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Defence Procurement Reform

  • Ensuring our people have the equipment they need when they need it requires a streamlined and flexible procurement system.
  • The enduring inflationary and supply chain impacts of the COVID-19 pandemic, the increasing pace of technological change, and growing concern over our changing geopolitical landscape have highlighted necessary changes in our procurement system.
  • That is why, we are working to improve the speed at which we deliver capabilities while also ensuring economic benefits for Canadians.
  • In fact, National Defence is supporting a Public Services and Procurement Canada-led Defence Procurement Review.
  • This review is looking at ways to make defence procurement faster and more effective, streamlining requirements definition and enabling joint development and procurements with our allies where it makes sense to do so.
  • We are also collaborating with our industry and Indigenous partners to find realistic solutions to ensure the delivery of capabilities on schedule.
  • While Defence procurement can take time, we need to ensure it is done right as this equipment is vital to the defence of our country and Canada's participation in international operations.

The Defence Industrial Strategy:

  • Building up Canada defence capabilities must also include building up our defence industrial base.
  • As outlined in Our North, Strong and Free, National Defence is changing how it works with industry, innovators, and researchers.
  • We are moving away from transactional approaches for acquiring capabilities to sustained strategic partnerships founded on transparency and trust, as we begin to develop a Defence Industrial Strategy for Canada.
  • This Strategy is intended to give our industry greater clarity regarding the long-term investments we are making.
  • Through long-term partnerships, Defence can pursue the rapid onboarding of new technologies, deeper integration with allied supply chains and innovation networks, and securing a reliable supply from Canadian industry.
  • For example, we are investing $9.5 billion over 20 years to accelerate the establishment of a new artillery ammunition production capacity in Canada and to build a strategic supply of ammunition.
  • By taking credible and responsible steps to systematically increase our spending and procurement capacity, we can work to build an innovative and effective defence industrial base throughout Canada.

Key Facts

  • Each year, over 100,000 contracts are awarded by, or on behalf of, National Defence.
  • National Defence has contracting authority up to $7.5 million for competitive goods and services contracts and to $375 thousand for non-competitive goods and service contracts.
    • This is a significant step in streamlining the procurement process, providing the Department the authority to proceed directly with 95% of its contracts.

Details

  • The Defence Team works closely with partners in other departments such as Public Services and Procurement Canada (PSPC), Innovation, Science and Economic Development Canada (ISED), as well as defence industry experts, to procure the equipment and services our forces need.
  • We follow a rigorous project planning and procurement process that ensures the equipment procured meets all Canadian Armed Forces (CAF) requirements, while ensuring financial value for Canadians as well as economic growth for industry.
  • National Defence's project management approach is governed by policy set by the Treasury Board of Canada, which states that:
    • projects achieve value for money;
    • sound stewardship of project funds is demonstrated;
    • accountability for project outcomes is transparent; and,
    • outcomes are achieved within time and cost constraints.

Streamlining Defence Procurement

  • 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.
  • The Tailored Project Approval Process was implemented in 2017 to provide a flexible and scalable framework for National Defence to fully leverage its Organizational Project Management Capacity Assessment Level, through improved internal coordination, increased delegation, and strengthened approval processes. Low to Medium Risk Projects that follow the tailored approval process progress on average two to three times quicker.
  • In November 2022, National Defence's Project Approval Directive was amended regarding the Urgent Operational Requirement process, resulting in significant time savings throughout the Project Phases for those capabilities that are most urgently needed.
  • National Defence works with government and industry partners to optimize defence procurement, including through new initiatives such as Continuous Capability Sustainment (CCS).
    • CCS shifts from more traditional transactional relationships with industry on in-service support, to a more partnership-focused relationship and seeks to identify ongoing investments in technology upgrades over the in-service phase of a capability to ensure CAF equipment remains technologically relevant, fit for purpose, and aligned with the high-level mandatory requirements.
  • Through its digital transformation initiative, the department will leverage necessary upgrades to its enterprise resource planning function to transform and modernize business processes, improve operational effectiveness and decision support at all levels. Through the increased use of analytics and a heightened trust in the data within the system, National Defence will be able to better harness vital data to inform decision making.

Professionalization of Procurement Staff

  • A number of steps have been taken to strengthen the capacity of the procurement specialist workforce (project managers, procurement officers and cost estimators).
    • The Project Manager Competency Development (PMCD) program provides project managers with development and learning opportunities through a defined framework for accreditation. Within project implementation organizations, project managers are matched with projects of an appropriate level of complexity and risk.
    • A Centre for Costing in Defence (CCD) was established to generate life cycle cost estimates for each project as it advances through the project life cycle. The cost estimates are based on the best possible information available at the time and evolve as more information is known. The cost estimates are provided to project sponsors and decision makers, who use them to set realistic budgets and make informed decisions.
    • A 'PG Academy' has been established to recruit and develop procurement and materiel management specialists. The Fundamental Program was launched in September 2023, and the development of additional programs are underway. In September 2024, National Defence held a ceremony to recognize the first cohort of 11 new graduates from the PG Academy.

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Professional Services and Conflict of Interest

  • While National Defence has expert staff dedicated to meeting our priorities, we also sometimes rely on outside expertise — but are committed to doing so in a responsible manner.
  • Consulting services can supplement the work done internally with industry expertise and, in some cases, proprietary information, which may help spur change and innovation within the Department.
  • To be clear, whenever consulting services are used, conflict of interest processes are followed to ensure transparency, so that any potential conflicts can be managed and mitigated, where needed.
  • Building on lessons learned, National Defence is taking decisive action to improve its internal conflict of interest processes.
  • Previously, the process relied on employees proactively taking the step to disclose outside activities which may raise a conflict of interest.
  • In addition to these steps for new employees, National Defence has introduced a new mandatory Conflict of Interest Questionnaire for existing employees.
  • This effort will continue to be expanded across the Defence Team to both civilian and Canadian Armed Forces members
  • On a broader scale, the Clerk of the Privy Council has recently instructed all departments to establish a mandatory annual conflict of interest attestation process for all employees. National Defence is reviewing options on how best to implement this directive.
  • Ultimately, I expect all Defence Team members to follow key policies, including the National Defence and Canadian Armed Forces Code of Values and Ethics.

Reduction on Spending on Professional Services:

  • Budget 2024 reiterated the Government's commitment to reduce overall government spending by more than $15 billion - while ensuring services and supports that Canadians rely on remain available.
  • As part of this effort, National Defence will reduce spending on professional services by $200 million this fiscal year and beyond.
  • National Defence is currently undertaking a priority setting exercise to determine where these reductions will be made.
  • Minimizing the impact on military readiness is the driving force behind each decision.

Key Facts

Professional Services

  • Budget 2023 announced a goal of saving $7.1 billion over five years through a 15% cut to discretionary spending on consulting, professional services, and travel over five years.
  • National Defence spends about $5 billion annually on contracting. About half of that amount is in direct support of fleet maintenance and sustainment, such as engineering services.
  • National Defence will reduce spending on professional services by $200 million in fiscal year 2024–25 and beyond, as part of government-wide spending refocusing effort launched in Budget 2023 and the 2023 Fall Economic Statement.

Background

Conflict of Interest (COI)

  • All Government of Canada employees have an obligation to prevent, identify, disclose, and manage conflicts of interest.
  • Members of the Defence Team are expected to follow key policies, including the Department of National Defence and Canadian Armed Forces Code of Values and Ethics.
  • Before entering into a contractual arrangement with the Government of Canada for which they would receive any direct or indirect benefit or income, Defence Team members must submit a confidential conflict of interest report. As per Treasury Board policy, the onus is on the employee to ensure any potential conflict of interest is reported.

Improving Conflict of Interest Processes

  • All members of the Defence Team are required to fill out a confidential report to declare all types of conflict of interest without delay, which are then reviewed by the Assistant Deputy Minister (Review Services) for assessment.
    • On May 8, 2024, a pilot for the new mandatory Conflict of Interest Questionnaire was sent to 292 procurement members of the Materiel Group.
    • Since then, approximately 2,500 employees and CAF members across three different organizations have been proactively screened. Financial and technology investments are needed to more efficiently expand the screening across the entire Defence Team.

COI Training/Awareness

  • National Defence provides COI training through an online course "Introduction to Defence Ethics." This course offers a comprehensive overview of ethics, including a module provided by the COI team that addresses topics outlined in the Defence Administrative Orders and Directives (DAOD).
  • COI-specific training has also been provided to groups internal to the Defence Team, including the Chief, Professional Conduct and Culture, Canadian Defence Attaches, Chaplains, the Level-1 ethics coordinator community, CAF senior executives, and executive at the Assistant Deputy Minister (Materiel), Assistant Deputy Minister (Digital Services Group), the Assistant Deputy Minister (Human Resources – Civilian), and the Assistant Deputy Minister of Defence Research and Development Canada.
  • Obligations regarding post-employment (DAOD 7021-2, Post-Employment)disclosure are incorporated into the Second Career Assistance Services seminar, which is received by individuals designated under our policies for post-employment restrictions.
  • Further, National Defence routinely posts information on its internal home page as well as through Defence Team-wide emails to provide further guidance on specific situations, such as taking a second job.

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Ammunition Investments in Our North, Strong and Free

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

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

  • The Government of Canada has entered into contracts worth $14.2 million with Canadian munitions suppliers to support the development of engineering plans to enhance ammunition production. Approximately $5.6 million has been spent so far.
  • It is estimated that it will take 3-5 years for this new production capacity to become available.

If pressed on other procurement initiatives for ammunition:

  • As part of the National Procurement Program, National Defence is authorized to immediately invest $520 million into the acquisition of ammunition and explosives over a period of five years, starting in fiscal year 2023/2024.
  • This additional funding will enable the department to address supply and demand challenges and increasing costs resulting from recent changes to the global security environment.
  • In addition to new investments in domestic ammunition production, Canada has also joined NATO's Air Battle Decisive Munitions framework.
  • Through this framework, Allies are working to reduce ammunition costs, accelerate deliveries, and ensure the interoperability of our stocks.

If pressed on Czech-led ammunition agreement:

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

Details

Munitions Supply Program (MSP)

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

NATO Air Battle Decisive Munitions (ABDM) Framework

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

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River-Class Destroyer (Canadian Surface Combatant)

  • National Defence is committed to providing the Royal Canadian Navy with next-generation warships to bolster naval capabilities at home and abroad.
  • This is why we are procuring Canadian Surface Combatants, known as the River-Class Destroyer.
  • The River-Class Destroyers are fast, maneuverable, long-endurance warships capable of conducting operations, escorting larger vessels, and defending against a wide range of threats.
  • This investment in our naval fleet ensures that Canada can continue to monitor and defend its waters and make significant contributions to international naval operations alongside our Allies.
  • I was honoured to visit the Halifax shipyard in June to celebrate the start of construction activities for this new fleet and announce the names of the first three ships: His Majesty's Canadian Ships (HMCS) Fraser, Saint-Laurent, and Mackenzie.
  • We anticipate full rate production of the ships to begin in 2025 and first ship delivery in the early 2030s.
  • This significant undertaking will support sustainable growth in Canada's marine supply chain and will create and sustain approximately 10,800 jobs annually throughout the 25-year construction period.
  • Overall, this project will generate at least $40 billion in GDP.

Key Facts

Estimated Budget: $56-60B (Design and Acquisition)
Timeline: Delivery of the first River-Class destroyer is anticipated for the early 2030s. Final ship delivery is expected by 2050.
GBA+: 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 Canadian Surface Combatant (CSC) River-Class Destroyer (RCD) 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.
  • Key features of the class include:
    • The United States Navy Aegis Weapon System as well as the Cooperative Engagement Capability (CEC), which is a real-time sensor netting system that enables high quality situational awareness and enhance anti-air warfare capability;
    • Surveillance radars, modern missile and torpedo capabilities, as well as an integrated underwater warfare system;
    • A CH-148 Cyclone multi-role helicopter, multi-role boats and facilities for embarking remotely piloted systems.

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 funding of $871M, for infrastructure improvements at the shipyard to ensure that it has the capability to construct the current CSC design and to meet the delivery schedule to support the RCN.
  • The Halifax Shipyard site expansion will include dredging, marine structures, and rock infill behind the structure creating approximately 13 acres of additional yard space. Within the shipyard, the newly expanded area is not expected to extend farther into the channel than the limits of the floating dry dock that was previously located at Halifax Shipyard. The upgrades are expected to enhance shipyard efficiency, directly contributing to the RCD build and delivery schedule.
  • Infrastructure enhancements began in 2023 to support the start of construction activities, which are expected to begin in 2024 and conclude by 2050.

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Arctic and Offshore Patrol Ships

  • A significant step to securing increased Canadian presence in the Arctic is the acquisition of six new Arctic and Offshore Patrol Ships (AOPS), designed to operate in previously inaccessible northern waters.
  • We have taken delivery of five ships; the final delivery is expected by late summer 2025.
  • These ships will operate in the Arctic between June and October, providing greater and longer Canadian Armed Forces (CAF) presence in the North.
  • Specifically, the AOPS are designed to perform surveillance operations, assist in emergency response, and conduct search and rescue missions.
  • In fact, HMCS Harry DeWolf recently rescued Canadian and Japanese citizens who were stranded in the Northwest Passage.
  • Further, as outlined in Our North, Strong and Free, we are exploring options to enable these ships to embark and operate maritime helicopters at sea.
  • This would increase the CAF's ability to assert Canadian sovereignty and respond to the growing range of maritime threats.
  • National Defence continues to advance the Arctic and Offshore Patrol Ships 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 related to components, such as failed valves, which have been addressed through preventative or corrective maintenance.
  • As issues across the class are resolved, these corrections are incorporated into the production of all follow-on vessels within the class, including those for the Canadian Coast Guard fleet.

Key Facts

Project Overview:

  • Budget: Up to $4.98B (excluding taxes)

Project Timeline:

  • July 31, 2020: Delivery of HMCS Harry DeWolf.
  • July 15, 2021: Delivery of HMCS Margaret Brooke.
  • September 2, 2022: Delivery of HMCS Max Bernays.
  • August 31, 2023: Delivery of HMCS William Hall.
  • August 29, 2024: Delivery of HMCS Frédérick Rolette.
  • Late summer 2025: Delivery target for the sixth and final vessel to the RCN, the future HMCS Robert Hampton Gray.

Details

Harry DeWolf Class Arctic and Offshore Patrol Ships (AOPS)

  • Harry DeWolf-class AOPS significantly enhances the CAF's capabilities and presence in the Arctic, better enabling the Royal Canadian Navy (RCN) to assert and uphold Canada's Arctic sovereignty. The AOPS augment Canada's presence on the Atlantic and Pacific oceans and conduct a wide variety of operations abroad.
  • The AOPS are able to operate in up to one meter of first-year ice, which is the ice condition experienced annually in the various waterways of the Canadian Arctic Archipelago between June and October. The ice capability provided by the AOPS allows for a greater and longer CAF presence in the Canadian North.
    • This allows the RCN to have unescorted access to areas of the Arctic that were previously inaccessible.
    • Notably, AOPS operate in Canada's exclusive economic zone along the Northwest Passage.
  • The ships are being built under the National Shipbuilding Strategy (NSS) by Irving Shipbuilding Inc. in Halifax, Nova Scotia.
  • For the first time in the history of the RCN, the class is named after prominent Canadian Navy figures who served their country with the highest distinction.

Deployments

  • Since 2020, AOPS have deployed annually as part of Operation NANOOK, Canada's premier whole-of-government exercise in the Canadian Arctic.
  • They also operate in the Caribbean Basin in support of numerous deployments under Operation CARIBBE, a US-led counter-narcotic operation.
  • These ships have also participated in the multi-national, bi-yearly Exercise RIMPAC in the Pacific, and have deployed to the Great Lakes Basin in support of recruiting efforts and public relations activities for the RCN and the CAF.

Deficiencies and Repairs

  • Prior to delivery of HMCS Harry DeWolf, HMCS Margaret Brooke, HMCS Max Bernays, HMCS William Hall, and HMCS Frédérick Rolette, 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 Defence Team 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 was finalized in early February 2023. The changes recommended by this investigation have been implemented in ships 1 to 5 and will be incorporated within follow-on ships, as appropriate.

Indigenous Relations

  • Each delivered ship is affiliated with an Inuit region to build strong ties with Arctic Indigenous communities as they operate in and around their territories.

GBA Plus

  • AOPS were designed to accommodate a mixed-gender crew and have a reduced cabin occupancy in order to create more 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.

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Submarine Replacement Project (VCM, VISCC & CPSP)

  • As Canada has the largest coastline in the world, and we recognize that underwater surveillance capability is crucial to our security and sovereignty.
  • Further, the Northwest Passage and broader Arctic region are more accessible than ever before and we are already seeing a more frequent presence and activity of foreign nations in the area.
  • Through Our North, Strong and Free, we committed to exploring options to renewing and expanding our submarine fleet, to protect our sovereignty from emerging security threats.
  • That is why, this summer National Defence began engagements with industry regarding the acquisition of up to 12 conventionally powered, under-ice capable submarines.
  • We formally released a Request for Information (RFI) for the Canadian Patrol Submarine Project in September 2024.
  • This RFI will help us gain insight on industry's capability to build and deliver a modernized submarine fleet to covertly detect, control, and deter maritime threats from coast to coast to coast.
  • We anticipate awarding a contract for the new fleet of by 2028, with the first submarine to be delivered no later than 2035.

Victoria Class Submarines:

  • Presently, the Victoria-class submarines are among Canada's most strategic assets for conducting surveillance of Canadian, international, and near-Arctic waters.
  • To ensure these submarines remain operationally relevant until the mid-2030s, we have also launched the Victoria-Class Modernization.
  • National Defence is currently engaged with industry to replace the Victoria In-Service Support Contract to perform critical maintenance, repairs, and management for our fleet.

Key Facts

  • Budget: As outlined in the Defence Capabilities Blueprint, the Victoria-Class Modernization (VCM) project is valued at up to $1 billion.
    • First modernization starting date: 2023
    • First delivery: 2027
    • Final delivery: 2038
  • The VCM project is currently made up of 13 separate projects. Seven are in the Implementation Phase and six are in the Definition Phase.

Canadian Patrol Submarine Project (CPSP):

  • On July 10, 2024, Canada announced its plans to move forward to engage industry on the renewal and expansion of Canada's submarine fleet – in particular, the purchase of up to 12 conventionally-powered, under-ice capable submarines.
  • On September 15, 2024, the Request for Information (RFI) was released, enabling industry engagement in the acquisition process.
    • This RFI has three distinct phases:
      • RFI deadline was November 18, 2024.
      • One-on-one engagements with respondents.
      • Deadline for final responses is February 28, 2025.

Details

  • The Victoria Class submarines are scheduled for end of life in the 2034-2040 timeframe. 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 (ex. the Acoustic Quieting Project will reduce the submarine's noise signature, thereby making the platform less likely to be detected).
    • Survivability – to ensure the survivability of the Victoria-class submarines against an evolving complex threat in an ever-changing battle space.
  • The current annual maintenance cost for the four Victoria-class submarines is approximately $300-350 million per year and is expected to remain stable.

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Future Fighter Capability Project

  • The Future Fighter Capability Project represents the most significant investment in the Royal Canadian Air Force in more than 30 years.
  • The F-35A aircraft will be essential for protecting the safety and security of Canadians, enhancing Arctic sovereignty, allowing Canada to meet its NATO and NORAD obligations, and boosting our interoperability with key allies and partners.
    • F-35As will replace existing CF-18 Hornets fighter fleet.
  • We are advancing towards the acquisition of an initial tranche of aircraft, with the first deliveries anticipated to begin in 2026.
  • To ensure our fighter fleet is immediately effective in the event of combat, in Supplementary Estimates B we are requesting $110 million to acquire Medium-Range Air-to-Air Missiles (MRAAM).
  • In addition, the Defence of Canada Fighter Infrastructure Project will ensure that the Canadian Armed Forces are ready to receive their new fleet.
  • We are currently designing Fighter Squadron Facilities in Cold Lake and Bagotville, which will accommodate these new aircraft.
  • Site preparation activities are already underway in both locations to prepare for the construction of the facilities.
  • We are confident that the procurement of the F-35A will deliver the right capability for the Royal Canadian Air Force, while providing high-value economic benefits for Canada's aerospace and defence sector for decades to come.

Key Facts

F35-A timeline and Project Budget:

  • Budget: $19 billion (excluding taxes) for acquisition.
  • First Aircraft Delivery to Canada: 2026 (first eight aircraft will be employed in U.S. for training of Canadian pilots).
  • First Aircraft Arrival in Canada: 2028.
  • Initial Operational Capability: 2029.

Project Deliverables to Date:

  • Long lead material procured to support production of initial quantity of Canadian aircraft in production lots 18 and 19.
  • Initial infrastructure designs and site preparation activity work required for the Fighter Squadron Facilities has been completed.

Economic Benefits:

  • Canada's participation in the U.S.-led multinational Joint Strike Fighter Program has yielded over USD $3.1 billion in contracts for Canadian companies since 1997.
  • There are currently 36 contractors in Canada who are active on this project and contributing a wide range of manufacturing support and other services to the global F-35 feet.

Details

  • Supplementary Estimates B includes $109,549,100 of funding for the acquisition of Medium-Range Air-to-Air Missiles that will be used with the CF-18 Hornets and F-35A fleets. (See note MAAMP).

Project Details

  • The Future Fighter Capability Project (FFCP) will successfully acquire and transition into service 88 advanced F-35A 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 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 National Defence completes the necessary infrastructure to support aircraft delivery and commence operations in Canada.

CF-18 Hornets

  • In October 2024, the RCAF announced its CF-18 Hornet Extension project achieved initial operational capability.
  • Full operational capability on all 84 CF-18 Hornets is anticipated by the first half of 2026.
  • Upgrades include sensors, weapons, countermeasures and mission support.
  • This project will allow the CF-18 Hornet fighter fleet to meet operational requirements to the North American Aerospace Command (NORAD) and the North Atlantic Treaty Organization (NATO) until scheduled retirement in 2032.

Gender-based Analysis Plus (GBA Plus)

  • New accessible infrastructure for the F-35A will be designed to include GBA Plus considerations. This includes the incorporation of a lactation room, multi-faith room, and gender-inclusive washrooms and showers in the design of the Fighter Squadron Facilities. The facilities will also be accessible for persons with disabilities and will include an area for Indigenous Smudging ceremonies.
  • Further, the F-35 cockpit accommodates the largest range of pilots compared to any legacy or operational fighter aircraft, accommodating operators from 103 pounds to 245 pounds.

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.
  • That said, National Defence continues to explore opportunities for partnership with Indigenous stakeholders and partners through FFCP, as well as related infrastructure projects, such as the construction of facilities in Cold Lake.

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 cooperate under the JSF PSFD MOU: Australia, Canada, Denmark, Italy, Netherlands, Norway, United Kingdom, and the U.S.
  • To date, there are 11 foreign military sales customers of the F-35: Belgium, Denmark, Czech Republic, Finland, Germany, Israel, Japan, Poland, Singapore, South Korea, Switzerland.
    • Greece and Romania are expected to finalize F-35 purchases shortly.

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