Canada says reviewing F-35 report, denies plan to cancel

F35

The Canadian government said on Thursday it was reviewing an independent report on the cost of the F-35 Joint Strike Fighter program, but denied that it had decided to cancel its planned purchase of 65 of the Lockheed Martin Corp warplanes.

The CTV network reported earlier that the cost of Canada's planned F-35 purchase was set to soar in cost and the government would start looking at alternative planes.

The media report was the latest embarrassment over the F-35 for the Conservative government, which announced in July 2010 it would buy 65 of the Joint Strike Fighters for C$9 billion.

Ottawa consistently brushed off critics who said the figure was too low, but had to launch a formal review of the project in April after a spending watchdog said the initial decision to buy the jets had been based on bad data from officials who deliberately downplayed the costs and risks.

CTV, citing unnamed sources, said the government would next week release an independent study showing the cost of buying and maintaining the jets was in fact around C$40 billion ($40.4 billion), much higher than the initial estimate of C$25 billion for purchase and maintenance.

The television network did not say what time period the C$40 billion covered. The C$25 billion estimate was for 20 years. Andrew MacDougall, spokesman for Prime Minister Stephen Harper, said the government was reviewing the report prepared by the accounting firm KPMG, but that reports indicating the government had decided to cancel its F-35 buy were false.

He said the government planned a "comprehensive public update" before the House of Commons takes a Christmas break at the end of next week.

"We are committed to completing the seven-point plan and moving forward with our comprehensive, transparent approach to replacing Canada's aging CF-18 aircraft." MacDougall told Reuters.

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