The House of Commons Standing Committee on Public Accounts met to study Report 2 of the Auditor General of Canada, “Delivering Canada's Future Fighter Jet Capability,” which examines the Department of National Defence’s progress in introducing the CF-35A fighter jet fleet. Appearing were Karen Hogan, Auditor General of Canada; Stefanie Beck, Deputy Minister of National Defence; Paula Folkes, Associate Assistant Deputy Minister at Public Services and Procurement Canada; Lieutenant-General Jamie Speiser-Blanchet, Commander of the Royal Canadian Air Force; Heather Sheehy, Assistant Deputy Minister for Materiel; and Peter Hammerschmidt, Assistant Deputy Minister for Infrastructure and Environment.
Karen Hogan stated that the original $19-billion cost estimate for the future fighter capability project was based on outdated information and had risen to $27.7 billion by 2024, with at least $5.5 billion more needed for essential elements like infrastructure upgrades and advanced weapons. She noted that construction of two fighter squadron facilities was over three years behind schedule, requiring an interim plan that would further increase costs, and that a shortage of qualified pilots remained a key risk. Hogan recommended more accurate cost tracking and proactive risk management, emphasizing that all parties should agree on what the Canadian Armed Forces need and then allow the public service to deliver without political changes.
Stefanie Beck acknowledged the cost increases but attributed many to factors beyond the department’s control, such as inflation, foreign exchange fluctuations, and the post-pandemic global environment. She highlighted that the project includes a significant contingency fund, which rose from $2 billion to $6.2 billion to account for risks like exchange rate changes, and stressed that the department is “full steam ahead” with the F-35 contract until directed otherwise. Beck also noted that the department is diversifying procurement sources, citing recent purchases from Australia and Europe, and that a defence industrial strategy is being developed to boost sovereign capabilities.
Paula Folkes explained that PSPC led the open, transparent, and competitive procurement process for the F-35, which included a fairness monitor and third-party review, and that the F-35 was the preferred bidder across cost, capability, and economic benefits. She noted that Canada’s decision to join the joint strike fighter program allowed access to detailed infrastructure requirements only after the purchase decision, contributing to cost uncertainties. Folkes also highlighted that Canadian firms already supply over $3 million worth of parts per aircraft and that a regional maintenance depot in Mirabel, Quebec, will support the fleet.
Lieutenant-General Jamie Speiser-Blanchet confirmed that the Royal Canadian Air Force is on track to receive the first F-35s in 2026 for pilot training in Arizona and in 2028 in Canada, with interim facilities planned until permanent infrastructure is ready in 2031. He reported progress in addressing personnel shortages, with fighter pilot staffing rising to 70.5% and maintenance personnel to 86%, and outlined initiatives such as re-attracting retired pilots and partnering with civilian colleges for technician training. He emphasized that a mixed fleet of F-35s and F-18s during the transition would be managed carefully, and that any change to a different aircraft would duplicate infrastructure and training costs.
Heather Sheehy elaborated on the cost estimation process, explaining that the original 50% confidence level in the $19-billion estimate was typical for early-stage projects, and that the 80% confidence level for the $27.7-billion figure required a large contingency, with 40% notionally allocated to foreign exchange risks. She noted that every one-cent increase in the exchange rate impacts the project by about $250 million, making contingency essential for risks beyond the department’s control.
Peter Hammerschmidt detailed the infrastructure challenges, stating that design requirements for the F-35 facilities changed significantly after the purchase decision, including the need for heavy steel plates for security, which required redesigning foundations and beams. He confirmed that permanent facilities in Cold Lake and Bagotville will not be ready until 2031, but that temporary structures are on track for the 2028 arrival of jets, and that lessons learned from this process are being documented for future acquisitions.
There was no procedural debate, motions, or votes recorded during this meeting.
AI-generated summary — may contain errors; verify against the official evidence.