National Defence committee  Yes, sir. It is interesting that Mr. Lajeunesse and Mr. Myers recently wrote to members representing the Canadian Manufacturers & Exporters Association and the Aerospace Industries Association. It was interesting. One paragraph says: By contrast, the JSF project allows Canadian suppliers to develop state-of-the-art technologies as part of the global supply chains of Lockheed Martin and other multinational aerospace contractors.

National Defence committee  That's wrong, sir.

National Defence committee  A fairly large number. They're starting up their first operational squadron next year. Nineteen are flying, sir.

National Defence committee  The statement of requirement for the next-generation fighter has been worked on over the past year. Public Works and Government Services had that in a final form last spring, because we had to consult with them on the question of whether or not to proceed under the PMOU or do a competition.

National Defence committee  It's astonishing. They're not even in the same league.

National Defence committee  My understanding, sir, is that in 2016 dollars, our F-18s would have cost $62 million. In 2016 dollars we expect an average price of about $72 million or $73 million for an F-35.

National Defence committee  Yes, sir, it's a fair statement. In fact, I think the British government made a statement today to the effect that they are only retaining a small portion of their Tornado fleet, which they have to upgrade, and F-35s, and they will now buy the carrier variant for the joint strike fighter instead of the vertical take off and landing variant, and they'll put flat decks on their two carriers.

National Defence committee  Yes, sir. I run the materiel group. I would have known if we had detailed plans to run a competition, but we had to do our due diligence in terms of cost, operational performance, the total cost of ownership, and, obviously, with Industry Canada, the industrial implications. But if it had turned out that we had serious concerns about operational performance or cost or other things, it would have been necessary to seriously consider a competition.

National Defence committee  Yes, sir, absolutely. I think potential adversaries...whether it's deployed internationally or continentally or in defence of Canada, when they know that Canada operates that capability and that air power is there and they don't know where it is, they don't know what it's going to do...they could be engaged and never know they'd been engaged until the last second.

National Defence committee  Frankly, I'm unaware of the detailed intelligence knowledge that you have of the Su-35. I'd be actually quite surprised that it's that technologically advanced. The F-35's capability is quite amazing, but that information is highly classified. The F-22 is strictly an air superiority aircraft--air to air.

National Defence committee  They will buy perhaps 80 over time, and the price will go down. The foreign military sales program with the U.S. government effectively results in a country being told that's the government-to-government price. But they can also work with a company like Lockheed Martin, or another company, to negotiate offsets separately from the government-to-government agreement.

National Defence committee  There are two things. First of all, in the department, we were engaged in a very detailed review of the options and the cost of those options from a performance point of view, a cost point of view, and an industrial point of view, working with our colleagues at Public Works and Industry Canada.

National Defence committee  Yes, absolutely.

National Defence committee  Thank you. The MOU stipulates in section 7.6 that “No requirement will be imposed by any Participant for work sharing or other industrial or commercial compensation”--IRBs or offsets--“in connection with this MOU”. That precludes MOU participants from demanding industrial offsets.

National Defence committee  But, sir, the second portion of that refers to the ability of Canadian companies to continue to partner with and have business relationships with U.S. firms. I give you the example of Héroux-Devtek. It has bought several American firms that build the big machined bulkheads for joint strike fighters.