Saturday, March 25, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
No Result
View All Result
Macdonald-Laurier Institute

Canadians should be concerned about fighter jet replacement process: Richard Shimooka in the Hill Times

November 21, 2018
in Columns, Foreign Policy Program, In the Media, Latest News, National Defence, Richard Shimooka
Reading Time: 3 mins read
A A

The Liberal government’s fundamental flaw is that it has sought to oversee a fair  fighter jet competition where none is possible, writes Richard Shimooka. 

By Richard Shimooka, November 21, 2018

Canada’s process to replace its CF-18 fighter jets stands as one of the strangest in the country’s history. It has witnessed four major decisions on the purchase of new fighter jets: in 2010, 2014, 2016 (for interim Super Hornets), and 2017 (for surplus Australian jets). Notably, the first three decisions were cancelled.

Even as the auditor general weighs in on the last episode, the current process to permanently replace the CF-18 fleet with 88 aircraft has avoided serious scrutiny. Like the interim buy, the entire process is fundamentally flawed and likely to produce a significantly poorer outcome for Canada.

The Liberal government’s fundamental flaw is that it has sought to oversee a fair competition where none is possible. Of the airframes considered, the F-35 offered the highest capability (by a significant margin) with the lowest lifetime cost, and due to its high international production rates (twice as many units as any of its competitors) has industrial benefits far exceeding Canadian offset requirements.

Many other nations have come to these conclusions; internationally, the F-35 has not lost a competition. In many cases, governments simply sole-sourced in order to avoid the potential expense of a competition with a foregone conclusion. In Canada’s case, the government has not sought to select the right option, but rather to create a vehicle for building political capital, using the façade of a fair and transparent competition process.

Upon coming to power, the Liberal government loosened the operational requirements to give an opportunity for other manufacturers to compete. In doing so, it undermined one of the strongest advantages of the F-35: its interoperability with NATO and Norad.

Interoperability should be one of Canada’s main considerations when modernizing its air fleet. Furthermore, the Royal Canadian Air Force expects the replacement to remain relevant in high-intensity operations until the 2070s. However, a less capable aircraft will mean that Canada will need to either consider costly upgrades or a full replacement earlier than that date.

The inherent industrial benefits to the F-35 program are one of its most obvious advantages. Yet this leg of the competition has proven the most problematic. The F-35 program has already delivered more than $1-billion of work to Canada. If Canada acquires the F-35, Innovation, Science, and Economic Development Canada predicts more than $10-billion over the program’s lifetime.

Canada joined the F-35 partnership and later, in 2006, signed the follow-up memorandum of understanding (MOU), largely to give national industries an opportunity to compete for lucrative subcontracts in the program. Notably, the 2014 Canadian defence procurement strategy was designed to obtain similar work for other projects, illustrating the efficacy of the approach.

Yet the MOU stipulates that Canada would not receive a guarantee for these contracts, in what is known as offsets. This was to ensure that contracts were awarded based on the best value and kept overall costs down. This was not a practical concern for Canadian industries: it was expected to secure a disproportionately large share of Joint Strike Fighter program contracts. Under the post-2014 procurement system that gives multipliers for high-tech direct work on a project, the F-35 would well exceed other program offerings. Nevertheless, the government has continued to insist on guaranteed offsets that will only undermine its industrial base.

The government’s mishandling of the offset piece threatens to derail its entire procurement strategy. The United States government has reiterated that it cannot receive guaranteed offsets under the MOU. Should the government insist on the offset guarantees, the only alternative is for Canada to leave the JSF program and become a Foreign Military Sales (FMS) customer for the F-35. This is the “normal” procurement process for U.S. military exports, but has a number of serious drawbacks.

First, Canada’s existing contracts would be immediately put at risk, as those were obtained through the best-value approach. Canada would likely receive contracts of lesser quality and duration in return. Second, the price Canada would have to pay for each F-35 would increase as would the cost of sustainment and upgrades over the life of the program. It would have to pay FMS administrative and research fees to the U.S. government, a termination cost to the JSF program, and the additional cost of guaranteed offsets. Whereas Canada’s per-aircraft flyaway cost is now about $85-million (significantly cheaper than all the other options), that cost would increase to $100- to $115-million per aircraft. This may make other options, particularly the Super Hornet, cost-competitive to the F-35.

The flaws of the ongoing process to replace the CF-18 should be evident to Canadians. In order to make the competition fair for other competitors, the government has created a format that seriously handicaps the F-35 program. It will artificially drive up its costs, discount its unique and important operational capabilities, and obtain poorer industrial outcomes for the country—but even then, the F-35 may win. Considering the importance of this selection to national security, Canadians should be concerned.

Richard Shimooka is a senior fellow at the Macdonald-Laurier Institute’s Centre for Advancing Canada’s Interests Abroad.

Tags: CF-18DefenceF-35militaryprocurement
Previous Post

Ep. 18 – Canada and the Future of Work with Linda Nazareth and Ken Coates

Next Post

Perpetual deficits and the failure to make tough choices: Sean Speer for Inside Policy

Related Posts

Putin and Xi driven to make authoritarianism the standard worldwide: Balkan Devlen in the National Post
Columns

Putin and Xi driven to make authoritarianism the standard worldwide: Balkan Devlen in the National Post

March 24, 2023
Outside intervention does a disservice to Indigenous communities that need to take control of their economic destinies: Chris Sankey in the National Post
Columns

Changing a lyric in O Canada is not a path to reconciliation: Chris Sankey in the Hub

March 23, 2023
Holding China to Account for the COVID-19 Coverup: Charles Burton and Brett Byers for Inside Policy
Columns

Beijing is the one stoking racism against Chinese-Canadians: Christian Leuprecht in the National Post

March 23, 2023
Next Post
Perpetual deficits and the failure to make tough choices: Sean Speer for Inside Policy

Perpetual deficits and the failure to make tough choices: Sean Speer for Inside Policy

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario
K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Follow us on

Newsletter Signup

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

Inside Policy Magazine

  • Current Issue
  • Back Issues
  • Advertising
  • Inside Policy Blog
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media

© 2021 Macdonald-Laurier Institute. All Rights reserved.

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.

Privacy Preference Center

Consent Management

Necessary

Advertising

Analytics

Other