Canada moving forward with sole-source contract to replace military surveillance planes

The federal government will award a multibillion-dollar, sole-sourced contract to Boeing to replace its aging military surveillance planes, Radio-Canada has learned. 

Two sources confirm a decision has been made amid public campaigns to launch an open and fair competition. 

When asked about the deal on Wednesday, Prime Minister Justin Trudeau said “ministers will address that issue.”

An announcement is expected on Thursday, the same say Boeing’s offer was set to expire, said a government source.

Canada is seeking to replace its CP-140 Aurora fleet, used to protect Canada’s sovereignty along the coastline. Originally procured 50 years ago, the aging planes are slated to retire from service in 2030, the government said. 

After a request for information from Canada, the U.S. government told Congress in July it approved the possible sale to Canada of up to 16 Boeing P-8A patrol aircraft and associated equipment worth up to $5.9 billion US, or about $8 billion Cdn. 

The federal government said last year Boeing’s P-8A Poseidon “is the only currently available aircraft that meets” the military’s needs, including anti-submarine warfare.

Calls for ‘open and fair’ competition

Unifor and the International Association of Machinists and Aerospace Workers took to Parliament Hill on Tuesday alongside Bloc Québécois MP Simon-Pierre Savard to add their voices to growing demands for a competitive procurement process. 

Ontario Premier Doug Ford, Quebec Premier François Legault and a parliamentary committee all called on Ottawa to allow competition for the contract.

Bloc Québécois Leader Yves-François Blanchet also criticized the government’s decision to buy from Boeing without looking at a proposal from Bombardier.

“The prime minister and the government does not seem able to help Canada’s and Quebec’s economy, but cannot refrain from being harmful to Canada’s and Quebec’s economy,” Blanchet told reporters on Wednesday.

At the centre of the controversy is Montreal-based Bombardier, which has publicly campaigned for a shot at the contract, arguing it will keep jobs in Canada.

Bombardier spokesperson Arevig Afarian said Tuesday the company is continuing to “push for an open and fair procurement process.”

A government source told Radio-Canada that the option proposed by Bombardier was too uncertain because the company’s proposed militarized plane hasn’t been developed yet. 

Boeing to open Quebec innovation centre, sources say

Bombardier joined forces with rival General Dynamics to provide the Royal Canadian Air Force with a new Multi-Mission Aircraft, which is a militarized version of its Global 6500 with submarine-hunting technology developed in Canada. The company has said it can meet whatever deadline the government reasonably sets for initial delivery, including 2030.

Boeing has committed to opening an innovation centre in Quebec, sources said.

Housing Minister Sean Fraser said he couldn’t comment on what was discussed around the cabinet table. He did say the government wants to get “timely access to the gear that we need.”

“We want to make sure that we continue to get value for money,” Fraser said Wednesday. 

Trudeau said Tuesday the government listened to Bombardier. Trudeau said he understands it’s the company’s job to sell planes.

“The important thing for us is to ensure both good jobs in Canada and the military equipment that our department needs,” Trudeau said in French.

Only one available option, government says 

Simon Page, an assistant deputy minister at Procurement Canada, told a parliamentary committee last month that a third party was hired to assess the market. 

Based on that assessment, the project team concluded “it would be very challenging” for the industry in Canada to come up with an aircraft to meet the military’s needs before the life expectancy of the old fleet expires, Page said.  

Page said the government received more than 20 responses to its request for information and Boeing was the only one that “provided a non-developmental, military off-the-shelf aircraft.” 

“The other responses were either only partial or sub-system-level solutions, or based on an aircraft not yet developed or requiring extensive modification,” said Page on October 17 at a hearing of the standing committee on government operations and estimates.

Bombardier released a report by PricewaterhouseCoopers in July that claims its plan could support 22,650 jobs directly or indirectly through its supply chains in Atlantic and Western Canada and lead to $800 million in tax revenue for different levels of government.

Boeing’s plan could create an annual benefit to the Canadian economy of $358 million and more than 2,900 Canadian jobs, said a study conducted by Doyletech. 

Better explanation needed, says expert

Defence procurement expert David Perry said the government has long faced criticism over procurement projects that drag out too long. The selection of the F-35 fighter jet is the “most outrageous example”, he said, adding it’s “pushing two decades to actually just select the aircraft.”

Perry estimates the government is on track to under-spend on capital equipment by about $6 billion this year under its current defence policy.

Whatever the federal government decides about replacing the surveillance planes, Perry said, the Canadian public deserves a more in-depth explanation. 

“This is an important project,” said Perry, president of the Canadian Global Affairs Institute.

“It’s [billions] of taxpayer dollars and potential consequential impacts for Canadian industry to go forward. So for all those reasons, I’m really hoping the government takes time to offer a fulsome explanation.”

Boeing said it does not have a comment at this time. Public Services and Procurement Canada told CBC News on Tuesday “the final decision will be based on the offered capacity, availability, pricing and benefits to Canada and Canadians.”