Canada's plan to replace its aging warplanes with U.S.-made F-35 stealth strike fighters is projected to cost almost 50% more than initially disclosed, according to a report from the federal Auditor-General.

The findings come at a time when Prime Minister Mark Carney's government is contemplating scaling back the order for F-35s and opting for European-made fighter planes to reduce reliance on U.S. military equipment.

The federal government, which recently finalized a deal to purchase 88 F-35 Lightning fighters from Lockheed Martin, initially estimated the acquisition cost at about $19 billion. However, the Auditor-General's office revealed that by 2024, the estimated costs had risen to $27.7 billion.

The replacement program for the warplanes faces significant risks that could potentially delay the introduction of the new fleet of fighters. The construction of two new fighter squadron facilities in Cold Lake, Alta., and Bagotville, Que., to accommodate the F-35s is over three years behind schedule, and there is a potential shortage of qualified pilots within the Forces, the Auditor-General reported.

Inflation, fluctuations in foreign exchange rates, and increased demand for munitions are cited as factors that have contributed to the rising costs of acquiring the F-35s. The Department of National Defence failed to consistently monitor inflation and foreign currency exchange rates, which could have impacted the overall cost.

Even with the updated price tag of over $27 billion for the F-35s, this amount does not include necessary Forces infrastructure upgrades and advanced weapons, which would add at least another $5.5 billion to the total cost of acquiring the fighters.

Canada's current fleet of CF-18s is nearing the end of its service life and must be replaced promptly to fulfill operational commitments, such as defending Canada and North America, the Auditor-General's office emphasized. The CF-18s are crucial for the North American Aerospace Defense Command and are required to be on continuous alert to address potential aerial threats.

The CF-188 Hornet, which entered service in the 1980s, has had its operating life extended through the Hornet Extension Program. The plan is to gradually phase out the CF-18s between 2025 and 2032 and replace them with F-35s.

David McGuinty, the Minister of National Defence, acknowledged the Auditor-General's findings and pledged to provide regular updates on acquisition projects. He attributed the significant cost increases to external economic conditions driven by the COVID-19 pandemic, including global supply chain disruptions, workforce shortages, and increased inflation and foreign exchange rates.

The ongoing review within the department regarding whether to reduce the F-35 order was not addressed by the minister. Following Mr. Carney's statement that Ottawa would consider scaling back its F-35 purchase plans to acquire a more cost-effective alternative aircraft with additional domestic industrial benefits, the decision remains pending.