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Ottawa to spend $16-billion on fighter jets

Minister of National Defence Peter MacKay checks out the cockpit of the F-35 Joint Strike Fighter following an announcement in Ottawa on Friday.

Adrian Wyld/THE CANADIAN PRESS/Adrian Wyld

The government defended its decision Friday to spend at least $9-billion for the latest generation of fighter jets - one of the biggest military purchases in Canadian history - without a single competing bid.

The Liberals and a former public servant who once headed the purchase project say the massive F-35 Joint Strike Fighter purchase should have been subjected to competitive tenders.

"I'm questioning the hypocrisy that now soars higher than this aircraft," Defence Minister Peter MacKay said in rebutting Liberal criticism that the contract was not competitive.

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He noted that the previous Liberal government launched Canada's involvement in the project a decade ago.

The total value of the contract is expect to rival the amount spent by the Conservatives four years ago when they rolled out a series of high-profile military purchases of transport planes, helicopters and armoured trucks.

Public Works Minister Rona Ambrose repeatedly refused to say how much the maintenance contract would be worth after being pressed by reporters.

For his part, all Mr. MacKay would say is that previously reported estimates of that were incorrect.

The government committed $9-billion to buy the 65 planes from Lockheed Martin, and the first aircraft is to be delivered by 2016, said a statement from the Defence Department.

But the overall cost is expected to soar to $16 billion when a 20-year maintenance contract is factored in.

The 65 new jets would replace the Air Force's aging fleet of CF-18s that recently underwent a $2.6-billion upgrade.

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Mr. MacKay said those airframes will be 40 years old by the time they need another upgrade in 2020 and it made more sense to invest in new aircraft.

"We need to ensure our fighter-aircraft fleet remains the best in the world to meet the threats of the 21st century," Mr. MacKay told a splashy news conference featuring a mock-up of the jet as a backdrop.

Mr. MacKay had assured Parliament there would be a competitive process for the selection of new planes, but cabinet decided to go with an untendered contract.

"We're very pleased with the decision and are committed to supporting the government of Canada in moving forward with the F-35 Program Integration," Lockeed Martin executive vice president Tom Burbage said in a statement.

Steven Staples of the Rideau Institute, a defence think tank, said the sorry shape of the economy made this the wrong time to buy these jets.

"These are 'Flying Cadillacs' that are not needed for the defence of Canada, and are unaffordable," Staples said. "The government should wait until national finances are in better shape, and use resources for other priorities, such as fixed wing search and rescue."

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Liberal Leader Michael Ignatieff said he would put the deal on hold if he were elected prime minister.

Mr. Ignatieff is calling on the House of Commons defence committee to reconvene as soon as possible to examine what he calls the Tory government's "secretive, unaccountable decision to proceed with this contract."

He says the non-transparent, non-competitive contract to build the F-35 Joint Strike Fighter is not a good idea considering the Conservatives are also looking at cuts to Veterans Affairs.

Newly released polls conducted for the Defence Department late last year suggest Canadians are generally quite supportive of increased military spending.

The survey conducted by the Strategic Counsel for the government indicated 74 per cent of Canadians surveyed support "significant government investment" in the Canadian Forces.

But the numbers drop when it comes to big-ticket items. Only 54 per cent of those surveyed said buying ships, aircraft or vehicles is a good use of public funds, while 25 per cent disagreed and 19 per cent weren't sure.

That represented a drop of eight points from the 62 per cent of Canadians who supported those purchases just a few months earlier in September 2009.

The numbers get worse for the Defence Department when respondents were asked if the government "gets good value for money when making major equipment purchases."

Just 26 per cent agreed with that sentiment and 44 per cent disagreed.

The survey of 1,000 adult Canadians was carried out between December 10 and 15, 2009. The results are considered accurate to within 3.1 per cent 19 times out of 20.

The Liberals want a committee to question other potential bidders and procurement experts to determine whether a sole-sourced contract gives maximum value to the government and taxpayers.

A previous Liberal government signed a memorandum of understanding with Lockheed Martin to develop the Joint Strike Fighter, but did not commit Canada to buy the aircraft.

The senior public servant who oversaw the Defence Department's initial involvement in the Joint Strike Fighter more than a decade ago said the federal government is abusing the sole-source procedure.

Alan Williams, the former assistant deputy minister of material, said such an expensive, complex project needs to go through an open, transparent bidding process.

There have been too many sole-sourced deals, he said, citing the purchase of 17 C-130J Hercules transports, battlefield helicopters for the military and heavy-lift transport planes.

"Don't get me wrong, I think the JSF is a marvellous aircraft; absolutely state-of-the-art, but there needs to be an open competition," Mr. Williams told The Canadian Press.

Ottawa has already invested $160-million with Lockheed Martin in order to be part of the development phase of the stealth-capable fighter.

But Mr. Williams, who brokered the deal in late 1999, said that doesn't commit the air force to actually buying the plane and argued it was seed money for economic development. Canadian aerospace companies have landed $275-million worth of contracts to manufacture components.

The fighter jet saga mirrors the controversy that engulfed the decade-plus process to replace Canada's 1960s era fleet of Sea King maritime helicopters.

In 1993, the Liberals tore up a Conservative-inked contract for about $5-billion for a new fleet of ship-borne helicopters to fulfill a campaign promise. Jean Chrétien branded the EH-101 helicopters "Cadillacs" during the election campaign that ended two consecutive governments of Tory rule, most of it under Brian Mulroney.

Mr. Chrétien spent 10 years in power without ever replacing the rusted out Sea Kings, which sapped morale in the Air Force and Navy, and proved more costly when new helicopters were eventually purchased.

With the Liberals now wanting to put the brakes on the Joint Strike Fighter project, unfavourable parallels are now being drawn with the delays attributed to the Sea King replacement under Mr. Chrétien.

Liberal MP Marc Garneau has rejected that comparison, saying there is time to study the Joint Strike Fighter deal because the current fleet of CF-18s don't need to be replaced for another seven years.

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