Fine.
On the matter of costing, Mr. Chairman, there are three key components: acquisition, sustainment, and operating. For the F-35 the acquisition envelope has been set at $9 billion. Sustainment and operating costs are estimated at $5.7 billion and $10 billion respectively for 20 years, beginning when the aircraft would be acquired later in this decade.
I would note that the approach we took for costing the F-35 is exactly the same approach—and the same 20-year timeframe—that has been taken with all our air asset procurements going back at least to 2004: for the maritime helicopter project, the Chinooks, the Hercules J models, and the new C–17 Globemasters.
In each case, announcements and communications focused only on the costs of acquisition and sustainment. Never did we talk about operating costs, Mr. Chairman.
On operating costs, the Vice Chief of the Defence Staff oversees a rigorous business planning process every year to ensure that the departmental costs of operating all of our fleets are affordable within our base budget.
The operating costs for the next generation fighter program would be included in the department's base operating budget—as are the operating costs of all other fleets—and debated in Parliament annually as part of the estimates process.
For decision-making purposes, we have assumed that the operating costs of the F-35s will be similar to those being incurred in our base budget for operating the CF-18 fleet.
Our approach to costing has never been characterized as “full-life cycle”. Our approach has been consistent and compliant with Treasury Board policy and guidance.
In this regard, in posting a comparison of the department's estimates and the Parliamentary Budget Officer's estimates on our website, we used the same average price per aircraft as all nine partners are using and have received from the joint project office, and, on a good-faith basis, we presented our estimates on the understanding that the Parliamentary Budget Officer did not include operating costs in his calculations.
As stated in the chapter, Mr. Chairman, we accept the Auditor General's recommendation on life-cycle costs, and within the context of the seven-point plan set out by the government, we will report annually on cost estimates through the new national fighter secretariat.
I will now turn my remaining time over to the Commander of the Royal Canadian Air Force, Lieutenant-General André Deschamps.