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November 3, 2017 | Local, Aerospace, Naval, Land, C4ISR

OEMs will invest in Canadian content if they have procurement program stability

If the Canadian government is to inject billions of dollars into military procurement over the next decade and successfully deliver on dozens of major capital projects, the defence industry must play a critical role.

When the new defence policy was released in June 2017, the Liberal government committed to increase the Department of National Defence (DND) budget from $18.9 billion to $32.7 billion by 2026-27 and provide up to $62 billion for the military over the next 20 years.

Experience has shown, however, that increased spending can strain government and industry capacity to meet the requirements and schedules for multiple projects.

Industry is up for the challenge providing it has predictability in the programs and the process, said Mike Greenley, president of Burlington, Ont.-based L3 WESCAM and a former chair of the board for the Canadian Association of Defence and Security Industries (CADSI).

“Industry capacity to respond and surge is obviously greater the more horizon you can give it,” Greenley said at a recent Ottawa conference, hosted by the Canadian Global Affairs Institute, examining the implications of Canada's Defence Policy: Strong, Secure, Engaged.

Greenley–a former executive with General Dynamics and CAE and a veteran of many procurement programs–said large foreign and Canadian manufacturers would make the necessary investments in smaller Canadian companies and production capacity if they have confidence in the opportunity.

“If we talk about these things far enough ahead of time, I think people will invest and have Canadian content ready,” he added.

MGen Jean-Marc Lanthier, chief of program, said the new policy had generated almost four dozen projects, but he cautioned that the government and military could not succeed if “we don't tap into innovation.”

One way to encourage early industry engagement might be to run competitions at the research and development (R&D) phase of certain projects, rather than waiting until after the statement of requirements (SOR) has been fully defined.

“If [you wait] for the SOR and everyone fights to the death for that thing, then your ability to respond and scale up is obviously diminished because you are not going to believe in it until, for sure, you absolutely have [it],” Greenley stated. “Industry can do a lot more if they are engaged earlier.”

As an example, he pointed to the process to replace the current fleet of CP-140 Aurora aircraft, which is undergoing a series of block upgrades to extend service life into the 2030s. If, as the commander of the Royal Canadian Air Force (RCAF) has suggested, the goal is a Canadian-built maritime patrol platform with Canadian-developed anti-submarine warfare and other capabilities, “while we modernize the CP-140s today, we could run a competition tomorrow [to get] an industrial team together for next generation maritime patrol.”

That would “allow things to happen easier and quicker, engage the whole base sooner, in addition to giving them stability” to survive a change in government or government priorities, he said. “We wouldn't normally do that in Canada. But to [earlier] points about how do you connect industrial capacity with innovation, with trying to get more done with less people with more money, we could [do it].”

Defence policies rarely survive as economic blueprints beyond their first few years. In a panel on framing the government's challenge, several former senior public executives noted how quickly a shift in the domestic financial picture or international circumstances forced previous governments to change course.

Still, current government officials were optimistic about the policy, noting it is still early days. Andre Fillion–chief of staff, Materiel, and a former RCAF officer who led the acquisition programs for the CC-177 Globemaster, CC-130J Hercules, CH-147F Chinook and CH-148 Cyclone–acknowledged that more certified project managers are needed, as are improvements to streamline the procurement process.

An increase in contracting authority to $5 million would allow the Army, Navy, Air Force and special operations forces to directly manage about 80 per cent of DND's procurement projects, freeing up resources and staff for the larger, more challenging and riskier programs.

The department will look more holistically at projects, factoring in infrastructure requirements, like hangars, when it acquires an aircraft, and it will place greater reliance on analytics using data to drive decisions on complex programs, said Jody Thomas, deputy minister of National Defence.

The department also added two new associate deputy ministers with extensive experience in government and procurement. “We are restructuring the department to deliver,” concluded Thomas.

https://www.skiesmag.com/news/oems-will-invest-canadian-content-procurement-program-stability/

On the same subject

  • Liberals press on with second-hand jets amid questions over who will fly them

    November 23, 2018 | Local, Aerospace

    Liberals press on with second-hand jets amid questions over who will fly them

    CANADIAN PRESS OTTAWA — The Trudeau government pressed ahead with its plan to buy second-hand fighter jets from Australia on Tuesday despite withering fire from the federal auditor general, who warned that the military might not have anybody to fly them. Six years after blowing up the Harper government's plan to buy new F-35s without a competition, auditor general Michael Ferguson targeted the Liberals' own attempts to buy jets. He first picked apart the government's aborted plan to purchase “interim” Super Hornets to bolster Canada's aging CF-18 fleet, and then its current plan to buy used Australian fighters. The government says those extra fighters are needed to address a shortage of CF-18s until a state-of-the-art replacement can be purchased and delivered — a lengthy process that will run through 2032, at which point the CF-18s will be 50 years old. But the auditor general's office arrived at a very different conclusion: The military doesn't need more planes because it doesn't even have the pilots and mechanics to operate what it already has. What it really needs, the office found, is more people. “The shortage of personnel in relation to technicians means that they don't have enough technicians to prepare and maintain the planes,” Casey Thomas, the principal auditor on the fighter jets study, told reporters on Tuesday. “And they have 64 per cent of the pilots that they need, so they don't have enough pilots to fly the planes. What National Defence actually needed was to increase its personnel.” The auditor general's report also flagged concerns that the government's plan to sink $3 billion into the current CF-18s and additional Australian fighters to keep them flying to 2032 won't be enough, as the money won't actually improve the aircrafts' combat systems. Without more money, which some analysts have suggested could mean hundreds of millions if not billions of dollars more, Canada's fighter-jet fleet will become even more obsolete, to the point where the plans might not be any use at home or overseas. Yet only a few hours after the auditor general's report was released, Defence Minister Harjit Sajjan announced that the Liberals had signed a contract to buy the 18 second-hand jets from Australia. Officials have pegged the cost at around $500 million. Sajjan also said he had directed officials to look at options for upgrading the combat systems on the CF-18s and Australian fighters, which he acknowledged would mean investing more money into aging fighter jets. Missing from the announcement: Any new funding or other initiative to increase recruiting and retention of pilots and technicians. Instead, Sajjan said the government and military have already introduced several initiatives through the Liberals' defence policy last year, such as giving tax breaks to military personnel deployed on overseas missions, to give them reasons to stay. At the same time, the minister sidestepped questions about recruitment, saying the military can't reduce its standards for new pilots. He noted that commercial airlines are also facing a significant pilot crunch. Air-force commanders have previously said the current training system, which can only produce 115 new pilots each year, a fraction of whom are fighter pilots, is not fast enough to replace all those who move on to commercial opportunities. The subtext to much of the auditor general's report on Tuesday was the question of how Canada ended up in a position where the military will be flying fighter jets until they are 50 years old. The Liberals were urged early in their tenure to launch an immediate competition to replace the CF-18s. Instead they spent two years working to buy those stopgap Super Hornets before a trade dispute with the company that makes them, Boeing, saw the government move on to the used Australian jets. The Trudeau government insists that it was doing its due diligence, but critics — including numerous retired air force and defence officials — have accused it of trying to bend procurement rules to avoid buying the F-35. Yet even before the Liberals took the reins, the Harper government was having a hard time making any progress on buying new fighter jets. The Tories championed the F-35 before resetting the entire process in 2012. That move was prompted by Ferguson's first report, which accused defence officials of misleading parliamentarians about the stealth fighter's costs and various technical issues. National Defence later pegged the full lifetime cost of the fighters at $46 billion. “Lot of people had a hand in this,” said defence analyst David Perry of the Canadian Global Affairs Institute, adding that the worst part is there is no easy or obvious solution to what has become a very troubling situation for Canada and its military. “I think our fighter force is in trouble.” https://lfpress.com/news/national/liberals-press-ahead-with-second-hand-jets-amid-questions-over-who-will-fly-them/wcm/859a3329-9d8b-4856-af7f-5c8064e778e7

  • Plan to buy more fighter jets puts Canada on hook for bigger share of F-35 costs

    January 31, 2019 | Local, Aerospace

    Plan to buy more fighter jets puts Canada on hook for bigger share of F-35 costs

    Lee Berthiaume, The Canadian Press OTTAWA -- Canada is being forced to shoulder a bigger share of the costs of developing F-35 fighter jets even though it has not decided whether it will actually buy any. Canada is one of nine partner countries in the F-35 project, each of which is required to cover a portion of the stealth fighter's multibillion-dollar development costs to stay at the table. Each country pays based on the number of F-35s it's expecting to buy. Canada has pitched in more than half-a-billion dollars over the last 20 years, including $54 million last year. But that amount was based on the Stephen Harper government's plan to buy 65 new fighter jets to replace Canada's aging CF-18s, which the Trudeau government has since officially increased to 88. Even though Canada has not committed that those 88 jets will be F-35s, the Department of National Defence says that change means it will have to pay more to remain a partner -- including about $72 million this year. "Canada's costs under the F-35 (partnership agreement) are based on an intended fleet size," Defence Department spokeswoman Ashley Lemire said in an email. "Canada changed its fleet size within the F-35 (agreement) from 65 to 88 aircraft to align with government decisions on the size of the intended permanent fighter fleet to be acquired through competition and the payment increased accordingly." As each partner contribution is determined annually, based on the overall cost of the F-35 development program for that specific year, Lemire said she could not provide details how much more Canada will have to pay. The F-35's development costs have been a constant source of criticism over the life of the stealth-fighter program, which Canada first joined under the Chretien government in 1997. The entire program is believed to have already cost more than US$1 trillion. The Trudeau government says it plans to keep Canada in the F-35 development effort until a replacement for the CF-18s is chosen -- partners in the development work can buy the planes at a lower price and compete for work associated with their production and long-term maintenance. Canadian companies have so far won more than $1.2 billion in contracts related to the F-35, according to the government. The F-35 is one of four planes slated to participate in the $19-billion competition that the government plans to launch this spring, the others being Boeing's Super Hornet, Eurofighter's Typhoon and Saab's Gripen. The competition isn't scheduled to select a winner until 2021 or 2022, meaning Canada will be on the hook for several more payments. The first new aircraft is expected in 2025 and the last in 2031, when the CF-18s will be phased out. F-35 maker Lockheed Martin says more than 350 of the stealth fighters have been delivered to different countries, while Israel became the first country to use the plane in combat last year when two of the jets struck targets in neighbouring Syria. Acting U.S. defence secretary Patrick Shanahan, a former Boeing executive, nonetheless criticized the program on Monday, saying it "has room for a lot more performance." "I am biased toward performance," he was quoted as saying when asked if he is biased toward Boeing. "I am biased toward giving the taxpayer their money's worth. And the F-35, unequivocally, I can say, has a lot of opportunity for more performance." https://www.ctvnews.ca/politics/plan-to-buy-more-fighter-jets-puts-canada-on-hook-for-bigger-share-of-f-35-costs-1.4275372

  • Canada Unprepared for Military Aggression Via Arctic, Say Defence Experts

    February 6, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

    Canada Unprepared for Military Aggression Via Arctic, Say Defence Experts

    BY RAHUL VAIDYANATH Modernizing outdated North Warning System not funded as part of defence budget No sooner had a gathering to discuss modernizing the defence of North America taken place than two Russian strategic bombers approached Canadian airspace from the Arctic. The menace underscores the message to the Canadian government and public that the country is at greater risk than it has been in decades. North American Aerospace Defence Command (Norad) reported the Russian activity on Jan. 31, just two days after the Canadian Global Affairs Institute (CGAI) hosted a major defence conference in Ottawa. “They [the Russians and Chinese] have the weapons systems and we are increasingly seeing the intent, so we haven't caught up to that yet,” University of Calgary political science professor and conference panelist Rob Huebert said in an interview following the incident. The Russian aircraft stayed in international airspace and didn't enter U.S. or Canadian sovereign airspace, but it nevertheless highlighted the threat. Huebert says what's been holding Canada back is a decades-long multi-faceted problem of attitudes. Canada is accustomed to playing the “away game” instead of the “home game,” meaning it prefers to face its threats as far away from its borders as possible. Thus the protection of the North American continent requires a change of mindset given the advanced capabilities of the Russians and Chinese. It's also naive on Canada's part to think it can simply talk to Russia and China and get them to play nice. “We have to be a lot more honest with Canadians,” Huebert said. A government can favour certain initiatives, and the current one has shown it can generate broad public buy-in for its environmental initiatives. But even if the public isn't clamouring for better military capabilities—as seen in the lack of interest the topic garnered during the election run-up—experts say the government can no longer ignore the military threat from Russia and China. “What this government has shown no willingness to deal with is a much more comprehensive understanding of security that encapsulates both environmental security and military security,” Huebert said. For example, the Liberals didn't put forth their Arctic policy until a day before the election was called. ‘People have to recognize there is a real threat' Canadian governments have put a lower priority on defence spending for decades, and that has left a consistent drop in capability compared to potential rivals. A case in point is that Canada opted in 2005 to not be a part of the U.S. ballistic missile defence program. Contrast that attitude with the Russians or the Chinese and their imperialist goals. Russia wants to destroy us and China wants to own us, said John Sanford of the U.S.'s National Maritime Intelligence Integration Office, at the CGAI forum. A power play is shaping up between the United States, China, and Russia, and the Arctic is the epicentre of the military conflict. That makes it Canada's business, according to defence experts. “People have to recognize there is a real threat,” said conference opening speaker Commodore Jamie Clarke, Norad's deputy director of strategy. “We are defending our entire way of life.” At risk is Canada's economy and infrastructure, not to mention that of the United States. At the heart of the matter is an outdated detection and deterrence system with no comprehensive replacement in the works. https://www.theepochtimes.com/canada-unprepared-for-military-aggression-via-arctic-say-defence-experts_3228565.html

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