House of Commons Hansard #99 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was aircraft.

Topics

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

3:40 p.m.

Liberal

Hedy Fry Liberal Vancouver Centre, BC

Mr. Speaker, it is really interesting that NORAD and Canadian pilots tell us that the flying of planes across Arctic airspace is something that goes on as a routine manoeuvre. We are talking about really important Russian propeller planes that are about 40 to 60 years old, so let us put this thing into perspective. I have not heard an answer to that. It is very easy for the member across the way to—

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

3:40 p.m.

Conservative

Laurie Hawn Conservative Edmonton Centre, AB

You have no idea what you're talking about.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

3:40 p.m.

Conservative

Greg Rickford Conservative Kenora, ON

You're supposed to be answering that question.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

3:40 p.m.

Liberal

Hedy Fry Liberal Vancouver Centre, BC

Mr. Speaker, I should be allowed to speak. I would expect some respect from the member opposite because I let him speak and ask his question. I would like to answer it now.

I am asking about priorities. I am asking clear questions. I am not asking questions that the member, with all of his wonderful knowledge, should not be able to answer. However, I am not getting the answer. I am getting rhetoric. I am getting nonsense. I am getting personal repudiation of myself and what I do or do not know from the member. Why would he not answer the basic questions I asked? Do we need this plane? Do we need it now? Would it satisfy our needs? I am still to hear about Russians flying across our airspace to harm us, and as most of us know, we were told by NORAD that these are routine flights and they are little propeller planes.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

3:40 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, a little earlier today the parliamentary secretary was explaining to me that we could not go out for competitive quotes because we would have to get out of the MOU. Yet our defence critic, the member for St. John's East, explained that we could stay in the MOU and still go out and check the market one last time before we were to proceed.

The member has indicated he will be speaking next, so I would like him to clarify this point in his speech. Also, I would like him to clarify specifically what benefits there are for Manitoba, the size of the contracts, the number of jobs and which companies would be available.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

3:40 p.m.

Liberal

Hedy Fry Liberal Vancouver Centre, BC

Mr. Speaker, I hope, as my hon. colleague just asked, we will get the answers when the member makes his speech.

As I said before, no one is arguing that we do not need to have defence planes. We are asking about what kind of plane, what do we need it for, what would we use it for and do we need it immediately or not? We are talking about a time when we are sitting with a $56 billion deficit and high unemployment. We are asking the government to make priorities. I gather and read that at the committee, Canadian companies and other companies, companies like Boeing and Dessault, said that they could provide the same equipment that was needed by the government for less money at a fixed time and at a fixed price. Also, they would actually turn over all the maintenance work and much of the intellectual property to Canadian companies.

The question is being asked by other people, and I would love to hear the member answer those questions when he makes his speech.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

3:40 p.m.

Edmonton Centre Alberta

Conservative

Laurie Hawn ConservativeParliamentary Secretary to the Minister of National Defence

Mr. Speaker, I am happy to have the opportunity to speak about our intention to acquire 65 F-35 Lightning IIs. It is a topic that is very important to me because I know the value of having modern and capable fighters.

When the government released the Canada first defence strategy two and a half years ago, we committed to rebuilding the Canadian Forces into a modern, integrated, flexible, multi-role and combat-capable military, a military that would be able to meet and overcome 21st century challenges.

Canada's overall defence priorities have not really changed since the 1964 white paper with respect to protecting Canada and being a reliable partner in NORAD and NATO and meeting our international commitments. What has changed is the threats we face. The Canada first defence strategy recognizes this fact with its plan for systematic restoration of the combat capability of the Canadian Forces after more than a decade of darkness.

For the Liberals to say that they do not understand the priorities and missions of programs like the next generation fighter makes me ask where they have been since 1964 and where they have been since we tabled the Canada first defence strategy over two years ago, and nary a comment on that until recently.

We embarked upon the Canada first defence strategy because, on behalf of all Canadians, we ask our men and women in uniform to do a lot of things at home and abroad, and they always get the job done, whether they are providing security at major events like the Winter Olympics, or responding to Canadians in distress in things such as hurricane Igor or patrolling North America's skies in co-operation with the United States, which we have an obligation to do. When an aircraft enters our air defence identification zone, we have an obligation to find out who that is, whether it is a Russian Bear, with absolutely up-to-date modern avionics and electronics, or whether it is an airline.

We are conducting operations in Afghanistan or elsewhere. The men and women of the CF are among the very best in the world and they deserve only the very best equipment, not just shiny little toys. The air force is instrumental in defending Canada and advancing Canadian interests and needs the best tools to carry out its work. We have a duty to acquire the best fighter aircraft available, and that is the F-35 Lightning II.

It is clear that our CF-18s are very useful in allowing Canada to exercise its sovereignty, especially in the Arctic, to defend North American airspace under the auspices of NORAD and to participate in international operations, as was the case in the first gulf war and in Kosovo. One thing is certain: the need for fighter jets remains. We use them every day.

We currently have CF-18s to undertake various missions across the country. They were recently used to escort Russian bombers that were flying close to Canadian airspace. In addition, last month CF-18s intercepted and escorted through Canadian airspace a cargo plane suspected of transporting explosive material.

Under the recently completed modernization program, we extended the operational life cycle of our Hornet aircraft until the end of this decade.

The concept of ops for the CF-18 was to operate the aircraft for phase-in plus 15 years. I know this because I was there and I helped write it. At that point we would be in the process of acquiring our new, next generation fighter and that would have put it around 2003.

It made perfect sense for the Liberals to sign onto the joint strike fighter MOU in 1997 and to up the ante in 2002. Our government upped it again in 2006 and made the formal decision to acquire the F-35 under the multinational MOU in July. While that technically did not commit us to buying the airplane, for the Liberals to say now that they had no intention of buying the aircraft is absolute nonsense. For buying aircraft, these programs are long lead-time items. We do not just go down to Walmart and pick one off the shelf. We are buying an aircraft to fly until at least 2050.

Also, threats are evolving. The strategic environment that our CF-18s faced over the past 20 years is not identical to what we see today or certainly will see tomorrow. We need to ensure that we remain agile enough to continue to have the ability to protect our sovereignty and to be interoperable with our NATO allies and international partners. This is why one of the Canada First defence strategy's main equipment goals was a commitment to acquire a next generation fighter capability.

We selected the F-35 to fulfill this next generation fighter capability following our air force's analysis of the mandatory requirements for such an aircraft, and that analysis was thorough. The analysis made it clear that only a fifth generation fighter aircraft, such as the F-35, could satisfy our mission requirements in a complex and evolving future security environment.

Canada has had subject matter experts, military and civilian, studying the joint strike fighter program, next generation fighter requirements, and other options for years at a very highly classified level, and that includes, of course, the current ADM materiel, who has been there for the past five years and is very current on the actual exercise of the MOU, unlike commentators who have not been there for several years. They initially looked at the F-35, the F-18 Super Hornet, the Typhoon, the Gripen and the Rafale. After analysis, the Gripen and Rafale were eliminated and a more extensive evaluation of the F-35, F-18 and Typhoon was conducted. The conclusion was that the F-35 is the only aircraft that meets the mandatory high-level capabilities and the more specific operational requirements, and at the best cost with the best industrial opportunities.

Comparisons done by others have one major flaw. They are based on third or fourth generation fighter knowledge and very limited understanding of the real difference to fifth generation capability. There is a very limited number of people anywhere who are fully read-in to the classified details and capabilities of the F-35.

The same process was followed in the United States, the United Kingdom, Australia, Denmark, the Netherlands, Norway, Italy and Turkey within the memorandum of understanding. Israel is on board outside the MOU, and Japan, South Korea and others are poised to follow suit. At least 10 highly advanced countries all came to the same conclusion, all following a similar process. This sounds like more than a coincidence.

When talking about a fighter aircraft capability, we are talking about acquiring equipment that we will be using for the next 30 or 40 years. The F-35 joint strike fighter will, first and foremost, enable the Canadian Forces to continue performing all of the CF-18's previous tasks while being able to offer so much more, and adapt to threats that we probably cannot even imagine yet.

The joint strike fighter's technological leaps, in terms of sensors, stealth technology, weapons systems, survivablity and the integrated nature of its systems, make it the most effective fifth generation fighter available to Canada and the only viable fighter to meet the Canadian air force's operational and interoperability needs. I must emphasize that a fourth generation aircraft, even those such as our modernized CF-18s, cannot be upgraded to fifth generation stealth capability.

The joint strike fighter represents a quantum leap from previous generations of fighters in terms of capabilities, and it brings four unique advantages.

First, the F-35's stealth technology will significantly reduce detection by enemy sensor systems, providing both lower risks for our pilots as well as enhanced operational capabilities.

Second, the F-35's advanced sensors and technology that fuses data together will help pilots better understand their tactical environment and make decisions more quickly. What this means is that the aircraft takes care of much of what pilots now have to do themselves. The aircraft will, in a sense, be the co-pilot.

Third, we will be seamlessly interoperable with our joint strike fighter development partners and our NATO allies, many of which are purchasing the F-35, as we conduct NORAD, NATO and other coalition operations.

Let us talk a little more about interoperability. In Kosovo, our CF-18s lacked the communications equipment necessary to be part of many packages, because the previous Liberal government had failed to keep the aircraft updated. Our allies had to dumb down so that we could be part of the missions, and it is more than radios and data link, when we talk about interoperability between fourth and fifth generation aircraft.

If there was a package of fifth generation F-35s with a package of Canadian fourth generation fighters tagging along, our fighters would stick out to enemy defences like a sore thumb and would endanger the whole package.

Fourth, the F-35's production line will last well into the middle of the century. So we will definitely be able to replace lost aircraft should the need arise.

Taken together, these factors make the F-35 the right next generation fighter for Canada. Considering that Canada will own these aircraft for several decades, it only makes economic sense and is only fair to the men and women in uniform who will be flying and maintaining these aircraft that we make the best possible investment and acquire the best possible aircraft.

That is exactly what we are doing with our commitment to purchase the F-35s.

The F-35 program will generate spinoffs outside the defence sector, all across Canada. Canadian industry will be guaranteed a role in the most extensive military co-operation program in the world.

Since 2002, Canada has invested $168 million in the Joint Strike Fighter Program and this investment has already resulted in the granting of contracts worth $350 million to companies and research establishments in Canada. With the government's decision to procure F-35s, Canadian companies will be able to benefit from additional spinoffs.

Thanks to the F-35 program, Canadian industry will be able to join the global supply chain that will build thousands of joint strike fighter planes and create high-technology jobs and sustained economic spinoffs in regions throughout Canada.

The business opportunities for Canada would have an estimated worth of $12 billion, an impressive figure that is expected to grow even further with export sales to non-partner nations. The Government of Canada would receive millions of dollars in royalty cheques from sales to these non-partners.

Moreover, the government's decision to base the F-35 fleet in Bagotville and Cold Lake, as announced in September, would ensure that the Canadian Forces' two fast-air bases remain an integral part of their respective communities and continue to bring economic benefits to their regions.

Canadian industry is behind the F-35 purchase, as well.

Mr. Bill Matthews, vice-president of marketing for Magellan Aerospace Corporation, summed the reasons for this quite well last month when he appeared before the Standing Committee on National Defence. He indicated that the F-35 Lightning II aircraft is the perfect example of the kind of program that Canadian companies seek, since it fits their core capabilities; it is exceptionally high-tech in its design, materials and systems, allowing manufacturing advancement; and it is expected to be in production for 20 to 30 years, allowing efficiencies and return on investment for industry manufacturers. As we know, industry loves certainty. It loves predictability.

Let us take a closer look at cost. If we translate the $16,090,000 that we paid for each CF-18 in 1980 dollars ahead to 2016 when we will be acquiring the F-35, they would then cost about $63 million. Our price for the F-35 will be between $70 million and $75 million for a quantum increase in capability. That is not a bad deal.

We are buying our aircraft starting in 2015-16, at the peak of production and lowest cost. In fact, Norway has delayed its acquisition, not because it is concerned about the program but to follow our example and get the aircraft at that cost sweet spot in the production cycle.

Let us look at the breakdown of the $16 billion we hear quoted. About $5.5 billion of that is for the actual aircraft. About $3.5 billion is for simulators, training, infrastructure, spares, et cetera, some of which will come to Canadian industry. This will be spread over at least six years.

The other $7 billion is a very well-educated estimate of what it will cost to support the aircraft for 20 years, much of which will come to Canadian industry. None of this is borrowed, as some across the way would suggest. It is all within the program funding envelope of the Canada First defence strategy. This will be spread over 20 years. No one is writing a cheque for $16 billion tomorrow. By 2015-16, we are going to be out of deficit and back into budget surplus situations.

The $3.2 billion that we have heard quoted as what we would save by an open competition is complete fantasy. It is a number pulled out of the air by a person who was ADM materiel five years ago. What his agenda is, I am not sure. However, it is not based on anything factual whatsoever. It is completely pulled out of the air and is being tossed around by members on the opposite side as having some credibility. It has absolutely no credibility whatsoever.

Let us look at the value of being part of the MOU.

Every member of the MOU has one vote.

Within the MOU we are exempt from foreign military sales fees. That saves us about $850 million on the cost of the aircraft.

For every foreign military sale outside the MOU, for example, Israel, Canada gets a portion of the royalties.

As part of the MOU, we also have the right to use all the classified intellectual property. We would lose that outside the MOU.

As part of the MOU, we have guaranteed spots on the production line. This is critical to the timing of bringing the F-35 into service and phasing out the CF-18 before the CF-18 dies a fatigue life death, which it will do on or before the end of this decade.

Membership has its privileges.

The F-35 is the right fighter aircraft for the Canadian Forces, and one that will provide many benefits for Canadian industry.

Canada needs an aircraft that will enable the men and women of the Canadian Forces to meet the increasingly complex demands and missions we ask of them, and maybe some will be flying it in 20 or 30 years. We are not sure.

These aircraft are an investment in a capability that we need.

Acquiring the F-35 joint strike fighter as Canada's next generation fighter aircraft comes down to three key priorities: defending Canada's airspace; exercising Canada's sovereignty; and assuming Canada's international responsibilities, including as part of NORAD and NATO. I do not think there is a member in this House who would disagree with the importance of these priorities.

Our commitment to purchasing the F-35 is just the most recent example showing that this government is doing what it takes to best equip our men and women in uniform. In no other MOU partner is the political opposition taking such a position, and it is having an impact on the credibility and confidence that our allies have in Canada.

It absolutely will cost jobs if they do not stop very soon. We have seen this partisan political movie before, in 1993. Seventeen years and close to a billion dollars later, we are still waiting for the first Sea King replacement. The implications of this situation are many times greater. That is not a track record, in terms of the Sea King replacement, that Canada should have much trust in.

The F-35 is the right aircraft at the right price with the right opportunities for Canadian industry. We have priced the other options. Dassault said the other day that its plane could do the job. Of course it is going to say that. It also said its plane costs $70 million euros, so we are talking about a 40% to 50% premium on the F-35, which is $70 million to $75 million.

I would like to quote Mr. Claude Lajeunesse, president of the Aerospace Industries Association of Canada, who has written and spoken quite openly about this. He represents about 400 companies. He said, “We are very concerned that this decision is becoming the object of political theatre. So we are calling on all political leaders from all parties to support the government's decision. We do not want to repeat the mistakes of the past because they will surely be more costly than ever before, costly for our industry, costly for our military and ultimately costly for our nation”.

Yesterday or the day before at the defence committee we heard from Tim Page, the executive director of CADSI, another industry organization that represents 860 companies in Canada. Every single one of those companies is absolutely on board with this program. All 860 of them obviously will not benefit but dozens and dozens of them will. They are absolutely supportive of this program and they are absolutely appalled at the kind of political theatre that is being played out in this case.

It is time the Liberals stopped this partisan political nonsense and got on with helping us do what is right for the Canadian air force, what is right for Canadian industry and what is right for our commitments at home and abroad for the next 40 years.

My only regret is that there will not be any two-seat F-35s built. My only hope is reincarnation, and I am old enough and we will be flying the airplane long enough that it might just work.

It is important that we get on with it now. The CF-18 is going to retire between 2017 and 2020. It is not going to be extended beyond 2020. What was said earlier by my colleague from Vancouver is absolutely untrue. We have to get on with this program. They are long lead time programs. This program has been looked at in huge detail by very qualified people from Canada and from many other nations, and they have all come to the same conclusion. It is absolutely the right airplane at the right time.

I will be pleased to answer the members' questions when I sit down, which I will do now.

I urge my colleagues to get on board with this program. It is just the right thing to do.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4 p.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, we have heard ministers and the Prime Minister repeat over and over in recent months that a competition to replace the F-18s took place a decade ago and that Canada was part of it.

On October 26, 2001, the U.S. under secretary of defense Edward Aldridge announced its decision to choose the F-35. The member knows that Canadians at National Defence headquarters here in Ottawa were glued to their TV sets, as Mr. Williams, the former ADM has said, to see what Mr. Aldridge would announce. Canada clearly was not part of making that decision. It does not sound as if we were engaged in deciding which plane would be chosen.

We have the words of the chief of the air staff at the time, Lieutenant-General Deschamps, who said when asked about the CF-18 replacement, “We're moving forward hopefully in the not too distant future to establish a discussion with government”. He was talking about the replacement and what the government might do. This was in 2001.

Would my hon. colleague admit that Canada was not part of the competition a decade ago and had no say in the decision?

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4 p.m.

Conservative

Laurie Hawn Conservative Edmonton Centre, AB

Mr. Speaker, that is not entirely true. We were involved in the program. We were not down there doing the nuts and bolts. Canada has been playing an increasingly active role in the program over the past years.

Mr. Williams also said when that was announced that national defence was thrilled, because it knew this would be a program that Canada could participate in and eventually replace our aircraft with.

We talk about commitment versus intent. The intent was clearly to replace the CF-18 with a next generation fighter capability. We were clearly part of that program in 1997 at whatever level. We had an increasing level in 2002 and a further increased level in 2006. We have finally come to the point that the Liberals started us on with the intent to acquire another airplane.

The whole premise behind the CF-18 program in the first place was to replace it sometime around now. We are a few years late, but we are getting it done. We are getting it done.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, the parliamentary secretary did not answer either one of my questions that I asked him in the last round.

If the parliamentary secretary is correct in his compelling arguments for this deal, then on that basis he should not mind submitting this to a final competition. It is only fair that taxpayers be assured of a really valued deal for the money they are spending.

The minister is suggesting that the government has all the answers and knows better than the public. He is sending out a totally different message than what the Conservatives delivered to the public when they were in opposition or when they get into an election situation.

My first question is with respect to what the member for St. John's East indicated. He said that we can still stay in the MOU and still do a competitive bid.

Second, what is the value to the province of Manitoba? How many jobs will be involved? What is the value? Where and when?

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:05 p.m.

Conservative

Laurie Hawn Conservative Edmonton Centre, AB

Mr. Speaker, I could not answer the question before because the member was not asking it of me. Now that he has asked it of me, I would be happy to answer.

The simple fact is that the member for St. John's East is wrong about the MOU. We cannot do a competition and stay within the MOU. The people who are managing the MOU today have made that pretty clear. Dan Ross said:

In terms of the joint strike fighter MOU, we have to be clear that in order to run a competition, Canada would be forced to withdraw from the MOU. I would point that out because the MOU precludes that countries have agreed not to apply the normal IRB process.

The competition that we are talking about would apply to the old “normal” IRB process.

A Canadian competition would have to entail the normal IRB process, and you cannot do that within the MOU.

The hon. member is just simply wrong. This is from the man who has been ADM materiel for the past five years. He knows the MOU inside and out and is working with it every day.

With respect to the specific question about Manitoba, Magellan Aerospace has already been highly active in the program. I cannot give him a specific number of jobs or specific dollars; that is being developed.

The other companies in Winnipeg who will be involved undoubtedly are Composites Innovation Centre and Northern Aero. Manitoba is going to get some very lucrative business out of this program.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:05 p.m.

Kenora Ontario

Conservative

Greg Rickford ConservativeParliamentary Secretary for Official Languages

Mr. Speaker, I am looking at an immediate news release here from the Aerospace Industries Association of Canada, which expresses serious concern and encourages all members of Parliament to vote against the motion that would cancel the planned purchase of the F-35. I quote:

To say that by cancelling the current process and starting from scratch would somehow result in a greater number of jobs for our industry and without penalties is not only a stretch but it is completely misleading. The instability in the Canadian industry on the issue is creating a climate whereby jobs and investment are being threatened if not lost already.

For the AIAC, the issue with the motion is that it says the direct industrial participation process, which underpins the purchase of the F-35, would create fewer jobs versus the industrial regional benefit.

I ask the parliamentary secretary if he could expound on the far-reaching consequences of cancelling the current process on our military, Canadian jobs and, in fact, beyond.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:05 p.m.

Edmonton Centre Alberta

Conservative

Laurie Hawn ConservativeParliamentary Secretary to the Minister of National Defence

Mr. Speaker, my colleague is quite right.

Mr. Lajeunesse goes on to say in the same article, and he is quite direct, that:

The IRB policy—the traditional approach to procurement policy when buying military equipment off-the-shelf—would result in guaranteed offset investments equivalent to the cost of the aircraft evaluated at about $4.8 Billion (USD) [call it $5 billion], not $9 Billion as suggested by some. Cancellation and delay of this purchase will not only mean lost jobs and investment related to the 65 planes, but also billions of dollars and thousands of Canadian jobs lost relating to thousands of planes to be built as part of the broader program.

The opposition and people like Mr. Williams, who have not advanced or evolved along with the process, do not get how business is done now in large memorandum of understanding partnerships, like we are in, in that we have access to much beyond the old IRB process.

Yes, we have to compete. Canadian companies have competed extremely well, have been very successful and will continue to be.

We are not just talking about 65 airplanes; we are talking about a global supply chain of 3,000 to 5,000 airplanes. I think anybody can see the economies of scale between 3,000 to 5,000 and 65.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:05 p.m.

Liberal

Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, the parliamentary secretary provided a number of reasons for the proposed procurement. I will pick a couple that sort of took me aback.

One was the possible use in Afghanistan. I thought we were leaving Afghanistan in 2011 and going into a training mission.

Another is that the price is right and the continuation of that. However, it started at $50 million, then he said $70 million to $75 million, but the defence minister said it could go as high as $100 million per aircraft. He certainly did.

The member also said that, by the way, we are going to be out of deficit by 2016 so it is okay that we spend this money. However, the Parliamentary Budget Officer says quite the opposite. In fact, there is an $11 billion difference in the projections; there will still be as high as an $11 billion deficit in 2016.

Why is the parliamentary secretary throwing out all kinds of unsupported statements hoping that one will stick? Why does he not just tell the truth?

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:05 p.m.

Edmonton Centre Alberta

Conservative

Laurie Hawn ConservativeParliamentary Secretary to the Minister of National Defence

Mr. Speaker, putting aside the implication that I am somehow lying, on missions like Afghanistan, clearly we are not going to use F-35s in Afghanistan. I think even my hon. colleague can figure that one out.

With respect to the cost of the airplane, we are going to pay between $70 million and $75 million per aircraft. That is in there. That is the same price that every member of the MOU is going to pay, whether it is Australia, the United States, the U.K. or whoever.

People outside of the MOU will have to pay an additional fee. It is called the foreign military sales fee, and that amounts to between 8% and 10%. If we were to buy the aircraft outside of the MOU, that would amount to an extra $850 million of taxpayers' money that we would not have to pay by being inside the MOU.

There are many other advantages of being inside the MOU, and I listed many of them; they are numerous. That is why we have great strength within the MOU with the partnership that we have and the oversight that we have from the United States Congress. We welcome that kind of oversight because it is to the benefit of everybody within the program.

I will remind my hon. colleague that the United States government is underwriting any increase in development costs for the aircraft.

Our price is a good price, and it is cheaper than the alternative of buying the other airplanes that have been mentioned outside of the MOU.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:10 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, I would like to thank my colleagues in the House for allowing me this opportunity to speak on this issue as there is a base in my riding, in Gander, and I proudly represent 103 Search and Rescue Squadron.

We have been talking about this particular issue for quite some time. As we go through this issue, there is no doubt about what the government is saying about the idea of a brand new process by which we go through procurement. I talk about working within the MOU, as was outlined by the parliamentary secretary. I do not doubt that is the way we are travelling and the way we are going to do this in the future as being part of a global supply chain.

The only way I disagree with my colleague is that he talked about reincarnation and coming back as a pilot. If he is reincarnated and comes back, he will be sitting in a room with two remote controls as they will likely be UAVs, or uninhabited aerial vehicles, which work so well in Afghanistan. By that time, that is probably what will be in the sky for all of these particular vessels. However, I digress.

Nonetheless, we have pilots, airmen and airwomen, and they serve bravely. I know them. The base in my riding does not have fighters. It does not house the F-18s, but it does have Cormorant helicopters, and members of the air force live in my riding and proudly serve as helicopter pilots for the Cormorants.

When it comes to the equipment itself, over the past 20 years, yes indeed, there have been cost overruns and cheques were written that we did not want to write. Nonetheless, the cost overruns dictated that we had no choice. For that there is a lot of blame to go around.

My hon. colleague mentioned a decade of darkness. Well, over the past five years, an Auditor General's report was produced that talks about what is to replace the Sea Kings and about the Chinooks. Some of the points made in this particular Auditor General's report are quite stinging, indeed. It talks about medium to heavy lift helicopter acquisition, directed procurement and some of the things that went wrong. It also talks about the navy, the joint supply ships, and how we had to go back to the drawing board with that one.

The past six years, although I would not call them a decade of darkness, certainly have not been bright, have they? I would ask the House to engage in a debate. I would ask the parliamentary secretary about some of the points. I want to bring up some of the things he mentioned in his speech.

He juxtaposed the acquisition of the F-35s with the mission in Afghanistan and the gist of the missions in Afghanistan. I do not seem to understand how the two are juxtaposed with each other. If memory serves me correctly, the F-18 was used in Kosovo.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:10 p.m.

Conservative

Laurie Hawn Conservative Edmonton Centre, AB

Very good, Scott.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:10 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Thanks very much. I am being complimented.

How that is juxtaposed with Afghanistan, I struggle to understand.

He also mentioned that we cannot just buy aircraft off the shelf. It is my understanding that the C-17 was pretty close to being off the shelf.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:10 p.m.

Conservative

Gary Goodyear Conservative Cambridge, ON

Pretty close.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:10 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

It certainly looks that way. I know it is something we engaged in quite some time ago, back in 2003-04, and we certainly felt the need to buy them.

He talked about writing a cheque for $16 billion in this particular case, which included the initial purchase of the aircraft and then the maintenance thereafter, the life cycle costs, taking us up to when the F-18s expire. It seems to me, from what the Auditor General tells us, that these costs could become greater. As a point of debate, we should be looking at the very essence of what we need to do to get the best equipment, the equipment that serves the military in the best way possible, and do it at a price that is brought down to a level that we can afford.

We entered into this agreement back in 1997. The Liberal Party did not decide to purchase the aircraft back in 1997. We entered into the SDD. The Liberal Party participated in the development process. In 2002, the Liberal minister of defence said that, “Ottawa is not prepared to commit to buying the JSF planes thus far”. I am sure the government would agree with me thus far. The Liberal government at the time invested $150 million in the joint strike fighter project, mainly for industrial and technological benefits.

I have never been in on the minutia when it comes to procurement, like the hon. member across the way, and I respect him for that service. My understanding, on the surface as it may be, is that in an IRB the point is to guarantee that we get the best IRB available, dollar for dollar expenditure, so we get guarantees that the people, the companies and the industries can count on.

I know work is being done. I know the government will point out to me that we have already secured many contracts. However, he did say at one point that industry loves certainty. I cannot think of anything that is more certain than the process by which we engage in the IRB. To do that, however, we must look at the way the competition was held. I will get to that in just a moment.

We talked about the search and rescue component of this. Right now the Buffalo aircraft, as it exists on the west coast, these planes are flying around on the west coast and going through the mountains. They have been discontinued. We are scouring the earth for parts. I know they have been refurbished but the refurbishment will continue for quite some time. Certainly these things should have been retired recently.

If the process for fixed wing search and rescue aircraft had been done right, as was described by the minister and which was guaranteed in 2007 to actually at that point make a go of this, we could have had them by 2012, but that will not be the case.

The expediency of the F-35 process boggles my mind, especially when all of a sudden the fixed wing search and rescue aircraft seems to be trailing well behind the pack.

We called in several departments and found there had been disagreements between departments. The National Research Council has been called, almost like a referee perhaps but I am not really sure. The requirements seem to be there for the government to take advantage of and certainly there for it to make a purchase of fixed wing search and rescue aircraft. I am not quite sure what has bogged this down. I am not sure what requirements are needed or why the NRC was called in to do this. Maybe the process is too vigorous when it comes to fixed wing search and rescue aircraft. The excuse seems to be that the government wants to get it right. I agree that we need to make this right but I question the F-35s. Did we get that right?

The announcements that have been made thus far when it comes to the procurement, equipment, suppliers, people in the business and my hon. colleague quoted someone from the industry, I understand that. I think it is a fantastic opportunity for them to be involved in this global supply chain.

What I wanted to see here was whether this was done right, whether this was the process by which we are able to secure, as my hon. colleague called it, certainty within the industry.

The global supply chain is something that is new, at least that is what I gathered from my visit to the defence committee. When we look at all the articles around the world, Israel, United Kingdom and certainly in the United States, we see that they too want to be part of this global supply chain. I agree. I think we should be a part of that.

However, If we do this, we need to create the certainty that my colleague talked about, and I do not know if this particular method gives the certainty that we are striving for. I sincerely and genuinely hope he is right. I hope we will be the strongest player out there for this global supply chain. We have the potential to do it.

My colleague also mentioned experts in the field who came back and said that this was the right plane. It almost seems like we go through a process where everything is under cover of the night and then boom, we need to do this now. We have an announcement, with a plane in the background, and the minister sits in the plane, so on and so forth. I get that.

Several years ago, the Conservatives said that they would go through the right procurement process that was there and yet in July it became a story that they had done it. I am not sure if this is a change of direction for the military or not but it concerns me. I am concerned about the global supply chain. I understand there are people who are getting it done. I congratulate them for being a part of this process and manufacturing the parts for thousands of F-35s. However, I need the certainty that I am not sure this process is giving.

When I hear the government say that it did make the choice back then, there is ample evidence here in articles and from experts and assistant deputy ministers that prove that was not the case. We were not a fundamental part of that decision. I find it hard to believe that we were, which is what scares me about this. We should be part of the decision because we need the certainty for our aerospace sector.

I have an aerospace sector in my riding that so far is not cashing in on this particular project. However, that is not what bothers me because some day it will. The certainty that I think we might be missing out on, which scares me, is why I am looking out for the aerospace sector in Gander, in my home riding. In the future, it will be that major player.

I just want to pass on a few comments that were put together by some experts in the field who did a lot of work and research on this.

I have some comments by David McDonough, a doctoral candidate at Dalhousie University and a visiting researcher at the Centre for International Policy Studies. He offers quite a bit of research and says:

One only needs to look at the recent report by the Auditor General Sheila Fraser, which criticizes the ballooning costs and attendant delays in both the Cyclone and sole-sourced Chinook helicopter acquisitions. Similarly, defence contractors recently informed the government that it could not build three Joint Support Ships for the amount that DND had budgeted.

Therein lies the concern about cost, as I mentioned earlier. We seem to be throwing around a definitive number about the cost and yet the experts are pointing out and past circumstances dictate that perhaps that will not be the case.

When Senator John McCain came here, he said that he too was worried about the spiralling costs of this project. At what point do we get involved in that process? I am genuinely asking that question. What are we on the hook for?

I sincerely hope the government can point out to me where it is I am wrong.

The final airplane costs: First, it remains to be seen whether the F-35 will also be required to undergo expensive modifications to make it sustainable to operate in Canada's unique environment. Was that discussed at the SDD. Was that discussed at the genesis of this program? Was the fact that we have a unique climate discussed?

One article I have here talks about one engine or two. It reads, “The new F-35 has only one, and that is enough”, the defence minister says, “but Canada chose its current fleet of CF-18s precisely because they had dual engines”.

It goes on to state:

As the Cold Lake Air Force Museum’s website notes, Ottawa selected the Hornets “mostly because of twin-engine reliability” in case one failed during flights between Canada and Europe or sucked in a bird during low-level operations.

Now that was one of the concerns at the time but I am assuming that was not entirely the case. It cannot be that simplistic. I would like to put my colleague at ease.

However, were these questions posed? Were we in on the ground level at that point, at the SDD, to ensure these planes could be tailored to what we needed? I will not even talk about the fact that we are chasing Russians out of the Arctic, which we are not. From what I understand, the cold war did end, and the TU-95 Russian bomber, I mean, seriously.

The F-35 purchase price might still significantly increase if the total number of jets manufactured is smaller than expected. Of note, Great Britain has already switched to the cheaper F-35C model and reduced its purchase from $138 million to $50 million and there is no guarantee that the United States will not follow suit.

Those are some of the concerns that we have. There was a $4 million guarantee on equipment that was achieved by Israel. What is the nature of that guarantee? Is that something that we are able to achieve being part of this global supply chain? I should hope so.

Despite alarmism that is often generated by Russian nuclear armed bombers, this threat is only actualized in the event that Russia threatens a significant nuclear attack on North America. The primary means of dealing with this possibility is not by a robust air defence systems in which more advanced F-35s would offer a definite advantage but rather by early detection and warning.

My hon. colleague asked if I knew what was in it. I probably do not know what is in it but I do not think our F-35 will make a big dent in reducing the harm that was inside that particular Russian plane. However, here is the situation. Why can we not get these solid answers that we are looking for? I think we are making some valid points here about the process by which we go through in procurement but we are not getting answers.

My hon. colleague, who was a minister in cabinet back in 2004-05, raised a valid point. What does what a fighter pilot did, and I respect what he did, have to do with the fact that we are in the middle of debate talking about the issues that the Canadian public wants to know about.

I would ask my colleague from northern Saskatchewan to refrain for just a moment because at the end of the debate he might find himself engaged in it and I understand that he is not a fighter pilot. I am interested in hearing what my colleague has to say because I hope he can prove me wrong on this. That is the benefit of having him here in the House.

The 2006 agreement for developing the controversial F-35 stealth fighter jet contains a withdrawal clause that would allow a new government to end Canada's participation with no penalties and appears to contradict the government's claim that Canadian firms involved up to now would suffer.

The ADM stated:

Any Participant may withdraw from this MOU upon 90 days written notification of its intent to withdraw to the other Participants.

That is contained within the memorandum of understanding signed along with the U.S., Australia, the United Kingdom, Turkey, the Netherlands, Italy, Norway and Denmark.

It further states:

For Contracts awarded on behalf of the Participants, the withdrawing Participant will pay all Contract modification or termination costs that would not otherwise have been incurred but for the decision to withdraw; in no event, however, will a withdrawing Participant's total financial contribution, including Contract termination costs, exceed that Participant's total share of the Financial Cost....

I do not think that we find ourselves in a situation where we are drastically put way back to the point of 1997 when we were searching for a replacement for the F-18.

I will summarize by pointing out that the process by which we are engaged here creates a lot of questions. I think that we as a Parliament need to be more forthcoming in what these answers should be. I have that aerospace sector that wants to be a part of the future of this country but to do that I need to know that the certainty that my colleague talks about is there.

I hope these answers can be borne out in this particular debate.

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:30 p.m.

Edmonton Centre Alberta

Conservative

Laurie Hawn ConservativeParliamentary Secretary to the Minister of National Defence

Mr. Speaker, I respect my colleague across the way and we agree on many things, but there are so many factually wrong things in what he has said that it is hard to know where to start.

First, the Chinook is not replacing the Sea King. It is a completely different program. We are sticking to the JSS budget, the joint support ship budget. The U.K. is buying 138 airplanes and Norway has a pretty similar climate to Canada. The engines issue on the F-18, and I was there and I was part of that process, was one of many factors that said F-18 versus F-16.

Has he asked the Canadian Forces or anybody in the Canadian Forces, army navy or air force, if they like what we are doing? Has he asked people in the Canadian air force on the fighter side what they think of this program? Has he asked industry what it thinks of this program? When industry talks about certainty, it talks about certainty of a program going ahead. This program, as everybody in the industry has said, is the best program for it because it gives it the absolute best opportunity to go far beyond the IRB process.

I will quote Paul Kalil from Avcorp, who said, “Canada is going to see the long term benefits that come with the economies of scale that a program this size delivers, and even greater opportunities, based on this timely government decision because of the technology transfers that that facilitates”.

This is important because the technology that is in the F-35 is the next generation of technology and getting in on the ground floor of that will lead to whatever comes after that. Has he asked any of those questions of industry or the Canadian Forces?

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:30 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

In fact, I have, Mr. Speaker, many times. In doing so, again, I go back to the process.

Let me get to the first point that the hon. member mentioned. I did not mean to confuse the Chinook/Sea King issue. What I was getting at was the procurement process by which this happened and the fact the costs are never in line with what we initially say they will be. Therefore, it would be disingenuous for us to talk about these final dollar amounts when in fact evidence proves that it could be inflated to a greater amount.

I talked mostly about search and rescue. We have a shortage of pilots right now with the Cormorant, which is a major issue. We have a major issue with the Cormorant itself. Some of the studies say that an optimal level of Cormorants would be 20. Currently we have about 14. Sure I would like to have more, but I know the money is not limitless. We have to look into the fixed-wing search and rescue issue. I think we will do a study on that later.

I understand the work the hon. member did on the F-18 issue and I appreciate what he has said. He has a greater insight to the workings of military than I do. However, I am asking the question that should be asked within the Parliament, and which Canadians want to know, about the security of the industry and if they are getting value for the dollar?

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:30 p.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

Mr. Speaker, the member is always a pleasure to listen to in the House and he is very thoughtful. I particularly admire him because he is from my grandfather's homeland.

I appreciate the fact that the hon. member raised the issue support for the SAR, our very important search and rescue and surveillance operations, also operating under the military. I had the great privilege this past summer of spending half of a week with 14 Wing at Greenwood with representatives of the other parties. It was a delightful experience. It became very clear to me that there were very serious needs already so we could deliver the services. The base in Nova Scotia services the hon. member's province of Newfoundland and Labrador.

Surely it is important, when we look at this kind of major purchase in the many billions, that we have an overall strategy on how we will serve the needs of all aspects of the military, including the important search and rescue and surveillance. Could he comment on that?

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:35 p.m.

Liberal

Scott Simms Liberal Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, all my best to the member's grandfather.

It is a valid point about the future direction of this. Again, I can speak to search and rescue because I have dealt with this for quite some time. I am no search and rescue expert, but nonetheless I have been exposed to search and rescue operations quite a bit.

I assume that right now the government is going back and forth about the requirements of what is to be fixed-wing search and rescue. There is no doubt that the Hercules and the Buffalo need to be replaced, whether it is with the C-130J or some other variant of that is one thing. Let us take a look at that issue for a moment. There does not seem to be any Canadian companies in contention for that. From what I understand, some Canadian companies are capable of providing that. At least that is what they say. Obviously the companies are going to talk about themselves in a way not to rule themselves out.

When it comes to military requirement, it seems to me that the search and rescue piece on fixed-wing seems to be going through many rigours and many processes until they find out what is required for fixed-wing search and rescue.

I am not so sure if this is happening with the F-35s. I fear that the long-term requirements are dictated to us, and that is what concerns me about this. It is not overt in the sense that we have to buy off the shelf, but nonetheless if we are part of a global supply chain—

Opposition Motion— National DefenceBusiness of SupplyGovernment Orders

4:35 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Questions and comments. The hon. member for Halifax West.