Art Eggleton

[Government Contracts, June 1st, 1998]

Mr. Speaker, I noted that the hon. member and his colleagues supported our purchases of submarines. They never complained about the fact that we did not go out for tender calls, proposal calls in that case, because it obviously did not make sense. There happened to be some slightly used ones available.

Every case has to be examined on its merits. This case was examined on its merits and it was determined that this was the best possible direction to go in. There was really no other choice.

The timing was such that cabinet decided if we did not get this bid in we would have lost the jobs in Moose Jaw. We would have lost all our opportunities and we would not have saved the money we are saving.

[Government Contracts, June 1st, 1998]

Mr. Speaker, the hon. member seems to have a tough time understanding that no rules in fact were broken. This was a government decision and it was the right decision to make in view of the timing. Otherwise we would have lost the opportunity. We would have had to close the base. Would the member opposite like to have the base at Moose Jaw closed with the resulting loss of jobs in that area?

We have saved those jobs. Ninety percent of $1 billion in industrial regional benefits will be in western Canada, with over 5,000 person years of employment. It is a good deal. It is one in which the private sector will carry the risk and we will get training for our pilots. It will amount to a saving of $200 million over 20 years.

[Government Contracts, June 1st, 1998]

Mr. Speaker, first of all there was no bending of the rules. Secondly, this was a decision taken by cabinet in light of all of the information that was brought forward and the capability of companies to be able to do the job.

It is not just Bombardier. Frontec Corporation of Edmonton, CAE Electronics of Montreal and British Aerospace of the United Kingdom are part of a consortium that is involved in this particular project. This consortium, together, can deliver on this project. It can save a lot of money for Canadian taxpayers. It can encourage foreign countries to send their pilots to this country. It can save the base in Moose Jaw and create lots of jobs in western—

[Government Contracts, June 1st, 1998]

Mr. Speaker, in addition to the fact that there was no other known competitor and that no other company could have matched a project of this magnitude, there was a timing problem. If we were going to be able to get other countries within NATO to become a part of this program, then a very timely decision had to be made. Otherwise we would have lost any opportunity, if we had gone through a very lengthy process, where there would have been no other competitors in any event.

Again, the government will be saving a lot of—

[Government Contracts, June 1st, 1998]

Mr. Speaker, first, the contract went to a consortium that included Bombardier and other companies. At the time it brought forward a proposal that was quite unique. The proposal was such that no other competitor would have existed in this country. There was absolutely no one else who could do something of this particular magnitude.

We proceeded with the contract that will save some $200 million over 20 years in providing this service and 90% of the jobs that will be saved or created will be in western Canada.

[Canadian Armed Forces, May 28th, 1998]

Mr. Speaker, there has been no charge laid against anyone. They have a right to maintain their privacy. They have a right to presumption of innocence. If charges are laid, and there has been no determination of that, when due process has been followed, then the results will be announced.

[Canadian Armed Forces, May 28th, 1998]

Mr. Speaker, matters are under investigation and the people involved in that investigation have the right to the presumption of innocence until there are charges laid, in which case there would be an announcement made as to any of those specific charges.

We believe in a fair process. Let us allow that fair process to take place.

For the opposition to try to bring discredit against a very senior officer, in fact the senior woman in the Canadian military, I think is disgraceful.

[National Defence, May 27th, 1998]

Mr. Speaker, I am not aware of that being the case. The information I have is that the matter is under investigation.

As the hon. member knows from his policing days, until the investigation is completed there is nothing further that can be said about it.

[National Defence, May 27th, 1998]

Mr. Speaker, I can only say that the matter is under investigation.

[Questions On The Order Paper, May 25th, 1998]

(a) The total project budget for the Canadian search and rescue helicopter, Labrador replacement, includes: a maximum of $593 million to E.H. Industries; plus approximately $200 million in government costs for project management, training, spare parts, integrated logistics support, and a small contingency allowance.

The estimated cost for the replacement of the Sea Kings will not be known until the government approves a Sea King replacement project. The final cost will be known when the government announces its decision.

(b) The annual steady state cost of supporting the Labradors is $36.4 M, current year 1997-98 dollars, and the cost of supporting the Sea Kings is $79.4 M, current year 1997-98 dollars. These costs include personnel, spares, modifications and engineering but not infrastructure costs such as base facilities and services. It should be noted that new helicopters will also have an annual steady state support cost. The delivery delay between the first delivery of a search and rescue SAR configured helicopter from the cancelled new shipborne aircraft new search and rescue helicopter project, and the first delivery of a helicopter from the current Canadian SAR helicopter project is approximately 12 months. The delay associated with the delivery of the new maritime helicopter is unknown since the project has not been approved.

(c) The total compensation paid to suppliers of the EH-101 is detailed in the Public Works and Government Services Canada and E.H. Industries Limited joint news released dated January 23, 1996 which follows.

(d) The cost to the Department of National Defence to operate the project management office during the implementation phase for the procurement of the EH-101 helicopters was $15.5M in 1993-94 dollars.

NEWS RELEASE

Public Works and Government Services Canada and E.H. Industries Ltd.

For immediate release

Date: January 23, 1996.

Settlement reached with E.H. Industries for EH-101 helicopter program.

Ottawa—The Government of Canada and E.H. Industries Ltd., a company jointly, owned by Westland Helicopters Ltd. and Agusta Spa, have negotiated a settlement agreement for E.H. Industries' claim arising from the cancellation of the $5.8 billion EH-101 helicopter program.

The details of the agreement, reached in October 1995, were announced jointly today by the Honourable David Dingwall, Minister of Public Works and Government Services and Enrico Striano, Managing Director, E.H. Industries Ltd.

“Negotiating this settlement has been a long process and I am pleased that the Crown and E.H. Industries have reached this mutually satisfactory agreement,” the Minister said. “It is fair to say that the Government of Canada has closed the books on the EH-101 helicopter program.”

The announcement of this agreement was delayed pending the conclusion of negotiations between E.H. Industries and its subcontractors.

Following a promise outlined in the Government's Red Book, the contract with E.H. Industries for the supply of helicopters, valued at $1.45 billion (1992 dollars) was terminated in November 1993.

The settlement agreement with E.H. Industries totals $157.8 million. This includes $136.6 million for the cost of work completed prior to termination and work in progress at the time of termination, and $21.2 million for termination costs.

The total termination costs include a $68 million settlement reached earlier with Loral, the project's other prime contractor and the $21.2 million settlement with E.H. Industries.

The Government allocated $250 million in 1994-95 Main Estimates for termination costs of which only $89.2 million has been required.

To ensure that the approach to settlement was undertaken in a fair and reasonable manner and to provide an independent and commercial perspective on various issues, the Crown enlisted the services of an independent consulting firm, Lindquist, Avey, Macdonald, Baskerville Inc.

Funding for this consulting contract was provided in the February 1995 federal budget and is therefore built into the existing fiscal framework.

Mr. Striano, expressing satisfaction with the final settlement stated, “Although we regret the loss of this contract, I am pleased we have been able to close the matter with the Crown to our mutual satisfaction and now look forward to future opportunities for our products in Canada.”

Information:

Franca Gatto Communications Public Works and Government Services Canada [phone]

Andy Moorhead Deputy Managing Director E.H. Industries 011 44 125 238 6404

NEWS RELEASE

For immediate release

Date: January 23, 1996

Erratum:

The english version of the news release issued by PWGSC this morning concerning the settlement with E.H. Industries did not include a paragraph that was included in the French version.

“The total termination costs include a $68 million settlement reached earlier with Loral, the project's other prime contractor, and the $21.2 million settlement with E.H. Industries.”

The following information provides further clarification:

EH-101 total project costs

Work related on the project that included project definition, research and development and project implementation:

$154.6 million

Costs of work completed prior to termination and work in progress at the time of termination. These monies were paid out prior to termination of the contract in November 1993:

E.H. Idustries—$136.6 million Loral—$98.4 million

Cost of contract termination:

E.H. Industries—$21.2 million (announced today) Loral—$67.5 million (announced March 31, 1996)

Total—$478.3 million

PWGSC regrets the inconvenience and any confusion this may have caused. The English and French releases will be re-issued.