08 November 2015

Canadian Defense Industry May See Immediate Benefit from F-35 Cancellation

Specifically, Canada has two needs, to replace its tired F/A-18s. but it also needs to replace much of its navy, which is well past its "sell by date".

It turns out that the money saved by cancelling the F-35 may well free up money to allow for new ships, which will have the effect of creating a net plus for the Canadian defense industry:
While Canadian firms stand to lose business with the country’s withdrawal from the F-35 program, its maritime industry is expecting a potential windfall from the change of direction in defense.

Prime Minister Justin Trudeau has promised to put more money into Canada’s ailing naval shipbuilding program, including any savings from selecting a cheaper alternative to the F-35 fighter jet. Maritime industry officials said that could mean more ships and more work.

Trudeau promised the shift in defense priorities during the recent federal election campaign. His government was elected Oct. 19 and took power Nov. 4.

The previous Conservative Party government had launched the National Shipbuilding Procurement Strategy (NSPS) in 2011. That outlined an ambitious CAN $30 billion plan (US $23 billion) to construct new vessels for the Royal Canadian Navy and Canadian Coast Guard. NSPS would see construction of 28 major warships and 116 smaller vessels.

Conservative Party Prime Minister Stephen Harper, who was defeated by Trudeau, had earlier dismissed the Liberal promise to spend more money on shipbuilding as unnecessary, noting that his government originally put enough funding into NSPS.

But the shipbuilding strategy has been dogged by concerns from industry. Defense analysts, the Royal Canadian Navy and the country’s Auditor General Michael Ferguson have all warned there is likely not enough money to build all the needed vessels.

Before the Conservative Party government was defeated, Defence Minister Jason Kenney acknowledged that the NSPS plan, supposed to build up to 15 replacement ships for the Navy's frigates and destroyers, might actually only finance 11 vessels.
Trudeau may very well have backed himself into a win-win scenario for canada.


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