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  December 20, 2018 | Local, Land

  Saudis fall $1.8B behind in payments for arms deal with Canada

  NORMAN DE BONO Saudi Arabia has fallen behind in making payments on its $15-billion arms deal with Canada, a contract that Prime Minister Justin Trudeau has said he's looking for ways to halt. The Saudi government was short $1.8 billion in payments to the end of September for light-armoured vehicles assembled at General Dynamics Land Systems Canada (GDLS) in London, according to financial statements from the Canadian Commercial Corp., the federal Crown corporation overseeing the controversial contract. “It is a problem. There is concern, absolutely,” a federal official with knowledge of the agreement told The London Free Press on Wednesday. The arrears on the deal can be traced to a new regime in Saudi Arabia since the agreement was signed in 2014, and there have been delays in payments since the change, said the official, who declined to be identified. “That changed the way everything worked, including payments,” he said of the desert kingdom's new leadership. However, since September the oil-rich country has been making payments and has reduced the amount owed, the official added. The deal, which the Liberals are under pressure to scuttle amid Saudi human rights abuses, including the slaying of dissident journalist Jamal Khashoggi at the country's consulate in Turkey, affects thousands of workers in the London area and in a supply chain that extends nationwide. Trudeau, whose government inherited the deal from former prime minister Stephen Harper's Conservatives, said publicly this week for the first time that the Liberals are trying to find a way to stop the sale involving hundreds of light-armoured military vehicles built by the Canadian division of American defence giant General Dynamics. The report by the Crown corporation handling the sale says “trade receivables” are short $1.86 billion as of quarterly statements ending Sept. 30, and that payments have been sparse over the course of about one year. “The significant increase in past due trade receivables, is mostly attributable to the ABP contract,” the report says, referring to the armoured brigades program. “Trade receivables are considered past due when the payor has failed to make the payment by the contractual due date.” The payment issue hasn't been helped by recent public musings by Trudeau, who on Sunday told CTV's Question Period the government is looking for a way to halt the sale. “We are engaged with the export permits to try and see if there is a way of no longer exporting these vehicles to Saudi Arabia,” he said, without being specific. Such a move would devastate GDLS Canada's 1,800-member workforce in London, as well as thousands of jobs with supplier companies, said David Perry, a senior analyst with the Canadian Global Affairs Institute think-tank. The Saudis may now feel even less inclined to write a cheque, he added. “It does not give the Saudis a reason to catch up on payments. The government of Canada is responsible for making sure GDLS gets paid for the work it has done,” said Perry. It also makes even less sense that Ottawa should want out of the deal now, he added. Not only would the federal government incur billions of dollars in penalties, according to GDLS Canada, but the Saudis aren't likely to pay the balance owed. “It does not make sense. It would leave the government out of pocket,” said Perry. A review of the quarterly reports suggest payments began slowing about a year ago, he added. “We are right back to dealing with an unreliable client, and that is a problem,” said London-Fanshawe NDP MP Irene Mathyssen. “Work has been done and they have not seen fit to pay their obligation.” She also slammed Trudeau for creating uncertainty around the issue. “It is a problem, it creates stress. The PM cannot make up his mind about what to do.” As for why payments aren't being made, Mathyssen cites reports of financial issues with the Saudi government. Media in May reported soaring debt in Saudi Arabia and economic woes as a result of low oil prices. “There have been reports they overspent, they do not have the cash they once did,” said Mathyssen. “Saudis are used to dictating to the world because they hold such significant oil reserves. They are used to calling the shots.” The Canadian Commercial Corp. (CCC) helps businesses sell overseas and works with foreign governments to buy here. It declined comment on the quarterly reports, saying financial matters between the Crown corporation and business are confidential. “CCC is bound by commercial confidentiality, and, as such, we are not able to disclose the details of our contracts or their management,” the company wrote in an email message. James Bezan, the Conservative critic for national defence, blamed Global Affairs Minister Chrystia Freeland for the slowing cash flow. Her tweets in May criticizing the Saudi human rights record coincide with fewer payments made, he said. “It is concerning. It occurred after irresponsible tweets from Freeland rather than working through proper diplomatic channels,” he said. “The Liberals are prepared to trade away good jobs in London and southern Ontario rather than deal with this at a diplomatic level.” Bezan encouraged the government to find other ways to pressure the Saudis, such as targeting oil imports here, instead of cancelling a contract that would result in massive job losses. “GDLS has been on time, and on budget,” and would be the ones punished. “The government has the responsibility to work through the payments in a timely fashion,” he said. TRUDEAU WEIGHS IN ON SAUDI DEAL Speaking to reporters at a year-end news conference, Prime Minister Justin Trudeau was asked about whether he'll cancel the Saudi arms deal serviced by a major London defence contractor. “Our priority since Day 1 has been thinking about the Canadian jobs, the workers in London, and in the supply chains that have fed into this contract. We know that there are a lot of hard-working families in London who rely on these jobs, and we're going to keep those jobs in mind.” Says the contract, signed by the previous Conservative government, includes a confidentiality clause that prevents him from discussing what's in it, or the nature of the penalties for breaking the contract. Says Canadians are increasingly questioning whether the country should do business with Saudi Arabia. Called it a “complex situation.” Says he's been answering questions about the deal since taking office Says he'll continue to reflect on the “best path forward for Canada and for Canadians.” https://lfpress.com/news/local-news/saudis-fall-1-8b-behind-in-under-fire-arms-deal-with-canada

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  April 25, 2019 | Local, Aerospace

  Canada's fighter jet tender competition (finally) takes off next month

  Murray Brewster · CBC News The politically charged competition to replace Canada's aging fleet of fighter jets will rocket forward at the end of May as the federal government releases a long-anticipated, full-fledged tender call. There are four companies in the running: Saab of Sweden, Airbus Defence and Space out of Britain, and the American firms Boeing and Lockheed Martin. Once the request for proposals is released, the manufacturers will have until the end of the year to submit bids, defence and industry sources told CBC News. It was the former Conservative government that kicked off the effort to replace the three-decade-old CF-18s in 2010, an attempt that was shot down in a dispute over the way the F-35 fighter was selected. The program became mired in politics when the Liberals promised during the 2015 election campaign not to buy the stealth jet. A final decision will now have to wait until after this fall's election. The competition comes at a time of renewed geopolitical rivalry between the West and Russia and China, and the chief of the Swedish Air Force says his fighters have been busier than ever. Maj.-Gen. Mats Helgesson said Sweden, which has a long history of being a neutral and non-aligned country, has over the past few years found its airspace violated more frequently by both Russian and NATO warplanes. That has required a stepped-up state of readiness for the country's Gripen fighter jet squadrons. "When we look around our borders, especially over the Baltic Sea, we can see increased activity, not only Russia, but also NATO," Helgesson told CBC News in an interview. "We see exercises. We see daily training and we also see intelligence gathering in a way that we haven't seen for many years." The Swedish air force is about the same size as the Royal Canadian Air Force. It has long flown the homegrown Gripen, which has gone through various iterations and models since it was first introduced in the mid-1990s. Saab AB, headquartered in Stockholm, intends to offer the latest variant — the E version — as a replacement for Canada's current fleet of CF-18s. The aircraft's design improvements, said Helgesson, are a direct result of what the military and the country's engineers can see being developed in Russia. "It's no secret that we need to be able to meet, not only Russia, but also other high-performing aircraft in the future," he said, pointing to Russia's Su-30 fighter jet, the more modern Su-35 (known by the NATO designation "The Flanker") and the stealth Su-57. There has been a rigorous political and academic debate about whether Canada should choose a legacy design from the 1990s, such as the Gripen, or the recently introduced Lockheed Martin F-35 stealth fighter. The notion that stealth fighters are needed for conflicts with countries like Russia — countries that have advanced air-defence systems — was partly dismissed by the Swedish Defence Research Agency in a recent report. Russia's anti-access/areas-denial weapons (known as A2/AD) are not all they're cracked up to be, said the report released last month, which looked at the use of such systems in the Syria conflict. "Much has, in recent years, been made of Russia's new capabilities and the impact they might have on the ability of NATO member states to reinforce or defend the vulnerable Baltic states in case of crisis or war," said the report. "On closer inspection, however, Russia's capabilities are not quite as daunting, especially if potential countermeasures are factored in." The Gripen is intended for operations in rugged environments, such as Sweden's Arctic region, Helgesson said. "We are operating from dispersed bases," he said. "We use highways and small airfields spread all over Sweden in remote places, far away. And the logistics footprint is very small." The Arctic is, naturally, an important area of operation for the Swedish air force, and having far-flung bases has required the force to become creative about warehousing fuel, ammunition and other supplies. Canada's CF-18s occasionally operate from forward bases in the North, but those deployments are infrequent compared with the routine activity of the Swedes, experts have noted in the past. Like Canada, Sweden has just started reinvesting in defence, Helgesson said. The competition among manufacturers for Canada's fighter jet business is expected to be intense. Lockheed Martin will again pitch its F-35 stealth fighter. Boeing is in line to offer the Super Hornet — a larger, more advanced version of the F-18. Airbus Military plans to offer its Eurofighter Typhoon. https://www.cbc.ca/news/politics/fighter-jet-saab-airbus-boeing-lockheed-martin-1.5096811?__vfz=medium%3Dsharebar

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  March 24, 2023 | Local, Other Defence

  U.S. President Joe Biden's visit puts Canadian defence spendinh and Norad modernization back under microscope

  U.S. President Joe Biden?s long-anticipated first trip to Ottawa this week is expected to put the state of North America?s defences and Canada?s military spending back under the microscope.