Government to commit to building first three warships despite budget concerns

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  July 14, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

  Annex B: Overview of long-term funding commitment to Canadian Armed Forces capabilities

  To ensure that the women and men of the Canadian Armed Forces have the capabilities required for Canada to be Strong at home, Secure in North America and Engaged in the world, this policy commits to significant long-term investment. This includes $33.8 billion for 52 critical new capital projects. In addition, the policy provides $74.2 billion for existing assets and previously planned equipment, infrastructure and information technology projects. As part of Strong, Secure, Engaged, these projects underwent a thorough costing review, which resulted in the provision of an additional $5.9 billion over 20 years on top of what had previously been budgeted for these projects, to better reflect their true costs. In total, this new vision for defence provides $108 billion for the development and acquisition of capital equipment over the next 20 years. All of these projects have been costed and the costing methodologies used were independently verified by five external accounting firms. Throughout the process, Defence also worked with costing experts from Deloitte who brought expertise gained from its involvement in recent defence reviews of close Canadian allies. This rigorous and unprecedented process ensures that the vision laid out in this policy is credible and realistic. Table 1 reflects the planned use of the accrual budget over the 20-year horizon of this policy. It is important to note that this table does not represent the total cost of all planned equipment acquisitions. For example, the first new Canadian Surface Combatant is not scheduled to be delivered until 2026, followed by the remaining 14 ships. As these ships have an expected service life of 30 years, much of the accrual costs will be incurred outside the 20 years reflected in the table. Furthermore, as these are 20-year estimates, there needs to be flexibility to adjust the accrual budget to reflect changes in major capital projects. The process to adjust or re-profile these estimates over time is through the investment planning process. Defence will publish the next Defence Investment Plan in 2018. The Defence Investment Plan will include all approved capital projects under the policy and will be updated every three years. This will help ensure that Parliament and Canadians can clearly understand future changes to the budget, and deliver on the Government's commitment to transparency, results, and accountability. Table 1: 20-year accrual and cash view of planned projects and new investments ($ billions) 20-year - Accrual basis 20-Year - Cash basis Capability Investments to fully fund and complete planned projects table 1 note1 New investment Strong, Secure, Engaged table 1 note2 Total planned projects and new investments Total planned projects and new investments Royal Canadian Navy 14.6 2.9 17.5 53.5 Canadian Army 10.1 8.8 18.9 23.2 Royal Canadian Air Force 26.4 20.1 46.4 64.4 Special Operations Forces 1.2 0.4 1.5 1.2 Joint/Emerging Domains 3.4 1.2 4.6 9.7 Infrastructure 4.5 0.4 4.9 12.0 Total Capabilities 60.1 33.8 93.9 164.0 Accrual Expenditure for Existing Equipment and Infrastructure table 1 note3 14.1 - 14.1 - 20 Year Total table 1 note4 74.2 33.8 108.0 164.0 Table 1 Note 1 Strong, Secure, Engaged commits $74.2 billion over 20 years to fully fund 281 projects that were planned, but for which Defence had insufficient funding to acquire. Adequate funding has now been allocated to deliver these core equipment projects. Return to table 1 note1referrer Table 1 Note 2 Strong, Secure, Engaged commits $33.8 billion over the next 20 years to 52 new equipment, infrastructure, and information technology projects for the Canadian Armed Forces. Return to table 1 note2referrer Table 1 Note 3 This amount ($14.1 billion), on an accrual basis, represents previously acquired equipment and infrastructure. As they are already in service, there is no future cash requirement to purchase these assets. Return to table 1 note3referrer Table 1 Note 4 Totals may not add up due to rounding. Return to table 1 note4referrer Below is an overview of capital funding commitments in Strong, Secure, Engaged, described in terms of investments in the Royal Canadian Navy, Canadian Army, Royal Canadian Air Force, Special Operations Forces, Joint Capabilities and Infrastructure. Investment in the Royal Canadian Navy The Government will provide $17.5 billion to fund equipment projects for the Royal Canadian Navy over the next 20 years. This includes: $2.9 billion over the next 20 years for two new equipment investments in the Royal Canadian Navy to replace obsolete components of current systems and improve the Royal Canadian Navy's ability to meet evolving underwater threats. $14.6 billion over the next 20 years to fully fund planned equipment projects. For example, this policy includes sufficient funding to acquire the full complement of 15 Canadian Surface Combatants. It is important to note that Table 1 only captures a 20-year view of the equipment investments committed to in this policy. As the first ship is not scheduled to be delivered until 2026 and the fleet is expected to be in service for 30 years, there will be significant expenditures outside this timeframe. Investment in the Canadian Army The Government will provide $18.9 billion for Canadian Army equipment projects over the next 20 years. This includes: $8.8 billion over the next 20 years for 20 new equipment projects. As examples, this investment will replace existing light and heavy trucks for use in domestic and expeditionary operations. We will also improve the Canadian Army's ability to operate in Canada's North with a new family of Arctic-capable land vehicles, as well as close critical capability gaps such as the Canadian Army's lack of ground-based air defence equipment, which will allow it to defeat threats posed by airborne weapons such as remotely piloted vehicles and aircraft used by potential adversaries. $10.1 billion over the next 20 years to fully fund planned equipment projects. For example, the upgrade of the Light Armoured Vehicle fleet will improve mobility and survivability. Investment in the Royal Canadian Air Force The Government will provide $46.4 billion to fund equipment projects for the Royal Canadian Air Force over the next 20 years. This includes: $20.1 billion over the next 20 years for 17 new equipment projects for the Royal Canadian Air Force. For example, this will deliver a Canadian Multi-Mission Aircraft to replace the CP-140 Aurora Long Range Patrol Aircraft, allowing us to maintain our technological advantage over potential adversaries. Under the Royal Canadian Air Force's responsibility for space capabilities, portions of new investment will expand the Canadian Armed Forces' ability to use space-based assets in support of operations. This includes projects for enhanced communications in the North. $26.4 billion to fully fund planned equipment projects. The new fighter program has been enhanced to ensure the Royal Canadian Air Force can acquire 88 new advanced fighters, which will allow us to deliver on NORAD and NATO commitments without compromise. Investment in Special Operations Forces The Government will provide $1.5 billion to fund equipment projects for Canada's Special Operations Forces over the next 20 years. This includes: $366 million over the next 20 years for four new projects. For example, integrated soldier system equipment will be modernized to enhance interoperability and maintain technological advantage against potential adversaries. $1.2 billion over the next 20 years to fully fund planned equipment projects. As an example, we will acquire an airborne intelligence surveillance and reconnaissance platform that will enhance the ability of our Special Operations Forces to improve their understanding of the operational environment. Investment in joint capabilities The Government will provide $4.6 billion for joint capability projects in domains such as cyber, intelligence as well as joint command and control over the next 20 years. This includes: $1.2 billion over the next 20 years for five new equipment projects and one information technology project. For example, the Combined Joint Intelligence Modernization project will provide a modern deployable intelligence centre for land-based operations, building on the lessons learned in recent operations. Additionally, the Secure Radio Modernization project will upgrade encryption capability of radios to maintain security and interoperability with our Five-Eyes partners. $3.4 billion over the next 20 years to fully fund planned equipment projects. For example, we will improve the capabilities of the Joint Deployable Headquarters and Signals Regiment. This will include the acquisition of portable structures to house the deployed headquarters and the equipment employed by its staff for command, control and communications. Investment in infrastructure The Government will provide $4.9 billion over the next 20 years to infrastructure projects across Canada in order to maintain the necessary portfolio of real property holdings. This includes: $446 million over the next 20 years for three new infrastructure projects. For example, this funding will enable the construction of new buildings to house the expanded and enhanced Canadian Armed Forces Joint Incident Response Unit. This will ensure that the unit is able to provide chemical, biological, radiological, and nuclear defence support to the Canadian Special Operations Forces Command. $4.5 billion to fully fund planned projects over the next 20 years. https://www.canada.ca/en/department-national-defence/corporate/reports-publications/canada-defence-policy/annex-b.html

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  January 15, 2020 | Local, Aerospace

  Canadian government to spend estimated $800M more to keep aging CF-18s in fighting shape

  OTTAWA — The federal government is planning to invest hundreds of millions of dollars more to ensure Canada's aging CF-18s can still fight while the country waits for replacement jets, which were originally expected years ago. The extra money comes after the federal auditor general warned in late 2018 that Canada's fighter jets risked being outmatched by more advanced adversaries due to a lack of combat upgrades since 2008 and will result in new weapons, sensors and defensive systems for the fleet. Royal Canadian Air Force commander Lt.-Gen. Al Meinzinger estimated the added cost will be around $800 million, which is on top of the $3 billion the government has already set aside to extend the lives of the CF-18s and purchase 18 secondhand fighter jets from Australia. “Canada has a history of upgrading their fighter aircraft,” Meinzinger said in a recent interview with The Canadian Press. “It's a consequence of the fact that over time, threats ... advance as technology advances.” The air force did not initially plan any upgrades to the CF-18s' combat systems after 2008 because it expected to retire the last of the fleet by 2020, when a new fleet of jets was to have taken over. Instead, thanks to how successive governments have managed — or mismanaged — the jet file over the past decade, a competition to select a new fighter for the air force is only now underway. Even then, the last CF-18 isn't scheduled to be retired until 2032. The air force “imagined perhaps transitioning the fighter force a little bit earlier,” Meinzinger acknowledged, which is why the need to invest in the CF-18s' combat systems wasn't taken — or even apparent — earlier. “Because we anticipate flying the aircraft longer, this is why we're doing what we're doing to ensure we've got at least parity with the threats that we would see over that timeline before we can transition to the new fighter,” he added. The federal auditor general flagged concerns with the combat effectiveness of Canada's CF-18s in a report in November 2018, warning that the planes “will become more vulnerable as advanced combat aircraft and air defence systems continue to be developed and used by other nations.” The auditor general also found that even though the Department of National Defence had decided to invest money into the CF-18s to keep them flying past 2020, it “removed upgrades to combat capability,” in part because of “cost concerns.” Documents obtained by The Canadian Press through the Access to Information Act show the auditor general's office initially wanted to say the fleet was “not fully capable for combat.” But defence officials said that could “compromise operational security” and suggested toned down language. “We've got an excellent capability,” Meinzinger said when asked about the state of the fleet. “The fighter force has got an outstanding reputation globally. They stand the watch 24/7, 365 under the NORAD rubric. ... I don't want Canadians to be worried about where we're at today.” The U.S. Marines are looking at keeping their F-18s — upon which the CF-18 is based — in the air until the 2030s, and Meinzinger said the two forces are working together to identify the best ways to do that. “We've made it a priority and we're moving as fast as we can to get it delivered,” he said. “Obviously our intent is always to ensure that we're making the investments such that we believe that we've got at least parity against the threats that we would face.” https://nationalpost.com/news/air-force-to-spend-hundred-of-millions-more-to-keep-cf-18s-fighting-fit

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  November 23, 2018 | Local, Naval

  Failed bidder files trade challenge against Ottawa's frigate design pick

  Murray Brewster · CBC News Move comes after Alion Canada challenged frigate design pick in Federal Court The federal government's decision to select a group of companies led by Lockheed Martin Canada to design and support the construction of the navy's new frigates is now facing a trade challenge, on top of a Federal Court challenge filed last week. Alion Science and Technology Corp. and its subsidiary, Alion Canada, have asked the Canadian International Trade Tribunal to look into the procurement deal. They're telling the tribunal that Lockheed Martin's design will need substantial changes to meet the federal government's requirements, which would mean higher costs and more delays. The company last week separately asked the Federal Court for a judicial review and an order quashing the decision, which saw Public Services and Procurement Canada select Lockheed Martin Canada as the preferred bidder on the $60 billion program. Alion pitched the De Zeven Provinciën Air Defence and Command (LCF) frigate, a Dutch-designed warship that is already in service in other countries. More delays? Depending upon how they play out, said defence procurement expert Dave Perry, both challenges have the potential to further delay the frigate program. Federal procurement officials had hoped to nail down a fully fledged design contract with Lockheed Martin by the winter. Perry, who works with the Canadian Global Affairs Institute, said he expects those negotiations to continue — unless the Federal Court orders them to halt. "Unless there is a compelling reason to stop, they are going to keep going," he said. "There is a recognition of the urgency across the board." That urgency is partly due to the program's legacy of delays, which have stretched the design competition out for almost two years. Public Services and Procurement Canada would not comment on the matter because it is before the courts, but a senior official, speaking on background Thursday, said the federal government has up to 20 days to respond to the court challenge. The official — who was not authorized to speak on the record because of the sensitivity of the file — said there is flexibility built into the timeline and the government is optimistic it can meet its goal of an early 2019 contract signing. Perry said there are aspects of both the court challenge and the application to the Canadian International Trade Tribunal that he finds puzzling. Alion claimed in its court filing that the winning bid was "incapable of meeting three critical mandatory requirements" of the design tender. Speed bump The company said, for instance, that the Type 26 cannot meet the mandatory speed requirements set out by the navy and that both Public Services and Procurement Canada and Irving Shipbuilding, the yard overseeing the construction, should have rejected the bid outright. Perry said the criteria cited by Alion were among the first the federal government evaluated. "The rest of Lockheed Martin's bid wouldn't have been looked at if the Crown and Irving was not satisfied that the bid met each of those [initial] criteria," he said. "It's a weird dynamic." Alion's trade tribunal application argues in considerable detail that in order for the Type 26 to meet Ottawa's speed requirement, it will have to undergo considerable redesign. The court application also cites the fact that the design tender was amended 88 times and those changes "effectively diluted the [warship] requirements" and allowed the government and Irving to select "an unproven design platform." Unlike its two competitors, the Type 26 has yet to enter service with the Royal Navy. Competitors have privately knocked it as "paper ship." Navantia, a Spanish-based company, was the other bidder in the competition. https://www.cbc.ca/news/politics/failed-bidder-files-trade-challenge-against-ottawa-s-frigate-design-pick-1.4916881