Liberals first to flesh out defence plans, but uncertainty in sector remains

by Rachel Aiello (feat. David Perry)

The Hill Times Online
September 28, 2015

The Liberals are the only party to release plans for the future of the defence sector, giving the best sense so far of where things would be heading if they’re elected. But stoking the debate over one of the country’s largest procurement programs has left the industry with more questions about what a change in government could mean for the sector. 

Last week, Liberal Leader Justin Trudeau said that, if elected, a Liberal government would not be purchasing the F-35 stealth fighter jet as the replacement for Canada’s outdated CF-18s. Instead, he would begin an “open and transparent competition” for a more affordable aircraft. 

Both Prime Minister Stephen Harper and NDP Leader Tom Mulcair came out hard against Mr. Trudeau’s plans: Prime Minister Stephen Harper said it would “crater” the aerospace sector, and Mr. Mulcair said the Liberal leader was pre-judging the public tendering process; neither offered much more detail on what they would do instead. 

David Perry, senior analyst with the Canadian Defence and Foreign Affairs Institute, said the F-35 procurement is still very much in limbo. The government is still a partner and could still order the 65 jets, which is expected if the Conservatives win, but clarity is lacking on whether or not Mr. Mulcair’s plan to start a new open bidding process would mean Canada would have to leave the partnership. 

 “I think people are just wondering, with polls so competitive, what is the next government going to do. I think especially now everybody is faced with the same challenges, with dwindling revenues but a need to obviously maintain a combat-capable defence force,” said Adam Taylor, director at Ensight Canada’s international trade practice. 

The defence sector feels plans are “sorely lacking right now,” Mr. Taylor said, adding that the future of Canada’s procurement projects is completely up to the next government, and any number of things could happen. 

“These questions are creating more uncertainty in a space that’s already fairly bogged down by uncertainty and confusion,” he said.

Further compounding the cloudiness of the file at the moment is the industry’s knowledge that what gets said during an election campaign and what happens are often not the same. Opposition parties aren’t privy to a lot of the information the government has and will sometimes get new info they didn’t have access to before coming into power, said Keelan Green, a partner at Prospectus Associates and communications representative for several large defence companies. 

Mr. Perry said after the election the industry will want to know rather quickly where things are going, and that would likely be when the tough conversations begin. He said that if the next government isn’t prepared to up the defence budget, then decisions on cuts will have to be made, as there are several billion dollars more in plans than there is money to pay for them. 

Another school of thought is that Canada should stop looking at defence as a “jobs strategy” because it’s possible other countries are producing better or more affordable options.

“Defence procurement should be about getting stuff for the military, not so much about getting votes in Halifax or Vancouver,” said Steve Saiderman, Paterson Chair in International Affairs at Carleton University, adding that at this point he doesn’t think any party has enough gumption to take that path. 

He has submitted questions to Monday’s Munk Debate on foreign affairs about what the leaders would cut from the military.

As for what the parties have said so far this campaign, Mr. Perry said the Liberals’ overall stance is trying to address the affordability issues at the Department of National Defence. 

The Liberal Party’s defence platform is navy-focused but includes many general promises. If they were to form government, current levels of defence spending would be maintained, including any currently planned increases. They would also embark on a review of the Canada First Defence Strategy and create a new Defence White Paper that would include increasing the number of Canadian Arctic Rangers, improving the timelines on procurement, and increasing Canada’s participation in anti-terrorism training assistance missions.

They say they would reduce the size of the administration inside the Department of National Defence and the Canadian Armed Forces, and would not lapse funding but rather “re-invest in building a leaner, more agile, better equipped military.”

The Liberals would also implement the spending efficiency recommendations made by their Orléans, Ont. candidate Andrew Leslie in 2011 when he was the Canadian Forces’ chief of transformation. 

They have also pledged to fast-track the Canadian Navy’s renewal and use any funds left from their F-35 decision to buy more ships. 

Mr. Saiderman said the Liberals have a “pretty reasonable” plan, but he’s skeptical that their fast-tracking of naval ships could actually happen, as there aren’t currently “a bunch of dry docks waiting for more ships.” 

The Conservatives have promised that, if elected, they would work toward their goal of growing the Canadian Forces reserves to 30,000 personnel, spending $163-million on the 6,000 new reservists needed to get there. Once that number is reached, they would spend $63.4-million in the following years. 

The Conservatives would also spend $4-million per year turning the College Militaire Royal into a degree-granting university, with the aim of targeting Quebec cadets and boosting the force’s bilingualism. 

The Conservatives have yet to make any targeted procurement promises, but they do credit themselves with rebuilding the Canadian Armed Forces’ capabilities and have received favorable reviews by some in the defence sector for the major projects they introduced. Canadian Joint Strike Fighter Industry Group Chair Scott McCrady, who’s also Magellan Aerospace’s F-35 program director, said he considers past delays in the procurement process as “water under the bridge.” 

The NDP has not yet released its full defence platform, but the party has budgeted $184.5-million for 2016-17, growing to $494.5-million in 2019-20 for veterans’ support, security and policing, and foreign affairs, among other measures that have yet to be specified. 

Earlier this month, the New Democrats brought forward a chunk of defence-related policy in their National Aerospace Jobs Plan. They’ve budgeted $25-million for 2016-17, growing to $75-million by 2019-20. They would like to see Canadian aerospace manufacturing companies expand to create jobs and boost production and this could potentially extend to other defence industries, Mr. Perry speculated. 

As well, they’re pledging to spend $40-million on the Canadian Space Agency’s Space Technology Development Program to help with commercialization. 

In their budgeted platform released earlier this month, the Green Party supported implementing Gen. Leslie’s spending efficiency recommendations to reduce the use of non-military contractors in the Department of National Defence. The Greens are planning to save $810-million every year by doing this. They would also prioritize peacekeeping roles, defensive missions with our allies, border and coast guard patrols, and search and rescue missions.