Monday, November 01, 2010

Things that need to be fact-checked

This National Post editorial, here:
Not going ahead with the promise to purchase would have its own set of consequences, both financial and military. While Mr. Ignatieff claims that Canada would pay no penalty, the Memorandum of Understanding our country signed with its NATO allies clearly imposes cancellation costs in the neighbourhood of $551-million.
No time to pull out that MOU this morning but I believe that's wrong. Any penalties would accrue once you've ordered and then you back out due to costs you have caused others to incur in the manufacturing. People can check that for themselves, it's in the withdrawal section. And again, you'd only incur that if we were in a contract, which we won't be until at least 2013, if we go with the F-35s after a competitive process. Here's Pugliese's early reporting on the point of penalties:
In 2006, the Conservative government signed an agreement that would commit Canada to contributing $551 million U.S. between now and 2051. That would cover Canada's portion of equipment and development needed for its share of the JSF planes that it wants to purchase.

That memorandum allows for a country to pull out of the agreement, with aerospace industry officials noting the penalties at this point would be small as Canada has yet to order aircraft.
So the editorial is fast forwarding us to a cancellation penalty situation which doesn't exist right here and now. It's misleading.

The part of the editorial on $12 billion in contracts is also presented in a torqued manner. As I understand, that's the amount the government says we could compete on, it's not a guaranteed amount at all, which is the way it reads there.