Airbus chosen to build Canada's new search planes, ending 12-year procurement odyssey

The Liberal government has chosen the Airbus C-295 transport as Canada's next fixed-wing search-and-rescue plane, in a two-step procurement process that will cost taxpayers $4.7 billion over the next two decades.

The selection of European defence giant Airbus ends a 12-year, frustrating odyssey that spans three governments.

Defence Minister Harjit Sajjan, Public Works Minister Judy Foote and the commander of the Royal Canadian Air Force, Lt.-Gen. Michael Hood, announced the deal Thursday at the country's largest military air base, in Trenton, Ont., which is also one of the principal search and rescue stations.

• Conservatives made 'political' decision to cut military flying time in 2014, Laurie Hawn says

The first phase at a costof $2.4 billion involves the purchase of 16 C-295W aircraftmodified for search-and-rescue missions.

A training simulator, to be located in Comox, B.C., and 11 years of in-service support and maintenance will be included. The maintenancewill be handled by PAL Aerospace in Newfoundland and Labrador.

An additionalin-service support program will have to be negotiated with Airbus, at an estimated cost of $2.3 billion.

Airbus wins $4.8 billion for search and rescue fleet

8 years ago

Duration 2:56

Ministers Judy Foote and Harjit Sajjan were on hand to announce the government's purchase of 16 new search and rescue aircraft from Airbus.

Taken together, the combined price tagis considerably more than the $3.8 billion approved by the former Conservative government in 2011, and higher thanthe original $3.1 billion cost affixed to the plan when Paul Martin's government first announced it in 2004.

"Whether it is in mountainous terrain, in the middle of the Atlanticor over the Arctic, the C-295 is the modern and versatileaircraft we need," Sajjan said Thursday.

The turbo-prop C-295 is in use in 15 countries, mostly formilitary transport, but also for maritime patrol and anti-submarine warfare.

Elimination of operating base considered

There were three companies in the running: Alenia Aermacchi North America (now rebranded as Leonardo-Finmeccanica), Airbus Defence and Space, and Embraer, a Brazilian aerospace firm.

In a statement, a representative with Leonardo-Finmeccanicawould only say that the companyhas been informed it is not the winner and will take some time to avail itself of a "debrief" from government officials before commenting.

The hybrid procurement was intended to deliver not only aircraft, but recommendations on how many planes are needed and where to station them.

The companies were asked to submit prices and aircraft numbers for a fleet that would operate out of at least four main bases across the country Greenwood, N.S., Trenton, Winnipeg and Comox, B.C. and a separate proposal using only three airfields.

But the announcement Thursday looks more like a straightforward procurement.

The high cost political and financial of dropping one of the main operating bases was, according to defence sources, a non-starter for a government that is already being knocked around over its handling of the fighter jet replacement.

The air force, which hadbeen accused in the past of favouring the Leonardo-built C-27J, fully got behind the Liberal government's decision on Thursday.

"Thanks to the sensors and systems aboard this new fleet of aircraft, I believe search and rescue is going to become a lot less about search and more about rescue," said Lt.-Gen. Mike Hood. "The C-295 more than meets the requirements of the Royal Canadian Air Force."

Replacing 50-year-old planes

The new planes are meant to replace the air force's nearly 50-year-old CC-115 Buffalos and older model CC-130 Hercules transports currently assigned to search-and-rescue duties.

Foote says the first planes are expected to arrive in 2019 and the final delivery will take place in 2022 18 years after they were originally ordered.

• Search-and-rescue plane replacement taking too long, says NDP critic

Paul Martin's Liberal government started the competition in 2004.

"It boggles the mind," said Alan Williams, who was the head of military procurement when the federal Finance Department approached National Defence, saying it had $1 billion to spend on equipment for the Forces.

Fixed-wing search-and-rescue planes were an obvious choice, he said.

"The minister gets up in the House and basically says, 'We need new airplanes to find people who are lost and save them.' It was a no-brainer from that perspective," said Williams.

Accusations of bid-rigging

But just before the Conservatives were elected in 2006, the program stalled over accusations from defence contractors that the air force had rigged the specifications in favour of theC-27J.

The air force has long denied the allegation, but in 2012 the top brass pitched the former Conservative government on buying surplus U.S. C-27Js.

Williams says there's an important lesson in the long-drawn-out fiasco.

"The military has to know and has to be told" on this project and other that their job is to define requirements for equipment needs and it's the government's job to hold an open, fair tender and pick the winner, he said. "And that's it."

Protecting military from themselves

Commenting on the issue of new fighter planes, he said, "I have no doubt the air force wants the F-35. I can understand that. I have no doubt the air force wanted the C-27J. I can understand that, too.

"But that's why it's incumbent on the assistant deputy minister of materiel, the deputy minister and the minister to safeguard the process and protect the military actually from themselves."

Former defence minister Peter MacKay said in December 2008 that the search planes were his top procurement priority, but the effort bogged down and it was eventually referred to the National Research Council for analysis.

The council agreed the military's specifications were far too specific and needed to be broadened in order to ensure competition.

• Air force warned fighter fleet readinessdeclining in 2014
• EXCLUSIVE |Majority ofCF-18swill fly beyond 'certified safe life': internal report
• Liberals to buy 18 Boeing Super Hornet fighter jets to fill 'capability gap'