Procurement

Equipping the Canadian Armed Forces

• People are at the core of everything the Canadian Armed Forces does to deliver on its mandate.
• That is why ensuring that our soldiers, sailors, and aviators are equipped with modern and effective equipment is a top priority for National Defence.
• Five of our Arctic and Offshore Patrol Ships are already in the water, with the fifth delivered in August 2024.
• We are also procuring up to 16 P-8A Poseidon, with delivery starting in 2026, which will provide us with an advanced multi-mission platform to conduct maritime and overland surveillance in defence of Canada and to support our allies.
• In July, the minister announced that Canada is investing $35.8 million to deliver 90 Light Tactical Vehicles to Canadian Army personnel deployed in Latvia under Operation REASSURANCE.
• In July, it was also announced that Canada is taking the first step towards the procurement of up to 12 conventionally-powered, under-ice capable submarines – and that Canada is launching the process to formally engage industry on this acquisition.
• This is an important step in implementing Canada's renewed vision for defence, Our North, Strong and Free (ONSAF).
• As part of ONSAF, we also made several important commitments to equip the Canadian Armed Forces with the equipment they need.
• This includes:
• $18.4 billion over 20 years to acquire a more modern, mobile, and effective tactical helicopter capability.
• $9 billion over 20 years to sustain military equipment under the National Procurement Program.
• $9.8B over 20 years to extend the life of the Halifax-Class Frigates until the delivery of the River-Class Destroyers.
• $2.7 billion over 20 years to acquire long-range missile capabilities to enable our forces to deter threats to Canada.
• $307 million over 20 years for airborne early warning aircraft that will vastly improve Canada's ability to detect, track and prioritize airborne threats sooner, and respond faster.
• We are also exploring options to acquire new All-terrain Vehicles for Arctic Mobility, Ground Based Air Defences, Long-Range Air and Sea Missiles, Modern Artillery Capabilities, and Surveillance and Strike Drones and Counter-Drone Capabilities.
• In addition, we will explore options to upgrade or replace our Light Armoured Vehicles and Main Battle Tanks.
• National Defence will continue to make these types of essential investments to support our people and deliver on operations.

Background

Armoured Combat Support Vehicles

• The Armoured Combat Support Vehicle (ACSV) will provide the Canadian Armed Forces with a new fleet of armoured and mobile vehicles to perform services such as ambulance, mobile repair and vehicle recovery services, as well as engineer support and command and control.
• Using the same platform for 8 fleet variants offers a number of advantages from an operational and a sustainment perspective; for example, it will reduce training and sustainment costs, and result in an increased availability of spare parts to enable vehicles to be repaired quickly during critical operations.
• With the Canadian Government's donation of 39 ACSVs to Ukraine in early 2023, changes were introduced to the ACSV production schedule. Instead of receiving the Troop Cargo Vehicle (TCV) variant first, the Canadian Army took delivery of the first ambulance variants on October 19, 2023. In September 2023, the Prime Minister announced that an additional 50 ACSV vehicles would be donated to Ukraine, consisting of 10 Ambulance vehicles to be redirected to Ukraine in the short-term, to be followed by 40 ACSV purpose built for Ukraine.

Arctic and Offshore Patrol Ships

• The AOPS will significantly enhance the Canadian Armed Forces (CAF) capabilities and presence in the Arctic, better enabling the Royal Canadian Navy (RCN) to assert and uphold Canada's Arctic sovereignty. The AOPS will also augment Canada's presence on the Atlantic and Pacific oceans and will conduct a wide variety of operations abroad.
• The AOPS will be able to operate in up to one meter of first-year ice, which is the ice condition experienced annually in the various waterways of the Canadian Arctic between June and October.

Our North Strong and Free (ONSAF)

Some of the measures announced as part of Canada's renewed Defence Policy include:

• $9.0 billion over 20 years to sustain military equipment under the National Procurement Program to ensure the CAF can continue to receive the critical updates necessary to preserve its ability to deploy on operations.
• $9.5 billion over 20 years to accelerate the establishment of new artillery ammunition production capacity in Canada and invest in a strategic supply of ammunition. Increased domestic production capacity will help meet the ammunition demands of Canada and our closest allies while generating skilled jobs and economic benefits for Canadian communities. It will also help replenish CAF ammunition previously donated to Ukraine.
• $18.4 billion over 20 years to acquire tactical helicopters. This will provide the CAF with the speed and airlift capacity to assert Canada's sovereignty and respond to natural disasters and emergencies throughout the country.
• $307 million over 20 years for airborne early warning aircraft that will vastly improve Canada's ability to detect, track and prioritize airborne threats sooner, and respond faster, and to better coordinate our response with the United States when required. They will allow Canada to continue making meaningful contributions to NORAD while also supporting allies and partners globally.
• $2.7 billion over 20 years to acquire long-range missile capabilities to enable our forces to deter threats to Canada from an appropriate distance and reach targets at greater ranges than our adversaries in combat.
• $9.8 billion over 20 years for the Halifax Class Life Extension to enable the continuation of the existing sustainment program which will focus on repair and replacement of degraded steel, procurement of spares for the marine and combat systems, repair and overhaul of equipment, software and hardware updates, and obsolescence management to ensure the Halifax-Class remains operationally relevant and safe to operate to meet the CAF's operational commitments.

In addition, we have committed to explore options for further investments in military capabilities:

• Ground Based Air Defences to Defend Critical Infrastructure from a diverse array of incoming airborne attacks, including drones, missiles, and artillery.
• Long-Range Air and Sea Missiles to enable our forces to deter threats to Canada from an appropriate distance and reach targets at greater ranges than our adversaries in combat.
• Modern Artillery Capabilities to significantly improve the protection of our deployed personnel by providing them with the capacity to strike enemy positions from farther away and in a greater number of directions.
• All-terrain Vehicles for Arctic Mobility to allow the military to maintain awareness in remote regions and along Canada's entire coastline, and better respond to unauthorized activity.
• Upgrade or Replace Main Battle Tanks, which continue to have a decisive effect on the modern battlefield and remain key to conducting land operations against conventional militaries with advanced capabilities.
• Upgrade or Replace Light Armoured Vehicles to replenish our fleet while also enabling industry to invest in a sustainable defence production capacity to support Canada and our NATO allies.
• Surveillance and Strike Drones and Counter-Drone Capabilities.

Responsible Principal: Assistant Deputy Minister (Materiel)

August 28, 2024

Ammunition Investments in Our North, Strong and Free

• Through our renewed defence policy, we are investing $9.5 billion over 20 years to accelerate the establishment of a new artillery ammunition production capacity in Canada and to build a strategic supply of ammunition.
• A domestic production capacity will help meet the ammunition demands of Canada and our closest Allies while creating skills, jobs, and economic benefits for Canadians.
• This will also increase the resilience of the Canadian Armed Forces by establishing a reliable Canadian supply of NATO-standard ammunition, such as 155mm artillery and 120mm tank ammunition.
• The Canadian Armed Forces will also establish a greater strategic reserve of battle-decisive munitions of air, land, and naval ammunition.
• This strategic reserve will ensure our military can sustain itself in longer, more dangerous operations, and enable sufficient ongoing training.
• In fact, Our North, Strong and Free provides greater clarity to industry on future acquisitions so that they can set up the necessary production lines.
• Taken together, these important investments will help us sustain our commitments to NORAD and NATO regardless of global capacity constraints.

If pressed on timelines for a Canadian artillery ammunition production capacity:

• National Defence has committed $19 million to date for the Canadian munitions suppliers to provide more substantive engineering plans for the ammunition production capacity enhancement.
• It is estimated that it will take 3-5 years for this new production capacity to become available.

If pressed on other procurement initiatives for ammunition:

• As part of the National Procurement Program, National Defence is authorized to immediately invest $520 million into the acquisition of ammunition and explosives over a period of five years.
• This additional funding will enable the department to address supply and demand challenges and increasing costs resulting from recent changes to the global security environment.
• In addition to new investments in domestic ammunition production, Canada has also joined NATO's Air Battle Decisive Munitions framework.
• Through this framework, Allies are working to reduce ammunition costs, accelerate deliveries, and ensure the interoperability of our stocks.

If pressed on Czech-led ammunition agreement:

• In April, it was announced that Canada is providing an additional $13 million to Czechia's ammunition initiative to procure and deliver large-caliber ammunition for Ukraine.
• This brings Canada's total contribution to the initiative to over $53 million, through which we will supply Ukraine with approximately 11,500 rounds of 155mm ammunition.
• Initial shipments were delivered in June and we anticipate the remainder to be sent in the coming months.
• We remain committed to Ukraine and ensuring they have the tools and equipment they need to defend their sovereignty and security.

Background

Munitions Supply Program (MSP)

• The Munitions Supply Program (MSP) was established by the Government of Canada in the 1970s and provides National Defence and the CAF with an efficient means of contracting large quantities of small arms and munitions for the CAF, while also encouraging the development and sustainment of a viable and competitive domestic munitions industry. Under the program, the Government of Canada maintains the capability to produce select high-volume operational and training military munitions in Canada.
• The five companies comprising the MSP are:
  • General Dynamics – Ordnance and Tactical Systems – Canada (GD-OTS-C), with three locations in Quebec, is the designated Centre of Excellence for ammunition, propellant, and explosives (AP&E).
  • Colt Canada, based in Ontario, is the Centre of Excellence for small arms.
  • IMT Defence, with three locations in Ontario, is the Centre of Excellence for the manufacturing of projectile bodies.
  • Magellan Aerospace, located in Winnipeg, is the Centre of Excellence for rockets, illumination flares, and rocket propellants.
  • HFI Pyrotechnics Inc., based in Prescott, Ontario, the Centre of Excellence for pyrotechnic technology.
• In February 2023, the Government of Canada awarded a $4.8 million (including taxes) contract to IMT Defence to increase the production capacity for the M107 variant of the 155mm ammunition projectile bodies. The production capacity has been increased as of December 2023.
• Furthermore, in March 2024, the Minister of National Defence announced that the Innovation for Defence Excellence and Security (IDEaS) program had awarded $4.4 million to GD-OTS-C and IMT Defence via program contribution agreements to fund research projects aimed at improving design and processes for the production of more modern variants of 155mm ammunition, including through automation, new materials and prototypes.
• In April 2024, as announced in Our North, Strong and Free: A Renewed Vision for Canada's Defence, the Government of Canada committed to accelerating the establishment of a new artillery ammunition production capacity to provide a reliable supply of NATO-standard ammunition to the Canadian Armed Forces and our allies. Work is underway with the companies to refine the engineering and costs for this initiative.
• The MSP companies are also working with each other to identify supply-chain issues and potential remedies and improve the production readiness of products on each company's designated product list.

Investments into Ammunition and Explosives (not MSP)

• As of 2024, National Defence and the CAF are authorized to immediately invest $520 million into the acquisition of ammunition and explosives over a period of five years as part of the inventory replenishment portion of the National Procurement (NP) Program.
• This additional funding will enable the department to address supply and demand challenges and increasing costs resulting from recent changes to the global security environment by reconstituting its ammunition and explosive inventory levels to support Force Generation training requirements both domestically and in-theatre.

NATO Air Battle Decisive Munitions (ABDM) Framework

• On April 17, 2024, on the margins of a bi-annual meeting of NATO's National Armaments Directors, Canada joined NATO's ABDM framework.
• Launched in 2014, the ABDM framework is one of NATO's multinational High Visibility Projects through which Allies aggregate their munitions and missile requirements for the entire air domain and convert them into multinational buys.
• ABDM is directly supported by the NATO Support and Procurement Agency, which has been pivotal in reducing costs and speeding up deliveries through this framework. This strengthens NATO's deterrence and defence posture and provides more options for Allies to increase their support to Ukraine.

Military Donations to Ukraine – Czech-Led Ammunition Agreement

• During a March 19, 2024 meeting of the Ukraine Defense Contact Group (UDCG), Minister Blair announced that Canada is committing over $40 million to Czechia's initiative to purchase large-caliber ammunition rounds for Ukraine.
• On April 26, 2024, during a UDCG meeting, Minister Blair announced that Canada would contribute an additional $13 million towards Czechia's initiative, bringing the total contribution to $53 million.

Responsible Principals: Assistant Deputy Minister (Materiel), Assistant Deputy Minister (Policy)

August 28, 2024

Canadian Surface Combatant

• National Defence is committed to providing the Royal Canadian Navy with next-generation warships.
• This is why we are procuring 15 Canadian Surface Combatants, known as the River-Class Destroyer.
• These warships will be built in Halifax, Nova Scotia, as part of the National Shipbuilding Strategy.
• The River-Class Destroyers are fast, maneuverable, long-endurance warships capable of conducting operations, escorting larger vessels and defending against a wide range of threats.
• Initial construction began over the summer with full production beginning on the first three ships in 2025.
• This project will reinvigorate Canadian shipbuilding by investing in Canadian innovation and supplier development.
• It will also generate at least $31 billion in GDP, as well as create and sustain more than ten thousand jobs over the next 25 years.
• We will remain transparent as we work with industry to find efficiencies, accelerate project timelines, and update costs as the design progresses, with an aim to ensuring value for taxpayer money.

If pressed on infrastructure investment:

• Shipyard upgrades will enable the production and delivery of the River-Class Destroyers, which will sustain the Royal Canadian Navy's capacity to meet Canada's defence and security requirements.
• Accordingly, the costs of the upgrades are directly attributable to the cost of building the ships.
• The decision to fund the upgrades was supported by a business case that demonstrated the upgrades will result in improvements to the build strategy and processes.

If pressed on delays and cost increases:

• We are assessing potential cost increases, mainly due to delays in the project schedule and higher than forecasted inflation.
• In Fall 2023, we received a revised cost proposal from Irving Shipbuilding Inc. for the first batch of three ships.
• The revised cost proposal is currently under review to better understand risks and savings opportunities associated with the proposal.
• We continue to make important progress, including preparations to begin full rate production on the first three ships in 2025.

Background

• The River-class destroyer will replace and update the capabilities found in both the retired Iroquois-class destroyers and the Halifax-class frigates. This single class of ship will be capable of meeting multiple threats on the open ocean and the coastal environment.
• As the future warship of the Royal Canadian Navy (RCN), the River-class destroyers must be capable of conducting a full range of military operations in high-threat environments and will upgrade and replace the capabilities of two classes of RCN ships in a single, combat-capable vessel. The new warships will be able to conduct a broad range of tasks, including:
  • Deliver decisive combat power at sea, either independently or as part of a Canadian or international task group;
  • Conduct counter-piracy, counter-terrorism, interdiction and embargo operations for medium intensity operations; and,
  • Deliver humanitarian aid, search and rescue, and law and sovereignty enforcement for regional engagements.

Project Status

• In February 2019, the Government of Canada selected the CSC design, based on the BAE Systems' Type 26 Global Combat Ship, to meet the unique operational requirements of the RCN. Irving Shipbuilding contracted Lockheed Martin Canada to provide the design and design team.
• Canada worked with Irving Shipbuilding, Lockheed Martin Canada, and their subcontractors to evolve the selected ship design and systems integration.
• On June 28, 2024, the Government of Canada unveiled the River-class destroyer and announced the beginning of construction on the production test module which will test and streamline processes, in order to implement lessons learned into the build process, and enable the start of full rate production in 2025.
• Delivery of the first ship, HMCS Fraser, is expected in the early 2030s, with the final ship expected by 2050.

Economic Benefits

• The project will promote growth of key industrial capabilities in Canada by creating investments in innovation, supplier development, and export opportunities with a focus on cyber security and the marine sector.
  • The build phase will create and/or maintain approximately 10,800 jobs annually throughout the 25-year construction period across the country.
  • The design phase of the project will create and/or maintain approximately 5,000 Canadian jobs annually across the economy. In total, this project will generate at least $40 billion in cumulative Gross Domestic Product.

Infrastructure Investment

• Irving Shipbuilding (ISI) is expanding and modifying its site and facilities at the Halifax Shipyard and supporting facilities in Dartmouth, including at Woodside Industries and Marine Fabricators.
• Canada has agreed to provide ISI with $758M excluding taxes, for infrastructure improvements to ensure that they have the capability to construct the River-Class Destroyer and to meet the delivery schedule.
• The Halifax Shipyard site expansion will include dredging, marine structures, and rock infill behind the structure creating approximately 13 acres of additional yard space. Within the shipyard, the newly expanded area is not expected to extend farther into the channel than the limits of the floating dry dock that was previously located at Halifax Shipyard. The upgrades are expected to enhance shipyard efficiency, directly contributing to the CSC build and delivery schedule.
• Infrastructure enhancements began in 2023 to support the start of CSC construction activities, which began in 2024 and will conclude by 2050.

Halifax-Class Sustainment

• The Halifax-class is a major component of the National Shipbuilding Strategy third pillar – Repair, Refit and Maintenance. Under this pillar the Government of Canada has contracts in place with the three large shipyards to execute the extensive Docking Work Periods required to sustain the class. Additionally, Defence is working with marine industry partners to implement a risk-based program for the Halifax-class to ensure they continue to operate safely until the River-class fleet is delivered.

Responsible Principals: Assistant Deputy Minister (Materiel), Royal Canadian Navy

August 22, 2024

Victoria-class Modernization Project

• As Canada has the largest coastline in the world, we recognize that underwater surveillance capability is crucial to our security and sovereignty.
• With that, the Victoria-class submarines are among Canada's most strategic assets for conducting surveillance of Canadian, international, and near-Arctic waters.
• That is why we launched the Victoria-Class Modernization Project to ensure our submarines remain operationally relevant in an evolving operating environment.
• This project will engage our domestic industry and provide opportunities for small and medium-sized Canadian businesses.
• The decision to modernize remains the most effective means to equip the Royal Canadian Navy with the increased capabilities needed to address evolving threats in the current and future operation environment.

If pressed on Canadian Patrol Submarine Project:

• We recognize Canada needs a renewed and expanded fleet of submarines to protect our sovereignty from emerging security threats.
• That is why we launched the process to begin engaging with industry regarding the procurement of up to 12 conventionally-powered, under-ice capable submarines in July, with a formal Request for Information to be posted in fall 2024.
• The procurement of these submarines is necessary to ensure the defence of our three coasts, and the federal government is looking forward to working with industry to find a partner that will deliver world-class submarines for Canada.

Background

• Our North Strong and Free committed to exploring options for renewing and expanding Canada's submarine fleet and further supports the Canadian Patrol Submarine Project, which was announced in 2022 with the remit to investigate options to replace the existing Victoria-class.
• Canadian submarines deliver a world-class, force-multiplying deterrent effect as well as an unmatched sovereign defence and security capability.
• These submarines are capable of covertly monitoring evolving situations at home and abroad.
  • At home, submarines provide critical, sovereign force protection capacity for our sea-based forces when required.
  • Abroad, these submarines can conduct "indications and warnings" and vital joint-targeting information, weapon delivery, or Special Operations Force insertion.
• The first three Victoria-class submarines were accepted into service between 2000 and 2003. The fourth submarine suffered a fire in transit to Canada, which delayed its acceptance into Royal Canadian Navy service until 2015.
• These submarines are scheduled for end of life in the 2034-2040 timeframe.
• The decision to modernize remains the most effective means of ensuring continued submarine operations for the Royal Canadian Navy into the 2030s.
• The Victoria-class Modernization Project will focus primarily on enhancing three distinct capabilities:
  • Habitability – to improve habitability and functionality of conditions onboard Victoria-class submarines.
    • These changes will be informed by GBA Plus and include improvements to the accessibility of living spaces, privacy enhancements, and the creation of gender-neutral washrooms.
  • Joint Force Capability – position the Victoria-class submarines to contribute meaningfully to joint operations ashore.
    • For example, the Acoustic Quieting Project will reduce the submarine's noise signature, thereby making the platform less likely to be detected.
    • Meanwhile, the Periscope Modernization and Flank Array Modernization Project will contribute to an increased ability to conduct intelligence, surveillance and reconnaissance missions.
  • Survivability – to ensure the survivability of the Victoria-class submarines against an evolving complex threat in an ever-changing battle space.
• The current annual maintenance cost for the four Victoria-class submarines is approximately $300-350 million per year, and is expected to remain stable.

Responsible Principals: Assistant Deputy Minister (Materiel), Royal Canadian Navy

August 26, 2024

Joint Support Ships

• National Defence is committed to procuring Joint Support Ships that will help defend Canada and contribute to international security by providing crucial at-sea replenishment capabilities.
• These ships will also have military capabilities, providing our sailors the protection they need when deployed in high-threat environments.
• Construction is underway with the delivery of the first ship forecasted for late 2025.
• National Defence continues to closely review timelines as we monitor production efficiency.
• This project will sustain over 1,000 jobs at Seaspan shipyard in British Columbia and a total of 3,900 jobs in the broader marine industry.
• Further, the construction of these ships represents a $2.4 billion investment in the Canadian economy.

If pressed on the MV Asterix

• The MV Asterix is an interim commercial solution to mitigate the capability gap while the Joint Support Ships are being built.
• Although the Asterix is fulfilling an immediate need, the ship is not equipped to conduct the full spectrum of military activities required by the Royal Canadian Navy.
• The period of service of the Asterix was extended to January 2025.

Background

• In June 2020, a $2.4 billion contract (including taxes) was awarded to Seaspan Vancouver Shipyards to progress with full-rate construction.
• The two new JSS are intended to replace the Navy's Auxiliary Oiler Replenishment vessels (AOR). They will provide at-sea support to naval task groups, limited sealift capabilities and support to operations ashore.
• The JSS are critical to the future of the RCN and constitute a vital and strategic national asset. The presence of replenishment ships increases the range and endurance of a naval task group, permitting it to remain at sea for significant periods of time without returning to port for replenishment.
• The JSS will provide Canada with a modern, task tailored, globally deployable, naval support capability that can provide support to the ships and aircraft of a naval task group at sea. They will be crewed by CAF personnel.
• The new JSS will have capabilities such as:
  • Underway support to naval task groups:
    • Re-supply of fuel, ammunition, spare parts and other supplies between ships at sea;
    • Operation and maintenance of helicopters; and
    • Task group medical and dental facilities.
• Sealift: JSS will be capable of transporting and delivering cargo both in support of task group operations and in support to operations ashore.
• Support to operations ashore: To meet a range of possibilities in an uncertain future security environment, the JSS will leverage its on-board facilities to support operations ashore, ranging from combat to humanitarian and disaster relief.
• Support to northern operations: JSS will have an Enhanced Ice capable hull designed to operate in limited Arctic waters and will be able to access the Nanasivik Naval Facility during summer navigation season.

JSS Survival Capabilities

• Equipped with systems to detect and protect against chemical, biological, radiological, and nuclear threats.
• Equipped with a full range of features and systems that enhance their survivability and allow them to fully integrate with other warships (e.g., a combat management system, multiple defensive weapons systems, an electronic support measures suite, air search radar and dual shafts for enhanced redundancy).

MV Asterix

• The MV Asterix remains an interim solution to mitigate the capability gap while the Joint Support Ships are being built.
• The period of service for the Asterix was recently extended to January 2025; however, the contract option periods provide a potential interim capability up to January 2028.

Parliamentary Budget Officer (PBO) Estimate

• In November 2020, the PBO released a fiscal analysis of the JSS project in response to a request from the House of Commons Government Operations and Estimates Committee (OGGO).
• The PBO estimated that the JSS will cost $4.1B (with taxes), which was in line with National Defence's cost estimate.

Responsible Principals: Assistant Deputy Minister (Materiel), Royal Canadian Navy

January 25, 2024