I have, over the past months, talked about defence procurement, which I think most people agree is a terribly muddled system and about a defence industrial base. Now, Erin O’Toole, in late 2016, promised, as I mentioned a few days ago, to double defence spending, bringing it up the 2% we agreed, in NATO, is our national goal, and, he said that he would create “a Defence Procurement Agency with the aim of depoliticizing major equipment purchases.” Now, as I said (first link) I think there has to be some politics in the process because its our money that they, the politicians, are spending.
In my mind a coherent defence policy include have a sensible procurement system and that must embrace a national defence industrial base.
The purpose of the national defence industrial base is not (just) to create jobs for Canadians. It must be there to allow us to have independent security, defence and foreign policies. Countries that are larger and richer than Canada, like France (Pop: 66 million, vs Canada’s 35 million and GDP: $2.5 trillion vs Canada’s $1.5 trillion) and smaller and poorer, like Sweden (Pop: 9.5 million (¼ of Canada’s) and GDP: $520 billion (⅓ of Canada’s) have well developed defence industrial bases. When Swedish sailors go on patrol they do so in Swedish designed and built warships, as do French sailors in French designed and built ships. When the French army goes to “keep the peace” in Africa the soldiers are in French made tanks, APCs and helicopters, using French made radio and firing French made weapons, the Swedes use Swedish tanks and artillery when they deploy for home defence or overseas. And, of course, both France and Sweden make their own high performance jet fighters in the intensely expensive and competitive global military combat aircraft market.
It has been a long, long, long time since Canadian pilots flew a Canadian designed and built jet fighter ~ that would be the old CF-100 Canuck, I guess. We have conceived and produced some “world beating” aircraft like the famous Buffalo and Caribou aircraft , both designed and built by de Havilland in Toronto. We also designed and produced other “world beaters” like the AN/GRC 103 family of multi-channel radios made, back in the 1960s, by Canadian Marconi, and, of course, the LAV III, based on a Swiss design reimagined by (then) the General Motors Diesel Division (now General Dynamics) in London, ON. Canada can and does, of course, design warships, too … but it has been many years since there was a Canadian ship designed in Canada by Canadian naval architects. Even our Harry DeWolf class Arctic parol ships, “designed” and built in Canada look an awful lot like Norwegian Svalbard class ships. World beaters are rare, Canada’s has a few, so has Sweden and Britain and the USA and so has Russia ~ think of the AK-47 Kalashnikov rifle. But the goal should not be to produce a “world beater” evert time, the goal should be to produce the “good enough” at an affordable cost most of the time.
The point is that most self respecting countries want and need some level of national defence industrial base because countries that depend too much on buying military hardware from others will find that they weapon systems come with “strings attached,” including (as we want to impose on countries that buy our LAV IIIs) how and against whom the weapons systems may or may not be used.
The defence industrial base matters, including to the issue of how much “bang” we get for each “buck” spent on defence. Equally, it is legally OK (under the international trade rules which we have agreed to obey) for governments to subsidize their defence industries in ways that are absolutely forbidden for other sectors.
Just one “pie in the sky” example
Just as an example, consider shipbuilding: if, as Erin O’Toole proposes, we spend 2% on defence, then let’s say, just for the sake of an example, that while spending is ramping up the Canadian government concludes that it will build or lease:
- 4 X military fleet support vessels (often called “oilers” or “tankers’ or, more properly AORs) ~ two built in Canada and owned by the Navy and two “converted” in a Canadian yard (Project Resolve) and leased by the Navy;
- 4 X submarines ~ although it is agreed that six, at least, are required;
- 4 X Harry DeWolf class large, Arctic and ocean going patrol ships;
- 8 X new destroyer/frigates; and
- 10 X corvettes.
The first 16 surface ships will all be completed over a bit more than a single decade (say, 2018-2032); the 10 corvettes will follow at a rate of one per year. By the time the last corvette is in the water (2042) the East Coast yard will need work and the government should have plans drawn up and money in the budget for, say, 10 new destroyer frigates, to be built between 2042 and 2050, and 10 new corvettes to follow and so on. The West Coast yard will, in 2030 be building ships for the Coast Guard and in, say, 2040 will do two major refits on the military support ships. That will look something like what the bureaucrats who designed the National Shipbuilding Procurement Strategy had in mind: a continuous flow of military and Coast Guard ships (and refits) that can provide a firm business base to keep two yards in business almost indefinitely.
Now consider something else proposed by Mr O’Toole: defence cooperation by the CANZUK nations. Suppose the admirals get together, and, in about 2020, produce an agreed, combined (all four nations) military requirement for three type of surface combatants:
- Large, expensive, very sophisticated warships that we will call cruiser-destroyers;
- Medium sized, less costly, still very sophisticated general purpose warships we can call frigates; and
- Smaller, less capable and less costly but still effective ships that we will call corvettes.
Suppose that, next, defence and industry and finance ministers meet and also agree that three of the four nations should agree that each will build some of the ships and all four nations will “sole source” their procurements of those types of ships from, say, about 2040 and on, to those three.
Let’s suppose, further, that 20 of the cruiser-destroyers (UK: 10, Canada: 6, Australia: 4) are required, and the UK will build them all. Next, let’s suppose that 35 frigates (UK: 14, Canada: 10, Australia: 8, New Zealand: 3) are needed and the UK will build 17 and Australia will build 10 and Canada will build 8. And, finally, suppose that 45 corvettes are required (UK: 17, Canada 12, Australia 12, New Zealand 4) and Canada will build 28 and Australia will build 17). That means the UK will build 37 ships, including all of the most expensive ones (a side deal might also give the UK the inside track to build large support ships (tankers) for each navy, too, because they have a larger workforce and bigger yards), Canada will build 36, but mainly of the smaller, corvette, type, and Australia will build 27 frigates and corvettes. What about New Zealand? Let’s say that we all agree that we all need coastal patrol and training vessels and that New Zealand will build, say, 20 for itself and Australia and will sell the plans to the UK and Canada who will each build a ten or twelve more for their own use. These small, Canadian built vessels would replace our Orca class training vessels.
A combined project like this would provide steady work for three yards in Canada building and refitting warships, ditto for the UK, Australia and New Zealand … if the four countries can agree (compromise) on common enough military requirements and on the fairness of the values of the work and sales. Four nations, one (relatively) large, two medium and one small, is probably about as many as could ever be expected to agree to such an arrangement. Further, it would give each nation, including New Zealand, a “lead” in a class of ships that could be exported to the world.
Both shipbuilding examples are just that, rather “pie in the sky” notions of what could happen if four leaders could agree that they need to defend their countries, that cooperation often works better than beggar-thy-neighbour competition and that defence procurement is “special” and needs to be done more efficiently and effectively.
More will follow, in a few days, about an idea for a very slightly less “politicized” defence procurement system.