Procurement

Strong, Secure, Engaged Progress (including the impact of COVID-19 on procurement)

  • Launched in 2017, Strong, Secure, Engaged continues to be National Defence’s guiding strategy for responding effectively to a changing world.
  • SSE aims to ensure that the Canadian Armed Forces are a modern, capable, combat-ready military that can keep Canada secure and contribute to a more peaceful world.
  • That is why we remain committed to the significant and strategic long-term investments and projects identified in Canada’s defence policy.
  • In fact, since 2017, 75% of the policy’s capital projects are in the implementation phase, near completion, or completed.
  • Despite the impact of COVID-19 on supply chains, we continue to deliver on major procurement projects, including new ships, new aircraft, and new vehicles for the Canadian Armed Forces.

If pressed on the PBO report on SSE progress:

  • We are fully committed to openness, transparency, and accountability to Parliament and appreciate the important work of the Parliamentary Budget Officer.
  • We have adjusted spending as project schedules and timelines are refined and lessons are learned.
  • As we continue to advance and deliver on all SSE projects flexibility in our funding model will allow us redistribute funds effectively.
  • We will regularly update the Parliamentary Budget Officer as we move forward with our Defence Capital projects.

If pressed on the impact of COVID-19 on procurement:

  • COVID-19 has had a significant impact on the procurement process and defence industry.
  • While progress has been made to mitigate and adapt, new challenges have developed and continue to affect a number of elements involved in military procurement.
  • For example, National Defence is currently assessing the schedule and cost impacts of COVID-19 on procurement, including on:
    • Production;
    • Skilled labour shortages; and,
    • Supply chains, which impact availability and delivery of parts and materiel.
  • National Defence will continue to press ahead on the timely delivery of Strong, Secure, Engaged in order to procure the best equipment for our members at the best value for taxpayers.

Key Facts

  • Defence Spending: Through Strong, Secure, Engaged, National Defence committed to increasing defence spending by 70% over ten years.
    • Canada is forecasted to spend 1.36% of GDP on defence in Fiscal Year 2021-22.
    • Canada’s forecasted defence spending will increase to 1.43% by 2024. The recent fluctuations are almost exclusively the result of the economic impacts of COVID-19.
    • Canada is the 6th largest contributor to NATO’s commonly funded budget, in comparison to other NATO members.
    • Canada is forecasted to spend 17.7% of defence spending on major equipment in 2021-2022, and to surpass the 20% NATO threshold in 2023-2024.
  • People: In 2021-2022 (as of December 31, 2021) 5,390 individuals joined the Regular Force and Primary Reserve, 16.7% of whom were women.
    • 2020-2021 intake: 4,262 individuals.
    • 2019-2020 intake: 10,270 individuals.
  • National Defence provides bi-annual updates (information and data) to the Parliamentary Budget Officer on the progress of projects under Strong, Secure, and Engaged.

Naval Procurement

  • Naval ships play critical roles in protecting Canada’s maritime domain, including our Arctic waters, and in contributing to international peace and security.
  • That is why we are undertaking the largest fleet modernization in decades which will include Arctic and Offshore Patrol Ships, Canadian Surface Combatants, and Joint Support Ships.
  • National Defence continues to advance these projects as it navigates the impacts of the COVID-19 pandemic on our shipyards and suppliers.
  • For example, we have already accepted delivery of two Arctic and Offshore Patrol Ships with a third to come shortly.
  • Through these projects we will help revitalize the Canadian shipbuilding industry, creating and sustaining tens of thousands of jobs across Canada.

If pressed on delayed procurement projects:

  • COVID 19 has had a significant impact on the procurement process and defence industry.
  • But new challenges continue to affect a number of elements involved in military procurement.
  • That is why National Defence is constantly analyzing and assessing the situation in collaboration with shipyards and partners.
  • We are adjusting spending as timelines are refined and valuable lessons are learned.

If pressed on allied involvement in the development of the Canadian Surface Combatant:

  • We are working closely with industry and allies to find efficiencies and best practices.
  • In fact, we meet with allies regularly to compare lessons learned.
  • Thanks to this collaboration we are able to get a clearer idea of how best to move forward.

Key Facts

Canadian Surface Combatant (CSC):

  • Estimated Budget: $56 - $60 billion
  • TimelineFootnote *: First delivery in early 2030s, last ship delivery in late 2040s
  • Economic benefits: This project is estimated to create or maintain more than 10,000 Canadian jobs throughout the 25-year construction period.

Arctic and Offshore Patrol Ships (AOPS):

  • Estimated budget: $4.3 billion
  • TimelineFootnote *: Delivery of all six ships by 2025
  • Economic Benefits: Building ships at Irving Shipbuilding’s Halifax Shipyard supports more than 2,000 direct jobs annually at the shipyard over the next few years.

Joint Support Ship (JSS):

  • Estimated budget: $4.1 billion
  • TimelineFootnote *:
    • Joint Support Ship 1: Cut steel: 2018; Planned delivery: 2023Footnote *
    • Joint Support Ship 2: Cut steel: 2022Footnote *; Planned delivery: 2025Footnote *
  • Economic Benefits: The Joint Support Ships program will sustain 3,900 jobs in the Canadian marine industry while the ships are under construction including more than 1,000 at Seaspan.

Canadian Surface Combatant (CSC)

  • Naval combat ships are critical for defending Canadian waters, and contribute to naval diplomacy and international security.
  • That is why National Defence is procuring 15 new Canadian Surface Combat (CSC) ships for the Royal Canadian Navy.
  • These ships will be capable of operating independently, alongside our allies and partners, and will deliver the combat power to meet future threats at sea and in coastal environments.
  • National Defence is working with industry to finalize the selected ship design and we expect to cut steel on the first ship in the 2024 timeframe, with anticipated delivery in the early-2030s.
  • This project will promote investments in innovation, supplier development, and will create export opportunities with a focus on cyber security, clean technology, and the marine sector. 

If pressed on delayed procurement projects:

  • COVID 19 has had a significant impact on the procurement process and defence industry.
  • But new challenges continue to affect a number of elements involved in military procurement.
  • That is why National Defence is constantly analyzing and assessing the situation in collaboration with shipyards and partners.
  • We are adjusting spending as timelines are refined and valuable lessons are learned.

If pressed on allied involvement in the development of the Canadian Surface Combatant:

  • We are working closely with industry and allies to find efficiencies and best practices.
  • In fact, we meet with allies regularly to compare lessons learned.
  • Thanks to this collaboration we are able to get a clearer idea of how best to move forward.

Key Facts

  • Budget: Estimated between $56-60B.
  • Timeline:
    • 2024: Construction is anticipated to begin.
    • 2030-2033: Anticipated first delivery.
    • Late 2040s: Anticipated last delivery. 
  • Impacts of COVID-19: All work related to the CSC project has continued to progress on the basis of alternate work arrangements where required.
  • Economic benefits:
    • More than 10,000 jobs over the 25 year build period.
    • Generating at least $31B in GDP.
  • GBA +: Canadian Surface Combatant ships will be specially designed to ensure equality and accommodation of gender, cultural and religious minorities.
    • Berths, wash places, bathrooms, medical facilities, and off-duty areas will be designed to accommodate all genders and promote privacy;
    • Flexible spaces will be included to allow for religious and spiritual accommodation; and,
    • Integrated Wi-Fi will facilitate crew communications with families back home.
  • Indigenous relations: Under the National Shipbuilding Strategy, Irving Shipbuilding Inc. is leading several initiatives, including:
    • The Pathways to Shipbuilding class for Indigenous Students program offers classes for Indigenous students in Pipe Trades, and employment for 15 qualifying graduates as registered apprentices. 
    • The Nova Scotia Community College Irving Shipbuilding Centre of Excellence aims to foster job training and apprenticeships for Indigenous Canadians, visible minorities, and underrepresented groups in shipbuilding.

Joint Support Ships (JSS)

  • Canada’s Joint Support Ships will provide crucial at sea replenishment capabilities and will be a major addition to the Royal Canadian Navy fleet.
  • The two new Joint Support Ships will have standard military capabilities, enabling the Navy to defend Canada and contribute to international peace and security.
  • These ships will also provide the Royal Canadian Navy and Allies with essential supplies and fuel while they are deployed around the world, and provide protection in high-threat environments.
  • Despite the impact of COVID-19 on supply chains, construction on the first ship remains underway, while the construction timeline of the second ship is currently being assessed. 
  • This project will directly benefit Canadians by sustaining 3,900 jobs and providing $2.4 billion of investment into the Canadian economy.

If pressed on delayed procurement projects:

  • COVID 19 has had a significant impact on the procurement process and defence industry.
  • But new challenges continue to affect a number of elements involved in military procurement.
  • That is why National Defence is constantly analyzing and assessing the situation in collaboration with shipyards and partners.
  • We are adjusting spending as timelines are refined and valuable lessons are learned.

If pressed on the interim solution (MV Asterix):

  • The Asterix is an interim solution while the Joint Support Ships are built.
  • While the Asterix is not a long-term solution, it ensures that the Royal Canadian Navy’s effectiveness and readiness is not compromised.

Key Facts

  • Budget: Up to $4.1B.
    • $3.1B used to purchase the ships and initial spares.
    • $1.0B will be used for supporting costs.
    • The impact of COVID-19 on the overall budget is currently under review.
    • Parliamentary Budget Officer estimate: $ 4.1B.
  • National Defence is assessing the schedule and cost impacts of COVID-19 on procurement, including:
    • COVID-19 related production impacts;
    • Skilled labour shortages; and,
    • Supply chain issues impacting availability and delivery of parts and materiel.
  • Timeline:
    • Schedules are being assessed in light of COVID impacts.
    • Cut steel on the second Joint Support Ship is currently under review.
    • Planned delivery date of the first Joint Support Ship is currently under review.
    • Planned delivery date for the second Joint Support Ship is currently under review.
  • GBA+: The Joint Support Ships were designed specifically to:
    • Accommodate a mixed-gender crew by including: gender-inclusive toilets and wash places; private showers and changing areas; chair heights and sightlines;
    • Provide Wi-Fi to facilitate crew communications with families back home; and,
    • Include modern fitness facilities, a library, and a computer lab.

Arctic And Offshore Patrol Ships (AOPS)

  • Arctic and Offshore Patrol Ships (AOPS) are critical to increasing Canadian presence in the Arctic and supporting Canadian sovereignty.
  • National Defence is making major progress on this procurement project: one ship is already operational, a second has been accepted, and we anticipate delivery of the remaining four by 2025.
  • In fact, the HMCS Harry DeWolf recently completed a circumnavigation of North America which included a transit of the entire Northwest Passage, the first Royal Canadian Navy ship to do so since 1954.
  • National Defence recognizes the importance of working closely with Indigenous and Northern communities; each ship will be affiliated with an Inuit region to build strong ties with these remote communities.
  • With a budget of up to $4.3 billion, this project benefits the Canadian economy by sustaining 2,000 jobs annually.

Key Facts

  • Budget: Up to $4.3B.
  • Timeline:
    • July 31, 2020: The first AOPS vessel was delivered. 
    • 2022: Delivery target for the third ship. First operational deployment of HMCS Margaret Brooke, joining the HMCS Harry DeWolf as part of Operation NANOOK.
    • Summer 2022: Production of the sixth and final ship for the RCN is expected to begin.
    • 2025: Delivery target for the final ship.
  • COVID-19 impacts: Workforce availability, workplace efficiency, and global supply chains. The full impact of the pandemic on the project timeline is being assessed.
  • Indigenous Relations: Recently, HMCS Harry DeWolf visited 5 communities in Nunavut. In each of the communities HMCS Harry DeWolf:
    • Raised awareness of affiliation;
    • Conducted community engagements;
    • Held leadership discussions with senior Hamlet Administration Officers and Elders; and,
    • Conducted ship tours.
  • GBA+: The AOPS were designed to accommodate a mixed-gender crew:
    • Reduced cabin occupancy will facilitate a mix-gendered crew, create privacy, and promote greater comfort;
    • Flexible use spaces will accommodate various spiritual practices and promote welfare and team cohesion; and,
    • Integrated Wi-Fi will facilitate crew communications with families back home.

Victoria-Class Modernization Project

  • Victoria-class submarines are among Canada’s most strategic assets for conducting surveillance of Canadian, international, and near Arctic waters, while also supporting allies.
  • To ensure these important vessels can operate into the 2030s, National Defence is currently undergoing a modernization of Canada’s fleet of four Victoria-class submarines.
  • This modernization will improve submarine living and deployment conditions, joint force capability with onshore operations, and ensure survivability against future threats.
  • The improvement of living conditions will also take into account gender-based considerations for privacy and functionality in various areas of the submarines.
  • This extensive project is valued at up to $1.0 billion and will benefit Canadian industrial and technological sectors and provide robust economic benefits for Canada.

If pressed on AUKUS alliance:

  • Canada maintains strong military relations and intelligence sharing agreements with AUKUS countries, regardless of the alliance.
  • As a Pacific nation, Canada will continue to play an active role in the region, and maintain a persistent presence to support peace, security, and Canadian interests in the region.

Key Facts

  • Timeline:
    • 2022: First modernization start date.
    • 2033: Full fleet modernized and operational.
  • Fleet Status:
    • HMCS Victoria is undergoing routine maintenance prior to entering into a planned extended maintenance period in mid-2022.
    • HMCS Windsor is undergoing routine maintenance that is expected to be complete by summer 2022.
    • HMCS Corner Brook is completing Harbour Acceptance Trials and will return to sea this year, 2022.
    • HMCS Chicoutimi is in a work period and will return to sea in 2023.
  • Recent Submarine Force activities include:
    • HMCS Windsor participated in Cutlass Fury 21, a Canadian-led, multinational exercise in the North Atlantic to improve interoperability with the United States and France.
    • HMCS Victoria participated in two exercises in 2021 alongside other RCN vessels and Maritime Patrol Aircraft.
    • Total submarine days at sea in 2021: 162 (72 days for HMCS Windsor and 90 days for HMCS Victoria).
  • Economic benefits:
    • Work to install the acquired equipment will be conducted by Canadian industry in Canada. 
    • The maintenance and modernization project will support jobs across Canada, both at shipyards and through supply chains.
    • Supply chains for equipment will also provide opportunities for Canadian small and medium sized businesses.
  • GBA+: New equipment will enhance accessibility for crew members, including improvements in both privacy and functionality of:
    • Sleeping areas;
    • Wash places (including gender-neutral washrooms); and,
    • Dining/social areas.

Future Fighter Capability Project (FFCP)

  • A modern fighter aircraft fleet is vital to protecting North American airspace and supporting our defence and security efforts at home and abroad.
  • That is why this Government launched an open and transparent competition to acquire 88 new, advanced fighter aircraft.
  • The process, led by Public Service and Procurement Canada, has oversight by an independent fairness monitor and a third-party reviewer.
  • I am pleased to say that we have entered the finalization phase of the project with the top-ranked bidder: the United States government and Lockheed Martin, for the F-35 fighter jet.
  • This means the bidder must successfully demonstrate that a contract will meet our criteria such as value for money, protection against risks and delivery assurances.
  • We are confident this process will deliver the best results for the Canadian Armed Forces, while providing economic benefits for Canada.

If pressed on timelines:

  • We continue working towards awarding a contract in 2022, with delivery of the first aircraft as early as 2025.

If pressed on the procurement of CF-18 Hornet fighter aircraft:

  • National Defence is taking concrete steps to ensure that the Royal Canadian Air Force can protect North American airspace and continue to fulfil NORAD and NATO commitments.
  • National Defence continues its stringent integration process of the supplementary CF-18 (former Australian aircraft) to the current fleet.
  • All supplementary aircraft were delivered and transferred to Canada by May 2021.
  • We aim to integrate all of the supplementary aircraft into our current fleet by the end of June 2023.
  • National Defence will continue to move forward with the project as we navigate impacts of the pandemic on supply chains and availability of personnel.

Key Facts

  • Budget: $19 billion in funding has established in Strong, Secure, Engaged.
  • Announcement: On March 28, 2022, the Government of Canada announced that they will enter into the finalization phase with the top ranked bidder: the United States government and Lockheed Martin, for the F-35 fighter jet.
  • Delivery of first aircraft as early as 2025. However the delivery schedule will be determined as the finalization process progresses.
  • Fighter Squadron Facilities: To prepare for the arrival of the aircraft we have already taken steps to prepare for the construction of some of the new fleet’s facilities in Bagotville and Cold Lake by awarding two contracts to undertake infrastructure upgrades to support the delivery of these future fighters. This infrastructure will support the long-term maintenance and operation of these new aircraft and brings Canada another step closer to delivering the infrastructure our aviators need for the future.
  • GBA +: Bagotville and Cold Lake Fighter Squadron Facilities are planned to include:
    • Gender-inclusive washrooms and barrier free facilities;
    • Cultural rooms to accommodate diverse backgrounds and faiths; and
    • Lactation and nursing rooms.
  • Economic benefits: Anticipated construction of Fighter Squadron Facilities will generate over 900 jobs.
  • Indigenous relations: The infrastructure design-builders in Bagotville and Cold Lake will prepare Indigenous benefit plans to support Indigenous procurement objectives.

Strategic Airlift

  • Strategic airlift is a critical capability for the Canadian Armed Forces to conduct operations at home and abroad.
  • It is routinely used to transport personnel and cargo, including for vaccine distribution and for evacuations.
  • The Strategic Tanker Transport Capability project will augment our strategic airlift capability and enhance our ability to conduct in-flight refueling and strategic airlift operations.
  • The project is currently in its Definition Phase and we anticipate a contract to be awarded in the 2022-2023 timeframe.
  • National Defence is also exploring options to expand its strategic airlift capability and further contribute to operations at home and abroad.

Key Facts

  • Operations:
    • Operation VECTOR: The Canadian Armed Forces used strategic airlift to transport, store, and distribute COVID-19 vaccines throughout Canada between December 2020 and June 2021.
    • Operation AEGIS: In August 2021, strategic airlift aircraft safely evacuated 3,400 individuals from Afghanistan.
  • Aid to Ukraine: Strategic Airlift was used to transport all lethal and non-lethal aid to Ukraine.
  • Strategic Tanker Transport Capability Project:
    • Budget: Expected project cost between $1B and $5B.
    • Timeline:
      • Spring 2022: request for proposal.
      • 2022-2023: contract award date.
      • 2028-2029: anticipated initial operational capability.
    • Economic benefits: The Strategic Tanker Transport Capability Project qualifies under the Industrial and Technological Benefits policy, ensuring the contractor undertakes business activity in Canada equal to the value of the contract.
    • GBA+: Engagements in the areas of GBA+ and Indigenous considerations have been initiated and are being further developed for application within the scope of the Strategic Tanker Transport Capability project.

Remotely Piloted Aircraft System (RPAS)

  • The Remotely Piloted Aircraft System will provide strategic surveillance, intelligence, and precision strike capabilities critical to addressing modern security challenges.
  • This is why we are working to acquire a new medium altitude, long endurance, and armed Remotely Piloted Aircraft System.
  • This system will be integrated into a network of intelligence, surveillance, and reconnaissance systems to provide essential, near real-time information to senior leadership.
  • We anticipate awarding the contract in fiscal year 2023/24, with delivery of the first system in fiscal year 2025/26 to 2026/27.
  • This procurement process is being led by Public Service and Procurement Canada with oversight by an independent fairness monitor.

If pressed on the precision strike capabilities:

  • While this Remotely Piloted Aircraft System will possess a precision strike capability, it will only be armed when necessary for the pre-approved, assigned task.
  • At all times, employment of precision strike capability will adhere to the Law of Armed Conflict, as well as any other applicable domestic or international laws.

Key Facts

  • Remotely Piloted Aircraft Systems are not autonomous. They are piloted by qualified pilots who control and monitor the aircraft from ground control stations.
  • Budget: Between $1B and $4.99B. 
  • Current Competition Status:
    • Two qualified suppliers:
      • L3 Technologies Harris; and,
      • United States Government and General Atomics Aeronautical Systems, Inc.
  • Operating Bases: The aircraft will be stationed at 14 Wing Greenwood, Nova Scotia, and 19 Wing Comox, British Columbia. They will also be operated out of a Forward Operating Location at Yellowknife, Northwest Territories. The ground control centre will be located in the National Capital Region.
  • Economic Benefits: 
    • Qualified suppliers are required to submit a Value Proposition as part of their proposals to outline planned investments in Canadian industry and economic benefits to Canada.
    • Infrastructure will be required to support remotely piloted aircraft operating from 14 Wing Greenwood, Nova Scotia and 19 Wing Comox, British Columbia, and to support deployment of remotely piloted aircraft to Yellowknife, Northwest Territories. A ground control center will be constructed in the National Capital Region to house the personnel and ground control stations required to pilot and operate the remotely piloted aircraft systems.
  • GBA+: Infrastructure will include:
    • Gender-inclusive washrooms and barrier free facilities;
    • Cultural rooms to accommodate members of diverse backgrounds and faiths; and,
    • Nursing rooms.
  • Indigenous relations: The request for proposal requires that bidders submit an Indigenous Participation Plan, and commit up to 5% of the contract value to support Indigenous participation. Consultation with Indigenous groups will occur to support development of the Indigenous Participation Plans, and for infrastructure design and construction.

Fixed-Wing Search And Rescue (FWSAR)

  • The Canadian Armed Forces provides life-saving search and rescue services to Canadians.
  • This is why National Defence is procuring 16 Kingfisher Fixed-Wing Search and Rescue aircraft to modernize this critical capability.
  • These aircraft will provide improved search and rescue capabilities across Canada, including in the Arctic, in difficult weather conditions, and at night.
  • As of February 2022, we have accepted nine aircraft, four of which have been delivered to Canada.
  • We anticipate that all remaining aircraft will be accepted by Canada by the end of 2022.
  • To ensure life-saving search and rescue services continue uninterrupted, existing fleets will continue to be used until the transition to the new aircraft is complete.
  • Through this project, one-hundred percent of the contract will be reinvested into the Canadian economy, sustaining highly skilled jobs across Canada.

If pressed on delivery delays:

  • The aircraft’s certification effort has taken additional time as a result of the volume and complexity of the work associated with developing this new capability, as well as impacts related to COVID-19.  
  • A revised project schedule is currently being assessed.

Key Facts

  • Budget: $2.2B
  • Contractor: Airbus
  • Timeline: Ground and flight testing is currently being conducted in Spain, the United States, and Canada.
    • March 2019: The first aircraft rolled off the production line.
    • September 17, 2020: The first delivered aircraft arrived at 19 Wing Comox, BC.
    • December 23, 2021: The ninth aircraft was accepted in Spain.
    • Fall 2022: Initial operational testing and evaluation is scheduled to begin.
    • Initial operational capability had been anticipated for summer 2022, however this timeline is shifting. This delay is attributed to several factors related to the progress of the aircraft’s certification, technical considerations, and training maturity.
  • The aircraft will:
    • Detect, identify, and classify objects and people, in low light and bad weather conditions, using state-of-the-art sensors;
    • Communicate better with other search and rescue systems through modern communication, navigation, and data management tools;
    • Conduct searches across the full range of Canada’s search and rescue areas of responsibility; and,
    • Be available when needed as a result of robust in-service support, including maintenance, engineering, and training support.
  • GBA+: The Fixed-Wing Search and Rescue Training Facility in Comox will include:
    • Gender neutral washrooms that accommodate members with disabilities;
    • Nursing Rooms;
    • Cultural Rooms for prayer; and,
    • Fixed-Wing Search and Rescue equipment has been designed to accommodate all genders.
  • Indigenous relations: The Defence Team engaged with the K’òmoks First Nation in the construction of the training centre at 19 Wing Comox, British Columbia, on K’òmoks First Nation Traditional Territory.

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