Canadian Forces have already endured enough flight delays

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The Gazette, Monday, November 1, 2010

Auditor-general Sheila Fraser blasted the Defence Department last week for cost overruns and solesourcing on helicopters that are costing $11 billion, twice as much as expected, with deliveries running up to seven years behind schedule.

The first of 28 Sikorsky Cyclones was ordered by the Chretien government and was to have been delivered in 2005, but has now been delayed until 2012. In 2005, the Martin government ordered an additional 15 Boeing Chinooks, with first delivery in 2013.

Looking down the road to the Harper government's decision to sole-source the $16-billion purchase and servicing of 65 F-35 fighter jets, Fraser said, "I hope that no one is assessing those as low risk."

Liberal leader Michael Ignatieff, who previously said he would review the F-35 contract, immediately responded to the AG's report and comments by saying he would cancel it outright and call for tenders.

If the helicopter cost and delays are to serve as a lesson, Fraser should have gone back to the beginning of the story, in 1993, when Jean Chretien said his first act in office would be to cancel the Mulroney government's order for 50 EH-101 helicopters at a cost of $4.8 billion.

Chretien was as good as his word. On his very first day in office, he announced the cancellation of the EH-101s, which he had derided as Cadillacs.

Oh, and by the way, the government paid a $500-million cancellation penalty.

It was one of those cases where good politics makes bad policy.

Seventeen years later, the Canadian Forces are still waiting for replacements for the 1960s-era Sea Kings, famous for falling into the ocean and for requiring 35 hours of service for every hour of flight.

And the government will end up paying more than twice as much in current dollars for eight fewer helicopters than the EH-101 fleet that would have been fully operational years ago.

Chretien did many good things in government, including balancing the country's books in 1997, which led to a decade of surpluses, partly because he broke another campaign promise, to "axe" the GST.

But cancelling the EH-101 was not only a bad decision motivated by pure electoral politics, it deprived our men and women in uniform of much-needed replacement helicopters, and put them in harm's way every time they boarded a Sea King.

And of course, the current procurement shambles over helicopters would not have occurred if Chretien had done the right thing and proceeded with the purchase of the EH-101s. We wouldn't have been spending $11 billion, we wouldn't be waiting 20 years for new choppers, and the AG wouldn't have been in high dudgeon about it.

As for the F-35, it was the Chretien government that joined, in 1997, a U.S.-led international consortium that chose this plane as the next generation fighter jet and replacement for our CF-18s, built in the 1980s and due to be replaced by the end of this decade. As for solesourcing it, Ignatieff says "we have to learn the lesson" from the helicopter debacle.

But it's not clear what's to be gained by open bidding on a plane that's built by only one company, Lockheed Martin. Perhaps there are efficiencies to be achieved by bidding among suppliers, where there's going to be a lot of work in the Canadian aerospace industry.

Speaking to the Aerospace Industries Association on the same day Ignatieff vowed to cancel any sole-sourced contract, Industry Minister Tony Clement claimed, "we are talking about up to $12 billion in industrial opportunities for our Canadian suppliers."

Fully half of Canada's $24-billion aerospace industry is located in the Montreal region. About 40,000 jobs are here. At present, 83 per cent of the industry's revenue stream is in the civil-aviation segment, according to a Deloitte consulting report for the industry. The F-35 represents a real opportunity for growth in military procurement.

And then there's the question of the sovereignty of our airspace, particularly in the Arctic. If we don't enforce it, the Americans will do it for us. Or perhaps we would like to wait 20 years for new jets, as we are doing for helicopters.

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