Plan to buy more fighter jets puts Canada on hook for bigger share of F-35 costs

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Canada is being forced to shoulder a bigger share of the costs of developing F-35 fighter jets even though it has not decided whether it will actually buy any.

Canada is one of nine partner countries in the F-35 project, each of which is required to cover a portion of the stealth fighter’s multibillion-dollar development costs to stay at the table.

Each country pays based on the number of F-35s it’s expecting to buy. Canada has pitched in more than half-a-billion dollars over the last 20 years, including $54 million last year.

But that amount was based on the Stephen Harper government’s plan to buy 65 new fighter jets to replace Canada’s aging CF-18s, which the Trudeau government has since officially increased to 88.

Even though Canada has not committed that those 88 jets will be F-35s, the Department of National Defence says that change means it will have to pay more to remain a partner — including about $72 million this year.

« Canada’s costs under the F-35 (partnership agreement) are based on an intended fleet size, » Defence Department spokeswoman Ashley Lemire said in an email.

« Canada changed its fleet size within the F-35 (agreement) from 65 to 88 aircraft to align with government decisions on the size of the intended permanent fighter fleet to be acquired through competition and the payment increased accordingly. »

As each partner contribution is determined annually, based on the overall cost of the F-35 development program for that specific year, Lemire said she could not provide details on how much more Canada will have to pay.

The F-35’s development costs have been a constant source of criticism over the life of the stealth-fighter program, which Canada first joined under the Chretien government in 1997. The entire program is believed to have already cost more than US$1 trillion.

The Trudeau government says it plans to keep Canada in the F-35 development effort until a replacement for the CF-18s is chosen — partners in the development work can buy the planes at a lower price and compete for work associated with their production and long-term maintenance.

Canadian companies have so far won more than $1.2 billion in contracts related to the F-35, according to the government.

‘Biased toward performance’

The F-35 is one of four planes slated to participate in the $19-billion competition that the government plans to launch this spring, the others being Boeing’s Super Hornet, Eurofighter’s Typhoon and Saab’s Gripen.

The competition isn’t scheduled to select a winner until 2021 or 2022, meaning Canada will be on the hook for several more payments. The first new aircraft is expected in 2025 and the last in 2031, when the CF-18s will be phased out.

F-35 maker Lockheed Martin says more than 350 of the stealth fighters have been delivered to different countries, while Israel became the first country to use the plane in combat last year when two of the jets struck targets in neighbouring Syria.

Acting U.S. defence secretary Patrick Shanahan, a former Boeing executive, nonetheless criticized the program on Monday, saying it « has room for a lot more performance. »

« I am biased toward performance, » he was quoted as saying when asked if he is biased toward Boeing. « I am biased toward giving the taxpayer their money’s worth. And the F-35, unequivocally, I can say, has a lot of opportunity for more performance. »

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Passenger bill of rights may let airlines ‘off the hook’ without an ombudsman: advocate

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A consumer rights advocate is frustrated Canada’s proposed new air passenger bill of rights doesn’t include plans for an independent body that will review passenger complaints.

Highlights of the proposed new regulations were released earlier this week.

« The most polite thing I could say is that we’re disappointed in what is being produced. After all this time — it’s been decades in the making — and really it’s like a bucket of muddy water, » said Bruce Cran, president of the Consumers Association of Canada.

« One of the things we would have liked to have seen, in fact I think it’s essential, is some sort of an ombudsman structure so people can put their complaints into an independent arbitrator. There’s not much in there for consumers. »

The U.S. and Europe have had passenger rights regulations in place for years, and Cran jokes that after this bill is put in place Canadians still won’t have them — they’ll have an « airline bill of rights » instead.

Right now, airlines set out their own terms and conditions, and if they break their own rules, a person can complain to the Canadian Transportation Agency, an independent tribunal run by the federal government.

Consumer groups have long complained that the CTA does little to enforce the payment of those tariffs, and that most Canadians don’t understand airlines’ obligations or know how to file a claim.

The new regulations would put more black-and-white rules in place for airlines — for example that passengers must be compensated a set amount in cash for delays, or airlines could face big penalties — but enforcement will still be kicked back to Canadian Transportation Agency staff.

Law ‘should protect passengers’

« I think there are a lot of things in there that probably let them off the hook and they’ll be decided in the favour of the airlines rather than the airline passengers … it’s not a matter of compensating passengers, it’s a matter of making it difficult for the airlines to survive if they don’t conform to what’s supposed to be the law, which again, should protect passengers, » Cran said.

The CTA had a complaints commissioner back in the early 2000s, but the position was eventually eliminated and its highly publicized annual reports faded away.

David Western, the former director of tariff enforcement and complaints with the CTA, said he was essentially the commissioner’s right-hand-man.

Past commissioners made ‘huge difference’

« I think that the [complaints] commissioner made a huge difference in terms of customer service from the airlines, » he said.

Western said that when Canadian Airlines and Air Canada amalgamated in 1999, there were thousands of complaints about the level of customer service from Air Canada, but over the two commissioners’ terms, service improved enormously.

« We were getting satisfaction on about 75 per cent of the complaints that had not been resolved satisfactorily by the airlines. »

The trick, according to Western, was that the commissioner put out an annual written report — and companies really, really didn’t want to be profiled in it.

He said one commissioner, an ex-NHL referee, loved to « blow the whistle » on cases where customers hadn’t been treated fairly.

« I think that there are advantages to having a readily identifiable spokesperson or an ombudsperson who people can recognize and turn to, » he said.

However Ian Jack of the Canadian Automobile Association says Canadians should see how the new bill plays out before worrying about adding another layer of bureaucracy.

Too soon to say

The CAA books about 700,000 trips each year, trips that Jack stresses aren’t for business travellers or frequent flyers, who are often taken care of more quickly when there’s an issue with a flight.

« It’s a brand new regime and I think we have to see how it works until you know before we decide that it’s not working, » Jack said.

« While the regime that’s been proposed by the government is far from perfect … the fact is, this is a solid advance over what we have had, which is a chaotic series of semi-hidden rules that nobody really knew about, where people who flew a lot were treated a lot better than people who didn’t. »

The CTA says there are currently no plans for an ombudsman, and if facilitation and mediation aren’t conclusive, the complaint will then go through an adjudication process.

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