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How Much Is One Killer Airplane Worth?

The $475 million price of one F-35 could buy a lot of social good. What would you have government spend it on?

By Katie Hyslop 13 Aug 2012 | TheTyee.ca

Katie Hyslop reports on youth and education issues for The Tyee Solutions Society. Find her previous articles published in The Tyee here.

Two years ago the federal government announced its intent to purchase 65 F-35 Lightning II Joint Strike Fighter aircraft for the Canadian military. The Department of National Defense justified the $9-billion expense as part of the Conservative government's plan to renew military infrastructure, and "defend against the threats of the 21st century at home."

In 2011 Parliamentary Budget Officer Kevin Page took another look at the purchase, and put the lifetime cost of the planes at over $29 billion -- about $450 million per plane, including the upgrades and maintenance required over a 30-year period. That's in 2009 numbers, though, meaning the total in 2012 dollars is $475 million.

It may go higher. A contract outlining a set fee for the planes has yet to be signed. And Page reported significant delays in the planes' production, increasing costs that meant prices could be subject to change. The government claims Page's estimate is inflated, but has handed responsibility for the acquisition over to the Department of Public Works and Government Services from the Department of Defense. A House of Commons committee is now re-analyzing the procurement numbers and hopes to reveal a new official cost in the fall.

But let's take the Parliament's Budget Officer, a man enlisted for his ability to understand numbers, at his word: let's say one F-35 Lighting II Joint Strike Fighter will cost Canadians $475 million.

We want our Canadian pilots to be well equipped (although there's a lively debate over whether the single-engine F-35 meets that test in the Canadian arctic). But so often we hear that just a little money would keep the lights on in this community service or that social program. Three million Canadians live below the low-income cut-off line. As many more again are at risk of being without shelter.

That prompted us to wonder: What if we only bought 64 planes instead of 65? What if we targeted the other $475 million at some of the harms not just threatening but often defeating millions of Canadians, "in the 21st century at home?" What other kinds of security could the price of a single jet plane buy?

We asked economists, anti-poverty organizations, and social policy thinkers for a wish list of what $475 million could buy in the way of programs to help neutralize the risk of low-income Canadians breaching our social safety net and falling into homelessness and a life of poverty. Here's just a sampling of what that money, deployed for civilian instead of military causes, could afford.

A room of one's own

In 2010, urban health think tank the Wellesley Institute estimated that 3.1 million Canadian households were "housing insecure," meaning they spent more than 30 per cent of their income on shelter. At the same time, about 300,000 people were visibly homeless at least once that year, while as many as 900,000 were "hidden" homeless: staying with friends or family, sleeping on couches.

Megan Yarema, director of education and outreach with the national charity Canada Without Poverty, estimates that for an extra $2 billion the federal government could create or repair enough social housing to give secure accommodation to every Canadian. But that would also mean foregoing four new planes. So how much housing could the $475 million price of a single plane buy?

Spread across the country, perhaps not a great deal. According to the Wellesley Institute, a new unit of social housing in Canada would cost on average $180,000. Spread across 10 provinces and three territories, $475 million would only cover 203 units of housing each, whereas B.C. alone needs 2,000 new units of social housing right now to meet needs.

That average price doesn't take into account larger units for families with more than one or two kids, either. Bigger units would cost more, bringing the total number of people helped below 150 -- or a few more "if cities already had land,” Yarema says, "as that would bring down the cost."

Targeted in one place, however, $475 million could do rather more. It might, for example: put a roof over the head of every homeless person in Victoria, with money to spare to operate its supportive housing for almost 27 years; provide 4,750 new social housing units for employable homeless in Alberta, a province that needs 8,000 new affordable housing units to end homelessness. The same $475 million could build 3,167 new houses on Aboriginal reserves, which sounds like a lot but would in fact address only four per cent of the identified housing need there.

Even a small investment in housing can make a difference though. The Community Social Planning Council estimates that each new unit of social housing in B.C. will cost $200,000 to build. But the federal government has all but retired its social housing program, spending less and less over the past 20 years, while the B.C. government has been notoriously slow in breaking ground on new social housing.

This leaves non-profits searching for ways to secure housing for those in need. But without equity of their own, borrowing to build social housing means mortgage payments that may be too high for affordable rental rates. Alice Sundberg of Vibrant Surrey Poverty Reduction Society says if the federal government put $475 million into providing non-profits with capital grants of $50,000 per unit for housing -- and the provincial government matched it -- non-profits could leverage the support to build 9,500 new units.

"You'll have 50 per cent of the equity that you'll need for your units," Sundberg told The Tyee Solutions Society.

"What governments are really trying to avoid are these long-term commitments to pay a (rental) subsidy for a term of the mortgage. So if they can instead provide a capital grant, it allows the society to leverage more dollars and still provide affordable rent. Then there's no further requirement of the government to be involved."

Put that in context: one foregone fighter jet could end housing insecurity for almost 70 per cent of the 13,500 families and individuals on BC Housing's wait list -- more than 1,000 of them listed as a priority because of homelessness, medical need or other emergency situations.

And Sundeberg isn't talking about people with addiction or mental health issues that require extra support, like life skills training, 24-hour onsite staff or meal programs. Rather, she says, "it's [housing for] people who can live in the community. Many of them are working poor," who can't afford clean and safe shelter suitable for their individual or families' needs.

Taking care of children

Stable housing gives families a chance to disrupt the cycle of poverty. But in order to stay out of poverty, families also need an adequate income. For parents of young children without affordable childcare, that's hard to achieve.

Childcare spaces are a scarce commodity in B.C. Families shell out anywhere from $600 to $2,000 a month for childcare of varying quality. The Canadian Centre for Policy Alternatives is asking Ottawa to invest $2.3 billion this year alone to meet national childcare needs. The Coalition of Childcare Advocates of B.C. meanwhile puts the additional cost to taxpayers of introducing good quality, affordable childcare here for one to 12 year-olds, at $1.2 billion over five years.

If B.C. were to adopt a provincial childcare strategy for just three to five-year-olds, into which government put $4 for every $1 that parents were required to pay, $475 million would keep more than 45,238 children in care spaces for a year or support two years of care for 22,619 children.

The investment would pay for itself, Yarema says.

"Publically funded childcare not only helps families economically, but it also allows more women to enter and stay in the workforce," she said. "In Quebec, where a universal childcare program is in place, labour force participation of women has increased. This means more financial stability for families and more money into the economy."

Buoying the poorest

Economist Iglika Ivanova spoke for almost everyone we recruited for this article when she pointed out the mismatch between the price of the world's most advanced production warplane, and the cost of helping people through social programs. In short, flying war machines are a lot cheaper than programs designed to help people.

Said Ivanova: "If you're going to actually look into reducing poverty, [$475 million] is a small amount for the country as a whole."

But again, it's a number that could make a big difference to a province, says Ivanova, who works for the B.C. office of the Canadian Centre for Policy Alternatives. It could, for example, increase welfare rates in this province for a year, by $200 for individuals, $300 for couples without children, and $400 for couples and single people with children. Equivalent to a monthly raise of between 32 and 42 per cent, the extra generosity would cost $383 million per year.

It won't bring individuals or families above the poverty line, but Ivanova says it's a start. "What that money would do for the families, is increase the embarrassingly low rates we have now," she told The Tyee Solutions Society.

The leftover funds could return some money to single parents on social assistance whose child support payments are now being clawed back through deductions in their monthly cheques. In B.C., the amount of child support a non-custodial parent owes depends on their annual income (although a judge ultimately determines the payment). For example, a father who makes an annual gross income of $36,000 would likely have to pay $327 per month in support for one child. But if the mother is on welfare, that $327 is deducted from her monthly cheque as unearned income, leaving her no further ahead.

Before welfare reforms in 2002, parents could keep up to $100 of their monthly child support payments. Ivanova would like to see that returned for the 13,760 single parent families on welfare as of June 2012: "If every single-parent family has $100 a month exempt [from clawback] that would be $16 million (per year)."

With $475 million, minus the $383 million to buoy up monthly welfare payments, we could support that payment for five years.

The lifetime costs of one jet could also ensure food security for over 13,000 people on disability assistance. While higher than B.C.'s welfare rates, disability assistance still falls below the low-income cut-off line in most areas of the province after tax. A single person on disability receives just $10,872 annually, not including GST/HST or carbon tax rebates, or any other benefits like Canada Pension Plan Disability Benefits.

Someone on disability in B.C. who is able to work may earn up to an additional $800 per month, enough to put a single person just over the poverty line in a city the size of Vancouver. But if you can't work or find a job, you have to make do on $906 a month for housing, clothing, and food.

One foregone F-35 would cover $100 extra per month for 13,194 people on disability assistance for 30 years. It wouldn't be enough to pull them out of poverty, but it might allow for such small quality-of-life improvements as better food.

And that's just one jet.

"If all 65 jets were not purchased and those monies were instead spent on food security for the most vulnerable, some 857,639 people -- almost equal to the number of people using food banks every month -- could be supported over 30 years," Rob Rainer, executive director of Canada Without Poverty told The Tyee Solutions Society via email. "Bombs or bread, indeed."

Support for Aboriginal people

The 2012 federal budget promised new support for Aboriginal Canadians, including a $275 million investment in Aboriginal education. But Aboriginal leaders have dismissed the number as insufficient to meet the underfunded needs of Canada's Aboriginal youth.

An additional $475 million would almost triple resources for Aboriginal education. But the Assembly of First Nations (AFN) points out that the price of one jet could also cover the one-time cost of 38 of the 40 new schools needed on Aboriginal reserves (at an average of $12.5 million each). Or it could pay the $126 million annual cost of funding First Nations language education for three and a half years -- bringing First Nations language instruction up to the same level as public school language programs.

Or how about funding primary healthcare (visits to family doctors, nurse practitioners, pharmacists, etc.) for residents of remote Aboriginal communities? One foregone fighter plane would cover the entire cost of primary healthcare for men, women and children in 70 of the nation's most remote and isolated Aboriginal communities for a year, with almost $180 million left over.

It's not just doctors and new schools that rural and remote reserves are missing. Many are in need of other infrastructure from roads and bridges to basic housing. This was apparent in the media firestorm earlier this year over Attawapiskat, a First Nations reserve in northern Ontario where residents were forced to live in overcrowded makeshift tents or dilapidated, mouldy housing without plumbing. An extreme case, but poor infrastructure and overcrowded living conditions are common on reserves across the country.

As of last August, 118 First Nations reserves were on boil-water orders, and the federal government's own analysis found 73 per cent of on-reserve water systems were at risk. The price tag for bringing safe water to every reserve is $6.578 billion.

Still the AFN estimates that $169 to $189 million more a year in federal spending would begin to retire unsafe reserve infrastructure like housing and roads.

The $475 million price of one warplane wouldn't close the infrastructure gap between reserves and non-Aboriginal communities. But it would almost double Ottawa's 2011-2012 commitment to its National First Nations Infrastructure Investment Plan, which puts money in schools, houses, roads, and water infrastructure for reserves, either for Ontario, Quebec and the Atlantic provinces combined, or all the prairie provinces.

Informing decision-makers

One of the smaller news items during coverage of the 2012 federal budget was the loss in action of the National Council on Welfare. Created under a Liberal federal government in 1969, the council had a mandate to advise the Ministry of Human Resources and Skills Development Canada on the country's social development, particularly poverty and low incomes. It also provided a wealth of information to the public on provincial welfare rates, what poverty costs the rest of society, and possible solutions to poverty.

"We were the only organization that looked annually at welfare incomes province by province, and at poverty profiles: who's in poverty, why are they in poverty, and what can we do about it," the council's former chair, John Rook, told The Tyee Solutions Society.

The federal government dismissed Rook's organization along with several similar advisory groups in science and the environment. On the money it will take to purchase one F-35, the National Council on Welfare could have completed its mission well past the quincentenary of the War of 1812, sometime into the final quarter of the 25th century.

"It was a really sad day when I heard the government wouldn't support something like [fighting] poverty, but they could do things like provide for an airplane that's going to do a lot of damage in the world," Rook lamented.

If he had $475 million to deploy, Rook would not only restore the council's funding. He'd raise it, to pay for research into how ideas like those floated in New Democratic Party MP Tony Martin's bill C-545, An Act to Eliminate Poverty in Canada, could be implemented. (The bill, unlikely to become law, would require government to create a national poverty reduction plan.)

Ivanova would like to see money returned to Statistics Canada, which will lose $53.9 million from its annual budget by 2014-15. According to the Globe and Mail, the national agency's spending had already been frozen for the previous three years, despite contracted increases in wage costs.

The service, which conducts a national census every five years, also completes regular surveys on 350 different topics, including income and labour, employment, health and immigration statistics. It offers the most comprehensive and credible look at Canadian demographics and much else. But last month Statistics Canada quietly released a list of 34 programs that will see cuts or be discontinued to meet its diminished budget.

While few tears may be shed over the loss of two of the four annual hog surveys, other cuts are more alarming. Programs mustered out included inventories of facilities providing care for the elderly or long-term patients with severe mental illnesses; information about Canadian companies involved in drilling and other services in the oil and gas industry; and the longitudinal Survey of Labour and Income Dynamics, which provides information on the income of Canadian families -- an essential tool for research on income inequality in Canada. $475 million would have kept those and others running for another eight years (without taking inflation into account).

Defending Canadians at home

Even a government retreat on its jet purchase of one fewer plane wouldn't buy much of a salute from left-leaning think tanks, economists, or anti-poverty groups. $475 million simply isn't enough to buy everything those advocates say Canadians need to be happy, healthy and equal. But even so it could give thousands of vulnerable Canadian households secure shelter, improve health care for tens of thousands of our most marginalized citizens, or help welfare recipients climb out of poverty and stay out.

For many Canadians, those are matters of security more immediate than making sure the Russians stay off our ice flows.

And now it's your turn. Appoint yourself Minister of WhateverYouWish and share in a comment below how you'd spend $475 million, either on a 65th F-35 fighter jet or something else. Or tweet your ideas (@TheTyee).  [Tyee]

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