National Defence committee  That, and because your intentions are to eventually procure the airplane, yes.

National Defence committee  That's correct.

National Defence committee  Well, the program was founded under good faith principles. There are industrial benefits that are being enjoyed by all the partners and the assumption is that there's going to be participation in the program. If at some point Canada decides not to participate, that's a Canadian decision.

National Defence committee  Because that's the way all programs are constructed.

National Defence committee  We have detailed plans. The one I mentioned for Canada has 206 projects identified today. Today, under contract, we have 54 companies and about $320-million worth of business with Lockheed Martin. That grows substantially as we get into the production rate of the program because they're making parts for airplanes.

National Defence committee  The industrial plan for the F-35 was dictated by the nine nations, including Canada, to not be an offset program. In our terms, offset and IRBs are the same. It was required to be a best-value program, but it was also required that industries in all the partner countries be allowed to compete to build the U.S. airplanes.

National Defence committee  I know Héroux-Devtek well and they do very important work for us on the F-35. One of their facilities is in Texas, but they have additional facilities here in Canada that are actively engaged in the program right now. We have a very definitized industrial plan. It has 206 different projects in it today, with more to come.

National Defence committee  We're talking about a misunderstanding or a misrepresentation by the media on the Israeli program. The Israeli program is much bigger than the first phase. It's a three-phase program, or possibly a four-phase program. The first phase is for the 20 airplanes you're referring to, but the industrial package that we've been working with Israel on covers the entire program, which is many more airplanes than 20.

National Defence committee  Yes, sir. Israel is the first country to come through a different channel, which is the foreign military sales process. They had been a monitor and a participant in the program, but not in the same category as the partner nations, for the last several years--since 2003, in fact.

National Defence committee  No, absolutely not.

National Defence committee  I can hear you.

National Defence committee  The F-35 is designed to be operated in Canada and sustained almost exclusively by Canadian industry. There may be some areas where some assistance would be required from the U.S. and from Lockheed Martin as a prime contractor. We will be operating under a performance-based environment, which means that my company, as the prime contractor, will be responsible for guaranteeing delivery of availability to the Canadian Air Force.

National Defence committee  Lockheed Martin doesn't control ITAR; the U.S. government does. Everything that we're doing inside the sustainment plan for Canada and for all the partner countries is done under the constraints of ITAR. There's not an issue there.

National Defence committee  Sir, I'm not aware of any Pentagon report that references any of the industrial values of any of our partner countries. But I repeat the best-value model: we don't give up-front guaranteed contracts, but we involve industry much earlier than has historically been done. When you extrapolate the benefits of the work already under contract for Canada, and you add to it the strategically sourced work that we've already identified for Canada, this is all work that is Canada's today but is Canada's to hold on to and perform to, and the value of that work is at the value of the procurement contract for the airplanes.

National Defence committee  The cost of the airplane is a complex factor, because you need to look at the cost of building infrastructure and the cost of sustainment. We're just talking about the costs of the airplane. They tend to come down a cost curve, which reduces with time and with volume. Today, all nine nations have given us firm planning figures for their production ramp rates and for the production volumes we're going to experience over the next few years.