Thank you, Mr. Chairman and committee, for hearing us. On behalf of the International Association of Machinists and Aerospace Workers, I would like to take this moment to say it's a pleasure for us to be able to appear before this committee.
We represent working members all over Canada in many trades. There are many different employers, which I mentioned in the brief that I submitted to the committee. I am not going to go down the whole list, because we only have 10 minutes, but just to be short, I will say that we represent Bombardier Aerospace, which is known pretty much by everybody; L-3 MAS, which does military contracts; Héroux-Devtek, which has a chance of obtaining some of the contracts on the F-35; and many other aerospace companies. We are the largest union in the aerospace industry. We also represent members in air transportation and in maintenance for air transportation.
Many of the above-mentioned companies may obtain some work on the F-35 purchase by the Canadian government. I must emphasize the word “may”, because there are absolutely no guarantees of this whatsoever. Although some of the companies have stated they will be getting some of this work, and despite an announcement made by the government to this effect, nothing is sure. I say this because it's merely speculation at the moment when we talk about Canadian content inside of the contract.
I've spoken to two of the companies we represent. I didn't go through every one of the companies, but the two I spoke to, L-3 Communications and CPS Industries, which are among the companies mentioned in the 80-plus companies that may obtain or bid on contracts, both said they have never been approached, either by Lockheed Martin or the government or anybody else, to bid on these contracts and have never had discussions on bidding on any of these contracts.
This brings me to the question: I wonder how many of the 80-plus companies are in the same situation as these two companies. Is it a positive spin or political strategy on the part of the government to say that 80-plus companies can bid? I don't know. I submit that question to the committee.
The other question I ask is the following. Out of the companies that are called Canadian companies for the purpose of this exercise—the ones that will be able to bid on this work and that also have other manufacturing sites outside of Canada—what content of their work will be awarded in or actually be done in Canada? Also, what assurances can the Canadian government get from these companies in this regard?
Take, for example, Héroux-Devtek, which has plants in the U.S., or Rolls-Royce, which has plants all over the world, or Bombardier, which also has plants worldwide, or L-3 MAS or L-3 Communications, which has plants all over the U.S., and so on and so forth. What guarantees does our Canadian government have to the effect that those employers will keep the work that they obtain in Canada? Once they have this work, what will stop them from transferring some of this work over to their plants in other countries, in the United States or in Europe, or wherever? After all, Mexico was in Montreal earlier this year, actively seeking to lure Canadian companies to move their plants south.
How does the government intend to ensure that these corporate commitments are fulfilled? Are there any penalty clauses included in these contracts?
In clause 3.2.1.1.1 of the F-35 memorandum of understanding, I understand, from reading the minutes of the previous meetings, but not from seeing or reading the contract, that it states the following:
Actual procurement of GSF Air Vehicles by the Participants will be subject to the Participants' national laws and regulations and the outcome of the Participants' national procurement decision-making processes.
The responsibility to have a clear policy is bestowed upon us. We must have a clear Canadian procurement policy stating that any taxpayer money spent on equipment bought for the purpose of the government, the military, or even municipal and provincial governments should have at least an equal amount of return in jobs or offset contracts. By offsets, as an example, there could be contracts on the F-16, when we're talking about companies like Lockheed Martin. If they can't give you work on the F-35, they can give you some on the F-16, or on the T-50, the C-130J, and so on and so forth, on any one of those contracts.
I'll move to my next point, which concerns the expertise that we as a country have developed over the last 30 years in maintaining, repairing, testing, and inspecting military aircraft. As you heard from Mr. Dan Ross, in his opening statement on October 19, “I would ask whether you would want your son or daughter or future granddaughter in yesterday’s technology....” Those were his words. They struck me as very pertinent. I asked myself the same questions with regard to the maintenance of the F-35 aircraft, which represents $250 million to $300 million a year for our economy.
Would I want another country to do the maintenance on the F-35s my kids would fly? Would I entrust anybody but the best manpower available to maintain this fleet of 65 F-35 fighter planes? Would I take the chance of having a longer turnaround time on our fighter jets in a time of need, because the Canadian F-35s are not the priority for another country servicing us and themselves? Am I putting in jeopardy my children's lives and my country's sovereignty by outsourcing this work?
Imagine for a minute the U.S government getting their rockets in the space program maintained or repaired and overhauled by another country. All the technology and knowledge they acquired through this program has affected not only their aerospace industry, but also everybody's daily lives. Cellular technology, microwaves, LCD—a lot of technology was developed through these programs, which is why it’s important that we keep programs like that here.
Through three employers—Canadair, Bombardier, L-3 MAS—our members at L-3 MAS over the course of the last 30 years have developed an expertise unequalled in Canada and other countries, an expertise in maintaining military aircraft, repairing and overhauling them, and extending the life of these aircraft. They have capabilities in mission modifications—they've done it for Canada, the United States Air Force, and the Royal Australian Air Force—structural renewal of the Hornet for the Royal Australian Air Force and for our aircraft; replacement of centre barrels; changes in systems, like avionics and night vision; wiring harness testing; and stress and fatigue testing, and at L-3 MAS we created programs for the stress and fatigue testing. They have in-house engineering capabilities, in-house machining capabilities, and one-off capabilities.
One-off capabilities means they can do.... Once 15 years has gone by, and the plane is not being sold by a manufacturer anymore, it’s difficult to build replacement parts for those planes. They have the capabilities to do one-offs, which means not production parts, but a one-off part that they need on an aircraft that has been broken, damaged, or needs to be replaced. It’s not everybody who can do that.
This expertise has permitted the Canadian government to save a considerable amount of money and delay the purchase of new jet fighters for many years. The life expectancy of the F-18s was doubled through modernization, replacement of components, and major repair and overhaul. The ongoing maintenance of the new F-35 fighter planes represents 30 years of work. If we compare it to the F-18s, the cost of the aircraft was in the vicinity of $27 million, but the upkeep over the years represents approximately $39.5 million per F-18. We’re are talking about an incredible economic impact if the same is done for the F-35. And with the 1,000 jobs in Mirabel, at an average of $50,000 a year in wages, we are talking about $18 million in taxes over 30 years, a ballpark figure of about $540 million in taxes, and great jobs created and maintained in Canada.
I don't know about you, but I’d feel comfortable with my kids flying in an F-35 maintained by members at L-3 Com, with the experience they've developed over the years. Any repair or maintenance done by our members will be safer and less costly. It would also permit us to put our planes in the sky when we need to, without being dependent on anyone else. This ensures our sovereignty as a nation.
But don't take my opinion. Look at the facts.
Thank you.