31 juillet 2020 | Local, Aérospatial
OTTAWA — Fighter-jet makers are leading with promises of jobs and other economic spinoffs as they make their final pitches for why Canada should buy their planes to replace the military's aging CF-18 fleet.
Friday marks the deadline for U.S. aerospace companies Lockheed Martin and Boeing, as well as Swedish firm Saab, to submit their bids in the current fighter-jet competition, which will see Canada spend up to $19 billion on 88 new planes.
The closing of the competition marks a major milestone in Canada's decade-long effort to buy new fighter jets for the Royal Canadian Air Force, which has been plagued by government mismanagement and political controversy.
While the combat capability of each of the three competing planes — Lockheed Martin's F-35, Boeing's Super Hornet and Saab's Gripen — will be the main focus as the government evaluates each bid, there will also be a lot of focus on the economic benefits of buying each plane.
To that end, Lockheed Martin commissioned a report in February that found up to 4,200 jobs will be created or sustained each year if Canada buys its F-35 stealth fighter, which the company equated to more than 150,000 new jobs over the life of the plane.
The analysis provided to The Canadian Press, which was compiled by Toronto-based OMX, also predicted the Canadian economy will see roughly $15 billion in additional activity between now and 2058 if the F-35 is selected to succeed the CF-18 as Canada's primary fighter jet.
That is in addition to the $2 billion in economic benefits that Canada has already received since 2007 as one of nine partner countries in the development of the F-35, which lets Canadian companies compete for work associated with the stealth fighter.
Canada has contributed US$541 million since 1997 to be a partner in the F-35 program.
"Lockheed Martin has prepared a comprehensive proposal," the company said in a statement on Thursday.
"The F-35 is the most capable, best-value fighter to strengthen defence, enhance ally partnerships and contribute to economic growth in Canada with significant, long-term industrial opportunities."
Lockheed Martin isn't the first to toot its own horn on the potential economic benefits of its fighter.
Boeing last month released its own commissioned report showing its existing operations in Canada created $5.3 billion in economic spinoffs last year and supported 20,000 jobs. Boeing says the numbers will go up if the Super Hornet wins, though it has not revealed its exact estimates.
The emphasis on jobs and money — rather than combat capability — comes as Canada's economy has been battered by the COVID-19 pandemic, forcing the federal government to spend tens of billions in financial support for Canadians.
Defence analyst David Perry of the Canadian Global Affairs Institute said it makes sense for companies to highlight the potential economic benefits of their bids. He said it helps to make the cost more palatable to the public and is also important in determining the winner.
"In any competition like this, you're always looking for any potential partial point that you can get," Perry said.
"Companies, if they're going to invest this significant time and significant amount of money preparing a bid like this, then they don't leave anything to chance. You make sure you try to wring every single last partial point you can get out of your proposal."
This report by The Canadian Press was first published July 30, 2020.
Lee Berthiaume, The Canadian Press
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31 mai 2019 | Local, Aérospatial
The Canadian Press, Lee Berthiaume OTTAWA — The federal procurement minister is defending the government's plan to loosen procurement rules for the F-35 stealth fighter in the face of questions and concerns from companies that make competing jets. Speaking at the annual Cansec arms-trade show Thursday, Public Procurement Minister Carla Qualtrough insisted the move is needed for a robust competition to replace Canada's aging CF-18s. That competition is expected to result in a $19-billion deal for a new fleet of fighters. “The innovations and modifications we are adopting will enable participation from all eligible suppliers while applying the same rules to everyone on a level playing field,” Qualtrough said during a breakfast speech. “This is a complex process. As complex as any the federal government has ever conducted.” The government's plan involves lifting a long-standing requirement that companies legally commit to putting some of their contract money back into Canadian industry if they win a defence competition. The proposal followed U.S. complaints that the requirement violated an agreement Canada signed in 2006 to become one of nine partner countries in the development of the F-35, which is being built by Lockheed Martin. While partner countries can buy F-35s at a discount, they must also contribute money to the planes' development — in Canada's case, more than $500 million to date. Partners are also forbidden from requiring economic benefits as a condition for buying the plane. Companies in each partner country instead compete for contracts associated with the aircraft, with Canadian industry having won $1.5 billion so far. But representatives from Boeing and Saab, which make the Super Hornet and Gripen fighter jets, respectively, said Wednesday the previous policy worked well in ensuring defence contracts benefit Canada economically. And they warned abandoning the requirement that bidders commit to reinvesting in Canada could hurt the country's aerospace industry, which would in turn make it more difficult for the military to support its new jets. Industry sources say representatives for the Eurofighter Typhoon, the fourth aircraft expected in the competition aside from the F-35, Super Hornet and Gripen, have expressed similar sentiments. Qualtrough, offering the government's most extensive defence of the plan to date, insisted that despite letting bidders choose not to make contractual obligations to re-invest, the government is committed to ensuring the largest economic benefits possible. Under the new process, bidders can still guarantee that they will re-invest back into Canada if their jet wins the competition and get full points — which is the likely approach for Boeing, Saab and Eurofighter. Those like Lockheed Martin that can't make such a commitment will be penalized and asked to establish “industrial targets,” lay out plans for achieving those targets and sign a non-binding agreement promising to make all efforts to achieve them. “No one should misunderstand this: our government remains committed as strongly as ever to the (industrial benefit) policy in this competition,” Qualtrough said during her speech. “We're getting the fighter jet for the RCAF's needs, at the right price, and with the right economic benefits for Canadians.” The government has said it plans to launch the long-overdue formal competition to select Canada's next fighter jet in July, nearly four years after the Liberals were elected in 2015 on a promise to hold an immediate competition. Companies are expected to submit their bids next winter, with a formal contract signed in 2022. The first plane won't arrive until at least 2025. –Follow @leeberthiaume on Twitter https://nationalpost.com/pmn/news-pmn/canada-news-pmn/procurement-minister-defends-rule-change-for-f-35-as-necessary-for-competition
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