[Bloquez l'empire!] CDN gov't will be asked to approve $8 Billion formilitary 'wish list'

[mary foster]

O'Connor has $8B military 'wish list'
New cargo jets a top priority for Defence Minister, sources say

Chris Wattie
National Post

Monday, May 29, 2006

The federal government will be asked this week to approve a
multi-billion-dollar "wish list" of equipment purchases for the Canadian
Forces, including new transport aircraft, helicopters, long-overdue trucks
for the army and multi-purpose troop transport and supply ships for the
navy.

Defence sources say Gordon O'Connor, the Defence Minister, will make a pitch
to a Cabinet committee tomorrow for six major projects worth more than
$8-billion.

The Minister will ask the priorities and planning committee to approve the
purchase of a long list of equipment, much of it on the drawing board for
years, military and industry sources told the National Post.

At the top of Mr. O'Connor's list will be four new C-17 Globemaster cargo
jets, which the sources said would be bought directly from the U.S.
manufacturer, Boeing, in a "sole source" acquisition.

The government will also be asked to approve the purchase of 17 tactical
transports -- smaller, propeller-driven aircraft that can land troops or
cargo in remote, rough airstrips. The likely winner of that contract will be
the C-130J, the latest model of the venerable Hercules now in service with
the Canadian air force.

Mr. O'Connor is also proposing to buy as many as 20 new heavy-lift
helicopters for the army and a total of 18 new search-and-rescue planes.

The army is to get a replacement for its 24-year-old logistics trucks, while
the navy will get approval for its three new joint-support ships, a
combination troopship and resupply vessel due to be built over the next five
years, the sources said.

Defence analysts said the ambitious purchasing program makes good sense both
militarily and politically -- if Mr. O'Connor can get the support of Stephen
Harper, the Prime Minister.

"It's politically saleable, because the Canadian Forces need this stuff and
have needed it for some time," said David Rudd of the Canadian Institute of
Strategic Studies. "The question is whether or not the Prime Minister will
back him on this."

Mr. Rudd said the Defence Minister could face resistance from Cabinet
because of the large price tag attached to the proposed purchases and his
oft-stated preference to buy military equipment "off the rack" from foreign
suppliers rather than funnelling all or part of the spending through
Canadian firms.

"There is going to be some 'push back' from other Cabinet ministers who've
seen their budgets frozen," he said. "And there will be pressure from some
quarters ... to buy Canadian.

"But it will be difficult for the Opposition to make much hay out of any of
these projects."

Finding the money for all this new equipment will be made all the more easy
by the recent rise in the Canadian dollar and changes to the way the
$14.8-billion defence budget is calculated.

Brian MacDonald, an analyst with the Conference of Defence Associations,
said the Conservative government has switched to accrual accounting, a
bookkeeping method that stretches large purchases such as defence
expenditures over a number of years instead of including them "up front" in
the defence budget when they are ordered.

That means that even a bill of more than $8-billion for the new equipment
can be squeezed into the relatively modest increase that this year's federal
budget allocated to the Department of National Defence, he said.

But until the projects are approved by Cabinet, there is no way of knowing
for sure how much they will cost, Mr. MacDonald said. "You're really looking
at a whole bunch of numbers," he said.

"What will it all eventually cost? Nobody knows the answer to that
question."

Mr. O'Connor declined repeated requests for an interview on the proposed new
purchases or the total bill for the new equipment.

However, according to estimates by industry and defence analysts the new
spending would easily top $8-billion, once parts and services for the new
aircraft, ships and vehicles are included.

Some of the proposed purchases have already been outlined in past budgets,
such as the new search-and-rescue planes ($1.3-billion) or the joint-support
ships ($2.1-billion).

The C-17 Globemaster cargo jets cost about $200-million each, or a total of
$1.6-billion for all four aircraft and the required servicing support, while
17 new Hercules transports would sell for about $75-million apiece, or a
total of $2.4-billion.

Heavy-lift helicopters would cost approximately $40- to $50-million each,
driving the total cost for 20 such aircraft to nearly $2-billion with
support costs included.

No estimates were available for the cost of replacing the army's 2,700
Medium Logistic Vehicle Wheeled (MLVW), a five-tonne transport truck.

Staff officers at National Defence Headquarters in Ottawa have spent the
past three months drawing up the list spending priorities for the new
government.

However, many other projects have been pushed back for a year or longer,
including a plan floated under the Liberal government to purchase one or
more large amphibious ships to carry troops, aircraft and equipment to
trouble spots around the globe.

Some Conservative policies have also been put on hold, including plans to
buy icebreakers for the navy and station rapid reaction army units at remote
bases across the country, such as Goose Bay, Labrador.

cwattie at nationalpost.com
© National Post 2006

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