October 31, 2022 | Local, Other Defence
Military attrition has hit its highest level in 15 years, warns briefing prepared for generals
The briefing acknowledged the military is facing a “workforce crisis”.
ANALYSIS: Cloud lifted from GDLS Saudi deal, but future business uncertain: analyst
Canada's $14-billion deal to sell armoured vehicles to Saudi Arabia is going ahead and will keep a London defence giant rolling, but some say questions remain about future business between General Dynamics Land Systems Canada (GDLS) and the desert kingdom.
Canada's $14-billion deal to sell armoured vehicles to Saudi Arabia is going ahead and will keep a London defence giant rolling, but some say questions remain about future business between General Dynamics Land Systems Canada (GDLS) and the desert kingdom.
The federal government said it's lifting a moratorium on new permits for military exports to Saudi Arabia, a critical step for London since GDLS, with about 2,000 employees in London, has a nearly 40-year relationship supplying armoured vehicles to the Saudis.
But Ottawa also said it's appointing an advisory panel of experts to review Canada's arms export process and to push for an international inspection for arms sales. That could threaten future business, warned analyst David Perry, vice-president of the Canadian Global Affairs Institute.
The Canadian-Saudi deal, with GDLS at the centre, negotiated by the former Conservative government and inherited by the Liberal successor, had come under sharp attack, with some critics calling for it to be scrapped, amid concerns about Saudi Arabia's poor human rights record.
“If I was a worker I would be tremendously relieved and happy they made the decision,” Perry said of the federal government. He stressed reviews of the contract determined there was no indication GDLS vehicles were involved in human rights violations.
“This went back and forth for a few years, and the government reviewed and threatened to cancel this contract outright. I think there has been irreparable harm. If you're another country open to exports, they may be thinking twice about doing business with Canada,” said Perry.
“They (Saudi Arabians) have options when it comes to sourcing. I think they may be thinking in the future about where they source (their military equipment).”
Lifting the cloud from the Saudi deal comes at a critical time on the London business landscape, with the fallout of the coronavirus pandemic and the lockdowns that have brought new uncertainty for many employers.
In clearing the air on the deal, the federal government also revealed it would have been on the hook for up to $14 billion if it had cancelled the contract to sell light armoured vehicles to the Saudis, a deal that dates to 2014.
The review panel, however, poses a level of uncertainty in future business dealings, Perry noted.
“A new export panel will offer another layer of review. I don't know how to interpret that. It depends on who is appointed to that panel,” he said.
In 2018, after news broke that the Saudi government had ordered the murder of dissident journalist Jamal Khashoggi, the Trudeau Liberals announced a review of all Canada's existing arms sales to Saudi Arabia. Ottawa also slapped a moratorium on new export permits for shipments of military goods to Riyadh.
Existing military contracts, such as the GDLS deal, were not affected by the moratorium. But in 2018 Prime Minister Justin Trudeau publicly talked about trying to find a way to end shipments of armoured vehicles to Saudi Arabia.
Thursday, Foreign Affairs Minister François-Philippe Champagne and Finance Minister Bill Morneau said the suspension of approval of new Saudi permits is now lifted. They cited a government review last September that found no credible evidence linking Canadian exports of military or other controlled goods to Saudi human rights violations.
But the moratorium on trade with the Saudis has already affected the Canadian defence sector to the tune of about $2 billion, according to a memo sent to the foreign affairs minister from two top foreign affairs and international trade officials.
“(Twenty) companies that have a history of exporting to KSA (Kingdom of Saudi Arabia) suggest that approximately $2 billion in trade has been affected since August 2018. A number of Canadian exporters to KSA have suspended their business development operations . . . The open-ended nature of Canada's moratorium on new export permits, and the lack of identified conditions that would allow a resumption of permit issuance, present a high commercial risk for Canadian companies,” the memo says.
Perry, who shared the memo with The Free Press, said he has heard similar concerns from the Canadian defence sector.
“I have spoken to businesses that have lost business opportunities” from the moratorium on arms trade with Saudis.
“This is welcome news,” he added of the lifting of restrictions, “but the government has introduced uncertainty into Canadian defence industry and exports.”
Political scientist Erika Simpson at Western University also questioned the role of the panel, saying there are few details about its authority and adding that only Global Affairs has the authority to impact trade agreements.
She also questioned why the contract appears to have been reduced by $1 billion in value. When the Conservatives announced it in 2014, it was worth $15 billion. Ottawa now says it is a $14-billion contract.
“I think $1 billion is a lot of money. What happened to $1 billion?” asked Simpson, an associate professor of international politics. “This is good news, but I want to know where the $1 billion went.”
GDLS Canada declined comment Friday.
Perry also questioned the timing of the announcement. With more than three million Canadians expected to be left unemployed due to the COVID-19 crisis, Ottawa could not jeopardize thousands of jobs across Canada, he said.
“As important as this is in Southwestern Ontario, it is not just Southwestern Ontario,” he said.
London Liberal MP Peter Fragiskatos downplayed down the idea the review panel could dampen further GDLS business.
“I don't think so. This government is behind this contract, this workforce, 100 per cent. On the contrary, I would say a review is a good thing. It will bring greater transparency to the arms program. I welcome it,” the London North Centre MP said.
He also stressed the Saudi deal is only about half complete, meaning about six more years of work may remain before there needs to be a discussion about future contracts.
“I am pleased to say the least. It was in the making for some time, but it is a very good result not just for the company and its workers, but for the city,” said Fragiskatos.
It's too soon to draw conclusions about the future of work by GDLS for the Saudis, since that depends largely on who is at the table negotiating future deals, said Bill Pettipas, former president of GM Defence, which General Dynamics bought and renamed.
Pettipas bargained several arms contracts with foreign powers, including a multi-billion dollar deal with the U.S. army to supply it with Stryker armoured vehicles.
“It depends on individuals, on relationships. It will get resolved. It will normalize eventually. That relationship has been going on since the early 1980s,” said Pettipas. “Time takes care of things.”
Officials with Unifor Local 27, the union for many GDLS workers in London, couldn't be reached for comment Friday. Unifor's national office declined comment.
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March 2, 2020 | Local, Aerospace
Pushing fighter jet deadline raises questions on which jets can do the work: experts
Amanda Connolly GlobalNews.ca WATCH: Canadian fighter jets intercepted two Russian bombers travelling near the North American coastline. While they were in international airspace they entered an area patrolled by the Canadians. The two American aerospace firms that want the Canadian government to buy their fighter jets say they did not request an extension on the deadline for bids. At the same time, defence experts say the decision to grant the extension reflects the bigger challenge facing a government that has repeatedly insisted a competition is the only way to move forward with the $19-billion procurement, despite there being a limited pool of options. “The government believes it needs to run a competition, but there're many situations where, in reality, there's only one or two competitors that can actually meet the needs of the Canadian Forces,” said Richard Shimooka, a senior fellow at the Macdonald-Laurier Institute and an expert on defence. “So the government's put in a bit of a pickle by its rhetoric where it wants to portray that ‘yeah, we're having a competition or we're providing value for money and all these kind of important things for Canada', but in fact knows there's really only one competitor.” On Tuesday, the government announcement that the March 30 deadline will be pushed back three months, to June 30 instead. READ MORE: Canadian fighter jet replacement project hit with another delay In a press release on the decision earlier in the week, the government had said this extension was being granted “at the request of industry.” “Procurements of this magnitude are complex, and submission of a good proposal is important for suppliers and for Canada,” the government said in the press release. “This extension allows eligible suppliers to address recent feedback on their security offers, ensuring that Canada receives competitive proposals that meet its technical, cost and economic benefits requirements.” Global News has since been told that feedback included specific assessments about whether a firm would be able to meet the Canadian government's requirements for inter-operability with key allies, including the U.S. and the Five Eyes, and whether allies would be comfortable with them. Because the government is using a process known as phased bids for the fighter jet procurement, bidders get the chance to address any findings of non-compliance with those requirements before submitting their final proposals. And because of how closely Canada and the U.S. work together on issues ranging from intelligence sharing, continental defence and others, inter-operability – or the ability for jets to work seamlessly across various areas where Canadian and American systems overlap – is considered key to this contest. “We've got to buy aircraft that can be completely and seamlessly inter-operable with the U.S.,” said Dave Perry, vice president of the Canadian Global Affairs Institute and an expert on defence procurement. “They've asked the bidders to put forward a proposal on how they're going to make that work.” Perry noted that in the past, questions around how aircraft will operate between Canadian and American systems hasn't been relevant because Canadian fighter jets have always been American. Now, with foreign bidders like Sweden's Saab, the onus is on them to demonstrate their jets can actually do the work. “Saab is the only competitor that is not part of either Five Eyes or Two Eyes and as a result, it would have the greatest amount of work in order to meet the requirements of the Royal Canadian Airforce,” said Shimooka. “Right off the bat, it requires the greatest amount of work for this.” While the government wouldn't say which firm asked for the deadline extension, both Lockheed Martin and Boeing offered statements saying it wasn't them. “We did not request the extension,” said Boeing spokesperson Stephanie Townend. A spokesperson for Lockheed Martin offered a similar response. “We have not requested an extension of delivery for the FFCP preliminary proposal,” said Amanda Hauck, strategic communications lead for the firm. A spokesperson for Saab was less clear. “While Canada's FFCP competition prohibits bidders from commenting publicly on confidential elements of the RFP process, Saab was prepared, and remains prepared, to submit a bid based on the Government of Canada's schedule,” said Patrick Palmer, executive vice president of sales and marketing for Saab Canada. “Saab will continue to finalize its response to all stated requirements of the RFP and can confirm that we will submit a fully compliant response to the Future Fighter Capability Program RFP. We are confident that our offer will provide the best value and best solution for Canada, industry and Canadians for generations to come.” Global News followed up with a request for Palmer to clarify whether the bid Saab said it was prepared to submit by the March 30 deadline would have been a fully compliant one. The company has not yet clarified its response. Saab is offering its Gripen fighter jet in the contest while Lockheed Martin is offering its controversial F-35 and Boeing is offering its Super Hornet. Two other European firms – Airbus and Dassault – dropped out of the contest over the past year-and-a-half, citing security requirements and associated extra costs for the suppliers if chosen. The competition is complicated though by questions and past concerns about both of the American offerings. Boeing brought a trade tribunal complaint against the Canadian aerospace firm Bombardier in 2018 which resulted in Bombardier being forced to pay steep duties on imports of its C-Series plane to the United States. Innovation Minister Navdeep Bains said shortly afterward that the government would weigh a company's “economic behaviour” and that those who had caused economic harm to Canada would be at a disadvantage in the fighter jet competition. That clause still exists in the criteria being used to assess the projects. But Prime Minister Justin Trudeau also promised during the 2015 election campaign not to buy the F-35, the planned procurement of which under the previous Conservative government had been dogged with accusations of hidden costs and sole-sourcing. Since the launch of the competition, the F-35 has become widely-viewed by military experts as a frontrunner in the contest. A government source speaking on background insisted the extension will not impact the expected decision date. The result of the contest are due in 2022 with expected delivery of whichever jet is chosen beginning in 2025. https://q107.com/news/6600416/canada-fighter-jet-competition/
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September 12, 2018 | Local, Naval
THALES CANADA OPENS NEW MARITIME OFFICE TO SUPPORT KEY NAVAL PROGRAMS
On September 10th, Thales Canada celebrated the official opening of its eighth Canadian location in Halifax, Nova Scotia. The office will be home to up to 20 new Thales employees dedicated to the Royal Canadian Navy, the Canadian Coast Guard and our maritime partners and suppliers. Today, the Halifax office will support the Royal Canadian Navy's AJISS Program; the comprehensive, long-term, in-service support contract for the Arctic and Offshore Patrol Ships (AOPS) and the Joint Support Ships (JSS) awarded in 2017. Thales, as the prime contractor for the AJISS program, will oversee the refit, repair and maintenance for these fleets over their operational lifetime; working together with the Royal Canadian Navy and the Fleet Maintenance Facilities to ensure ships are mission-ready, where and when they are needed from coast to coast to coast. Today our team is focused on readiness – ready to support the first ship under the AJISS program. Our newest location in the Maritimes marks an important milestone of our in-service support program which will create jobs for the maritime industry across Canada,” said Mark Halinaty, President & CEO of Thales Canada. “As we move forward, we will continue to work closely with the Royal Canadian Navy, our customers and partners, helping them master every decisive moment along the way. Thales Canada's Halifax office will leverage Thales' deep expertise in project management, systems engineering and integrated logistics support; the foundation of the development of a new Canadian supply chain that will offer comprehensive in-service support for all systems and equipment of the AOPV and JSS fleets over their operational lifetime. The new Halifax location will also support the integration of key digital capabilities in big data and artificial intelligence to support modern in-service support practices. Thales' naval in-service support program solution will create jobs, contribute to important skills development, and invest in important research and development across Canada. Contact Cara Salci, Thales Canada Media Relations +1-613 894 4592 cara.salci@ca.thalesgroup.com https://www.thalesgroup.com/en/canada/press-release/thales-canada-opens-new-maritime-office-support-key-naval-programs