Hogan, who presented the findings to the House of Commons on Tuesday, examined whether the Department of National Defence (DND) could deliver the new fighter capability on time and within budget. She found not only escalating costs but also significant risks threatening the project’s timeline.
In 2022, the federal government estimated the cost of the F-35 contract at $19 billion. Hogan’s audit revealed that these estimates were based on “outdated data” from 2019 rather than more accurate 2022 figures from the Joint Strike Fighter Program Office.
“We found that the department was not using the annual 2022 estimates produced by the Joint Strike Fighter Program Office that were more up to date than 2019, which were showing that costs of the aircraft had already increased substantially,” the report stated. It also highlighted that DND was only 50 per cent confident in its 2022 forecast.
Between 2022 and 2024, DND’s latest projections show a 46 per cent increase in the cost of the programme, driven largely by global inflation and other external factors. However, the reported $27.7 billion still does not include necessary components like infrastructure and advanced weaponry.
The audit added that full operational capability will require at least another $5.5 billion. Hogan recommended DND update its cost assessments annually and include all components in its total calculations—a recommendation the department accepted.
Construction of two key fighter squadron facilities in Cold Lake, Alberta, and Bagotville, Quebec, is also behind schedule by more than three years. This delay could lead to further cost increases as interim solutions are developed.
Under current plans, 88 F-35 jets are scheduled to be delivered between 2026 and 2032, with the first eight arriving in Arizona in 2026 and 2027 for pilot training. Aircraft will begin arriving in Canada from 2028, but necessary infrastructure will not be ready until 2031, according to DND estimates.
A shortage of qualified pilots continues to pose a challenge to the transition from CF-18s, an issue first raised in a 2018 report by the auditor general. “The government needs to be ready to receive them. I think that’s my biggest concern,” Hogan told reporters.
She added that DND must do more to monitor the programme’s total cost, noting that although some cost increases were out of its control, delays were “the department’s slowness,” which added further expenses.
The report comes shortly after Prime Minister Mark Carney pledged to meet NATO’s defence spending target of two per cent of GDP, with an emphasis on boosting Canadian defence manufacturing. It also coincides with a government-ordered review of possible alternatives to the F-35 amid ongoing trade tensions with the United States.
Defence Minister David McGuinty confirmed that 16 F-35 jets have already been acquired and are due for delivery in the coming months. However, he declined to confirm whether the full purchase would proceed, stating, “We’re going to begin with 16, and then we’ll see where we are.”
2025 Spring Reports of the Auditor General of Canada
