Category Archives: Trade

Mark Collins – World Defence Spending 2015/2016

A tweet–US$, Canada steady at no. 15 (what do we buy–only part of defence spending–for it?):

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – We Have a Winner! RCAF Fixed-Wing SAR: 16 Airbus C295W for $2.4B

Initial cost, after a twelve-year process! Further to this post,

New RCAF Fixed-Wing SAR Plane Choice Real Soon?

a deal at long-last done (note at end of post additional refueling, transport roles which the government does not mention for some reason):

Airbus chosen to build Canada’s new search planes, ending 12-year procurement odyssey
16 Airbus C-295 aircraft announced by ministers, head of air force at CFB Trenton

The Canadian military will receive new fixed-wing search and rescue planes in a two-step procurement that will cost taxpayers $4.7 billion over the next two decades.

The selection of European defence giant Airbus end a 12-year, frustrating odyssey that spans three governments.

Defence Minister Harjit Sajjan, Public Works Minister Judy Foote and the Commander of the Royal Canadian Air Force, Lt.-Gen. Michael Hood, announced the deal at the country’s largest military air base in Trenton, Ont., which is also one of the principal search and rescue stations.

Conservatives made ‘political’ decision to cut military flying time in 2014, Laurie Hawn says

The first phase — with a pricetag of $2.4 billion — involves the purchase of 16 C-295W aircraft modified for search and rescue missions.

A training simulator, to be located in Comox, B.C., and 11 years of in-service support and maintenance [with a Canadian company, see below] will be included.

An additional in-service support program will have to be negotiated with Airbus. That cost is estimated at $2.3 billion.

Taken together, the combined price tag is considerably more than the $3.8 billion approved by the former Conservative government in 2011, and higher still from the original $3.1 billion price tag affixed to the plan when Paul Martin’s government first announced it in 2004.

The turbo-prop C-295 is in use in 15 countries, mostly for military transport but also for maritime patrol and anti-submarine warfare…

It was Paul Martin’s Liberal government that started the competition in 2004 [as a “major priority”! see top right here]…

…the first planes are expected to arrive in 2019 and the final delivery will take place in 2022 — 18 years after they were originally ordered [emphasis added, but after procurement intention announced–no order in 2004].

It cannot have hurt Airbus that the C295W has Pratt & Whitney Canada engines whereas the main competitor, the Leonardo-Finmeccanica (company’s new name) C-27J, does not.

Image:

c295w.jpg
Canada Selects Airbus C295W for Fixed-Wing Search and Rescue
Photo Credit: Hand-out / Airbus Defence and Space

From the government’s new release–jobs! jobs! jobs!


Following a rigorous, open and transparent competition, the Government of Canada today announced the awarding of a contract for $2.4 billion to Airbus Defence and Space to replace Canada’s fleets of CC115 Buffalo and legacy CC130 Hercules aircraft. The company has partnered with Newfoundland-based PAL Aerospace for maintenance and support services [emphasis added, PAL website here].The contract will provide a complete, modern and technologically advanced search and rescue solution, including maintenance and support services up to 2043.

As part of this contract, Airbus will provide 16 C295W aircraft, equipped with advanced technology systems, to support Canada’s search and rescue operations, construct a new simulator-equipped training centre in Comox, British Columbia, and provide ongoing maintenance and support services. The contract also includes options to extend the maintenance and support services for an additional 15 years. Should Canada choose to exercise these additional options, the contract value would increase to $4.7 billion.

The new technology being acquired includes state-of-the-art communications systems that will allow search and rescue personnel to share real-time information with partners on the ground. Using integrated sensors, crews will be able to locate persons or objects, such as downed aircraft, from more than 40 kilometres away, even in low-light conditions.

As part of its proposal Airbus Defence and Space has committed to make investments in the Canadian economy equal to the value of the contract, creating and maintaining good middle class jobs. Through Canada’s Industrial and Technological Benefits Policy [website here], the company will incorporate many of Canada’s leading aerospace firms into its global supply chain and establish strategic partnerships with Canadian companies to ensure the aircraft are supported in Canada by Canadians. This work will help grow Canada’s innovative and strong aerospace sector, while providing well-paying jobs for the middle class and those working hard to join it [emphasis added, last phrase is now really hurl-worthy]…

Related Products

Backgrounder: A modern and effective search and rescue solution for the Canadian Armed Forces 
Backgrounder: Fixed-wing search and rescue aircraft procurement process
Infographic: Procuring Canada’s future fixed-wing search and rescue aircraft 
Infographic: Capability

Associated Links

Public Services and Procurement Canada: Fixed-Wing Search and Rescue Aircraft Replacement 
National Defence: Investing in Equipment 
Royal Canadian Air Force:  Search and Rescue Search and Rescue in Canada: A shared responsibility
Innovation, Science and Economic Development Canada: Industrial and Technological Benefits

And from the Airbus news release–note additional roles near end:


The C295W features substantial Canadian content. Every C295 is powered by Pratt & Whitney Canada engines, pilots and technicians will be trained at a new facility developed by CAE in Comox, BC, and the electro-optical systems for FWSAR will be provided by L3 Wescam of Burlington, ON. In-service support for the life of the program will be provided by AirPro, a joint venture between Airbus Defence and Space and PAL Aerospace of St John’s, Newfoundland. In-service support will be conducted by Canadians in Canada.

[Simon] Jacques [Head of Airbus Defence and Space in Canada] added: “About 20 percent of the aircraft is already Canadian, meaning that it already serves as a global ambassador for the skills, innovation and expertise of Canadians. Now it will get to serve them directly.”

Canada’s C295Ws will be delivered starting three years after contract award. In service, they will join five Airbus CC-150 aircraft used in the air-to-air refueling, transport [emphasis added–why doesn’t the government mention those subsidiary roles?], and VIP travel roles.

When the contract is finalized, 185 C295s will have been ordered by 25 countries…

Something else to keep in mind–the RCAF’s 32 older-model Hercules are being followed-on by just 17 new C-130Js, so the RCAF has always wanted the new SAR aircraft to be able to double when necessary as a tactical transport in order to keep that capability up (see e.g. 424 Transport and Rescue Squadron):


Air force Col. Dave Burt, director of aerospace requirements, said at the time [2004] that search and rescue was the priority, adding that the service wanted “something that is smaller and (more) cost efficient than a Hercules but still has some of the transport-type qualities that a Hercules has.”

Although the aircraft would be used for search and rescue, there may be room to have them perform a secondary role of airlift if that is deemed feasible, Burt added…

Something that has not been mentioned for years for no good reason that I can understand.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins- Canadian Government Averting Oil Pipeline Heartbreak? Two “Yes”, One “No”

Further to this post,

British Columbia/Alberta Hydrocarbon Heartbreak Update: Good News, Bad News

the Liberals are walking a fine environment/economy tightrope and it remains to see when (if?) something actually gets built–an opinion piece at the Globe and Mail’s business section:

Canadians about to see yet again that approvals don’t end pipeline battles

If there’s one thing that’s become clear over the past decade of pipeline battles, it’s that approval doesn’t beget acceptance. Canadians are about to get more proof.

For those executives and politicians with big dreams of sending batches upon batches of heavy Canadian crude oil to the Pacific and onward to Asian markets, that’s good reason to keep any victory dances to a minimum. These fights are far from over.

Yes, with new federal approvals in hand, Kinder Morgan Canada and Enbridge Inc. can get on with the business of working through the lists of conditions they must meet before trenching rights of way to points south and west from Alberta.

Read more: Ottawa approves Trans Mountain pipeline, Line 3

Read more: Trans Mountain pipeline expansion key to expanding crude market

But the project that is now officially dead – Northern Gateway – is the most instructive as backers, opponents and governments huddle to hammer out strategies for their next moves, all while claiming the environmental and economic high ground. It was three years ago that Northern Gateway, the $7.9-billion pipeline proposed by Enbridge to ship oil sands-derived crude to Kitimat, B.C., from Alberta, won National Energy Board approval.

After a decade of planning, discussion and hearings, that proved to be not the beginning of the project’s road to construction, but the beginning of the end…

Tuesday’s [Nov. 29] approvals don’t signal clear sailing either. Battles are about to intensify for Enbridge’s Line 3 replacement and Kinder Morgan’s Trans Mountain expansion. The curve ball in the equation is the increasingly likely resurrection of Keystone XL under the administration of president-elect Donald Trump after years as a protest point.

The Trans Mountain expansion is seen as the oil patch’s best hope to get its crude to the Shangri-La known as tidewater. Today, backers say increasing pipeline capacity to the United States is all fine and good, but that long-relied-upon customer is turning into a fierce competitor as its own exports increase.

Kinder Morgan wants to use its existing right-of-way to triple the capacity to nearly 900,000 barrels a day, which would land in Burnaby, B.C., for shipment to Asia-Pacific markets. The Alberta government has been front and centre pushing for such market access, hoping for it to help jump-start its stalled economy while holding out the promise of tougher carbon restrictions.

Despite that, the wall of opposition to the expansion has been growing to include the mayors of both Burnaby and Vancouver, as well as First Nations such as the Tsleil-Waututh. Its leaders met with Natural Resources Minister Jim Carr this week to press their case that Trans Mountain should not proceed under any circumstances due to oil-spill risks that could have long-lasting impact on the coastal community. Count on busy courts. One would think Line 3 would be a breeze, given that Enbridge touted the $7.5-billion project as a safety measure – fitting out an existing route to the U.S. Midwest with all new equipment. It won NEB approval last spring, but is still hung up in the United States, where it faces opposition by environmental groups in Minnesota, including 350.org, one of the leaders of the battle against Keystone XL [website here].

Indeed, the protests and blockade of the Dakota Access pipeline have shown opposition to projects is pancontinental in scope [more here].

Government approval isn’t the end of the fight. Not even close…

Whilst at the main news section:

Ottawa’s pipeline approvals give Alberta boost, but rile critics 

Trudeau didn’t just approve Trans Mountain, he put his weight behind it

[Premier] Christy Clark says Ottawa close to meeting B.C. pipeline conditions

Then there’s still this sticky challenge:

Still room for Energy East after latest pipeline approvals: Natural Resources Minister

Earlier:

Canadian Hydrocarbon Heartbreak: Energy East Pipeline vs Quebec First Nations and Others

On verra.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – New RCAF Fixed-Wing SAR Plane Choice Real Soon?

Further to these January and February posts respectively,

RCAF Fixed-Wing SAR Bids In: No LockMart But Embraer
[links to the contending aircraft at the post]

New RCAF Fixed-Wing SAR: Evaluation of Bids Starts

it looks like we’ll have a winner (this now twelve-year old acquisition process–a “major priority” in 2004!–having been rather lost in the new fighter hoo-hah, more on that here):

Canada to take December decision on SAR aircraft -sources

Canada’s federal government is expected to take a decision in early December on new fixed-wing search-and-rescue aircraft, with Airbus Group SE’s C-295 and Leonardo Aircraft’s C-27J Spartan emerging as front-runners [as in forever], two aerospace industry sources familiar with the matter said.

The federal Treasury Board is expected on Dec. 8 to authorize the government to enter into a contract with the winning bidder for the purchase and in-service support of aircraft, a third industry source said on Thursday [Nov. 24].

All three sources spoke on condition of anonymity because the deal is not public and the timing of the Treasury Board decision could be changed.

The value and number of aircraft in the procurement have not yet been made public, a spokesman for Canada’s National Defence Department said. The value of the deal, including the acquisition and in-service support, has been estimated in media reports at about C$3 billion ($2.22 billion).

Embraer’s KC-390 is also part of the competition, but the aircraft is not expected to win because the program is still in development and Canada’s government wants an aircraft that is already certified, two of the sources said.

The Canadian government has said the SAR aircraft procurement will allow the Royal Canadian Air Force to replace its current fixed-wing fleet of six CC-115 Buffalo aircraft and 13 CC-130H Hercules aircraft that are being used in Canada for search-and-rescue missions…

Note from the end of the first link at the top of this post:

Something else to keep in mind–the RCAF’s 32 older-model Hercules are being followed-on by just 17 new C-130Js, so the RCAF has always wanted the new SAR aircraft to be able to double when necessary as a tactical transport in order to keep that capability up (see e.g. 424 Transport and Rescue Squadron):

“…
Air force Col. Dave Burt, director of aerospace requirements, said at the time [2004] that search and rescue was the priority, adding that the service wanted “something that is smaller and (more) cost efficient than a Hercules but still has some of the transport-type qualities that a Hercules has.”

Although the aircraft would be used for search and rescue, there may be room to have them perform a secondary role of airlift if that is deemed feasible, Burt added…”

Something that has not been mentioned for years for no good reason that I can understand…

And I’ll bet you dollars to Timbits–air-droppable to those in needImage result for timbits
Image result for timbits
–that the tactical transport role won’t be mentioned now.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – Chicom State-Owned Firms’ Investment in US: a Good Thing?

An American government body has its doubts–music to president-elect Trump’s ears? Might our government think very hard about what sorts of Dragon investment in Canada might come under the aegis of any future bilateral trade agreement?

U.S. panel urges ban on China state firms buying U.S. companies

U.S. lawmakers should take action to ban China’s state-owned firms from acquiring U.S. companies, a congressional panel charged with monitoring security and trade links between Washington and Beijing said on Wednesday [Nov. 16].

In its annual report to Congress [see here], the U.S.-China Economic and Security Review Commission said the Chinese Communist Party has used state-backed enterprises as the primary economic tool to advance and achieve its national security objectives.

The report recommended Congress prohibit U.S. acquisitions by such entities by changing the mandate of CFIUS, the U.S. government body that conducts security reviews of proposed acquisitions by foreign firms [website here].

“The Commission recommends Congress amend the statute authorizing the Committee on Foreign Investment in the United States (CFIUS) to bar Chinese state-owned enterprises from acquiring or otherwise gaining effective control of U.S. companies,” the report said.

CFIUS, led by the U.S. Treasury and with representatives from eight other agencies, including the departments of Defense, State and Homeland Security, now has veto power over acquisitions from foreign private and state-controlled firms if it finds that a deal would threaten U.S. national security or critical infrastructure.

If enacted, the panel’s recommendation would essentially create a blanket ban on U.S. purchases by Chinese state-owned enterprises…

One wonders if this committee established by the previous Conservative government is still active:

Foreign Investment in Canada and National Security: Pretty Secret Review

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – Davie Québec Actually Going to Supply Some Icebreakers for Coast Guard?

Further to this post,

Davie Québec Wants to Build Icebreaker for, Unload Other Vessels on, Canadian Coast Guard, Part 2

it now looks like the company (website here) has a real opening; Lord knows the CCG could use some icebreaking help–and the towing vessels might just help get oil pipelines built, note “Comments”. A government news release:

Coast Guard seeks input on potential interim options for icebreaking and towing

The federal government is seeking input from the marine industry on options for filling potential interim needs in the Canadian Coast Guard’s delivery of icebreaking services pending the arrival of new vessels being built under the National Shipbuilding Strategy (NSS).

A Request for Information (RFI) was issued today [Nov.17] by Public Services and Procurement Canada (PSPC) on behalf of the Canadian Coast Guard (CCG).

In addition to input on icebreaking services, the RFI also seeks input on bringing the Coast Guard’s capacity to tow ocean-going vessels to world-class standing as part of efforts to strengthen its marine pollution response capability [emphasis added, i.e. tankers carrying oil from any new pipeline–and see this: “Quebec shipyard pitches Liberals on oil-spill vessel after Trudeau announces $1.5B to protect coastlines”].

Industry responses to the RFI will inform CCG decisions on how best to fill the potential capability gaps and ensure continuity of service.

Quotes

“Our Government is committed to equipping the men and women of the Canadian Coast Guard with the ships they need to serve Canadians. The National Shipbuilding Strategy is a long-term approach to shipbuilding that will strengthen our economy by bringing middle class jobs and prosperity to communities across the country. Pending the arrival of new vessels being built under the Strategy, we recognize the Canadian Coast Guard may require interim solutions. We will examine these options through fair, open and transparent processes.”
The Honourable Judy Foote, Minister of Public Services and Procurement Canada…

Quick Facts
– Icebreakers are crucial to Coast Guard services, vital to the safety of mariners, the protection of coastal waters, resupply of northern communities and the orderly flow of commerce through Canadian waters that contributes more than $200 billion to the Canadian economy.
– The ability to tow ocean-going vessels in distress to safety is critical to preventing marine pollution events.[emphasis added, pipelines ditto].

Related Products

Backgrounder: RFI – Canadian Coast Guard Icebreaking and Tow Capacity

Could make real practical sense and be very good politically (Québec) as long as Irving Halifax and Seaspan Vancouver don’t lose out.

Davie has already had a win with this ship (“Project Resolve“):

Davie Shipyard’s $700M deal for navy supply ship retrofit to go ahead

And very relevant to the new RFI:

RCN, Canadian Coast Guard: Big Changes for Government’s Shipbuilding “Strategy”?

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – Trump and NAFTA, or, Pity Ontario Autos and Quebec Bombardier…

…if the president-elect notices that these industries are essentially being kept going by governments’ subsidies, with perhaps the most US political relevance, in the case of cars, to the rust-belt states that gave Mr Trump his electoral college victory.

Background:

Ontario Autos: Union Deals Made–Time for Fed Funding for Bombardier? 

Plus Québec money essentially saving Bombardier:

Bombardier on ‘brink of bankruptcy’ in 2015, CEO reveals

Quite a few significant people in Ottawa, Toronto, Montreal and Quebec City must be excreting bricks hoping that all that Canadian corporate welfare somehow escapes detection by the Trump, er, radar with his Mexican fixation.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – Irving Working with BAE Systems: Implications for RCN Canadian Surface Combatant?

Further to this post,

RFP Finally Issued for RCN Canadian Surface Combatant: “eye-watering” Details Wanted

there is something of a fishy smell to the collaboration below in terms of the CSC competition:

Irving joins UK firm on new bid worth $5.2 billion

Irving Shipbuilding [website here] has partnered with UK-based defence company BAE Systems to bid on a the Arctic Offshore Patrol Ships [more here] and Joint Support Ship [more here] In-Service Support contract, worth up to $5.2 billion.

BAE announced last week in a press release that the two companies had joined forces under the name Canadian Naval Support Ltd [BAE’s announcement here].

Irving is also responsible building the fleet of six Harry DeWolf-class AOPS, while Seaspan’s Vancouver shipyards are constructing the two Queenston-class auxiliary vessels…

BAE Systems is the the designer of the UK navy’s yet-to-be constructed fleet of frigates — the Type 26 Global Command Ship [more here]. BAE also happens to be one of 12 pre-qualified firms that have been approved to bid on a joint design and combat systems integrator for the Canadian Surface Combatant program. The firm is to expected to submit the Type 26 as an off-the-shelf design for Canada’s new fleet of warships, which will be constructed by Irving Shipbuilding, also the prime contractor.

Last summer, the government drew accusations of stacking the deck in favour of BAE Systems from industry sources after widening the criteria for the new frigate to allow designers to submit bids for ships that have already been built by other countries, as well as those on which detailed design work has commenced, making room for the Type 26.

[But from the company Nov. 4: “BAE Systems has confirmed that the first steel will be cut on the Royal Navy’s Type 26 Global Combat Ships in Glasgow in summer 2017, subject to final contract negotiations with the UK Ministry of Defence…”]

During a media briefing on the the launch of the CSC request for proposal in late October, assistant deputy minister of materiel and retired rear admiral Pat Finn defended the government’s decision to allow for ship designs that have yet to be constructed in the competition, saying that with the number of design changes that will be needed to Canadianize the ship, every bidder could be seen as offering “paper ships.”

Former navy commander and marine security analyst Ken Hansen said the new partnership between Irving and BAE is likely only partially about the support contract. If the Type 26 is being looked on favourably by insiders, as has been alleged, Hansen said the collaboration between them is a smart business move…

No flipping kidding.

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – Trump’s Victory: Trump’s Implications for Canada: Defence, NAFTA, Keystone XL, Climate Change

Four tweets:

1) Defence:

2) NAFTA:

3) Keystone XL:

4) Climate change:

Lots on the bilateral plate for our government and prime minister–and then there’s always softwood lumber, eh?

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds

Mark Collins – Spookery Today, Especially SIGINT and Cyber Stuff

The Economist focuses almost solely on the US and UK amongst Western countries (several graphics):

Special report: Espionage

Espionage

Shaken and stirred

Technology

Tinker, tailor, hacker, spy

Governance

Standard operating procedure

Edward Snowden

You’re US government property

China and Russia
[a few other countries mentioned]

Happenstance and enemy action

How to do better

The solace of the law

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds