New fighter jets could cost more than Liberals Projected

By: DANIEL LEBLANC AND STEVEN CHASE, The Globe and Mail 

The Liberal Party promised massive savings on the purchase of new fighter jets in the last election, but the recent purchase of Boeing F/A-18 Super Hornets by Kuwait suggests bargains will be hard to find.

The federal government is nearing a decision on the replacement of its fleet of CF-18s, facing pressure to deliver a better deal than the previous, Conservative government had put together.

While straight comparisons are never easy in military procurement, Kuwait’s recent purchase of 40 Super Hornets for $13.5-billion raises questions about Canada’s ability to meet its own financial targets for new fighter jets.

During the 2015 election campaign, the Liberals said they could acquire their own fleet of Super Hornets for $65-million per unit - a figure far less than then $335-million Kuwait just agreed to pay. 

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The deal means Kuwait will be paying an average of $335-million per aircraft, a price that includes training, spare parts and engines, weaponry and logistical support.

During the 2015 election campaign, the Liberals said they could acquire their own fleet of Super Hornets at a flyaway price (which does not include training or spare parts) of $65-million per unit; by way of comparison, the Liberals said the Lockheed Martin F-35, which had been favoured by the Conservatives, had a flyaway price of $175-million per aircraft.

Military analyst David Perry said the Kuwaiti deal suggests the Liberals were overly optimistic before they came to power.

“This cements my skepticism about the assumption that some fighter options are horrendously expensive and others are dirt cheap,” said the senior analyst at the Canadian Global Affairs Institute.

The previous government had set aside an envelope of $9-billion to acquire a fleet of 65 fighter jets.

Mr. Perry said it is impossible to determine how much Canada would pay for a fleet of Super Hornets or F-35s today, but the numbers out of Kuwait show “all of these aircraft are expensive.

“Some of them may be relatively more or less costly, but there is no such thing as cheap fighter aircraft.”

The federal government is promising a decision on the final process to replace its CF-18s by the end of the year. The matter will go to cabinet shortly.

“We have a lot of credible information and analysis that were done over the summertime and we’re putting the final touches onto that,” Defence Minister Harjit Sajjan said in an interview.

“At the end of the day, I want to make sure that our men and women have the right type of aircraft and that we have the right benefits as a nation, because we’re making a very big decision here and I want to make sure we get this right,” the minister added.

During the campaign, the Liberals said they would change the requirements for the new fighter jets to place less emphasis on “first-strike stealth capabilities” and greater emphasis on the ability to contribute to the “defence of North America.”

“We will reduce the financial procurement envelope for replacing the CF-18s. Instead of budgeting for the acquisition of 65 F-35s, we will plan to purchase an equal or greater number of lower-priced, but equally effective, replacement aircraft,” they said.

Still, they promised to launch an “open and transparent competition” for new fighter jets, which officials at both Lockheed Martin and Boeing continue to advocate.

Sources said there are three options before the cabinet: launching a competition, buying a new fleet through a sole-source process or acquiring a few aircraft to form an “interim fleet” and finalizing the fleet at a later date.

The Department of National Defence predicts that its fleet of CF-18s will be able to fly into the next decade, with some aircraft due to be retired in 2023; but the Canadian Armed Forces will need a new fleet of fighter jets by 2025.

Ottawa Pushes Military Deal with Kuwait despite UN

STEVEN CHASE
OTTAWA — The Globe and Mail
Published Sunday, Jan. 31, 2016 9:42PM EST
Last updated Sunday, Jan. 31, 2016 9:48PM EST

The Canadian government is busy promoting Canada’s defence industry in Kuwait even as a United Nations report accuses a Saudi-led coalition, which includes Kuwait, of “widespread and systematic” bombing of civilians in Yemen.

Ottawa’s efforts to secure military contracts for Canada’s defence industry are coming under increasing scrutiny as controversy grows over the federal government’s commanding role in a $15-billion sale of weaponized armoured vehicles to Saudi Arabia, a country notorious for human-rights abuses.

Kuwait is among a group of Arab states conducting air strikes in Yemen and has supported this effort with its air force, which includes fighter jets and KC-130J tanker aircraft that can supply warplanes with fuel while in the air.

Montreal-based CAE recently built a flight simulator for the Kuwait Air Force that trains military pilots on the KC-130J tanker aircraft. It was contracted to supply the simulator to the air force’s Al Mubarak air base near Kuwait International Airport.

Canadian officials paid a visit to the simulator last week, talking up the Canada-Kuwait business deal on the same day the UN report on Yemen air strikes made international headlines.

The delegation included a top executive from the Canadian Commercial Corp., Ottawa’s defence and security export sales outfit, as well as Martine Moreau, Canada’s ambassador to Kuwait.

“Great visit to @CAE_Defence’s impressive new KC-130J flight sim[ulator] & facility with @CanadaKuwait CDN Ambassador Moreau,” Cameron Mackenzie, vice-president of business development and sales at Canadian Commercial Corp., wrote on Twitter this past Wednesday.

A leaked UN panel report last week attributed 60 per cent, or 2,682, civilian deaths and injuries in the Yemen conflict to air-launched explosive weapons and said the Saudi-led coalition’s actions are a “grave violation of the principles of distinction, proportionality and precaution” and violate international law.

Saudis and their Arab allies launched a military intervention in Yemen last year in support of President Abed Rabbo Mansour Hadi who was under threat from Houthi forces aligned with Iran.

Kuwait, a Persian Gulf state of 3.4 million, is heavily dependent on oil exports. According to Amnesty International, even peaceful criticism of Islam and the emir, the ruling head of state, remains criminalized. The rights watchdog says human-rights activists and political reformers are among those targeted for arrest, detention and prosecution. Authorities have prosecuted and imprisoned critics who express dissent through social media and they have curtailed the right to public assembly, Amnesty says.

Foreign Affairs Minister Stéphane Dion’s department did not immediately respond when asked Friday to explain why the government is promoting military sales in Kuwait while the Mideast country is part of a Saudi-led coalition that is carrying out air attacks in Yemen.

Targets in Yemen, the UN report found, have included refugee camps; weddings; civilian vehicles, such as buses; homes; medical facilities; schools; mosques; factories and civilian infrastructure.

Canadian military sales to regions such as the Mideast have risen significantly in the past decade as the former Harper government worked to build up this country’s role as an international arms dealer. Pentagon budget cuts drove the Canadian Commercial Corp. to look further abroad for arms buyers. In 2009 it created a new line of business, Global Defence and Security Sales, to seek new customers. This move into “non-traditional defence and security markets will require an increased vigilance for responsible and ethical business conduct,” the agency says in its latest published corporate plan.

Critics say Ottawa’s policing of arms exports is in dire need of an overhaul.

“The credibility of Canadian export controls is severely strained. It is high time the government address persistent, legitimate questions about the process by which military export authorizations are granted,” said Cesar Jaramillo, executive director of Project Ploughshares, based in Waterloo, Ont.

He said the UN report “left little doubt about the systematic targeting of civilians and the violation of international humanitarian law by the Saudi-led coalition that Kuwait is a part of. Canada should proceed with utmost care when pursuing or entering into military exports deals” with these countries.

Mr. Jaramillo said the Canadian government is in a conflict of interest when it comes to military exports. “There is a clear tension in Ottawa between the sometimes conflicting objectives of facilitating trade deals for private Canadian companies and ensuring that Canadian-made goods do not contribute to the violation of human rights or serve to exacerbate conflict situations.”

Asked whether CAE would cease doing business with Kuwait in light of the UN panel report, a CAE spokesman said the company is complying with all Canadian government rules on exports.

Pascale Alpha, director of global communications at CAE, said the simulator deal with Kuwait was arranged through the U.S. military.

“We follow Canada’s export regulations as well as NATO regulations, and the export regulations of the countries we operate in. In this case, our contract was to supply a simulator to the U.S. Navy. Through Foreign Military Sales, the U.S. Navy supplies the aircraft and training equipment to foreign nations, including the Kuwaiti air force,” Mr. Alpha said.

Follow Steven Chase on Twitter: @stevenchase