Laurie Hawn

[Business of Supply, November 18th, 2010]

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.

[Business of Supply, November 18th, 2010]

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.

[Business of Supply, November 18th, 2010]

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.

[Business of Supply, November 18th, 2010]

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.

[Business of Supply, November 18th, 2010]

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.

[Business of Supply, November 18th, 2010]

You have no idea what you're talking about.

[Business of Supply, November 18th, 2010]

Mr. Speaker, it is hard to know how to react to that. If she considers the equipment that the Canadian Forces need to do their job and protect Canadians at home and people around the world as pretty little toys, then I guess she probably thinks they are little tin soldiers or something too. That is pretty offensive.

I am speaking next. I would invite her to stick around and listen because I will answer a bunch of those questions. She was right about one thing. She has limited knowledge of what she speaks.

However, I will ask her one question. She talks about the capabilities of the Bear, about which she obviously knows nothing. Old airplanes can have some pretty modern stuff inside them. What is her knowledge of the electronic capabilities of the Bear aircraft?

Does she think we should allow Russian airplanes, or any other airplane, to fly around in our air space of interest without our taking action to see who they are? Does she think they should just be able to wander at random through our air space, as she seems to imply?

[Business of Supply, November 18th, 2010]

Mr. Speaker, I did not catch all of my colleague's comments but I did get the last few minutes. I do have a question for him.

The member talked about the former assistant deputy minister of materiel, who has not been in that job for over five years. He may be historically accurate in what he was talking about back then, but for many years now we have had a new assistant deputy minister of materiel who is actually working with the MOU today and not something from five years past.

We have a significant number of highly expert civilian and military people who have been examining this at the highest level of security for many years. These are people who are current with the program and current with the MOU, and not five years past. The same kind of process is taking place in at least nine other highly advanced countries.

If we are going to hire these people and pay them all this money for their expertise but ignore them and listen to somebody who is five years out of date simply because it fits a partisan political position, what is the point?

[Business of Supply, November 18th, 2010]

Mr. Speaker, there are so many things and so little time. Yes, we heard from Dassault and we heard from Boeing. Do we expect people to say that they cannot meet it? Of course they will say they can. That is why we have hired and paid experts, military and civilian, over years to look at these kinds of issues. Dassault admitted that its airplane would be $50 million more expensive than the F-35. That is enough right there.

If we hire and pay these experts, military and civilian, for years and years to look at things like this, at very highly classified levels, when they give us the answer, as happened in nine other very advanced countries, and if we go through that very rigorous process and at the end of the day not listen to what they say, what is the point?

[Business of Supply, November 18th, 2010]

Mr. Speaker, I do work with my hon. colleague on the defence committee and, by and large, we have a pretty good working relationship and we get things done. However, I do need to challenge him on a couple of things.

First, I want it to be clear that the amount of money we are talking about really starts in 2015-16, not today, and it is spread over a period of 20 years.

The $3.2 billion that members keep talking about that we would save if we had a competition is a complete fantasy number pulled out of the air by someone who used to be the ADM of materiel five years ago, rather than listening to the person who has been the ADM of materiel for the past five years who is currently working with the MOU and all the allies and, frankly, has much more credibility.

The member also talked about sole sourcing. In 2004, we were not at war like we are today. Arguably, we were at war with Volkswagen jeeps, which is the kind of equipment that the Paul Martin government and the Chrétien government before him had equipped us with. When a country is at war, there is a certain urgency for equipment requirements for safety on the battlefield. That is what we have been providing and that is one of the reasons for sole sourcing.

I would like to challenge the member on that $3.2 billion. Where is the justification for that, other than somebody's opinion?