Last week, following a story in the Ottawa Citizen that stated government funding “and participation in the F-35 stealth fighter jet program continues unchanged” despite the government’s creation of a new seven-point plan to review the purchase, the new Associate Minister of Defence, Bernard Valcourt, put out a rebuttal by way of his communications man.
As part of the new seven-point action plan it launched in response to the spring auditor general’s report on the fighter jet procurement, “all funding for the CF-18 replacement has been frozen,” Valcourt said. That, he continued, includes “payments to the Joint Strike Fighter Program under the MOU,” until such a time when “due diligence is complete and conditions have been satisfied.”
The quote went mostly unrecognized and was buried almost entirely the next day as the New Democrats convened their information session on the ailing fighter jet procurement. But those monitoring the F-35 procurement – or, at least, the procurement of a replacement jet for the CF-18 – heard it loud and clear.
Next year, Canada is due to pay into the JSF program again. In December 2006, when Canada signed on to the third phase memorandum of understanding among the program partners that, according to the spring auditor general’s report, committed Canada to pay up to US$551 million over 40 years, “provided Canada remains a partner.”
If Canada were to stop making its payments to the JSF, theoretically, it would fall out of good standing among the partners in the program. Canada’s next payment to the JSF is due sometime in 2013, but that will only happen if the government’s new seven-point plan is complete by that time. iPolitics asked Public Works when in 2013 Canada is due to make its next payment to the JSF program, but the department did not provide an answer.
The prospect of falling out of the program in this manner is unlikely, says Philippe Lagassé, assistant professor at the graduate school of international affairs at the University of Ottawa, and one of the guests the NDP invited to discuss the state of the F-35 procurement last week.
“My sense is that if [the government] were serious about looking for a way out, the first step that they would take is starting to look at alternative aircraft. So, to my mind, it’s not really in the government’s best interest to try and scuttle this by creating a fight with Lockheed. That wouldn’t be the best way to go,” he told iPolitics.
Industrial benefits?
Still, a lengthy delay on Canada’s part – pushing such a deadline – would likely increase pressure from Lockheed Martin, the F-35 manufacturer and even perhaps from domestic industrial partners to make a decision.
But on the latter, again, Canada must weigh the cost-benefit.
Industry Canada states on its website that “to date, 70 Canadian companies have secured over $435 million USD” in contracts related to the F-35 development and initial production.
During the NDP’s meeting last week, MP Matthew Kellway asked former assistant deputy minister of materiel at the Department of National Defence, Alan Williams, about how much Canadian industry has benefited from Canadian participation in the JSF program.
“You cite about $400 million worth of contracts that have come our way,” Kellway said to Williams. But in the last five to six years, Kellway said, “it seems to me that that number has been stuck.” He asked if Williams could say whether there was an explanation for that.
“No. There isn’t,” Williams replied.
However, in contrast to Kellway’s assertion, Industry Canada also states the $435 million figure is “up from $370 million in June 2011.”
iPolitics asked Industry Canada for a breakdown of how much Canadian industry has gained in contracts for each year of participation in the developmental stage of the JSF program, but the department has yet to provide any of the requested information.
The government steadily lowered the amount Canadian industry could benefit from the JSF program. In 2009, DND claimed Canadian companies could bid on as much as $16.6 billion worth of contracts. In 2010, DND used two different figures – $15.4 billion and $12 billion. That same year, Industry Canada agreed with the $12 billion. Earlier in 2012, during a parliamentary committee meeting, senior Industry Canada associate deputy minister Simon Kennedy told MPs Canada could bid on only $9.85 billion in contracts.
Departmental sources have continued to assert to iPolitics that the work that has been created is certainly good for Canada, and would likely not have existed had it not been a participant in the program. However, iPolitics has also been told there have only been as few as two contracts awarded that may have the potential to provide substantive contracts capable of innovation opportunities or jobs for 40 years (the expected life of the jets).
“There’s such a paucity of information about what exactly is going on,” Lagassé said. “It’s all well and good to look at the government side and release figures about, okay, what we expect the F-35 sustainment costs to be and so on and so forth, but are we getting accurate figures with respect to the industrial benefits and contracts. And, similarly, what kind of contracts are we getting?”
Original Article
Source: ipolitics
Author: Colin Horgan
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