The fact is 3 of the 5 potential competitors proposed building in Canada (Airbus, SAAB, and Dassault). One would have to presume they all thought this could be done
within the project budget, or they would not have proposed such a solution.
Here is more on this:
AIRBUS: 800% Bigger Installations at Mirabel Airport in Quebec - Taking Options For More Land
This is clearly not going away.
AND
Counterpoint: There is a project budget, which can't be exceeded, so I don't know why the conclusion this will cost 2-3 times more than anywhere else. The cost of building an assembly line, even if it was hundreds of millions of dollars, is still a small percentage of the $15-19 Billion budget.
Also, with regards to the potential order, I would like to point out that the operational requirement if for 88 fighters. This does not include airframes for test or attrition. The original order of 138 Hornets included 10 attrition airframes and 8 test airframes (there was also an option for another 20, which was not exercised). So, it would not surprise me if the requirement is somewhere around 100.
A few things to keep in mind which applies to production of anything, not just military kit. There is a difference between assembly for a finished product from components supplied by/imported from other countries, and a solely or mostly whole domestic production and assembly operation. If Canada were to do a domestic assembly for the future fighter jet, but mostly importing the parts from the supply chain for the existing fighter production, the cost to establish the assembly operation would be significantly less. It would still be at least dozens if not hundreds of millions of dollars. OTOH if Canada were also seeking to produce most of the actual parts for the future fighter, the setup costs could easily approach if not exceed USD$1 bil. Since suppliers for the components would need to be sourced and certified, as would the raw materials
As for three of the five contenders suggesting domestic production for their entry, and the idea that it would be within a specific budget which cannot be exceeded... Hogwash.
For starters, one of the contenders, Dassault, has already withdrawn and is no longer eligible to participate. For another, defence companies have indeed been known to submit bids on projects that the company knows will actually cost more than the submitted bid. The LockMart/AW submission of a Presidential variant of the EH101 for the new Marine One helicopter fleet comes to mind as an example. It is rather unfortunate, but cost overruns are a common feature for many gov't programmes, and new defence acquisitions in particular, regardless of gov't or country.
Without knowing more information on what the RFP or RFI covered, and without having read the actual submissions offering the Gripen or the Typhoon, we are extremely light on details. I could easily see the submissions for those two fighters offering a range of options, with the different options also having different price points. Amongst the options provided, I would expect the vendors to offer the Typhoon or Gripen fighters produced on the existing production lines, since the flyaway costs I have been able to come across should be low enough to fall within the proposed budget, assuming an order for 100 total aircraft were placed. By way of example, the flyaway cost for the EF2000 Typhoon appears to be around USD$112 mil. which would put an order for 100 at ~CAN$14.85 bil. and additional funding would be required to establish training programmes for pilots and ground crews, as well as making all needed changes to existing facilities and tooling to enable the RCAF to maintain and operate the new fighter fleet. As a matter of practicality and realistic thinking, I do not believe that Canada (or anyone else for that matter) would be able to setup a line to produce ~100 new Typhoon fighters for a lower per fighter cost than the already existing Typhoon production facilities are capable of.
A similar sort of situation exists for the Gripen, although the reported flyaway price for the Gripen NG appears to be around USD$85 mil. this would mean pretty much any offer from Saab that falls within the budget parameters would not be for domestic production. Looking at the cost to assemble 36 Gripen NG's for Brazil, ~29 are to be manufactured in Brazil, with some of the aerostructures produced in a new Saab facility built in Brazil, it appears the average cost for the Gripen NG's for Brazil are to be USD$130 mil. each, and this does not include the costs for any weapons packages, which Sweden has extended a USD$245 mil. line of credit to acquire weapons for the new fighters.
Also worth looking at and considering are some of the cost estimates if the US were to re-start the F-22 Raptor production line, especially if one is thinking that Canada could economically engage in domestic production of parts for their future fighter. The US retained 95% of the tooling for producing the F-22, yet it was still estimated that it would require (and cost) USD$228 mil. to refurbish the production tooling. A further USD$1.2 bil. would be required to re-qualify or re-certify component and raw materials sources, and of course a facility would need to be established to actually produce the F-22, with no estimated cost for this provided even though the old F-22 facility is now being used to support F-35 production so is no longer available. A further item which would be an issue for Canada but not the US is that Canada does not currently have a pool of production workers skilled in manufacturing fighter aircraft, which the US does.
