F-35 Decision Unleashes Demands For More Spending In Canada
A fighter aircraft selection in March by the Canadian government has some aerospace suppliers ramping up for a long-deferred financial windfall, while others are lobbying Ottawa to protect training and depot maintenance capabilities that may otherwise disappear.
- Contract negotiations may stretch into 2023
- First F-35 deliveries could slip one year to 2026
The selection of the Lockheed Martin F-35A to replace a fleet of Boeing CF-18s also lets the Department of National Defense move forward with a growing list of supporting capabilities, such as similarly deferred acquisitions for tankers, training jets, uncrewed aircraft systems, maritime patrol aircraft and the modernization of the North Warning System.
A contract signing for 88 F-35As for the Royal Canadian Air Force is still months away. Filomena Tassi, minister of public services and procurement, assured a Cansec exhibition audience on June 2 that final negotiations would be complete by the end of the year. But J.R. McDonald,
Lockheed’s vice president for F-35 business development, told reporters during the event that the government-to-government talks could stretch to early 2023, with first aircraft deliveries potentially deferred by a year to 2026 [emphasis added].
Any further detail may seem trivial compared to the 20-year search for a CF-18 replacement, however. Then-Prime Minister Stephen Harper announced a plan to buy 65 F-35As. But the opposition Liberal Party objected to a selection without a competition, rejecting Harper’s argument that the choice flowed out of Canada’s decision in 2002 to join the F-35 development program. In 2017, Prime Minister Justin Trudeau launched a five-year competitive bidding process, which reaffirmed the predecessor’s choice 12 years after the fact.
That decade of indecision put Lockheed’s F-35 Canadian suppliers in a difficult position. Production contracts for parts and services continued and in some cases expanded, but Canadian industry remained locked out of the lucrative sustainment phase of the F-35 program.
“There were no opportunities there, but I think it will open up now,” says Shaun Horning, president and CEO of Gastops, which supplies sensors for the Pratt & Whitney F135 engine.
For its part, Lockheed is open to expanding the program’s global network of suppliers in all phases of the program. The ongoing expulsion of Turkey’s industry from the F-35 supply chain has created voids and reinforced Lockheed’s appreciation for supplier diversity.
“We have to expand our vision, so to speak, for production providers,” Lockheed’s McDonald says.
Some Canadian industry officials are concerned that the selection of the F-35 imperils certain industrial strengths.
CAE, for example, leveraged its role as the training system supplier for the CF-18 into a global franchise and continues to operate the NATO Flying Training in Canada center in Cold Lake, Alberta. Lockheed’s internal simulator systems division, however, provides turn-key training services for the F-35. As the CF-18 fleet retires, CAE’s role as a locally based training supplier is at risk [emphasis added].
On the eve of the Cansec exhibition, CAE executives called on the Canadian government to demand the establishment of a global F-35 training center as part of final contract negotiations with the U.S.-led Joint Program Office. Such work is often set aside as an industrial offset in international fighter deals, but the terms of Canada’s membership in the international F-35 development, production and follow-on sustainment program prohibit such non-competitive set-asides.
A
training center, which could leverage Canada’s existing training ranges and vast airspace, could be established if Trudeau’s governent ims willing to pay for more than just a CF-18 replacement [emphasis added].
“If you want something unique in your country, you have to ask for it,” says Jacques Morin, CAE’s vice president of business development and strategy. “If you don’t ask for it, you’re not going to get it.”
But committing to spend more on services and support for the F-35 could be difficult. In addition to a long list of airborne refueling, surveillance and air defense needs, Ottawa is also developing a new class of Canadian Surface Combatant ships for the Royal Canadian Navy and acquiring a new fighting vehicle for the army.
In 2017, Trudeau’s “Strong, Secure, Engaged” defense policy committed the Liberal government to a 70% boost in military spending over a decade. The policy paid for the new fighters, ships and fighting vehicles now in development but kept overall expenditures at around 1.4% of GDP. The government is currently updating the defense policy and must decide if a second wave of spending increases is necessary.
https://aviationweek.com/defense-space/aircraft-propulsion/f-35-decision-unleashes-demands-more-spending-canada
Mark
Ottawa
