billion.
The government repeated that it was ready to push the reset button on the whole acquisition process but so far has refused to call tenders. Other options will now be looked at but the F-35s are still on the table.
The new official in charge, Public Works Minister Rona Ambrose is ably trying to calm the storm.
But the “F-35 fiasco,” as interim Liberal leader Bob Rae put it, is of the Conservatives’ own doing. He lashed out at the Harper government, accusing it of dishonesty and incompetence—and called for the resignation of MacKay.
Over the last year and a half, the Harper government has had ample opportunity to admit its mistakes, Rae hinted. But instead, Conservatives lashed out at their critics. When the Liberals called for a full review of the process, Harper accused them of “playing politics with the lives of our men and women in uniform,” and that he wouldn’t tolerate it.
The Tories have tried their best to contain the damage but the F-35 debacle has been a hard landing for Harper.
The reputation of the Conservatives as strong defenders of the public purse has suffered. In every election campaign, Harper has taken great pains to sell the Tories’ record on fiscal management and responsible spending. But Harper has had to push back his timetable for a balanced budget three times and now has to deal with the fallout from the skyrocketing costs of the fighter jets.
Can he really sell the F-35s to the Canadian public at a time when he’s gutting at least $5.2 billion in government expenses and giving pink slips to 20,000 government employees? He’s got three years before the next federal election in 2015 to turn things around. It won’t be easy—but the Tories don’t give up easily.
June 1: This AQ-Efecto Naím segment looks at sustainable cities in the hemisphere.