Janes Defence Weekly


November 15th 2012


Title: Annual Defence Review (Canada) 2012

Subtitle:  Canada moves to upgrade land, sea and air capabilities


The big news in Canada this year continues to be fallout from the Conservative Party’s win of a majority government in 2011, which finally gave Prime Minister Stephen Harper latitude to put his fingerprints on defence policy, following years of successive minority regimes.


With $240 billion of land sea and air procurements planned over the coming 20 years, the stakes are high. The Canadian economy was far less hit than many Western nations by the 2007 financial crisis and ensuring recessions. Thus despite budget pressures and wind-downs of Canadian troops in Afghanistan and the end of the Libyan campaign, the Conservatives are expected to continue to make defence a priority.


The two trends will considerably decrease immediate pressures. Canada’s drawdown of its forces in Afghanistan (950 troops there are ending their combat role this year), remains on track, though many will stay to help train the Afghan National Army, until their scheduled 2014 departure. The country also recently opened its embassy in Libya, following its participation in the NATO campaign to depose the Gadaffi regime.


That said Canada’s procurement process, which is handled by a partnership between the Department of National Defence and Public Works and Government Services Canada (PWGSC), clearly needs fine tuning. A report by Auditor General Michael Ferguson, earlier this year, highlighted significant cost overruns and inefficiencies in Canada’s decision to participate in the early phases of a program to acquire F-35 Joint Strike Fighters from Lockheed Martin. Key steps were said to have been taken out of sequence, which led to a selection of the aircraft, without careful consideration of the alternatives. Industry professionals are particularly upset by the lack of offset requirements associated with the deal. Political interference by defence minister Peter MacKay’s staff is thought to have been part of the problem.


The Harper Government managed to partially deflect the issue when PWGSC Minister Rona Ambrose appointed Tom Jenkins, CEO of Open Text, to review the entire procurement process. One of Jenkins’ mandates will be to look for new ways to boost Canada’s domestic defence capabilities, as opposed to favouring partnerships with foreign contractors, who then spin off industrial and regional benefits.


On the naval front, Canada’s $33 billion National Shipbuilding Procurement Strategy is moving on pace. In late 2011, Irving Shipbuilding Inc. was selected to do the “metal-banging” on 21 combat vessels and Vancouver Shipyards Co. Ltd. was chosen to handle the non-seven combat vessels, to be produced over the coming 20 to 30 years. Contracts for several initiatives, including Joint Support Ships, Surface Combatants and Arctic Offshore Patrol Vessels will be handed out over the coming months and years, with considerable sub-contract work up for grabs for packages such as armaments, fire control, communications, navigation, ISR and other systems.


On the land front, a team lead by Textron was awarded a $600 million contract to supply 500 Tactical Armoured Patrol Vehicles.  A contract to supply Close Combat Vehicles is expected to be awarded in the coming months.






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