Charlie Bouchard steps down from Lockheed Martin Canada’s top job

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  March 7, 2022 | Local, Aerospace

  MDA to Build 17 Satellites to Enhance Globalstar's LEO Constellation

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  November 12, 2018 | Local, Naval

  Steel costs for sixth patrol vessel could be steeper

  Andrea Gunn (agunn@herald.ca) Ongoing steel and aluminum tariffs between the United States and Canada will not drive up costs for the first five Arctic and Offshore Patrol Ships, but could contribute to the final price tag for the sixth, the Department of National Defence says. There have been tariffs in place on imports of Canadian steel and aluminum to the U.S. of 25 per cent and 10 per cent respectively since the end of May. In response, Canada implemented its own dollar-for-dollar duties on steel and aluminum being imported from the U.S. Both the American tariffs and Canadian countermeasures remain in place, even with a new tentative agreement to replace NAFTA. On Tuesday, Prime Minister Justin Trudeau confirmed the signing of the new trilateral trade deal was not contingent on the lifting of those tariffs. In an emailed statement, Department of National Defence spokesperson Ashley Lemire said these tariffs will not have an impact on the cost of the first five Arctic and Offshore Patrol Ships (AOPS) being built by Irving Shipbuilding as part of the National Shipbuilding Strategy. Lemire said most, if not all, of the steel has already been purchased for these vessels and none of it comes from the U.S. “As part of its contract with the Government of Canada, Irving Shipbuilding Inc. is responsible for the procurement of steel used for the construction of the Arctic and Offshore Patrol Ships,” Lemire said in an email. “Irving procured the majority of steel from a foreign supplier who sourced it from Europe and, to a lesser extent, from China. A small amount of steel was procured in Canada.” Lemire said for the sixth AOPS, which the government confirmed plans to build last week, the department has planned and budgeted for the risk of increased steel and aluminum prices. Earlier this week a DND spokesperson said buying a sixth AOPS will increase the cost of the $2.3 billion project by about $810 million. Of that, $250 million is set aside for “adjustments” — things like labour rates, inflation, and exchange rates. Lemire said any additional steel costs will come from that $250 million fund. David Perry, senior analyst with the Canadian Global Affairs Institute, said the materials needed to build a navy vessel are so specialized that it's not uncommon for governments to do advanced purchases “There's a limited supply; you can't just go and call it up at the last minute kind of thing,” he said. Perry said in the case of the AOPS, having a separate fund set aside for potential cost increases — rather than paying the company a higher contract price to assume all the liability for changes in commodity or labour prices — will likely save taxpayers money if costs do go up. Ian Lee, associate professor at Carleton University's Sprott School of Business told The Chronicle Herald the federal government is lucky to have avoided any major increases with the AOPS. But, Lee said, if the tariffs remain in place, they are likely to impact future builds either directly or indirectly. “It's not going to affect the (AOPS) program but it's still a burden on the economy it's going to be passed on through the cost of doing business,” he said. This is perhaps concerning given the most expensive build of the National Shipbuilding Strategy — the Canadian Surface Combatant — is on the horizon. But how much that project would be impacted if tariffs remain in place is anybody's guess, Lee said. “Historically governments have been very, very involved in the shipbuilding industry with subsidies, and offsets and that sort of thing, so it's hard to predict how it might affect future builds,” he said. “It's not a normal competitive market like the stock market or most commodities.” That said, Lee said there will likely be a big push on the federal government's part to get the tariffs sorted ahead of the upcoming election. “Generally speaking when you look at the trade agreements that have been signed in the last 10 or 20 years whether it was the original NAFTA, CETA or the TPP, one of the first things and most important things you do is reduce or eliminate tariffs,” he said, “I think it's going to make it more difficult for Mr. Trudeau and his government to defend this in the fall 2019 election, that's why I think they're going to be working assiduously to try and remove them.” https://www.thechronicleherald.ca/news/local/steel-costs-for-sixth-patrol-vessel-could-be-steeper-257534/

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  November 26, 2019 | Local, Other Defence

  U.S. sent ‘blunt’ letter to Canada criticizing defence spending: sources

  BY MERCEDES STEPHENSON AND KERRI BREEN Canada has been officially called out by the United States over how much it spends on the military, Global News has learned. A “blunt” letter from the U.S. government was delivered to the Department of National Defence that criticized Canadian defence spending levels and repeated American demands that Canada meet NATO targets. Global News has not seen the letter — said to have a frustrated, critical tone — but multiple sources have confirmed it was sent and received. U.S. President Donald Trump has long called for members of the 29-nation military alliance to beef up their budgets for defence. His national security adviser Robert O'Brien, who spoke Saturday at the Halifax International Security Forum, said getting NATO members to meet the established target — two per cent of Gross Domestic Product (GDP) — is an urgent priority. “There are very serious threats to our freedom and our security and if NATO is going to be effective, and if we want to put our money where our talk is, we got to spend that money to defend ourselves,” he said. Nations including Canada agreed at the 2014 NATO summit in Wales​ to move towards the military spending target within a decade, he noted. “We expect our friends and our colleagues to live up to their commitments and their promises,” he said. He also praised Canada's plan to build and deploy Arctic patrol vessels. The North, he said, is going to be the new “frontline” of defence, as Russia and China have made it clear they are going to militarize the Arctic. One Canadian source told Global News that the U.S. is concerned that Canada does not take the threat from those countries in the Arctic seriously and wants the country to boost its contributions in that area. Just seven countries — including the U.S. and the U.K. — have met NATO's two per cent of GDP spending goal, according to figures released in June. NATO's estimates show Canada is expected to spend 1.27 per cent of its GDP on the military this year, up from about one per cent in 2014. Canada does fare better when you look at its defence budget in dollars and cents, said Dave Perry, vice president of the Canadian Global Affairs Institute. The country spends the sixth highest amount overall among NATO members on its military. As for meeting the percentage of GDP target, Perry's not optimistic despite planned increases in the defence budget. “Canada is not on a path to live up to the commitments that we were signing up for in 2014 in Wales,” he said. Last year, Canada spent about $22.9 billion on the Department of National Defence. But Ottawa intends to dramatically boost military spending in the coming years. In 2017, the government released a plan to increase the budget to almost $33 billion annually within a decade. Asked about the letter from the U.S., Defence Minister Harjit Sajjan touted this plan to strengthen spending. Discussions around “burden sharing” within the bloc have been happening for some time, he said. He noted that under the government's plan, the defence budget would see an increase of 70 per cent, a “significant amount.” “The relationship with Canada and the U.S., the defence relationship, I think, is even stronger now, because they see a tangible plan that we have created,” he said on an episode of The West Block that aired Sunday. “It's working, actually, extremely well.” The U.S. sending such a letter is an unusual, formal means of relaying a message, and it represents an escalation from previous attempts to get Canada to spend more on its military. That pressure has been increasing in recent weeks ahead of the NATO summit in London starting on Dec. 3. In fact, the same message has been conveyed in multiple ways to the federal government, a diplomatic source said, and NATO itself also wants to see more military spending from Canada. In July, however, NATO Secretary General Jens Stoltenberg suggested publicly he was happy with improvements in Canadian defence spending. “Under your leadership,” he said to Prime Minister Justin Trudeau, ​​”Canada has stepped up its contributions to our NATO alliance including with forces for NATO missions and operations and increased spending.” But one former defence minister said the letter from the U.S. — NATO's leader in defence spending in relation to its GDP — was not a good sign. Peter MacKay said such a letter amounts to “a very serious diplomatic slap — not on the wrist, but in the face.” During his time in government, the former Nova Scotia Conservative MP said he had talks with defence secretaries regarding Canadian military spending and the country's goal of reaching two per cent. “Those discussions can be forceful and frank but they took place face to face,” said MacKay, who was defence minister for six years under former prime minister Stephen Harper. “Sending a démarche (diplomatic letter) is really ratcheting it up a notch.” https://globalnews.ca/news/6210623/canada-defence-spending-nato/