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The Harper government responded by suspending the procurement, ordering the RCAF to conduct an “options analysis” of the F-35 and alternative aircraft, and setting a $9 billion limit for acquisition cost.

The Harper government also commissioned KPMG to clarify the cost of 65 F-35s. In November 2012, the accounting firm came up with a total project cost of $45.8 billion. The Canadian dollar was then at US$1.01.

In November 2014, the Department of National Defence (DND) released an update on the F-35 procurement that estimated the same total project cost as KPMG, namely $45.8 billion. It arrived at that number using an exchange rate of US$0.92.

Here’s the bottom line: the total cost of the F-35 program is now $49 billion — an increase of $3.2 billion from the projections provided by KPMG in 2012 and DND in 2014.

In its update, DND also acknowledged that changes in the exchange rate were a “major, uncontrollable risk to the program cost estimate.” It went on to explain that an exchange rate of US$0.755 would raise the acquisition cost by approximately $1.7 billion and the sustainment cost by approximately $2.6 billion. Sustainment costs, incurred during major repairs and upgrades, are affected by the exchange rate because this work is conducted by the F-35’s manufacturer, Lockheed Martin, in the U.S.

By happenstance, the Canadian dollar has been hovering around US$0.755 for the last few weeks. This means that 65 F-35s would now cost $10.7 billion — well above the $9 billion acquisition cost limit set by the Harper government — and that the sustainment cost would now be $16.86 billion, up from $14.26 billion.