May 1, 2013

 

Janes Defence Review

 

Canada: defending the true north[1]

Melting polar ice, which is gradually unlocking a northwest maritime passage and vast Arctic resources, is a major focus of $240 billion in planned infrastructure and readiness procurements.

 

On paper the announcement earlier this year by Peter MacKay, Canada’s Minister of National Defence of the awarding of a definition contract to Irving Shipbuilding, for the Arctic Offshore Patrol Ship (AOPS) project, was a minor event. The dollars (about $300 million) and jobs created (about 200) were modest. However its import was not. Establishing Canada’s sovereignty in its increasingly strategic northern regions, which the eight projected AOPS ships are expected to help achieve, represents a major extension of the country’s defence commitments.

 

Although Canada’s northern pivot is starting slowly, a considerable portion of the country’s $240 billion in projected defence procurements during coming years will have an Arctic focus. “While the Royal Canadian Navy can patrol Canada’s East and West Coasts, it (cannot) effectively patrol all three oceans,” said MacKay, regarding the Arctic, Atlantic and Pacific. “(AOPS) – an entirely new platform – is intended to fill this critical gap.” 

 

A new chief of defence staff makes his mark

Canada is ideally gifted from a defence standpoint. The country, which has the largest land mass of any NATO member, has spectacular geographic features, which make it a formidable adversary to any invader. The United States, the only country that ever tried, was repulsed both times (during its War of Independence and the War of 1812) and is now a close ally.

 

The country’s armed forces, which employ 68,000 regular force members, 27,000 reservists and 27,000 civilian employees, comprise the Canadian government’s largest department. These include some 1,500 military personnel active in more than a dozen operations around the world, including Afghanistan, where Canada is currently the second largest contributor of personnel (about a thousand) behind only the United States.

 

Lt-General Thomas J. Lawson, who took over as Canada’s Chief of the Defence Staff (from the outgoing General Walter Natynczyk) late last year, heads up these assets, a tough mandate he acknowledges.

 

“In this period of tightening resources, governments and militaries are forced to operate with less,” said Lawson at a presentation in Ottawa last month. “I learned at the NATO military committee meeting in Brussels (earlier this year) that virtually every partner is looking for ways to continue to operate effectively in the current climate.” In one of his first major moves after taking command, Lawson, along with Ron Fonberg, Deputy Minister of National Defence, set up a team of military and civilian professionals to look at ways to reduce administrative overhead, energize business process renewal and establish performance metrics.

 

Ironically this streamlining will take place in the midst of a massive equipment modernization cycle. In its Canada First Defence Strategy, which it outlined in 2008, the Harper Government identified six core missions for which it would reequip land, sea and air forces over the coming decade.

 

These include domestic operations (such as marine patrol and Arctic surveillance), supporting major events in Canada (such as the 2010 Olympics), responding to a terrorist attack, providing support during crises (such as natural disasters) and conducting international operations. That latter mandate has been highlighted with increasingly frequency in recent years, with Canada taking an active role in the Libya and Afghanistan campaigns, assisting France in its Mali operations as well as in humanitarian efforts in Haiti.

 

The Royal Canadian Navy: NSPS procurement begins

Canada has the longest coastlines of any country in the world. As Vice-Admiral Paul Maddison, commander of the Royal Canadian Navy noted in an industry presentation last month, these pose both tremendous threats and opportunities. “In this increasingly maritime century, Canada’s economy floats on salt water,” said Maddison, echoing a common government theme. “Oceans matter more to Canada’s prosperity and security than ever before. The Royal Canadian Navy has arrived at a moment of unprecedented strategic opportunity.”

 

Maddison isn’t kidding. Canada’s entire economy revolves around trade, with exports (depending on the year and currency valuations) generally accounting for 30 percent of gross domestic product and often more. A big part of that mix is natural resources shipments such as oil, natural gas, potash and uranium, to emerging nations such as China, which are projected to increase in coming years. In short open sea lanes is a core Canadian interest … and thus, also a vulnerability.

 

That vulnerability is likely to increase during coming decades, as global warming gradually opens up a long-sought northwest passage to maritime transport, possibly as early as mid-century. This, coupled with the massive potential resources thought to be located under those ice sheets, make asserting Canadian sovereignty in the area an increasing priority.

 

Disputed northern waterways

Yet while Canadians have always regarded the northern waters as their own, there is considerable potential for dispute. The United States for example sends its vessels through these waterways at will (the two countries have agreed that US vessels will notify Canadian authorities when they do). The worry is that when a northwest passage clears up, other nations will do the same. This would lead to a steady flow of traffic, possibly including rusty oil tankers which could pose tremendous environmental threats.  Jurisdiction over Hans Island, located between Greenland and Elsmere Island is also disputed (by both Canada and Denmark).

 

To meet these challenges, as MacKay noted, Canada currently has only aging maritime defence assets. These range from support ships, frigates, destroyers and four rusty diesel submarines that Canada picked up from the UK more than a decade ago (which Canada has been struggling for years to get into serviceable order). All these assets are nearing the end of their useful lives.

 

Subcontractors start to line up

About a year and a half ago, the Harper Government announced the winning bidders in its National Shipbuilding Procurement Strategy (NSPS). This $33 billion multi-decade program is slated to completely reequip the Royal Canadian Navy. Vancouver Shipyards won the seven vessel non-combat portion of the package. This will include new joint support ships, science ships for the Canadian Coast Guard and a new polar icebreaker.

 

Irving Shipbuilding won the 21 vessel combat portion, which in addition to the AOPS, will include a new Canadian Surface Combatant. Yet while the two shipyards will focus on the “metal banging,” and some systems integration, suppliers from around the world have been scrambling to beef up their Canadian offices to bid on subcontract work ranging from propulsion systems, to armaments, communications tools and other gear. “Renewal of the Canadian fleet is among the most complex of enterprises Canada will undertake in this coming decade and into the 2040s,” said Maddison. “The sum of public money is huge.”

 

Halifax Class Modernization, Victoria Class Upgrades

With the new NSPS vessels only slated to be rolling off the production line during coming years and decades, the Harper Government is trying to squeeze every minute of useful life out of existing hardware. Two major initiatives bear mention. The first is the Halifax Class Modernization/Frigate Life Extension program, which expected to be completed by 2017. As its name implies the initiative will result in the refit of the 12 existing frigates which form the backbone of the country’s naval capabilities. The goal is for them to do patrol work needed until they can be replaced with the new Canadian Surface Combatants (which are inching into the definition and procurement cycle).

 

The second initiative is the Victoria Class Submarine upgrade program, which is slated to get those four old ex-UK diesel subs up to scratch, for the first time since they were acquired in 1998. The goal is to finally get one sub operating on each of Canada’s coasts, and other two in a reserve/rest rotation.  According to Canada’s Department of National Defence, work on the HCM-FELEX project (which is being split between yards on Canada’s East and West Coasts, Victoria Shipyards in British Columbia and Halifax Shipyards in Nova Scotia), is progressing well. The HMCS Halifax, the first of the seven frigates that will enter modernization and refit, is in the latter stages of refit in Halifax. For its part, the HMCS Calgary, the first of the five west coast frigates, is in the final phase of its modernization in Victoria.

 

Canada shops for F-35 alternatives

The big story on the air front remains Canada’s decision to consider alternatives to Lockheed Martin’s F-35 Lightning II program. Canada, along with the UK, was one of the first countries to join the program’s early stages. However now, as in many countries, its commitment is in doubt and Canada is studying a range of other options.

 

While the F-35 troubles in the United States, which range from cost overruns, to delays and quality issues, are well known, developments in Canada carry their own particular twist, and shed interesting light on the country’s procurement process. A major issue dates back to the Harper Government’s initial decision to bypass traditional procurement procedures.

 

The normal critical path starts with Department of National Defence officials specifying requirements for a particular piece of kit. These are then forwarded to Public Works and Government Services Canada, which then seeks out competitive bidders. However in the case of the F-35 it appears that the government blindly accepted the RCAF’s opinion that the aircraft was the way to go (relying partially on the results of the US competition), without looking at alternatives and then went full speed ahead. Lately it has begun backpedalling.

 

In early March, Public Works and Government Services Canada sent requests for information to five aircraft suppliers that produce existing fighters including the Boeing Company (which makes the SuperHornet, a sister ship to the F-18s, the current backbone of Canada’s air force), Dassault Aviation (the Rafale), EADS (the Eurofighter Typhoon), Lockheed Martin itself and the Saab Group. There were several reasons for the Harper Government’s U-turn on the F-35, which comes in the wake of an Auditor General’s report into substantial mismanagement in the procurement process, delays and cost run-ups.

 

Political pressure clearly played a role. Just as important though may have been the findings of long-awaited report released earlier this year, by Tom Jenkins, a special advisor to Rona Ambrose, the country’s Minister of Public Works and Government Services which recommended a sweeping revision of defence purchases, notably “developing original product domestically” and building “key industrial capabilities.”

 

While the report did not make specific recommendations related to the F-35, the purchase, which is to be by far the largest in Canada’s history, had considerable shortfalls on both fronts. For example no clear industrial benefits or offsets requirements were spelled out, nor was there any clarity as to where the aircraft to be serviced. This shortfall left out in the cold several major value-added Canadian defence suppliers including CAE (which could have developed and produced the flight simulators) and L-3 MAPPS (which currently services Canada’s F-18s and would be ideally positioned to service the F-35s). 

 

That said, Lockheed Martin has considerable incumbent advantages. For example Yvan Blondin, Commander of the Royal Canadian Air Force remains solidly behind the project. In testimony before the Standing Senate Committee on National Security and Defence in March, Blondin noted his continuing support for the aircraft and said that he was untroubled by the fact that it had only one engine (unlike Canada’s existing CF-18s) which some regard as a major operational weakness in Canada’s harsh, frozen, isolated and barren northern climes.

 

While Lockheed Martin has not sub-contracted core work to Canadian players, it has given out numerous large secondary parts orders and has recently begun promoting this fact. Those subcontracts have led to the emergence of a domestic Canadian sub-contractor stakeholder base, including players such as Quebec-based Heroux-Devtek who will (it is hoped) be more outspoken in defending the project both publically and behind the scenes.

 

Furthermore, while F-35 opponents rightly argue that Canada has no realistic possible enemy against which it would need the aircraft to defend against, its attack capabilities could prove valuable in coming years. Canada, which long ago shed the peacekeeping role, with which it was formerly identified, has increasingly joined the United States in a range of foreign entanglements including the overthrow of the Ghadaffi regime in Libya, the Afghanistan mission (noted above) and the Serbia conflict. As a result of this policy shift, the conservative Harper Government, which is closely aligned with US policy, will want to keep its options open to participate in future similar endeavors. The F-35, despite its challenges, looks to be the leading contender to help make that possible.

 

New transport aircraft capability

The Canadian Forces learnt many lessons in the Afghanistan War, one of which was its deficiencies on the power projection front. One glaring weakness was in its ability to get troops and equipment to where they are needed in a timely fashion. During the war, Canada quickly took delivery of four Boeing Globemaster CC-17s to fill its short-term needs and shortly thereafter ordered an additional 17 Lockheed Martin CC-130J transport aircraft, the last of which was delivered in 2012.

 

As CDS Tom Lawson noted, the transport aircraft found additional use earlier this year, when a C-17 was assigned to support the French operation in Mali. “Canada is one of only a small number of countries that can provide this very important capability on short notice,” said Lawson. “(It’s) a capability which is critical to operational success.”

 

Another key lesson learnt during the Afghanistan mission was the importance of transport helicopters in combating local insurgents who increasingly began deploying improvised explosive devices (IEDs) to attack Canadian forces as they moved around the country. As Lt-General Blondin noted in his senate testimony, the RCAF’s quick acquisition of six old Chinooks, and its ability to incorporate them into operations was a major accomplishment. The RCAF has since then ordered a further 15 CH-147 Chinooks from Boeing which are scheduled to be delivered starting this year. Plans are also afoot to acquire drone and updated Fixed Wing Search and Rescue capabilities.

 

The growing role of flight simulators

One of Lt- General Blondin’s biggest assets is his ability to think strategically, particularly about the increasingly important role of simulator training in modern air defence preparedness. The massive fuel and operational costs involved in keeping existing fighter jets in the air alone is sufficient reason for defence stakeholders to want to do as much of their training work on simulators as possible. However as Blondin notes, the remoteness of Canada’s north, makes simulator use, particularly related to sensor applications increasingly crucial.

 

“When you are flying north of Bagotville in an F-18 at night, there is not much to sense out there. There is nothing. In Cold Lake it’s the same thing.” says Blondin. “If I want to be flying and seeing a bunch of radar and airplanes, the simulator will give me a realistic environment. With the next generation of fighters, we are looking at 50 percent of training being done in a simulator.”

 

Land: Tanks, Light Armored Vehicles and trucks

It is often joked that generals are always refighting the last war. However the Afghan conflict, which taught the Canadian Armed Forces so much on the air front, also provided considerable lessons on the land front. One of these was the continued importance of main battle tanks, a capability many thought redundant with the end of the Cold War and the advent of asymmetrical conflict.

 

However the cleverness of the Afghan rebels’ shift to IED warfare caught the Canadian forces as much off-guard at it did their NATO allies. It turned out that many Canadian land vehicles ranging from jeeps to patrol vehicles and personnel carriers were simply not equipped to withstand the repeated assaults. The one exception was the country’s Leopard battle tanks which were quickly drawn into operations. Not surprisingly, when Canada began to reequip its land capabilities to replace worn out stock and beef up capabilities, Leopard 2 main battle tanks were among the first to be acquired.

 

Canada’s Light Armored Vehicles (LAV IIIs) for their part performed well in Afghanistan. However the drawing down of Canadian participation in the conflict coincided with a major upgrade to the 550 vehicle fleet, which is currently being conducted by Ontario-based General Dynamics Land Systems. The upgrades, which will be made at GDLS’s London operations, will include installation of a double-V hull technology, developed in-house, which tests show offers superior protection against IEDs. New power components, munitions, sensors and communications gear will also be installed.

 

Two other initiatives on the land front bear noting. The first is the Canadian government’s purchase of Tactical Armored Patrol Vehicles. It ordered 550 last year, from Textron Systems, which will be partnering with Rheinmetall Canada and Kongsberg Protech Systems Canada on the bid. The second initiative relates to Canada’s efforts to buy Close Combat Vehicles to support Canada’s tanks. The effort has been having trouble getting traction. An initial procurement path was recently torpedoed with all bidding companies told that their submissions were non-compliant.

 

How serious is Canada?

The recurring question in Canadian defence circles (as in many Western countries these days) relates to how serious the Harper Government is with regards to its loudly touted initiatives. While NSPS and the jet fighter initiatives were both announced with great fanfare at fancy press conferences, the devil is in the details. Individual contracts in those and other programs proceed incrementally and all it takes is one election campaign (or similar obstacles) to stall and possibly reverse major procurements.

 

That said, several things appear to be working in Canada’s defence industry’s favor right now. The most obvious relates to the conservative, pro-defence Harper Government itself, which holds a Parliamentary majority, with no elections projected for the foreseeable future. Even there the government’s opposition appears to be perfectly split between the traditionally left-wing New Democratic Party (which has been lately tacking to the center) and the Liberals, who recently elected a young new leader, Justin Trudeau, the son of a former Prime Minister.

 

The second positive backing Canada’s defence sector relates to the country’s relatively strong economy, which although it has slackened somewhat, has outperformed the G-7 average since the financial crash. There are no projected “sequester scale” defence cuts on the agenda in Canada right now.

 

None of this or course guaranties that things will continue this way. However for the time being, although Canada’s defence focus is increasingly on its cold Arctic regions, from an industry point of view, things look fairly warm.

 

peter@peterdiekmeyer.com

 

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[1] Note to Editor: The expression “true north” comes from Canada’s national anthem…

 

 


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