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Procurement Integrity and Reform

  • 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.
  • To address increased demands for procurement expertise, the department is closely prioritizing and focusing efforts on the most critical capabilities and procurements, such as ammunition and urgent operational requirements.
  • The Government announced additional funding in Budget 2022 to address critical gaps in the capabilities of the CAF. National Defence is authorized to make an immediate investment of $520 million, over five years, in ammunition and explosives to help sustain the CAF’s inventory.
  • Critical capabilities are also being delivered through urgent operational requirements (UOR), such as the Portable Anti-X Missile (PAXM) project, which will deliver missiles, simulators and associated support to empower the Canada-led multinational NATO enhanced Forward Presence Battle Group Latvia.
  • Further, we are working with our partners across Government, including Public Services and Procurement Canada, to improve the speed at which we deliver capabilities with the aim of reducing complexity and redundancy in our processes.
  • For example, we have applied the Risk-based Approach to Contract Approval for low-risk defence projects including the Heavy Weight Torpedo Upgrade, Naval Engineering Test Establishment, and Minor Warships and Auxiliary Vessels projects.
  • We also must work more collaboratively with our industry and Indigenous partners to ensure alignment and find realistic solutions and deliver capabilities on schedule.
  • Growing the project management and procurement workforce continues to be a priority as we move forward on the delivery of critical capabilities to the Canadian Armed Forces.
  • We will continue to make these types of investments so that our personnel in uniform are prepared and equipped to succeed on operations.

Interoperability with Allies

  • Maximizing commonality to achieve affordability and coalition interoperability are key considerations in many CAF procurements.
  • Canada cooperates closely with allies and partners including Australia, the UK and the US on the development of capabilities, interoperability standards and joint experimentation.
  • Procurement projects that have interoperability considerations include the Canadian Multi-Mission Aircraft (CMMA), Future fighter capability project (FCCP), and Strategic Tanker Transport Capability (STTC).

Procurement Integrity

  • National Defence takes seriously its responsibility as a steward of public funds and our officials follow a systematic process to ensure that the services we procure meet a capability gap or emerging requirement.
  • Within the past year, changes were made to our Procurement policy instruments and training with respect to the bid evaluation process, as well as roles and responsibilities of the evaluation team, including:
    • In Fall 2023, a new Confidentiality and Conflict of Interest Declaration in which all members of a bid evaluation team, regardless of if they are a voting member or not, must certify to uphold the confidentiality of the procurement process and declare there is no real or perceived conflict of interest (COI).
    • A contracting compliance framework and oversight program that reviews various procurement files, including professional services contracts to ensure adherence to departmental and TB procurement policies.
  • Further, the Government of Canada announced the launch of the Office of Supplier Integrity and Compliance, which will come into effect in May 2024, replacing the existing Integrity Regime.
  • This new office will provide new tools and flexibility for Public Services and Procurement Canada to respond to evolving risks to the procurement system, in a manner proportionate to the actual risks posed by suppliers of concern.

Key Facts

Procurement Ombudsmen Review of DND Procurement Practices

  • In response to observations from the Office of the Procurement Ombud’s review of DND procurement practices, DND recently hired additional resources to conduct additional Contracting Practices Reviews contracts across the Department, selected using a risk-based criteria, to ensure compliance with procurement and contracting policy.
  • These additional resources conduct deeper dive reviews of specific contracts to validate contracting practices are sound and in accordance with departmental, PSPC and TB policy.

Public Service and Procurement Canada’s Code of Conduct for Procurement

  • The Code of Conduct for Procurement (“Code”) is embedded within the terms and conditions for all DND contracts and addresses Conflict of Interest (COI). By submitting a bid, vendors warrant that no real, apparent or perceived conflict of interest exists or is likely to arise in the performance of the contract.
  • If vendors become aware of any matter that causes or may cause a conflict of interest, they must immediately disclose the matter to the contracting authority in writing.
  • The Code requires Bidders to respond to bid solicitations in an honest, fair and comprehensive manner, accurately reflect their capacity to satisfy the requirements set out in the bid solicitation and resulting contract, submit bids and enter into contracts only if they will fulfill all obligations of the Contract.
  • By submitting a bid, the Bidder is certifying that it is complying with the Code of Conduct for Procurement. Failure to comply with the Code of Conduct for Procurement may render the bid non-responsive.

Details

Streamlining Defence Procurement

  • National Defence has taken a number of concrete steps to ensure the members of the CAF get the equipment they need, when they need it, including:
    • Updating defence procurement program management processes by eliminating redundancies and improving collaboration with industry.
    • Accelerating procurement by eliminating certain requirements for low-risk, low-complexity projects.
    • Working closely with colleagues across government to implement more agile and innovative procurement approaches.
    • Investing in procurement professionals to make sure we have the expertise and capacity we need to advance projects.
    • Working with industry and other government partners on how we can move forward on sustaining operationally capable solutions for platforms. Specifically, providing National Defence with the flexibility required to rapidly integrate the latest technology developed by industry, to ensure platforms remain relevant and capable throughout their lifetime.
    • Shifting from more traditional transactional relationships with industry on in-service support, to a more partnership-focused relationship. This will ensure we work together on setting out capability roadmaps for systems that will need to be continuously updated and integrated on various platforms throughout their lifecycles. This revised process will make sure industry is part of the solution and able to help predict and rectify any obsolescence as the platform progresses, thereby reducing our need for timely modernization or upgrade projects.
  • PSPC-led Risk-Based Approach to Contract Approval enables lower complexity projects to progress through the acquisition process with fewer check points, allowing the overall program to progress towards a timely delivery of projects and capabilities.

Urgent Operational Requirement (UOR)

  • Portable Anti-X Missile (PAXM) – The PAXM systems include missiles, simulators, and associated support to empower CAF personnel deployed with the Canada-led multinational NATO enhanced Forward Presence Battle Group Latvia with training and the capability to destroy main battle tanks.
    • Request for Proposal (RFP) was issued in summer 2023, with a contract award expected before end 2023.
    • Initial Operational Capability (IOC) is expected in early 2024; while Full Operational Capability (FOC) is expected by the end of 2024.
  • Air Defence (AD) – The AD project will acquire a soldier portable Very-Short Range Air Defence System (VSHORAD) for the NATO enhanced Forward Presence Battle Group Latvia in order to defeat attack aircraft and hostile small unmanned aircraft its area of operations.
    • RFP was issued in Summer 2023.
    • Contract award is expected in early 2024.
  • Counter Uncrewed Aircraft Systems (CUAS) – The CUAS Project will provide protection measures against hostile small unmanned aircraft for CAF personnel deployed in the Operation REASSURANCE.
    • RFP was issued in Summer 2023.
    • IOC is expected in Fall 2024; while FOC is expected in Fall 2026.

Procurement Integrity

Integrity Regime

  • The Integrity Regime was introduced in 2015 as a government-wide policy-based debarment system designed to further protect the integrity of the Government of Canada’s contracts and real property transactions.
  • The current Regime is a government-wide debarment system that is designed to help ensure that the Government of Canada conducts business with ethical suppliers in Canada and abroad.
  • Under the Integrity Regime, if a supplier is charged or convicted of an offence listed in the Ineligibility and Suspension Policy, the supplier may be suspended and determined to be ineligible to be awarded a contract. A suspension or determination of ineligibility would also be triggered by a foreign offence that is similar to one of the listed offences.
  • The new Office of Supplier Integrity and Compliance program – announced March 2024 - will provide new tools and flexibility for Public Services and Procurement Canada to respond to evolving risks to the procurement system, in a manner proportionate to the actual risks posed by suppliers of concern.
  • Further details concerning the launch of the new Office and the revised Ineligibility and Suspension Policy will be made available in the coming weeks, in advance of the new program coming into effect.

Conflict of Interest

  • A Conflict of Interest (COI) is a situation, whether real, apparent or potential, in which a person employed in the Government of Canada has private interests that could influence the performance of their official duties and responsibilities or in which the person employed uses their office for personal gain.
  • The Conflict of Interest Act came into effect 2007 with the purpose of advising contracting officers to pay particular care to avoid entering into non-competitive (sole-source) contracts with any family members of any Minister, and to include clauses in procurement contracts for Ministerial appointees regarding the restrictions on their actives.
  • It is a responsibility of contracting officers to ensure the integrity of a procurement process. If there is any doubt that what is being done (or asked by the client to be done) might bring the integrity of the process into question, the contracting officer should consider suspending the procurement process until the issue is resolved. Issues that cannot be resolved satisfactorily at the contracting officer level must be referred to a higher authority within the organization.
  • The risk of COI must be given serious consideration prior to contract award and, if necessary, a thorough review will be conducted by DND’s Review Services team to address the COI, or perception of a COI, prior to engaging the services of any person or entity.

Preventing Conflict of Interest

  • All members of the Defence Team are required to fill out a confidential report to declare all types of conflicts of interest, which will then be reviewed by Assistant Deputy Minister (Review Services) for assessment.
  • ADM (Review Services) will provide conditions to mitigate the risk of conflict of interest, and these conditions will be shared with employees' supervisors to ensure compliance. The consequences of non-compliance include disciplinary measures up to and including termination.
  • Conflicts of interest are assessed based on:
    • Compliance of actions or decisions with the DND and CAF Code of Values and Ethics and the TBS Directive on Conflict of Interest.
    • Whether there is use of government property.
    • The timing of outside activities.
    • Potential adverse public perception.
    • and connections with government contracts.
    • Whether the position with an enterprise is paid, if the enterprise contracts with the government, and the extent of the employee's access to information relevant to the enterprise.
Summary of COI Reporting Requirements
Issue / Activities TB requirements DND employees CAF RegF Footnote ** CAF ResF Footnote **
Outside activity Within 60 days Without delay Without delay + CO permission Without delay + CO permission
Non-exempt asset or liability Within 60 days Without delay Without delay Without delay
Contracting with GoC Footnote * Prior to contracting Prior to contracting Prior to contracting Prior to contracting
Conflict of Interest Restrictions on Employees
Classification/Rank Contracts for Services Post-employment
Civilian Employees – below EX minus 1 No restrictions – if a conflict of interest is discovered there must be mandatory disclosure to a supervisor No restrictions
Civilian Executives & EX minus 1 No restrictions – if a conflict of interest is discovered there must be mandatory disclosure to a supervisor Restrictions: one-year “cooling off period” restricting the ability to work with or be employed by external entities with which the person had significant official dealings within their last year of employment
Regular and Reserve Class B/C Force Members – below Lieutenant-Colonel No restrictions – if a conflict of interest is discovered there must be mandatory disclosure to a supervisor No restrictions
Regular and Reserve Class B/C Force Members –Lieutenant-Colonel and above No restrictions – if a conflict of interest is discovered there must be mandatory disclosure to a supervisor Restrictions: one-year “cooling off period” restricting the ability to work with or be employed by external entities with which the person had significant official dealings within their last year of employment
Reserve Class A Force Members No restrictions – if a conflict of interest is discovered there must be mandatory disclosure to a supervisor No restrictions

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Canadian Surface Combatant (CSC)

  • National Defence is committed to providing the Royal Canadian Navy with next-generation warships, which is why we are procuring 15 Canadian Surface Combatants that will be made in Halifax, Nova Scotia as part of the National Shipbuilding Strategy.
  • We are currently working with industry to finalize the selected ship design for the Canadian Surface Combatants and anticipate starting work in 2024 to ensure that the shipyard is prepared to begin building the vessels and cut steel.
  • This year, we will also be making initial milestone payments for an Integrated Communications System as well as the Integrated Bridge and Navigation systems for the Land Based Test Facility at Hartlen Point, NS.
  • The future Land Based Test Facility will be used to test the combat, navigation and communication systems for the upcoming Canadian Surface Combatant ships.

Economic benefits:

  • This project will reinvigorate Canadian shipbuilding by investing in Canadian innovation and supplier development.
  • It will also generate at least $31 billion dollars in GDP and create and sustain more than ten thousand jobs over the next 25 years.
  • This includes job training and apprenticeship opportunities for Indigenous peoples, visible minorities, and underrepresented groups.
  • We will remain transparent as we work with industry to find efficiencies, accelerate project timelines, and update costs as the design progresses.

If pressed on delays and cost increases:

  • While the project budget has not changed, we are assessing potential cost increases, mainly due to delays in the project schedule and higher than forecasted inflation.
  • We’ve received an initial cost estimate from Irving Shipbuilding Inc. for all 15 ships, which is currently under review in order to better understand risks and savings opportunities associated with the proposal.
  • We continue to make important progress, including preparations to begin low-rate production in 2024 and the continued purchase of long lead acquisition material.

If pressed on infrastructure investment:

  • Shipyard upgrades will enable the production and delivery of CSC ships to meet operational needs at an affordable cost, which will sustain the Royal Canadian Navy’s capacity to meet Canada’s defence and security requirements.
  • The Halifax Shipyard site expansion will include dredging, marine structures, and rock infill behind the structure creating approximately 13 acres of additional yard space.
  • The upgrades are expected to enhance shipyard efficiency, directly contributing to the CSC build and delivery schedule.
  • Accordingly, the cost of shipyard upgrades is directly linked to the cost of building CSC 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, with associated improvements to schedule and cost.

Key Facts

  • Estimated Budget: $56-60B (Design and Acquisition)
  • Timeline: First delivery in early 2030s
  • PBO 2022 Report Costs:
    • Total Life-Cycle Cost: $306B
      • Development: $4.3B
      • Acquisition: $80.2B
      • Operation & Sustainment: $219.8B
      • Disposal: $1.7B
  • GBA Plus: CSC ships will include berths, wash places, bathrooms, medical facilities, and off-duty areas that are designed to accommodate all genders and promote privacy.
  • Indigenous Relations: Irving Shipbuilding Inc. is leading initiatives, including job training and apprenticeships for Indigenous Canadians, visible minorities, and underrepresented groups in shipbuilding.

Details

  • The CSC 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 CSC 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:
    • Delivering decisive combat power at sea, either independently or as part of a Canadian or international task group;
    • Conducting counter-piracy, counter-terrorism, interdiction and embargo operations for medium intensity operations; and
    • Delivering 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 is currently working with Irving Shipbuilding, Lockheed Martin Canada, and their subcontractors to finalize the selected ship design and systems integration.

Economic Benefits

  • The CSC 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.

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 $463M taxes, included, for infrastructure improvements at their shipyard to ensure that they have the capability to construct the current CSC design and to meet the delivery schedule to support the RCN.
  • Infrastructure enhancements began in 2023 to support the start of CSC construction activities, which are expected to begin in 2024 and conclude by 2050.

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Halifax-class Frigates

  • The Halifax-class frigates enable the Royal Canadian Navy to deliver on its core missions at home and abroad.
  • These frigates are the backbone of the Royal Canadian Navy and can conduct maritime engagements against air, surface, and subsurface threats.
  • HMCS Montréal and HMCS Vancouver, both Halifax-class frigates, recently returned in December 2023 from deployments in the Indo-Pacific.
  • Meanwhile, HMCS Charlottetown departed on 31 January 2024 to participate in Exercise STEADFAST DEFENDER, the largest military exercise in Europe since the Cold War.
  • HMCS Charlottetown will also be deployed this summer as the flagship of the Standing NATO Maritime Group 2 in Europe.
  • Notably, these frigates are Canada’s only surface combatant ships and, therefore, are the only ships capable of defending Canadian interests against adversaries at sea.
  • That is why we will continue to prioritize the maintenance and life extension of our Halifax-class, in order to ensure the Royal Canadian Navy has the capacity to support maritime operations at home and abroad, until the transition to the future fleet is complete.
  • We recognize that this will require investments and are working to allocate accordingly.
  • Canada continues to invest in maintaining and upgrading the fleet with our Canadian industry partners, including Seaspan Victoria Shipyards, Irving Shipbuilding, Chantier Davie, and Fleetway Inc.

If pressed on impacts of Canadian Surface Combatant delays:

  • National Defence is assessing current Halifax-class program plans to ensure the Royal Canadian Navy has the fleet capacity required to support operations until the transition to its future fleet is complete.
  • National Defence will continue to work with marine industry experts, to ensure a risk-based program is in place for the Halifax-class to operate safely and effectively until the delivery of the Canadian Surface Combatants.

Key Facts

Modernization Program

  • 1992 – 1996: The Royal Canadian Navy’s accepted 12 new Canadian-built Halifax-class multi-role patrol frigates.
  • 2008: The Halifax-class Modernization project was launched to modernize the fleet’s combat systems and to ensure the ships remain effective throughout their service life.
    • 2014: First updated ship delivered under the Modernization program.
    • 2018: Last ship delivered under the Modernization program.

Ongoing Sustainment Requirements

  • The sustainment of the Halifax-class currently costs approximately $700 million to $800 million per year and is enabled through a number of individual contracts. Some of these key contracts include:
    • 2019: The Government awarded contracts to Seaspan Victoria Shipyards, Irving Shipbuilding, and Chantier Davie, to carry out maintenance work on the Halifax-class frigates.
      • The duration of these contracts will be extended up to the end of the life of the Halifax-class frigates, and until the Canadian Surface Combatants enter into service. Overall, the Government has signalled its intent to invest an estimated $7.5 billion in these contracts.
    • 2020: National Defence announced the award of an in-service support contract to Fleetway Inc, valued at $72.6 million for the first six years, to provide a full range of technical data management and systems engineering support services for the fleet of Halifax-class ships.
    • 2020: The Government awarded a contract to General Dynamics Missions Systems Canada, valued at approximately $182 million, for in-service support on 6 Halifax-class combat systems until the arrival of the Canadian Surface Combatants.
    • 2021: National Defence announced an in-service support contract with L3 MAPPS Inc, valued at $24.5 million for six years, to ensure the fleet’s Integrated Platform Management System remains well-maintained.

Details

  • For the last 30 years, the Halifax-class multi-role patrol frigates have served as the main deployable ships of the Royal Canadian Navy (RCN). They can deploy anywhere in the world, either independently, with NATO or with individual allied nations.
  • While the Halifax-class was initially designed for anti-submarine warfare and anti-surface warfare, its role has changed as maritime threats have evolved. As a result, over time Canada has invested in maintaining and upgrading the fleet’s capabilities.

Modernization and Upgrades

  • In November 2008, two multi-ship competitive contracts were awarded to Irving Shipbuilding Inc. (on the East Coast) and Seaspan’s Victoria Shipyards Co Ltd. (on the West Coast) to undertake a mid-life refit of the RCN’s 12 Halifax-class frigates, as well as an overhaul of the fleet’s combat systems.
    • A contract was also awarded to Lockheed Martin Canada to provide the fleet with a new Combat Management System and upgrades to several combat systems.
  • This project included a number of upgrades to the fleet, including new radar suites; an internal communications system upgrade; a harpoon missile system upgrade (surface-to-surface); and new electronic warfare systems.
  • The first modernized Halifax-class frigates were delivered in late 2014, with the last ship delivered in 2018.
  • The Modernization program was costed at approximately $4.3 billion.

Ongoing Sustainment Requirements

  • The modernized Halifax-class frigates are serving as the bridge to the future fleet and, along with Kingston-class Maritime Coastal Defence Vessels and Victoria-class submarines, allow the Navy to continue to deliver on its core mission until the arrival of the Canadian Surface Combatants.
  • As the fleet ages, increasing investment is needed to ensure that the ships are seaworthy and fit for purpose. For example, the Halifax-class frigate’s structure and hull was designed to last for 30 years – which will be reached between 2022 and 2026 for all 12 ships of the class.

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Joint Support Ships (JSS)

  • 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.
  • 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.
  • These ships will also have military capabilities, providing our sailors the protection they need when deployed in high-threat environments.
  • Further, investing in these new ships will provide an invaluable operational capability to the Royal Canadian Navy, and significant investment in local economies from coast to coast.
  • This project will sustain over 1,000 jobs at Vancouver Shipyards in British Columbia and a total of 3,900 jobs in the broader marine industry.
  • Construction is underway with the delivery of the first ship forecasted for late 2025.

If pressed on JSS delivery delays:

  • We remain committed to providing the Royal Canadian Navy with the equipment they need to ensure their current and future operational effectiveness.
  • The revised schedule is a result of supply chain challenges due to the COVID-19 pandemic and further unanticipated delays due to a first-of-class delivery.
  • The first ship, previously scheduled for delivery in 2023, is now expected in 2025.
  • The second ship, which was previously scheduled for delivery in 2025, is now expected in 2027.
  • We are actively monitoring progress and working with Vancouver Shipyards to ensure the timely delivery of these ships.

If pressed on commercial alternatives to building JSS:

  • The Joint Support Ships are being built for the RCN under the National Shipbuilding Strategy.
  • While the cost for the acquisition of these ships is significant, investing in these new ships will provide an invaluable capability to the RCN.
  • For example, this critical capability will allow the RCN to operate around the world without the need to rely on partner nations or port visits in other countries.
  • Further, the construction of these ships represents an important contribution to Canada’s shipbuilding industry.
  • Working with Canadian industry has also provided an opportunity to tailor the design and capabilities of the Joint Support Ships to the needs and priorities of the RCN.
  • For example, the Joint Support Ships will be equipped with enhanced damage control, self-defence systems, and Command and Control systems that will allow it to be interoperable with Canadian and Allied fleets.
  • These systems cannot be found in other commercially available solutions.

Key Facts

  • Budget: Up to $4.1BFootnote *
  • Timelines:
    • Joint Support Ship 1: Cut steel: 2018; Planned delivery: 2025
    • Joint Support Ship 2: Cut steel: 2022; Planned delivery: 2027
  • GBA Plus: The JSS were designed specifically to accommodate a mixed-gender crew by including gender-inclusive toilets, chair heights and sightlines, and private showers and changing areas.

Details

  • 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) retired in 2016.
  • The new JSS will have capabilities such as:
    • At-sea support to naval task groups:
      • Re-supply of fuel, food, 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 during the summer 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 and multiple defensive weapons systems)

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 extended to January 2025, however, the contract option periods provide a potential interim capability up to January 2028.

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Interim Auxiliary Oil Tanker Replenishment (iAOR)

  • The challenge of sustaining and supplying Canada’s naval forces has been mitigated by the procurement of the Motor Vessel (MV) Asterix, an interim Auxiliary Oiler Replenishment (AOR) vessel.
  • This innovative interim solution provides Canada’s Navy with an essential, at-sea replenishment capability, and serves as a viable bridge until the arrival of the Navy’s two new Joint Support Ships.
  • The AOR service contract began on January 29, 2018, and was extended to January 2025 to align with the delivery of the Joint Support Ships.
  • The Asterix continues to play a key role to support the RCN during non-combat domestic and international operations.
  • This contract can be further extended if required, ensuring the Royal Canadian Navy will maintain this capability.

If pressed on the increased value of MV Asterix contract:

  • With the extension, the contract value did increase ($188 million). A rigorous budget review was conducted and we remain within the original program budget.
  • The total contract value is $879 million and covers operations, maintenance costs, and other related contract costs, such as insurance up to January 2025.

If pressed on purchasing 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.
  • Our long-term requirements in terms of survivability and armament can only be met by a new, purpose-built warship, designed to conduct much more than replenishment at sea.

If pressed on other interim solutions until JSS delivery:

  • Purchasing or leasing a different vessel was not an option due to a lack of viable alternatives that met the Navy’s requirements.
  • Further, burden-sharing with Allies would have resulted in a loss of refueling skills within the Royal Canadian Navy, impacting the amount of time required to bring the Joint Support Ships into service.

Key Facts

  • Contract Value: Up to $879,115,690.31 (including taxes)
  • Project Details:
    • Contract Awarded: November 15, 2015
    • Awarded to: Federal Fleet Services Inc.
    • Contract Duration: 5 years, with an additional 5, 1-year option periods at the discretion of the Government of Canada
    • Vessel Entered into Service: January 29, 2018

Details

  • The (RCN) had to retire the former Her Majesty’s Canadian Ship (HMCS) Protecteur and Preserver earlier than anticipated.
  • This left the RCN with an urgent requirement to fill a critical gap in replenishment at-sea capability until the Joint Support Ships (JSS) are delivered.
  • The key role of the interim provision of service contract is to provide an at-sea supply and replenishment service to the RCN during non-combat domestic and international operations. It could also offer significant additional capabilities, such as aviation support, space for medical support, and humanitarian assistance or disaster relief.
  • The contract option periods provide the ability to extend the service up to January 2028.

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Victoria-class Submarine Modernization Project (VISSC)

  • 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 update the fleet and ensure it remains relevant in an evolving operating environment.
  • The decision to modernize remains the most effective means of ensuring continued submarine operations into the mid-2030s.
  • In December 2023, we awarded a contract for the Galley Improvement Project, which will improve the quality of life for submariners.
  • The improvement of living conditions will also take into account inclusiveness and gender-based considerations for privacy and functionality in various areas of the submarines.
  • The Victoria-class Modernization Project will also support jobs across Canadian shipyards and throughout the supply chain, including for small and medium-sized businesses.

    • If pressed on the Canadian Patrol Submarine Project:

    • We are in the early stages of defining the operational and capability requirements for a new class of submarines to replace the Victoria-class.
    • We have conducted initial engagements with countries and companies that currently have, or are in the process of building, submarines that meet Canadian requirements.
    • We are examining all options to meet the Navy’s requirements.

    Key Facts

    • Budget: Up to $1.0B (including taxes)
    • Timelines:
      • First modernization starting date: 2023
      • First delivery: 2027
      • Final delivery: 2036
    • The Victoria-class Modernization Project involves 16 projects. All projects are in either the definition or implementation phase.
    • Economic Benefit: This modernization project will benefit Canadian industrial and technological sectors and provide robust economic benefits for Canada.
    • Maintenance and modernization projects will support jobs across Canada at the shipyards and through the supply chain.

    Details

    • 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.

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    Arctic and Offshore Patrol Ships (AOPS)

    • National Defence is committed to enhancing and safeguarding Canada’s sovereignty in the North, which is why we are procuring six new Arctic and Offshore Patrol Ships, designed to operate in previously inaccessible northern waters.
    • These ships will operate in the Arctic, between June and October providing a greater and longer Canadian Armed Forces presence in the North, thereby supporting a range of domestic and international operations.
    • Four of the Arctic and Offshore Patrol Ships have already been delivered, with the fifth planned for delivery in Summer 2024.
    • The sixth and final ship is anticipated to be delivered in Summer 2025.
    • National Defence will continue to advance this project, which supports over 2,000 jobs in the Canadian economy, including in Nova Scotia and within the broader shipbuilding industry.

    If pressed on technical issues (including flooding):

    • Technical issues are not unusual during the introduction period of a new capability.
    • Most of the in-service issues are technical in nature, such as anchor and bow thruster deficiencies, and have been addressed.
    • In fact, a solution is in place and will also be implemented for ships 5 and 6.
    • Aside from HMCS Margaret Brooke (which requires additional parts to complete the work), the flooding issue is addressed for the rest of the class, but is still being monitored.
    • Addressing the remaining issues continues to be a top priority to ensure our ships sail on operations and that our personnel in uniform remain safe.
    • All issues have been resolved and the corrections are being considered during the production of all follow-on vessels.

    If pressed on who will pay for repair costs:

    • A shipbuilder’s Material and Workmanship warranty is in effect for 12 months following a ship’s delivery.
    • To date, the Material and Workmanship warranty has covered $5.3M (excluding taxes) in repair costs.

    If pressed on cost increases:

    • Ship production is complex and relies on multiple activities, such as forecasted cost and availability of material and labour.
    • While costs did increase – due primarily to the pandemic, inflation, longer lead time in procuring parts and challenges associated with ongoing ship production – cost forecasts have since stabilized.

    If pressed on delays for the Nanisivik Naval Facility:

    • Infrastructure work in the Arctic poses many challenges, including a harsh climate and isolated work locations.
    • National Defence is also mindful of the need to respect the environment and local communities.
    • For instance, the Royal Canadian Navy has agreed with the Government of Nunavut to not break ice near the facility to protect community access to frozen waters and protect wildlife.
    • We are currently finalizing commissioning work at the facility, which will operate as a docking and refueling facility to support the Arctic Offshore Patrol Ships and other government vessels.

    Key Facts

    • AOPS Budget: Up to $4.98B (excluding taxes)
    • Timeline:
      • July 31, 2020: The first AOPS, HMCS Harry DeWolf, was delivered.
      • July 15, 2021: The second AOPS, HMCS Margaret Brooke, was delivered.
      • August 15, 2022: Production of the sixth and final ship for the RCN began.
      • September 2, 2022: The third ship, HMCS Max Bernays, was delivered.
      • August 31, 2023: The fourth ship, HMCS William Hall, was delivered.
      • Summer 2024: Delivery target for the fifth ship, the future HMCS Frédérick Rolette.
      • Summer 2025: Delivery target for the sixth and final ship, the future HMCS Robert Hampton Gray.
    • Indigenous Relations: Each ship will be affiliated with an Inuit region to build strong ties with Arctic Indigenous communities as they operate in and around their territories.
    • GBA Plus: The AOPS were designed to accommodate a mixed-gender crew:
      • Reduced cabin occupancy to 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.

    Details

    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  to assert and uphold Canada’s Arctic sovereignty.
    • This will allow the Royal Canadian Navy (RCN) to have unescorted access to areas of the Arctic that were previously inaccessible.
    • The ships are being built under the National Shipbuilding Strategy (NSS) by Irving Shipbuilding Inc. in Halifax, Nova Scotia.
    • These vessels perform a wide variety of tasks, such as:
      • Surveillance operations of Canadian waters;
      • Humanitarian assistance, emergency response and disaster relief; and
      • Search and Rescue.

    Deficiencies and Repairs with the AOPS

    • AOPS is the first new warship built in Canada in the last 20 years. Shipbuilding in general is difficult and when building the first ship in a class, it is expected that there will be issues identified throughout the building process—including after delivery—that require correction.
    • Prior to delivery of HMCS Harry DeWolf, HMCS Margaret Brooke, HMCS Max Bernays and HMCS William Hall, construction deficiencies were identified and documented as part of a rigorous quality assurance program. Both the Government of Canada and the shipbuilder agreed that certain deficiencies could be corrected after delivery.
    • The Project Management Office works closely with the shipbuilder to resolve these deficiencies while progressing the ships’ trials and operational schedule. In the meantime, appropriate mitigation measures have been put in place where necessary.
    • A Technical Investigation into issues with the Main Diesel Generator (MDG) on the AOPS was finalized in early February 2023. The changes recommended by this investigation are being implemented in ships 1 to 4 and will be incorporated within follow-on ships as appropriate.
    • Ships 1 and 2 (HMCS Harry DeWolf and HMCS Margaret Brooke) have completed repairs to their Main Diesel Generators and Central Fresh Water Cooling System. This work was completed in Harry DeWolf in July 2023 and was completed in HMCS Margaret Brooke at the end of August of 2023.
    • Repair work on Ship 3 (HMCS Max Bernays) was completed under the builder warranty.
    • Work on Ship 4 (HMCS William Hall) is now complete and was delivered in August 2023. Issues identified in-service are being rectified proactively during the construction of new ships, including Ship 5 and 6.

    Nanisivik Naval Facility

    • In 2007, the Government announced its plan to convert the deep-water port at Nanisivik to a logistics hub, which will operate as a docking and refueling facility for the Royal Canadian Navy and other government vessels and serve to enhance the Navy’s presence in the North. The construction of the Nanisivik Naval Facility in Nunavut is nearing completion.
    • The Auditor General’s report on Arctic Waters Surveillance noted that the Nanisivik Naval Facility (NNF) would not be equipped with heated fuel tanks, limiting its period of operation to approximately 4 weeks per year.
      • As an Arctic facility, the operational year is usually from early August to as late as October, depending on ice-coverage and temperatures. As long as the waters are navigable and the facility is accessible, the site will be open to ships. There are a number of factors which contribute to the length of the facility's operating season.
      • National Defence is working on a longer-term plan to lengthen the operating season, once success and capabilities have been established with the current model.

    Indigenous Relations

    • Each AOPS will be affiliated with a region of Inuit Nunangat. These affiliations are a long-standing naval tradition and deeply valued by the sailors and the civilian communities.
      • HMCS Harry DeWolf formally affiliated with the Qikiqtani region of Nunavut in May 2019.
      • HMCS Margaret Brooke formally affiliated with the Nunatsiavut region on September 21, 2022, in Hopedale, Labrador.
      • HMCS Max Bernays formally affiliated with the Kitikmeot region on 8 November 2023 in Cambridge Bay, Nunavut.
      • HMCS William Hall will be formally affiliated with the Kivalliq region on 23 March 2024 in Rankin Inlet, Nunavut.
      • The two remaining ships will be affiliated with the following regions in Inuit Nunangat, that being Nunavik, and Inuvialuit.
    • Over the next several years, the six vessels and their crews will build ties with the communities in these regions, founded on mutual respect, during routine operations in Canada’s Northern waters.

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    Canadian Multi-Mission Aircraft (CMMA)

    • To enable Canada to credibly defend its interests, at home and abroad, we are acquiring up to 16 P-8A Poseidon aircraft for the Royal Canadian Air Force.
    • These aircraft will replace the aging CP-140 Aurora, which have been in service for more than 40 years.
    • This procurement will also enable the Canadian Armed Forces to sustain a technological advantage over potential adversaries.
    • For example, the P-8A Poseidon will provide the Canadian Armed Forces with a modern long-range, crewed maritime patrol aircraft specialized in anti-submarine and anti-surface warfare.
    • It is also the only currently available aircraft that meets all Canadian Multi-Mission Aircraft operational requirements, as there is no alternative on the market today.
    • In fact, the P8-A Poseidon is a proven capability that is operated by several of our defence partners, including all other Five Eyes nations, as well as Norway and Germany.
    • Ultimately, we are fulfilling our commitment under Canada’s Defence Policy – Strong, Secure, Engaged – to acquire next generation multi-mission aircraft, and will continue to make the necessary investments to provide our Armed Forces with the equipment they need.

    Project status and economic benefits:

    • We are moving ahead with a payment schedule to the US government under the Foreign Military Case.
    • This includes advance payments for the initial acquisition of the P-8A aircraft. These payments would generally cover associated training devices and simulators, ground mission system support, spare parts and equipment and training.
    • The first aircraft is scheduled for delivery in 2026, with the final P-8A set for delivery in 2027-2028.
    • Boeing will make targeted investments across Canada, with the potential to create up to 3,000 jobs annually.

    Procurement options – historical:

    • Canada’s adversaries are deploying increasingly sophisticated, stealthy, and lethal capabilities.
    • At the same time, the CP-140 is reaching its estimated end of service date of 2030.
    • As with any procurement, we examined our military requirements and held consultations with industry, in order to determine the best capability for our members and value for money.
    • In the case of the CMMA project, we had multiple engagements with industry, led by Public Services and Procurement Canada.
    • A developmental option brings a high degree of risk and uncertainty with regards to cost, schedule and the delivered operational effectiveness.

    Transition to P-8A Poseidon:

    • Long range surveillance and reconnaissance capabilities are critical now and will continue to be critical well into the future, as Canada’s adversaries deploy increasingly stealthy and sophisticated technologies.
    • As such, we are modernizing Canada’s CP-140 Aurora fleet, to extend its lifetime to the 2030 timeframe, and to ensure that it remains operational until the arrival of the P-8A Poseidon.
    • By the end of 2024, the Auroras will have been modernized with a world-class integrated mission suite with state-of-the-art avionics, communications systems, computer networks, and sensors.

    Key Facts

    • The Canadian Multi-Mission Aircraft (CMMA) will equip the CAF with a long-range manned aircraft with Command, Control, Communications and Computers (C4); Intelligence, Surveillance and Reconnaissance (ISR); Anti-Submarine Warfare (ASW); and Anti-Surface Warfare (ASuW) capabilities.
    • Project Cost: Estimated at $10.6 billion (including taxes):
      • 14 aircraft with an option for up to two additional aircraft.
      • This includes support equipment, technical assistance, training devices, training, and an initial in-service support period.
      • Canada is assessing the infrastructure needs for the replacement fleet and requirements to recapitalize infrastructure at the operating bases.

    Timelines:

    • First delivery: 2026
    • Initial Operational Capability: 2028
    • Full Operational Capability: 2033

    Economic Benefits:

    • Boeing will integrate Canadian companies in global supply chains and support the development of skills and training in Canada, allowing for follow-on service to be completed domestically.
    • Boeing’s commitments have the potential to generate more than 3,000 jobs annually and contribute at least $358 million annually to Canada’s GDP over 10 years.
    • Boeing will open an innovation centre in Montreal, invest in research centres, and develop partnerships with universities across Canada.

    Details

    P8-A Poseidon Procurement Process

    • In April 2021, DND launched a third-party CMMA Candidate Aircraft Analysis, which identified potential CMMA candidates and their suitability against required CMMA missions and ranked these potential solutions against High-Level Mandatory Requirements (HLMRs).
    • In February 2022, PSPC, as the procurement authority, released a Request for Information (RFI), which sought input from Industry.
    • Following these engagements with Industry, as well as engagements with Allies and independent third-party studies, the Government determined that the P-8A Poseidon was the only currently-available aircraft that met all of the CMMA operational requirements, namely anti-submarine warfare and C4ISR capabilities.
    • In March 2023, Canada submitted a Letter of Request through the U.S. Government’s Foreign Military Sales program, outlining Canada’s requirements and requesting an offer.
    • In return, Canada received a Letter of Offer and Acceptance (LOA) from the United States government in July 2023, and confirmed that the capabilities offered met the Royal Canadian Air Force’s (RCAF) operational requirements, and that pricing was aligned with that offered to other FMS partners.
    • ISED reviewed Boeing’s Economic Benefits proposal to ensure the proposal provided economic benefits for Canada.
    • On 30 November 2023, Canada announced that it had finalized a government-to-government agreement with the U.S. Government and Boeing for the acquisition of up to 16 P-8A Poseidon aircraft for the RCAF.

    Aurora Upgrades

    • The upgrades currently underway to ensure that the CP-140 Aurora will remain operational until the P8-A Poseidons are in service are:
      • A state-of-the-art self-protection system;
      • A Link 16 Data-link system (a military tactical data exchange network used by NATO countries); and
      • A High-bandwidth beyond-line-of-sight satellite communications system.
      • Full operational capability for these upgrades is planned for late 2024.
    • Additional updates to the CP-140 are planned in the next five years, including: Multi-Fleet Air Traffic Management Avionics updates; Secure Radio Modernization; and Light-Weight Torpedo Upgrade.

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    Strategic Tanker Transport Capability (STTC)

    • Strategic airlift is an essential capability for the Canadian Armed Forces, allowing them to deliver aid abroad, evacuate people, and re-supply deployed troops.
    • It will also support the ability of the Canadian Armed Forces to project and sustain forces across Canada, including in the North.
    • We are ensuring this capability remains intact, through the procurement of five used Airbus A330-200 and four new Airbus A330 Multi Role Tanker Transport aircraft.
    • The first two used aircraft were delivered in August 2023 and February 2024 with the other three expected for delivery in 2024/2025.
    • To further progress this project, this year, we are focusing on rolling out funding items and parts for these aircraft that will take longer to procure such as eight (8) Rolls-Royce engines and initial payment for the order of one new A330 green aircraft.

    Benefits of the aircraft:

    • These aircraft will improve the flexibility, responsiveness, interoperability with allied nations, communications security, and protection of the Royal Canadian Air Force’s current fleet.
    • Further, the aircraft will allow Canada to meet future challenges and ongoing commitments to collective defence with our NATO and NORAD allies.
    • Specifically, the aircraft will be able to refuel current and future RCAF fighter aircraft, including the F-35, as well as fighter aircraft used by the U.S. as part of NORAD and by NATO partners.
    • This project also has the potential to contribute over $145 million annually to Canada’s GDP, and create up to 1,050 jobs annually for Canadian industry over a thirteen-year period.
    • Further, through the Industrial and Technological Benefits Policy, Airbus will undertake business activity in Canada equal to the value of the contracts, helping to sustain highly skilled jobs across Canada and contribute to the growth of Canadian supply chains.
    • We remain confident that Canada will be provided with a Strategic Tanker Transport Capability that will support the Canadian Armed Forces for years to come.

    If pressed on new aircraft for the Prime Minister:

    • We are moving forward with replacement of Strategic Tanker Transport aircraft, as the current fleet is over thirty years old.
    • This includes the replacement of the aircraft that is used to transport the Prime Minister and senior government officials.
    • Additionally, they will support key airlift operations by the Royal Canadian Air Force while providing best value for Canadians.

    Key Facts

    • Project Budget: Estimated total project cost is $10.2 billion.
      • This includes the procurement and operationalization of up to nine new or used STTC aircraft, associated equipment, integrated logistic support elements, training simulator(s), sustainment, supporting infrastructure, and information management and information technology,
    • Project Timeline:
      • Early Implementation: June 2022
      • Implementation Phase: June 2023
      • Initial Operational Capability: 2028/2029
      • Final Operational Capability: 2032/2033
    • Aircraft will conduct multiple tasks, such as:
      • In-flight refueling of other aircraft;
      • Military personnel and cargo airlift;
      • Medical evacuations; and
      • Strategic transport of Government of Canada officials.
    • Project scope will encompass:
      • In-service support for the new aircraft;
      • Infrastructure to house and maintain the fleet at operating bases in eastern and western Canada; and
      • Training and simulation capability to prepare and maintain crew readiness.
    • Used Airbus A330-200:
      • The first two aircraft entered RCAF service in November 2023 and February 2024. These aircraft will be used to perform troop and passenger airlift operations.
      • The other three aircraft are expected to be delivered in 2024/2025 and will be directed for conversion in Spain as scheduled.
    • GBA Plus: Engagements in the areas of GBA Plus and Indigenous considerations have been initiated and are being further developed.

    Details

    Project Summary

    • The Government of Canada is acquiring a new fleet of aircraft to replace the CC-150 Polaris, which currently has an estimated life expectancy to 2027.
    • The project will acquire an in-service support solution for the aircraft, infrastructure to house and maintain the fleet at two main operating bases located in eastern and western Canada, as well as supporting infrastructure at a Forward Operating Location in the north.

    Infrastructure

    • New infrastructure will be required to house the new fleet of aircraft. The western and northern locations remain to be determined. CFB Trenton will serve as the Eastern Main Operating Base.
    • National Defence is in the process of analyzing infrastructure options and assessing schedule, cost, scope, risk, operational benefits, personnel and logistics implications of the various options to inform the decisions for permanent operating locations in the west and in the north. A decision is anticipated in Spring 2024 for the western operating base and summer/fall 2024 for the northern location.
    • The RCAF has selected Ottawa International Airport as the location for interim operations of the first two used CC-330 aircraft.

    Modifications

    • New aircraft in the fleet will start out as A330-200 model aircraft and come off the assembly line and then undergo a conversion to achieve the final STTC configuration.
    • Used aircraft will undergo the same conversion process to produce an equivalent STTC aircraft.
    • As part of the conversion, some of the modifications that will be undertaken include:
      • Upgrading to a suite of secure communications capabilities, secure operational data links, and already-certified self-protection system to allow the RCAF to safely employ these aircraft in areas of elevated threat and risk.
      • Adding air-to-air refueling capabilities, specifically capable of refueling a wider range of allied aircraft simultaneously and without reconfiguration, tasks that the current fleet cannot do.
      • Expanded Aeromedical Evacuation Capability - the CC330 aircraft will have the ability to be reconfigured to contain an expanded and enhanced Aeromedical Evacuation configuration, in which trained medical personnel will have the equipment they need to deliver care to patients.

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    Remotely Piloted Aircraft Systems (RPAS)

    • The Remotely Piloted Aircraft System (RPAS) will provide the CAF with a large and sophisticated remotely piloted aircraft, roughly the size of a fighter jet.
    • The fleet of 11 aircraft will be used in domestic and international missions, for example, monitoring Canada’s coastline at home and providing near real-time information in deployed operations.
    • This system will complement and be integrated into existing intelligence and surveillance capabilities to increase our maritime and Arctic domain awareness.
    • The contract for this system has been awarded to General Atomics Aeronautical Systems Inc. with delivery of the first system in early 2028.
    • The foreign military sales arrangement with the US Government to acquire RPAS was signed in December 2023.
    • The project is proceeding according to schedule and work is currently underway to integrate, test, and certify the systems to enable communications at high Northern latitudes.
    • RPAS will be stationed in Greenwood, NS and Comox, BC, will have a forward operating base in Yellowknife and be piloted out of Ottawa.

    Key Facts

    • Project Budget: Estimated acquisition cost is $2.49B
    • Economic benefits: The contractor is required to provide investments in Canadian industry and economic benefits to Canada.
    • GBA Plus: RPAS facilities will include, in compliance with Directives:
      • Gender neutral bathrooms;
      • Nursing rooms;
      • Cultural rooms for prayer; and
      • RPAS equipment will accommodate all genders.

    Details

    Project Details

    • This project will acquire a long-range, high endurance, armed Remotely Piloted Aircraft System along with associated equipment, weapons, infrastructure, and in-service sustainment capability that will support up to three concurrent lines of tasking, domestic (including contributing to Canada’s presence in the Arctic) or international.
      • It will only be armed when necessary for the assigned task and employment of precision strike capability will adhere to all applicable law, including international laws, such as the Law of Armed Conflict.
    • These systems are not autonomous. They are piloted by qualified pilots who control and monitor the aircraft from ground control stations.
    • The Systems will be commanded and controlled in a manner similar to other capabilities, such as fighter aircraft. Qualified and authorized Canadian Armed Forces members will always be responsible for employing these systems.

    Project Timelines:

    • First delivery: early 2028
    • Initial operational capability: fiscal year 2027/28 to 2029/30
    • Full operational capability: fiscal year 2030/31 to 2032/33

    Indigenous Relations:

    • The contract requires that the contractor 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.

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    Cyclones

    • It is imperative that our members in uniform have the equipment they need to fulfill their missions.
    • This includes the CH-148 Cyclone, a capable maritime helicopter that operates alongside our naval fleets.
    • The Cyclone can be used for surface and sub-surface surveillance, search and rescue missions, tactical transport, and more.
    • Further, these aircraft are also critical in supporting search and rescue operations and utility operations at sea.
    • To date, 26 Cyclone helicopters have been delivered, an additional one is undergoing acceptance, and the last one is scheduled for delivery in 2025.
    • The CH-148 Cyclone is helping us fulfil our commitment to provide the Canadian Armed Forces with modern equipment, while also ensuring the best value possible for Canadians.

    If pressed on main rotor blade issues:

    • The safety of our personnel is paramount.
    • We are aware of a manufacturing defect affecting some of the main rotor blades installed on the in-service CH-148 Cyclones.
    • As soon as a potential issue was identified, we immediately conducted an inspection and removed any affected rotor blades from service.
    • We have also returned the affected blades to the manufacturer for replacement, and it is anticipated that this issue will be completely resolved by September 2024.

    If pressed on increased costs:

    • In May 2023, the project was granted additional expenditure authority to procure new equipment related to survival and defensive capability, and to allow the Cyclone to interface with Halifax-class ships.
    • Inflation has also hit the aerospace industry with certain costs rising on average 23 percent over the past year.

    Key Facts

    • Project Budget:
      • Acquisition cost: $3.3 billion
      • In-service support until 2038: $5.8 billion
    • Project Details:
      • Contract award: 2004
      • First delivery: 6 Cyclones in 2015
      • Deliveries to date: 26 Cyclones (25 in service).Footnote *
      • Final delivery: Delivery and acceptance of all 28 Cyclone helicopters is expected to be completed in spring 2025.
      • Full operational capability: September 2026.
      • Current estimated life expectancy: 2043

    Details

    • The CH-148 Cyclone is a very capable maritime helicopter, with a suite of sensors that allows it to accomplish the missions it is designed to undertake.
    • The aircraft serves several key roles, including anti-submarine and anti-surface warfare, disaster relief, counter-narcotic operations, fisheries and pollution patrols, search and rescue missions, and international peacekeeping.
    • Maritime helicopters must be able to operate from the Royal Canadian Navy (RCN) Halifax-class ships and the contracted commercial vessel, MV Asterix. They must also integrate with RCN future fleets – the Arctic and Offshore Patrol Ships, the Joint Support Ships, and the Canadian Surface Combatants.

    Main Rotor Issue

    • In June 2022, the aircraft’s Original Equipment Manufacturer (OEM) notified National Defence of an airworthiness risk affecting 46 main rotor blades installed on in-service CH-148 Cyclones.
    • There are reoccurring preventive inspections being conducted until all of the suspect blades are returned to the OEM.
    • As of 23 January 2024, 9 blades are affected, spanning 4 aircraft.
    • Blades that are found to be defective are immediately removed from service and are returned to the OEM for replacement.
    • It is anticipated that the issue will be completely resolved by September 2024.

    Tail Cracking Issue

    • In November 2021, during routine maintenance, National Defence detected cracks in the tails of 21 CH-148 Cyclone aircraft. Repairs were undertaken immediately on all aircraft with the support of the manufacturer, Sikorsky.
    • Sikorsky has worked closely with National Defence technicians and engineers since the cracks were found and has made the determination that the cracks are the result of structural loads caused by the Electronic Support Measures and Sat/Com antenna mounts while in flight.
    • Sikorsky has identified a long-term design fix consisting of replacing the structural area experiencing the extra stress with a more robust design through the use of a thicker material.

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    Fixed-Wing Search and Rescue

    • The Canadian Armed Forces have effective search and rescue capabilities to keep Canadians safe.
    • Our existing fleets (CC-130H Hercules and CC-130J Hercules) are being used to ensure continued operations while we transition to a new aircraft.
    • We are finalizing the procurement of 16 new Fixed-Wing Search and Rescue aircraft (CC-295 Kingfisher) that will enable more effective search and rescue missions in all weather conditions.
      • Ground and flight testing is currently being conducted in Spain, the U.S., and Canada.
      • Five (5) aircraft are in Comox, BC, while ten (10) aircraft remain in Seville, Spain. These 10 are held in a preservation state and will be fully updated before transport to reflect the latest development activities.
      • The final aircraft will be accepted in Q4 2025 once all qualification and certified processes have been completed.
    • We anticipate the initial operational capability of the new fleet in 2025-2026.
    • This project will generate positive economic dividends for the Canadian economy, including by providing highly skilled jobs across the country.
    • For example, Canadian companies are providing many key components on the aircraft, such as the engine (Pratt & Whitney) and infrared vision systems (L3 Harris (Wescam)), which will be integrated into the manufacturer’s broader supply chain.
    • Airbus (the manufacturer) has also developed a joint-venture with Newfoundland and Labrador-based PAL Aerospace to provide in-service support for the Kingfisher aircraft in Canada.
    • We will continue to advance this project and welcome the many jobs and investments it generates for the Canadian economy.

    If pressed on delivery delays:

    • We are currently working with the manufacturer to ensure the design and development challenges associated with the integration of the new technical capabilities are addressed.
    • We remain confident that Canada will be provided with an advanced search and rescue capability that will support Canadians for years to come.
    • As we await initial operational capability of the CC-295 Kingfisher, the Royal Canadian Air Force does not anticipate any impact to their ability to retain and replace personnel for the CC-130H, CC-130J, CH-149, and CH-146 communities.

    Key Facts

    • Contract Value: currently $2.9B and up to $5.9B (including taxes).
    • Economic Benefit: As part of the Request for Proposal, Airbus is required to reinvest 100% of the contract value into the Canadian economy.
    • GBA Plus: The Fixed-Wing Search and Rescue Training Facility in Comox includes:
      • Gender neutral washrooms that accommodate those with disabilities;
      • Nursing rooms;
      • Cultural rooms for prayer; and
      • All equipment has been designed to accommodate all genders.

    Details

    The CC-295 Kingfisher aircraft will be able to:

    • Detect, identify, and classify objects and people, in low light and challenging conditions, using state-of-the-art sensors;
    • Communicate better with other search and rescue systems through modern communication, navigation, and data management tools; and
    • Conduct searches across the full range of Canada’s search and rescue areas of responsibility.

    Delays in achieving Initial Operational Capability (IOC)

    • IOC was initially anticipated for summer 2022; however, this timeline has shifted to 2025-2026. This delay is attributed to several factors related to the progress of the aircraft’s certification, technical considerations, and training maturity.

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    Future Fighter Capability Project (FFCP)

    (Includes language on Defence of Canada Fighter Infrastructure (DCFI))

    • On January 9, 2023, following a rigorous and competitive procurement process, the Government of Canada announced an agreement with the United States Government and Lockheed Martin with Pratt & Whitney for the acquisition of 88 F-35A fighter aircraft.
    • This represents the most significant investment in the Royal Canadian Airforce in more than 30 years.
    • The F-35 will be essential for protecting the safety and security of Canadians, enhancing Arctic sovereignty, allowing Canada to meet its NATO and NORAD obligations, and boost our interoperability with key allies and partners.
    • We continue advancing towards the acquisition of an initial tranche of aircraft, with the first deliveries anticipated to begin in 2026.
    • In parallel, the Defence of Canada Fighter Infrastructure Project will ensure the Canadian Armed Forces are ready to receive the new fleet.
    • We are currently designing the Fighter Squadron Facilities in Bagotville, QC, and Cold Lake, AB.
    • Over the last fiscal year, (FY23/24), work continued on scoping the requirements for IT upgrades in Bagotville and power grid modernization in Cold Lake, with implementation work set to start for these two elements in this fiscal year (FY24/25).
    • Construction of these facilities will generate over 900 jobs in the surrounding regions.
    • We are confident this procurement will deliver the capability needed for the Royal Canadian Air Force, while providing high-value economic benefits for Canada’s aerospace and defence sector for decades to come.

    If pressed on the Parliamentary Budget Officer Report on CF-35 Life Cycle Cost:

    • National Defence appreciates the important and independent work of the Parliamentary Budget Officer (PBO), including its recent (November 2023) report on the CF-35 procurement.
    • A modern fighter aircraft is critical to protecting North American airspace and meeting defence and security challenges abroad.
    • National Defence will remain transparent as we work to validate and update costs as the project continues to progress.

    If pressed on economic benefits:

    • Canada’s participation in the U.S.-led multinational Joint Strike Fighter Program has yielded approximately USD$3.5 billion in contracts for Canadian companies since 1997.
    • Canadian industry will have significant sustainment opportunities on the CF-35A fleet.
    • Opportunities are expected in areas such as airframe and engine depots, as well as in training and in component maintenance over the life of the fleet.
    • Canadian companies were also hired also to support the development, design and construction of Fighter Squadron Facilities for the F-35A aircraft at 4 Wing Cold Lake and 3 Wing Bagotville.
    • There are currently 36 contractors in Canada active on this project, contributing a wide-range of manufacturing and services to the global F-35 fleet.

    If pressed on training RCAF pilots outside of Canada to operate CF-35A aircraft:

    • As with all major military procurements, careful planning and preparation is required to introduce new equipment into service
    • This is particularly true for highly advanced weapons systems where, for instance, sophisticated training for pilots and technicians is needed while continuing to conduct daily operations.
    • As such, the initial training of the RCAF pilots and aircraft maintenance technicians will take place in the United States, until a suitable training capability is established in Canada.

    Key Facts

    Future Fighter Capability Project (FFCP)

    • $19 billion in acquisition funding was established in Strong, Secure, Engaged. This includes the aircraft, associated equipment, sustainment set-up and services, as well as the construction of Fighter Squadron Facilities in Cold Lake, AB, and Bagotville, QC.
    • Procurement: Canada has committed to an initial tranche of 16 F-35A aircraft via the Production, Sustainment, and Follow-on Development Memorandum of Understanding (PSFD MOU).
    • Delivery: The first aircraft will be delivered in 2026. The project will work with the F-35 Joint Program Office (JPO) through the project implementation phase to acquire additional CF-35A fighter aircraft along with the associated equipment and services.
    • Initial Pilot Training: The initial aircraft will be located at the F-35A Pilot Training Center in Luke Air Force Base, Arizona, to enable the training of RCAF pilots while DND builds the necessary infrastructure to support aircraft delivery and commence operations in Canada.

    Defence of Canada Fighter Infrastructure (DCFI)

    • On March 24, 2023, the Prime Minister announced that the DCFI program will deliver a range of infrastructure elements to support Canada’s new fleet of CF-35A fighter jets and Canada’s NORAD contributions.
      • Through the DCFI project, National Defence will invest $7.3 billion to modernize, recapitalize, and build new infrastructure to support the arrival of the F-35 fighter jets.
      • The DCFI project will upgrade airfields, electrical and IM/IT systems, and build hangarettes, QRA facilities, maintenance facilities, storage warehouses, accommodations, and training facilities to support operations, personnel, and logistics.
      • The DCFI project is scheduled for Initial Operational Capability in 2029, with Full Operational Capability scheduled by 2032.
    • GBA Plus: A GBA Plus analysis was conducted for the FFCP, and the project will continue to assess potential differential impacts based on gender and other identity factors. This includes considering GBA Plus impacts on equipment/aircraft design and training, as well as design of facilities in Bagotville & Cold Lake.

    Parliamentary Budget Officer (PBO) Report

    • On November 2, 2023, the PBO published its report providing an independent analysis of costs associated with the F-35 procurement. In this report, the PBO estimates acquisition costs to be $19.8 billion and $73.9 billion for the total life-cycle cost.

    Details

    Project Details

    • FFCP will successfully acquire and transition into service 88 advanced fighter aircraft along with the associated equipment, weapons, infrastructure, information technology, and sustainment, including training and software support.
    • Three variants of the aircraft are being produced. The F-35A is the conventional takeoff and landing variant, whereas the B and C variants are the short take off and landing and the carrier-based variants respectively.
    • The competitive process was led by Public Service and Procurement Canada (PSPC) and was overseen by an independent fairness monitor.
    • Concept work for the FFCP indicated that the current infrastructure layout and design at Canada’s two main airbases, Cold Lake and Bagotville, is outdated and retains design elements from the 1950s. These facilities require extensive upgrades to accommodate the F-35A fighter aircraft.
    • In response to both new infrastructure requirements for Canada’s F-35A fleet and to address legacy infrastructure issues, National Defence established the DCFI program as a distinct endeavour from the FFCP acquisition.
    • The DCFI program was announced by the Prime Minister, during a visit by the President of the United States, on 24 March 20237.

    Gender-Based Analysis Plus (GBA Plus)

    • New accessible infrastructure for the F-35A will be designed to include GBA+ considerations, including safety and the equitable fairness of infrastructure such as washrooms, sleeping quarters, and cultural spaces.

    Indigenous Considerations

    • The requirement for federal departments and agencies to ensure a minimum of 5% of the total value of each and all department and agency contracts are awarded to Indigenous businesses does not apply to FFCP procurement.
    • This commitment came into effect after FFCP’s release of its Request for Proposal, during the Proposal evaluation phase. Furthermore, the FFCP procurement is conducted through Government-to-Government Arrangements (MOU and Foreign Military Sales Cases) and is therefore not subject to the set-aside Program for Indigenous Business.

    Joint Strike Fighter Program (JSF) and Production, Sustainment and Follow-on Development (PSFD) MOU

    • The JSF Program is a U.S.-led multinational cooperative effort to build an advanced combat aircraft equipped to fulfill multiple roles.
    • The objectives of the JSF program include: developing, producing, and sustaining the most advanced, affordable fighter for participants; maximizing commonality to achieve affordability and coalition interoperability; implementing a global sustainment system to deliver continuous cost and performance improvements; and promoting industrial involvement for participants.
    • Canada has been an active participant in the JSF Program since it began in 1997, and in 2006 became a partner in the PSFD MOU, which was renewed in 2021. The current PSFD MOU was renewed to December 2051
    • To date, Canada has spent USD $809.8M to participate in the program. The most recent payment was for USD $97.3M.
    • 8 partner countries are part of the JSF PSFD MOU: Australia, Canada, Denmark, Italy, Netherlands, Norway, United Kingdom, and the U.S.
    • To date, there are 10 foreign military sales customers of the F-35: Belgium, Finland, Germany, Israel, Japan, South Korea, Poland, Singapore, Switzerland, and the Czech Republic.

    Parliamentary Budget Officer Report

    • On 2 November 2023, the PBO published a report that encompassed analyses of the development, acquisition, operations, and sustainment, as well as disposal costs of the FFCP project.
    • The PBO’s findings are largely aligned with those previously published by National Defence.
    • Canada’s historical contributions to the Joint Strike Fighter Program MOU (2006) was not included as part of PBO’s costing.

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