Estimated life-cycle cost of military’s Cyclone choppers rises to $15.9B

The Department of National Defence (DND) has revised its estimate of the lifetime cost of owning and operating the air force’s CH-148 Cyclones to $15.9 billion — slightly more than a billion dollars higher than its previous estimate.

CBC News reported last week on 2021 internal documents that projected the full life-cycle cost — including purchase, operations and sustainment — was expected to exceed $14.87 billion.

CBC asked the department at the time for current figures but received only partial information. DND didn’t reveal the latest cost projections until earlier this week.

The revised figures forecast higher sustainment and operating costs over the decade-and-a-half the aircraft is expected to remain in service.

Despite the fact that the maritime helicopter procurement is a two-decade old program, the air force has yet to receive the final two aircraft out of the 28 it ordered.

DND has said it will receive the second-to-last helicopter at the end of next month and the final aircraft in 2025.

Defence Minister Bill Blair told CBC News that while he is “deeply troubled” by the cost increases, there are no plans to ditch the program and begin looking for another aircraft to fill the critical role of anti-submarine warfare.

“The air force still reports confidence in that platform, in the Cyclone,” Blair said. “They are still very much committed to it.”

Still, the department is looking for an external consultant to help it map a way forward for the troubled program, which was initiated by a previous Liberal government in 2004.

A leaked internal report, obtained earlier this month by CBC News, showed that even though the Cyclone has not reached its final operational status (an important designation that indicates the military got what it paid for), the aircraft’s combat, data links and communication systems are becoming obsolete already and need replacement.

Critics have blamed much of the higher cost projections on the fact that the Cyclone is a so-called “orphan” helicopter with its own unique supply chain. Canada is the only country flying the CH-148.

DND has countered that argument by saying the Cyclone supply chain, while unique, is not driving the higher cost projections because those figures are based on flying hours and spare parts.

Blair said the Cyclone’s costs remain manageable.

“My job is to continue to ask questions, whether or not [the program] still makes a good business case for Canadian taxpayers,” he said.

“If the military comes back and says this has become unmanageable, where the costs are unacceptable, then we have to look at alternatives to replacement, and then there are circumstances where going to a different platform may be the right choice.”

Blair said the defence department isn’t at that point.

Retired colonel Larry McWha — an aviation expert who commanded 423 Squadron when it flew CH-124 Sea Kings — said he believes DND and the air force are highly unlikely to ditch the program.

“I think they’re addicted to it,” said McWha, a frequent critic of the Cyclone program. 

“The bureaucracy that’s responsible for this project does everything in its power to convince the authorities, the politicians … to show them that the aircraft, as purchased, was viable.”

The Cyclone is based on the S-92 civilian helicopter. When it was first pitched by the U.S. manufacturer Sikorsky, DND envisioned a relatively pain-free conversion.

Canada’s ‘worst procurement’ ever?

It did not turn out that way.

A leaked internal DND report from late 2021 said that Sikorsky “had limited experience in the scope and depth of in-service support required by Canada, as well as limited knowledge of Canada’s airworthiness system.”

It also said Sikorsky wrongly assumed a high level of commonality between the CH-148 and the civilian certified S-92 and “as a result, the company grossly underestimated the number of changes and testing required to militarize the S-92A to meet Canada’s requirements.”

Delays and escalating program costs prompted former Conservative defence minister Peter MacKay to describe the Cyclone almost 12 years ago as “the worst procurement in the history of Canada.”

After hiring its own outside consultant, however, the Conservative government of the day still chose to sign a renewed contract with Sikrorsky.