F-35 deal not cancelled, Tories insist

The Conservative government says it has not made a decision on the F-35 as a replacement for Canada's CF-18 fighter jets, but the government now appears to concede that alternative fighter purchase options will be considered.

The Prime Minister's Office denied a media report Thursday that the F-35 purchase was dead, calling the report "inaccurate on a number of fronts" and promising to update the House of Commons on its seven-point plan to replace the jets before the House rises for the Christmas break at the end of next week.

That plan is now expected to involve a real competition.

Part of the government's new process for replacing the aircraft is an audit of the F-35's costs by accounting firm KPMG. The government said Thursday it now has the report and is reviewing it.

CBC News has learned the KPMG report is based on a longer and more realistic life cycle for the next-generation stealth fighter, which would therefore also arrive with a higher price tag than previously reported.

The cost of the F-35 project was first pegged at $9 billion for 65 planes when it was announced by the government more than two years ago, but successive reports by the parliamentary budget officer and federal auditor general put the total cost to buy and maintain the planes at $25 billion or more.

Public Works took over the process for procuring a CF-18 replacement earlier this year.

A statement from the office of Public Works Minister Rona Ambrose said that the government will be providing "a comprehensive public update" before the House rises.

"We are committed to completing the seven point plan and moving forward with our comprehensive, transparent approach to replacing Canada's aging CF-18 aircraft," the statement from Ambrose's office said.

The government has long maintained the F-35 was the only plane that met Canada's needs. But last week, Gen. Tom Lawson, chief of the defence staff, told MPs that there are other planes with stealth capabilities.