October 25, 2019 | Local, Aerospace, Naval, Land, C4ISR, Security

Analysis: Defence issues could be on the back burner as minority Liberal government focuses on survival

As the Trudeau government focuses on its survival and seeking political support from potential allies like the NDP or the Greens, key defence issues could be put on the back burner or become part of any backroom quid pro quo.

Dealing with health care, affordable housing, pipelines, the environment and healing rifts with Alberta and Saskatchewan are expected to be just some of the top issues facing the minority Liberal government.

Chief of the Defence Staff Gen. Jon Vance has been telling headquarters staff in Ottawa that with the world becoming more dangerous he expects a steady flow of funding for the Canadian Forces to continue.

That, however, isn't a given. Some of the Liberal's election promises come with a steep cost, including the $6 billion needed to be set aside for the first four years of a pharmacare program and a plan to improve access to medical services.

Defence and security issues were barely mentioned during the federal election campaign, even though billions of dollars in equipment purchases will need to be approved by the government in the coming years.

Prime Minister Justin Trudeau backed away Wednesday from forming a coalition with one of the opposition parties, but he did emphasis collaborating with the other party leaders on various issues. That could open the potential to work together on certain defence files.

The Liberals have talked about using more Canadian military resources to deal with climate-related disasters and to provide help to poorer nations dealing with the effects of climate change. Those are initiatives both the Greens and the NDP could get behind as they mirror proposals from those parties.

The NDP has also stated it wants a fair competition for new fighter jets and to keep the multi-billion dollar shipbuilding procurement on schedule. The Green Party more generally has supported a well-equipped Canadian military but hasn't gone into details.

Bloc leader Yves François Blanchet has said his priority is not sovereignty but to promote Quebec interests. That includes a push to see Davie Shipbuilding in Levis, Que., named as the third yard under the federal shipbuilding strategy. The Bloc's wishes coincide with the Liberal's efforts to steer more shipbuilding work toward Davie.

The politics of a minority government could also come into play on the project to acquire a future fighter jet. Although the Lockheed Martin F-35 stealth fighter is now seen as the leading candidate, an aerospace union is raising warnings that the selection of that plane could mean large-scale job losses in Quebec.

In early September the Machinists Union complained that the Liberal government bowed to pressure from the administration of U.S. President Donald Trump to change rules to keep the F-35 in the procurement race but at the expense of other firms offering guaranteed work for Canada's aerospace sector.

The union is worried that if Canada were to purchase the F-35 then most of the long-term maintenance would be done in the U.S. That, noted the labour organization, would put in jeopardy the 600 jobs at L-3 Harris in Montreal that are linked to maintaining the Royal Canadian Air Force's current CF-18 fleet. “We will follow the situation closely and demand that manufacturing and maintenance activities of the next fighter aircraft take place in Quebec,” said David Chartrand, the Quebec co-ordinator of the Machinists Union.

Any loss of 600 jobs in Quebec is bound to get the attention of the Bloc Québécois and cause problems for the Liberals.

Trudeau also said Wednesday he would swear in a new gender-balanced cabinet on Nov. 20. Trudeau will be in need of experienced ministers in various high-profile cabinet positions, so there is a strong possibility Harjit Sajjan, who served as defence minister, and Carla Qualtrough, the procurement minister, might end up in new portfolios.

There have been suggestions at National Defence headquarters that Liberal MP Karen McCrimmon, a retired air force officer who won re-election in Kanata-Carleton, could be a potential candidate for the defence portfolio. McCrimmon, a former lieutenant colonel, was the first woman in Canada to qualify as an air navigator and the first to command an air force squadron.

Such a choice would meet Trudeau's needs for a female cabinet member with experience in the portfolio.

https://ottawacitizen.com/news/national/defence-watch/analysis-defence-issues-could-be-on-the-back-burner-as-minority-liberal-government-focuses-on-survival

On the same subject

January 16, 2019 | Local, Naval

Seaspan Announces Closing of Second $500 Million Investment by Fairfax Financial Holdings Limited
HONG KONG, Jan. 15, 2019 /CNW/ - Seaspan Corporation (NYSE: SSW) ("Seaspan") announced today the closing of the second tranche of the $1 billion aggregate investment commitment by Fairfax Financial Holdings Limited and its affiliates (collectively, "Fairfax") in Seaspan. As with Fairfax's initial $500 million investment in Seaspan, and pursuant to definitive agreements entered into on March 13, 2018 and announced on March 14, 2018, this second tranche of funding (the "Second Fairfax Investment") is structured as a $250 million issuance of (i) 5.50% senior notes due 2026 and (ii) approximately 38.46 million warrants (the "2019 Warrants"). Pursuant to a definitive agreement entered into and announced on May 31, 2018, Fairfax has agreed to immediately exercise the 2019 Warrants at an exercise price of $6.50per warrant, for additional equity proceeds to Seaspan of $250 million. As a result, Seaspan's aggregate proceeds from the Second Fairfax Investment will be $500 million. This brings Fairfax's total investment in Seaspan to $1 billion, the proceeds of which will be used to fund future growth initiatives, repay debt and for general corporate purposes. With the closing of the Second Fairfax Investment, Fairfax's aggregate shareholdings in Seaspan are 76.9 million Class A common shares or approximately 36% of shares outstanding. Fairfax continues to hold the 25 million seven year warrants, with an exercise price of $8.05, which were issued to it on July 16, 2018. Summary of Fairfax Investments1 Investment Date Issued/Exercised Proceeds to Seaspan 2025 Notes February 14, 2018 $250 million 2018 Warrants July 16, 2018 $250 million 2026 Notes January 15, 2019 $250 million 2019 Warrants January 15, 2019 $250 million 1 Does not include the 25 million seven year warrants outstanding as of the date hereof David Sokol, Chairman of Seaspan Corporation commented, "The closing of this follow-on Fairfax investment bolsters Seaspan's balance sheet for the future. Seaspan's management team and Board of Directors are proud to continue building upon the strong partnership created with Fairfax. This additional investment will enhance Seaspan's ability to execute on our long-term goals of deleveraging, strengthening our balance sheet, and creating value through disciplined and thoughtful capital allocation." Prem Watsa, Chairman and Chief Executive Officer of Fairfax said, "With the closing of this investment, we are excited to expand our partnership with Seaspan, which now represents one of Fairfax's largest investments." About Seaspan Seaspan is a leading independent charter owner and operator of containerships with industry leading ship management services. We charter our vessels primarily pursuant to long-term, fixed-rate, time charters to the world's largest container shipping liners. Seaspan's operating fleet consists of 112 containerships with a total capacity of more than 900,000 TEU, an average age of approximately 6 years and an average remaining lease period of approximately 4 years, on a TEU-weighted basis. Seaspan has the following securities listed on The New York Stock Exchange: Symbol: Description: SSW Class A common shares SSW PR D Series D preferred shares SSW PR E Series E preferred shares SSW PR G Series G preferred shares SSW PR H Series H preferred shares SSW PR I Series I preferred shares SSWN 6.375% senior unsecured notes due 2019 SSWA 7.125% senior unsecured notes due 2027 SSW25 5.500% senior notes due 2025 About Fairfax Financial Holdings Limited Fairfax is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. Investor Inquiries: Mr. Matt Borys Investor Relations Seaspan Corporation Tel. +1-778-328-5340 Email: mborys@seaspanltd.ca SOURCE Seaspan Corporation https://www.newswire.ca/news-releases/seaspan-announces-closing-of-second-500-million-investment-by-fairfax-financial-holdings-limited-848167000.html
May 10, 2019 | Local, Aerospace

ASSESSING THE DAMAGE FROM CANADA’S FIGHTER REPLACEMENT FIASCO: NEW MLI REPORT
OTTAWA, ON (May 6, 2019): In a hard-hitting new Macdonald-Laurier Institute report, MLI Senior Fellow Richard Shimooka takes a critical look at the government's approach to replacing Canada's aging fleet of CF-18 fighters. In the report, titled The Catastrophe: Assessing the Damage from Canada's Fighter Replacement Fiasco, he argues that Ottawa's performance on this file mirrors the SNC-Lavalin Scandal and the Mark Norman Affair. “At their heart, these two incidents represent attempts by the Liberal government to circumvent established processes to meet their partisan interests,” Shimooka explains. “This description is just as apt for the fighter program.” Canada is a participant in the Joint Strike Fighter (JSF) Program that has been developing the F-35s. These fighter jets were slotted to replace the RCAF's aging CF-18s, but after the program was mired in political scandal under the previous government, the Liberal government changed plans. “During the 2015 election campaign, the Liberal Party promised not to buy the F-35 jets, but instead to use a competition to identify and subsequently purchase a lower-cost competitor... this decision proved to be impossible, unethical, and potentially illegal,” writes Shimooka. From billions of dollars being wasted on a procurement process to fix a contrived capability gap to potentially threatening Canada's defence relationship with the US, the report finds that political interests have consistently been put above Canada's defence needs. Shimooka argues that “the decisions made [regarding fighter jet replacement] were purely for reasons of political interest: not a single one could be claimed as being in the country's national interest.” The “fiasco,” as Shimooka describes it, has caught the attention of both Canada's Office of the Auditor General (OAG) and senior US officials. According to documents never before seen by the public, the OAG had specifically cautioned the government against its chosen course of purchasing Australian Hornets as an interim measure in a draft report – and the final OAG report was heavily revised to obscure that recommendation. Worse still, letters from US officials reveal that “resentment and distrust towards the government of Canada had grown, particularly within the US Air Force.” These letters, which again have not been made public until now, outline the significant strategic and economic benefits that have already been accrued from being part of the JSF Program. Yet they also contain an implicit (but clear) threat that Canada could be kicked out of the Program – if Ottawa continues with its current policy of trying to obtain guaranteed industrial benefits that, by their very nature, are not allowed under the JSF Program. “There was a complete lack of logic of Canada's policy, which seemed to ignore basic facts about membership in the JSF program, including clear advantages in cost and capability that the F-35 provided.” Despite these persistent, high-level issues with the government's chosen approach on the fighter jet replacement, the file has avoided serious public scrutiny. Shimooka finds that this happened in large part due to the successful gag orders levelled by the government. “The government has also suppressed negative viewpoints within and outside the Department of National Defence, allegedly up to and including the deletion of portions of Memos to Cabinet that highlighted why certain decisions should not be taken.” Moving forward on the file may prove to be difficult; defence procurement woes have plagued Canada since Confederation, and the issues with the fighter jet replacement are deeper than just purchasing the right aircraft. Worse still, Shimooka says that the brunt of the burden of consistently poor decision-making in Ottawa will be borne by the RCAF itself. “While the negative consequences are clear for Canada as a whole," Shimooka explains, "no community has felt the impact more than the RCAF. As a result of this government's policies, its ability to conduct its most basic function, the defence of Canadian sovereignty and that of our allies, is diminishing rapidly.” “It is a sad state of affairs.” To read the commentary in full, click here. https://www.macdonaldlaurier.ca/assessing-damage-canadas-fighter-replacement-fiasco-new-mli-report/
June 17, 2019 | Local, Naval

Canada assumes command of Standing NATO Maritime Group Two
From: National Defence News release June 17, 2019 – Ottawa – National Defence/Canadian Armed Forces Commodore Josée Kurtz of the Canadian Armed Forces (CAF) officially assumed command of Standing NATO Maritime Group Two (SNMG2) during a change of command ceremony held in Souda Bay on the Greek island of Crete on Saturday, June 15. Commodore Josée Kurtz assumed command from Commodore Boudewijn Boots of the Royal Netherlands Navy. This deployment is part of Operation REASSURANCE, and Canada's contribution to NATO regional maritime security operations and assurance measures in the Mediterranean region and the Black Sea. Canada continues to answer the call to serve and contribute to international peace and security. As a founding member of NATO, Canada has demonstrated leadership and will continue to do so under our defence policy, Strong, Secure, Engaged. Quotes “The appointment of Commodore Josée Kurtz to lead this NATO Maritime Group is a demonstration of the Canadian Armed Forces' professionalism, leadership and strong commitment to NATO and our Allies. Our members are a visible symbol of Canada's commitment to international security and cooperation in the region and around the world.” —Lieutenant-General Mike Rouleau, Commander, Canadian Joint Operations Command “It is an honour and privilege to take command of Standing NATO Maritime Group Two. Over the next six months, I look forward to working with the highly trained and professional sailors from NATO member nations as we take on the challenges of this mission and work together to strengthen global and regional stability.” —Commodore Josée Kurtz, Commander Standing NATO Maritime Group Two Quick facts Her Majesty's Canadian Ship (HMCS) Toronto is deployed with the Maritime Task Force as part of OP REASSURANCE and is now the flagship of Standing NATO Maritime Group Two (SNMG2). SNMG2 is one of four multinational, high readiness maritime forces composed of vessels from allied countries. These vessels are permanently available to NATO to perform tasks ranging from participation in exercises to operational missions. These groups provide NATO with a continuous maritime capability and help to establish Alliance presence, demonstrate solidarity, conduct routine diplomatic visits and enhance interoperability among Allied naval forces. They also serve as a consistently ready maritime force to support the NATO Very High Readiness Joint Task Force. With Commodore Kurtz's appointment, Canada is currently leading three NATO efforts globally. Since June 2017, the CAF have led a robust multinational rotational NATO Battle Group in Latvia as one of four Framework Nations formed as part of the Alliance's enhanced Forward Presence in the Baltic countries and Poland. Since November 2018, Canada has also led NATO Mission Iraq (NMI), which aims to create the conditions for more effective and sustainable Iraqi security institutions and structures. Commodore Josée Kurtz is an exceptional leader and outstanding role model and her appointment demonstrates Canada's leadership and strong commitment to the Alliance. This commitment to multinational naval leadership follows Canada's recent command of Combined Task Force 150 from December 2018 to April 2019. The Royal Canadian Navy (RCN) is making significant contributions to security and stability around the globe, and is an agile, fighting force that can be rapidly deployed and flexibly employed. A capable, steadfast partner, our sailors, and ships have a solid reputation and are always ready to help, lead and fight. https://www.canada.ca/en/department-national-defence/news/2019/06/canada-assumes-command-of-standing-nato-maritime-group-two.html

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