Canadian JSF Purchase Not A Done Deal!

Apparently there is nothing to hold Canada to the planned purchase of the Joint Strike Fighter until a contract is signed in 2013. This means that a future Liberal government may nix the deal - talk about deja vu! Remember the EH-101 helicopter debacle?

Canada won't be required to sign a contract committing it to purchasing new multi-billion-dollar stealth fighters until 2013, opening the door for any future government to back away from the proposed deal.

The Conservative government's decision in mid-July to spend an estimated $16 billion on the Joint Strike Fighter has sparked controversy, with opposition parties questioning whether the purchase is needed at a time when the country's deficit has ballooned to $50 billion.

Liberal Leader Michael Ignatieff, concerned that no competition was held to select the fighter plane, known as the JSF, has vowed to review the deal if his party forms the next government. The proposed purchase is the most expensive military equipment procurement in Canadian history.

Military and aerospace industry officials say despite the Conservative's announcement there is nothing at this point holding Canada to the acquisition. That won't come until 2013 when the contract will be signed with the U.S. government for the delivery of the first airplanes, industry representatives, including those with JSF-manufacturer Lockheed Martin, confirm.

"We have no contract or agreement requiring us to purchase this aircraft," said Alan Williams, the Defence Department's former assistant deputy minister, who signed the original memorandum in 2002 that allowed Canada to participate in the initial development of the JSF. "That's all the more reason to hold a competition so taxpayers can get the best value out of this."

The 2002 memorandum, signed under the then-Liberal government, has Canada investing $150 million U.S. into the JSF program so Canadian firms would be allowed to bid on building parts for the planes. Canadian firms have received an estimated $328 million in contracts from that deal, according to the government.

In 2006, the Conservative government signed an agreement that would commit Canada to contributing $551 million U.S. between now and 2051. That would cover Canada's portion of equipment and development needed for its share of the JSF planes that it wants to purchase.

That memorandum allows for a country to pull out of the agreement, with aerospace industry officials noting the penalties at this point would be small as Canada has yet to order aircraft.

But Tom Burbage, a senior official on Lockheed Martin's JSF program, said any pullout of the program will significantly hurt Canadian firms who are hoping to receive more contracts.

By: Shelldrake