Tories defend $9B jet purchase
'This is the right aircraft for our Canadian air forces and for Canada': MacKay
Conservative ministers launched a defence of plans to spend upwards of $9 billion on stealth fighter jets, arguing that the purchase will bring Canada security and jobs.
The ministers told the Commons defence committee on Wednesday that the decision to purchase 65 F-35 Lightning II jets from U.S. aerospace giant Lockheed Martin is a good one. They said Canada needs to replace its aging fleet of CF-18 jets with the best and newest technology available.
"This is the right plane, this is the right number, this is the right aircraft for our Canadian air forces and for Canada," Defence Minister Peter MacKay told the committee.
The CBC's Kady O'Malley liveblogged during the defence committee hearing. Read her minute-by-minute take on the meeting.
"If we don't make this purchase, there is a real danger we will be unable to defend our airspace, unable to exercise our sovereignty, unable to share our responsibilities through NORAD and NATO."
Liberal MP Scott Simms and other opposition members on the committee demanded to know why the government would settle on the Lockheed Martin contract without allowing other companies to bid on the deal.
Public Works Minister Rona Ambrose said the government researched the possibilities extensively and determined that the F-35 was the only jet to match Canada's specific needs. She said the Canadian government's defence strategy, laid out two years ago, stipulates that Canada needs a next-generation fighter jet.
Ambrose said since no other jets could work, there was no point to open bidding.
Ministers hit the road
Five Conservative MPs took to the road Wednesday to promote the benefits of the fighter jets contract, visiting Canadian aerospace companies who have already benefited with contracts:
- Treasury Board Minister Stockwell Day was in Vancouver.
- Public Safety Minister Vic Toews went to Winnipeg.
- International Trade Minister Peter Van Loan was in Mississauga, Ont.
- Minister of State for Economic Development Denis Lebel was in Montreal.
- Fisheries Minister Gail Shea went to Lunenburg, N.S.
"Competitions do not need to be held when there is only one product available that meets the requirements set by the client," Ambrose said. "Frankly, it would be dishonest. It would be a waste of time and a waste of resources."
NDP critic Jack Harris demanded to see the list of Canadian requirements that the government used to determine the F-35 was the only option, asking that it be tabled for the committee to study. MacKay said while the defence department can speak generally to the requirements, the specifics are part of an internal document that has copyright concerns that cannot be made public.
Alan Williams, the former head of procurement for the Defence Department, said he thinks the government shouldn't rush into the deal. He said he has nothing against the F-35 jets, but said without having bidding on the contract, the government can't be sure it's getting its money's worth.
He said during his time handling military contracts for the government, contracts that were bid for on always came in cheaper and faster than those that weren't.
"Be open and transparent about it, put out a requirements document and let everybody see that," he told CBC News in an interview after the committee hearings ended. "Let the competitor see that and let the best bid win."
No guarantees for Canadians
The jets are expected to be delivered in early 2016, at least a year before Canada's CF-18s are expected to need to be retired. The CF-18s aren't expected to last beyond 2017-2020.
MacKay said the cost of maintaining the new jets will be similar to the cost of maintaining the old ones — $250 million a year for 20 years, or $5 billion.
The deal Canada signed does not include guarantees that Canadian companies will get contracts to build components of the jets. With most contracts, a guarantee is in place, forcing the winner of a contract to spend, dollar-for-dollar, the value of the contract in Canada.
"Why aren't you insisting on a legal contractual obligation which would require Lockheed Martin to spend [money] in partnership here in Canadian sectors?" asked MP Dominic LeBlanc, the Liberal defence critic, during the committee hearing. "We feel this is a shortcoming, a failure on your part."
Industry Minister Tony Clement said Canadian companies want to be competitive, and aren't interested in a guarantee. He said they are eager to bid for Lockheed Martin contracts so they can supply parts and labour on the company's 5,000 jets, not just the 65 coming to Canada.
Clement said that so far, 60 Canadian contracts have been signed in relation to the deal.
"The upside is you're part of the global supply chain. You're not building for 65, you might be building for 5,000 planes over the next 40 years, and that is a very positive upside," Clement replied.
"Our industry has told me they're ready to compete, they want to compete, they will win contracts. They are winning contracts."
Leblanc asked why not then at least insist Canadian companies are guaranteed $9 billion, and let them compete for more if they can.
"I wouldn't settle for $9 billion," Clement said. "Current calculations show that Canadian companies could get up to $12 billion [in contracts out of the deal]. That's the upside. Canadian companies can punch above their weight.… That's what we expect to occur."
Clement said other ally countries purchasing the jets are not making such demands. He said everyone has to compete.
Canada's jet purchase comes 13 years after the country joined the U.S.-led Joint Strike Fighter program to develop a new generation of fighter jets. In 2001, after extensive research, the program chose Lockheed-Martin's jets over rival bidder Boeing.
When Jean Chrétien's Liberal government signed on to the program in 1997, it never committed to buying any jets. Nine countries are part of the program, to which Canada has contributed $168 million US so far.