After years of neglect, Canada's armed forces are poised to benefit from increased defence spending and long-needed modernisation programmes
Political change and material necessity have pushed the modernisation of Canada's defence forces to near the top of its domestic agenda. After taking office in November, Prime Minister Paul Martin has approved much-needed military spending programmes worth C$7 billion ($5 billion) already, and more are on the way. Aerospace equipment is a leading priority, with deals lined up for fighter upgrades, patrol helicopters, fixed-wing transports, missiles and training systems.
Martin, who has an interim appointment until elections are held in the third quarter, inherited a defence portfolio described as being on the brink of disaster in an analysis published in December 2003 by the Ottawa-based Queen's University. The report, commissioned by a group of Canadian defence companies, contends that the air force, after several years of financial neglect, is in danger of disintegrating as a result of obsolescence after 2008. Army and navy equipment stocks face the same fate a few years later.
Spending increase
Among strong action recommended was a C$5 billion annual increase in defence spending to push through long-needed upgrades. Martin's budget responded with a more modest C$2 billion jump in the 2004-5 budget, but the spending plan kick-starts several dormant programmes into life.
Compared with the decade-long regime of former premier Jean Chretien, the new Canadian government has taken a more active approach towards national security. Helping to repair a strained relationship with the Bush administration, Martin has pledged to bolster Canada's contribution to North American security in a plan unveiled just days before his White House visit on 30 April. Martin has also launched a defence policy review, expected in the third quarter, that is likely to endorse an accelerated pace for modernising Canadian forces, although it remains unclear if the policy goals will be tied to a concrete funding strategy.
Canada's shrinking defence industrial base, meanwhile, may be expected to welcome the sudden spending spree on weapons, but there are mixed feelings. Despite the possible surge in military expenditure, aerospace industry leaders continue to express concern about the lack of a policy that protects and sustains a national industrial base. Canada has no domestic sourcing requirement, and the political system often eschews offering direct support to industrial sectors, so native companies are concerned that foreign suppliers, especially from the USA, will dominate any future contract awards. Only seven of the top 17 Canadian defence companies are owned by Canadians, with the rest split between subsidiaries owned by US and European firms.
There are also worries about the impact on national security should the government fail to protect the defence industrial base. If the sweeping modernisation plans become reality, Canadian forces will be training and deploying with a new generation of military equipment and technology. The concern among defence observers is that the national industry base will be ill-equipped and ill-trained to repair or maintain the next-generation machinery, forcing the government to rely on foreign sources for routine or emergency support.
Defence sales account for only 10% of Canadian aerospace industry revenues, falling from a peak of about 20% a decade earlier, says Ron Kane, vice-president of the Ottawa-based Aerospace Industries Association of Canada. Kane, a former acquisition officer in the Department of National Defence (DND), notes that Canadian defence firms are struggling to modernise their capabilities, but lack the customary luxury of assured access to national defence procurements afforded by protectionist contracting laws. Without such a safety net, Canada's suppliers have reached out to foreign projects, such as the US-led Lockheed Martin F-35 Joint Strike Fighter programme, to stimulate technology advancements.
Public feud
Amid this debate, leaders of two of Canada's largest aerospace firms - Bombardier and CAE - are locked in a public feud. CAE failed to win a contract to provide training and simulator support for Canada's Boeing CF-18 fighters despite submitting a lower bid, says chief executive Derek Burney, who adds that the winning team led by Bombardier is dominated by US-based suppliers, especially simulator supplier L-3 Communications. Bombardier chief executive Paul Tellier has responded that Burney has not himself inspected both bids, and is in no position to guess Bombardier's pricing or workshare terms.
CAE has filed an appeal against the C$270 million contract award, claiming its bid was C$44 million cheaper than Bombardier's. In a letter to the prime minister's office in early April, Burney wrote: "It is one thing for CAE to be discriminated against in defence contract competitions outside Canada - as we are - but, when it happens in our own country, we are left to wonder whether Ottawa is an island unto its own, divorced from the reality of the country it purports to serve."
Tellier points out in response that Canadian suppliers composed about two-thirds of Bombardier's bid. He has been actively lobbying Martin and cabinet officials to increase government support for the aerospace sector, especially in the area of research and development funding.
New budget
Martin's administration has not signalled its intentions about providing direct government support for the aerospace or defence sector, either in terms of enacting domestic workshare quotas on defence contracts or providing economic assistance, such as increased research spending or government-backed loans. But Martin's new budget, unveiled last month, makes it clear that military spending is on the rise.
An estimated C$13.2 billion 2004-5 budget unveiled in early April is stocked with fresh equipment spending, highlighted by a C$2 billion effort to launch a Joint Supply Ship programme. Martin's first budget also backs previously announced commitments to accelerate a C$1.3 billion effort to replace ageing Lockheed Martin C-130 Hercules and de Havilland C-8A Buffalos with a new fixed-wing search and rescue (SAR) fleet, and to add 66 Stryker mobile gun systems to replace the army's Leopard, Coyote and Cougar armoured vehicles.
Some lingering capability gaps, such as an inter-theatre airlifter, left uncovered in this year's budget could be addressed by the end of the year. Martin has called for the defence policy review in an effort to establish a national security policy for the first time. In general terms, he has called for training and equipment to be "modern, relevant and usable" across a broad range of missions, as well as being compatible with allied forces and easy to deploy. Martin's defence vision includes sharing more of the load for North American defence, a goal focused on some level of Canadian involvement in the emerging US ballistic missile defence programme, which becomes operational on a limited scale later this year.
In airlift, Canada still must rely on US military or commercial flights to transport Canadian troops and equipment overseas. The DND briefly proposed an airlift replacement programme, focusing on the Boeing C-17 or Airbus Military A400M, but suspended the programme - and eliminated the office - earlier this year. So far, this is one of the few defence requirements receiving no attention.
But perhaps the most visible sign of the change in mood on defence spending in Canada is the revived Maritime Helicopter Programme (MHP). In December, Martin fulfilled a vow to relaunch the programme. The MHP has languished for a decade after the Chretien administration reneged on a contract for AgustaWestland EH101s. The replacement programme remained in limbo while Canada's 1960s-era SH-3 Sea King helicopters became steadily more difficult to sustain, and are now frequently grounded. The government is expecting to receive bids this month based on the AgustaWestland EH101 and Sikorsky S-92 for the C$3 billion MHP award.
Surprising observers, government contracting officers eliminated a bid based on the NHIndustries NH90 before the three competing teams had a chance to refine their proposals. The procurement, however, is moving forward after the NH Industries/Lockheed Martin team made no move to appeal against the decision.
Meanwhile, Martin's new budget advances the pace for Canadian forces to acquire an all-new fixed-wing SAR fleet. The competitive phase of the SAR replacement programme is expected to begin in the middle of this year, and the Canadian Forces are expecting by October to have received proposals based on the EADS Casa C-295 and the Lockheed Martin/Alenia Tactical Transport Systems C-27J.
The fixed-wing SAR requirement is driven by a severe obsolescence problem with the Hercules and Buffalo fleets. Around 40% of the 30-year-old Hercules fleet is unavailable for operations at any given time, a problem attributed as much to aircraft ageing as to a prolonged recruiting freeze in the 1990s that allowed experienced maintainers to leave the service without being replaced, says Dave Burt, director of air requirements.
Speed needed
A requirements document is expected to be released in June, but it is already clear that a single factor could decide the competition. Of all the elements for Canada's future SAR platform, "speed is of the essence", says Burt. Speed is needed to offset two conditions of the Canadian terrain - long distances and poor weather. The ability to provide "immediate assistance" is a firm goal, and is defined by the ability to reach any search and rescue location within 24h.
The aircraft also must be able to carry a medical evacuation payload, land in austere conditions and be able to communicate with a control station and offboard sensors.
By simply measuring aircraft performance, the competition tilts in favour of the C-27J's normal cruising speed of greater than 300kt (555km/h). In contrast, the business case for the CASA C-295 is built on offering a more efficient solution than the C-27J, as it is much slower, cruising at roughly 250kt.
Operations of the Lockheed MartinCP-140 Aurora (P-3Orion)maritime patrol and anti-submarine warfare aircraft will continue for the foreseeable future, with these the subject of an ongoing incremental modernisation programme. MacDonald, Dettwiler and Associates last year received a C$225 million deal to perform an imaging and surveillance radar upgrade to the 18-strong fleet of the aircraft. Canada's first CP-140 entered service in 1980.
Canada is expected to continue operating 80 CF-18 fighters, early production F/A-18As, for at least 13 more years, but the air force is working to bolster the fleet's mission systems. An avionics upgrade under way for more than two years aims to make the Canadian fighters compatible with NATO communications system, and offer a new capability to drop precision-guided weapons.
The first squadron of upgraded aircraft was stood up in November 2003. In phase two of the avionics upgrade, which begins in December 2006, the CF-18s are to be equipped with the Joint Helmet-Mounted Cueing System, Link 16 tactical datalink and ALE-47 chaff/flare dispensers.
In addition, after dropping out of the German-led IRIS-T programme two years ago, Canada's air force is close to selecting an air-to-air missile vendor. An intense competition has been narrowed to the MBDA ASRAAM and the Raytheon AIM-9X Sidewinder missiles. A contract is expected to be awarded within weeks. The government is also launching a competition to provide a multirole infrared targeting pod: upgrading the CF-18's existing Night Hawk pods. Raytheon's ATFLIR, Northrop Grumman's Litening, and Lockheed Martin's Sniper XR pods are in contention.
Canadian army officers have warmed to the use of unmanned air vehicles, but the air force is still not convinced that long-range surveillance drones can be useful. The army has had long experience operating the Bombardier/EADS Dornier CL-289, and last year purchased Sagem Sperwer UAVs three weeks before deploying a peacekeeping force to Afghanistan.
Sperwer success
Faced with abbreviated training and challenging operating conditions in the mountains ringing Kabul, the army crashed or heavily damaged the first six Sperwers within the first five months of operations. Despite the costly toll on equipment, the deployment was considered successful, and army officers have disclosed plans to double the size of their Sperwer fleet to 12 in the middle of the year.
Air force officials, meanwhile, have been waiting to see a long-range UAV in action. There have been two attempts by the US Air Force and Northrop Grumman to stage a demonstration flight of the RQ-4A Global Hawk in Canadian airspace, including a planned flight this year, although the first attempt was scratched because no Global Hawk was available.
More immediately, the air force has completed work on an operational requirement document (ORD) for the General Atomics MQ-9 Predator B UAV for a medium-altitude, long-endurance surveillance profile, but it could be several years before a procurement is launched. That ORD is "not in the upper half of priorities", says Burt, who adds: "We still need to prove to ourselves that this is a capability we need."
STEPHEN TRIMBLE / OTTAWA
Source: Flight International
