$274M for Canadian military vehicles to be built in U.S

EagleSmack

Hall of Fame Member
Feb 16, 2005
44,168
95
48
USA
That's very true. Quite a bit of US military/NSA intel comes from RADARSAT II and we are required to spend 10% of our military budget in the US and they are required to match that sum in Canada. Considering the recent Canadian purchases of military equipment from the US, do you think the US is buying $10 billion worth from Canada?

I cannot say yea or nay as I don't know. But if quite a bit of US purchases for the military are from Canada I would say that we are matching the 200+ million that we are talking about here.

Let me go check. I would bet we are spending a great deal on Canadian hardware for the military. I'll try and see what I can find.
 

EagleSmack

Hall of Fame Member
Feb 16, 2005
44,168
95
48
USA
That's very true. Quite a bit of US military/NSA intel comes from RADARSAT II and we are required to spend 10% of our military budget in the US and they are required to match that sum in Canada. Considering the recent Canadian purchases of military equipment from the US, do you think the US is buying $10 billion worth from Canada?

But as I do go check... do you think comparing our budget to yours is fair? If you had to spend 10% of your budget of US hardware and we had to spend 10% of our budget on Canadian hardware you would think that would be a fair trade?
 

Tyr

Council Member
Nov 27, 2008
2,152
14
38
Sitting at my laptop
But as I do go check... do you think comparing our budget to yours is fair? If you had to spend 10% of your budget of US hardware and we had to spend 10% of our budget on Canadian hardware you would think that would be a fair trade?

What I am saying is that contractually "must" match it dollar for dollar (not 10% of our budget to 10% of your budget)

We have spent upwards of $10 billion US on american defence products in the last 2 yrs. The US has bought nowhere near that amount from Canada
 

Tyr

Council Member
Nov 27, 2008
2,152
14
38
Sitting at my laptop
I believe my source is the Vancouver Sun. I can only assume that is where you got the original story from as you failed to post a link (which is the proper thing to do lest people accuse you of plagiarism).

"I believe.... I assume.....

Do you ever check?

Here is one of the story from the Vancouver Sun (but in fact it's a concern voiced by the Aerospace Industries of Canada)

OTTAWA — Canada's aerospace industry is furious that the federal government has reneged on a promise that companies from Vancouver to Montreal to Halifax would be able to share in billions of dollars worth of high-tech military contracts associated with the purchase of new military aircraft.

Instead, "work packages" negotiated between the federal government and U.S. defence giants like Boeing Co., and Lockheed Martin Corp., amount to little more than contracts for "putting gas in the planes and changing the tires," said one angry industry official, who requested anonymity.

On Friday, the Aerospace Industries Association of Canada, an industry lobby group that represents about 400 Canadian companies and the 80,000 Canadians those firms employ, warned Defence Minister Peter MacKay that Canada is not getting the benefits of the billions of Canadian tax dollars being given to U.S. defence contractors for the planes.

"I now write you to underscore that our industry remains acutely concerned that major defence procurements are proceeding in a way that will not fully engage and strengthen capabilities resident in the domestic industrial base," said Claude Lajeunesse, the chief executive officer of the AIAC, in a letter obtained by Canwest News Service.

Lajeunesse also warned that, in letting foreign defence companies take responsibility for the maintenance of Canadian military assets, Canada is ceding its sovereignty to other countries.

The federal government is in the midst of a once-in-a-generation purchasing cycle for new military planes and helicopters. The government has four separate purchase projects for aircraft worth about $16 billion, most of which will be going to Boeing and to Lockheed Martin. For each contract, Canada, as part of its major contract procurement policy, insists that for every dollar Boeing or Lockheed Martin receives from the government, they must spend a dollar purchasing Canadian goods or services. In addition, cabinet ministers have insisted that the U.S. firms should buy high-tech, top-quality goods and services that would create manufacturing jobs in Canada and also boost the industry's technological capability.

"We are continuing to make sure Canada's aerospace and defence industries obtain maximum benefit so they can build and sustain capacity to support these aircraft over the long term," former public works minister Michael Fortier said on Jan. 16, 2008 in announcing that Lockheed Martin had won a contract to provide Canada with 17 C130-J Hercules transport aircraft.

Shortly after that, the federal government issued news releases detailing how much money each region of the country would receive as a result of the two contracts that have so far been awarded to Boeing and to Lockheed Martin. For example, the aerospace industry in Quebec, centred around Montreal, could expect $660 million in new contracts, the government said. Western Canadian companies would get $341 million in contracts, with more likely to come.

"These significant investments are a sign of confidence in the talent and abilities of our region's businesses, which have demonstrated that they have what it takes to become part of Boeing's and Lockheed Martin's global supply chains," Treasury Board President Vic Toews, the regional minister for Manitoba, said on Jan. 25, 2008.

Canada's aerospace industry says it does indeed have what it takes to be part of those supply chains but Canadian firms are being shut out of those lucrative partnerships and the federal government is doing nothing to help them.

"The issue is the Canadian guys aren't getting the good work," said another defence company lobbyist, who spoke on condition he not be identified.

Canadian firms have historically been the lead contractor to maintain Canadian military aircraft. L-3 Communications Mas (Canada) Inc., in Montreal, for example, took the lead in keeping the CF-18 fighters in shape. L-3 Spar Aerospace Ltd., in Edmonton and, later, Cascade Aerospace Inc., in Abbotsford, B.C., kept the Hercules fleet flying. And IMP Aerospace in Halifax provided the maintenance and repair on the Aurora patrol aircraft.

But now, for the first time, a foreign firm will be in charge of keeping a key group of Canadian military aircraft flying.

"To ensure that this substantial expenditure of Canadian's taxpayer dollars not only secures much needed defence assets but also helps Canada weather the downturn in the global economy requires urgent intervention by you and your cabinet colleagues to ensure that the capabilities of Canadian industry are drawn upon to the fullest in supporting the new fleets over their long lifespans," Lajeunesse said in his letter to MacKay.

Lajeunnesse's letter comes as the federal government is about to unveil six or seven "work packages" it has negotiated with Lockheed Martin for the maintenance and repair of the Hercules aircraft, the first of which is to be delivered in the winter of 2010.

For the first time, the prime contractor that built the plane — Lockheed Martin — also will be the prime contractor charged with servicing the plane. The contract to build the planes is worth about $1.4 billion US but the contract to service the planes over their 20-year lifespan could be worth as much as $4 billion US.

"The . . . approach resulted in (Lockheed Martin) making available to Canadian companies work packages that were mainly for low-complexity technical labour and supply warehousing and that lacked any substantial design, engineering support, program management planning and development activities," Lajeunesse wrote MacKay. "It also vests overall control of the (service and support) with a foreign aircraft manufacturer, raises questions as to Canada's control of its defence assets and lessens Canada being a 'smart buyer' in terms getting full 'value-for-money'."

The industry says it worries that the government will repeat this action when it awards the next multi-billion dollar contract, this time for Chinook helicopters made by Boeing, and when it proceeds with the acquisition of new search-and-rescue aircraft.
 

Cannuck

Time Out
Feb 2, 2006
30,245
99
48
Alberta
No sweat. I "don't feel like" doing your homework for you

It's not my homework. I have a pretty good understanding of the goings on at DRDC. I just thought that some others would like to read up a little on the issues surrounding the purchasing of military equipment and technologies. If you are not that is fine. I do not post here for your benefit.
 

Spade

Ace Poster
Nov 18, 2008
12,822
49
48
9
Aether Island
Dear Prime Minister Stephen Harper,

Thank you for assisting the new American Government move towards its goal of creating 3 million jobs in the US. Your $274 million purchase of military vehicles from us translates into the equivalent of 4566 jobs paying an annual salary of $60 000.

God bless you and the Canadian Taxpayers!
President Elect
Barack Obama

cc. The Dubya

See what real change can accomplish!
 

EagleSmack

Hall of Fame Member
Feb 16, 2005
44,168
95
48
USA
The Defence Production Sharing Agreement is a bilateral trade agreement between the United States and Canada that aims to balance the amount of military cross-border buying in order to avoid trade imbalances. Since its signing in 1956, it has led to a number of US companies sending military production to Canada in order to "offset" Canadian purchases of US military equipment. The Agreement has been amended on several occasions. The similar Defense Development Sharing Program organized sharing of military research and development.

From Wiki
 

EagleSmack

Hall of Fame Member
Feb 16, 2005
44,168
95
48
USA
Dear Prime Minister Stephen Harper,

Thank you for assisting the new American Government move towards its goal of creating 3 million jobs in the US. Your $274 million purchase of military vehicles from us translates into the equivalent of 4566 jobs paying an annual salary of $60 000.

God bless you and the Canadian Taxpayers!
President Elect
Barack Obama

cc. The Dubya

See what real change can accomplish!

And what about the $274 Million worth of Canadian Products Navistar has agree to purchase?
 

Spade

Ace Poster
Nov 18, 2008
12,822
49
48
9
Aether Island
PS from Barack
The $274 million for 1300 trucks is just $210 769.23 per vehicle! Hell, it would be cheap at twice the price.
PPS
We've got some more knives and hammers...
 

Tyr

Council Member
Nov 27, 2008
2,152
14
38
Sitting at my laptop
Dear Prime Minister Stephen Harper,

Thank you for assisting the new American Government move towards its goal of creating 3 million jobs in the US. Your $274 million purchase of military vehicles from us translates into the equivalent of 4566 jobs paying an annual salary of $60 000.

God bless you and the Canadian Taxpayers!
President Elect
Barack Obama

cc. The Dubya

See what real change can accomplish!

Dear Cousin Spade (odd name??? But hey it's probably a Canadian pronunciation)

Thank you so much for the kind words and support.

Please do remember to forward it to Gov. Blagojevich (Governor of Illinois where Navistar is based) as it was his dilligent efforts and "unique salesmanship" that made it all possible.

Looking forward to you and the missus dropping by for the inaugeration thing. It outta be a hoot.

ps. You might want to write the governor post haste as there is a rumour he may be stepping down soon due to poor health and/or..... well, we'll just leave it as poor health. He's been under alot of stress lately and has taken to muttering Kipling's "If" in the oddest places...

Regards Obama
 

Spade

Ace Poster
Nov 18, 2008
12,822
49
48
9
Aether Island
Dear President Elect Obama,

The mis'ss and I would be pleased to attend your inauguration. Our social calendar is full, but we'll manage. I was going to help the Prime Minister and Flaherty draft the budget, but I am informed by reliable sources from the Governor General's office that Parliament won't be meeting as formerly scheduled.

As always,
Your cousin,
Spade

PS
I will be bringing a surprise for you. I discovered the plans for it in a defunct Canadian company's litter.
 

Tyr

Council Member
Nov 27, 2008
2,152
14
38
Sitting at my laptop
Dear President Elect Obama,

The mis'ss and I would be pleased to attend your inauguration. Our social calendar is full, but we'll manage. I was going to help the Prime Minister and Flaherty draft the budget, but I am informed by reliable sources from the Governor General's office that Parliament won't be meeting as formerly scheduled.

As always,
Your cousin,
Spade

PS
I will be bringing a surprise for you. I discovered the plans for it in a defunct Canadian company's litter.

Yes. um thanks. That's great. Malia and Sasha will be besides themselves with unencumbered joy (did I actually say "unencumbered?)

Did you say they were the ONLY copies of the first 50,000ft Mach2 aircraft in existence? George and Dick had given me the impression that there weren't ANY plans in existence and that the proto was sitting on the bottom of Lake Ontario.

In fact Robert Gates had assured me that we had "horse traded" some old Bomarc missles and F-101's to ensure that that fighter never saw the light of day.
 

Tyr

Council Member
Nov 27, 2008
2,152
14
38
Sitting at my laptop
The Defence Production Sharing Agreement is a bilateral trade agreement between the United States and Canada that aims to balance the amount of military cross-border buying in order to avoid trade imbalances. Since its signing in 1956, it has led to a number of US companies sending military production to Canada in order to "offset" Canadian purchases of US military equipment. The Agreement has been amended on several occasions. The similar Defense Development Sharing Program organized sharing of military research and development.

From Wiki

I'll try to explain the readers digest version.

Navistar gets $274 mil to produce a militarized truck in a yr. It buys $274 mil worth of "parts for said truck from Canada suppliers over 7 yrs. These will include highly complex material s such as washers, bolts, screws, paint... maybe a an oil filter and some sheet metal. Some of the really "high end" stuff

Are those Canadian suppliers going to weather the rescession/depression and still be around 7 yrs form now? Who knows? Navistar doesn't and they will no longer be obliged to use a supplier that doesn't exist

But we wil be optimistic and say they are.

The end result is that Navistar now has a marketable product (they own the rights and design) for a vehicle to be exported world wide with the potential for many follow on orders just from nordic countries alone

Canada becomes the world class leader (?) in washer, bolt and screws

Still with me. Does it sound about right?

Canada becomes the shaftee and the US becomes the shafter
 

Praxius

Mass'Debater
Dec 18, 2007
10,609
99
48
Halifax, NS & Melbourne, VIC
I could see how this would get the Ol' Canadian blood up! It would get mine up too. But I would bet that some of what the US Military uses in made in Canada as well.

Very true, but I see a difference in this situation.

Both countries are pretty hungry for jobs at the moment, so it's a bit more sensitive. If the economy and jobs were all still decent like say 7 years ago, most on either side probably wouldn't care so much.

For me when I read these kinds of stories with jobs going elsewhere out of the country, I keep hearing all the news stories and people in the back of my head who've gone over and over about how their losing jobs, trying to make ends meet, big companies with thousands of workers going tits up...... it's a bit of a piss off in a sense.

Not towards the US per se, but moreso in our own dumbass government.
 

EagleSmack

Hall of Fame Member
Feb 16, 2005
44,168
95
48
USA
I'll try to explain the readers digest version.

Navistar gets $274 mil to produce a militarized truck in a yr. It buys $274 mil worth of "parts for said truck from Canada suppliers over 7 yrs. These will include highly complex material s such as washers, bolts, screws, paint... maybe a an oil filter and some sheet metal. Some of the really "high end" stuff

Are those Canadian suppliers going to weather the rescession/depression and still be around 7 yrs form now? Who knows? Navistar doesn't and they will no longer be obliged to use a supplier that doesn't exist

But we wil be optimistic and say they are.

The end result is that Navistar now has a marketable product (they own the rights and design) for a vehicle to be exported world wide with the potential for many follow on orders just from nordic countries alone

Canada becomes the world class leader (?) in washer, bolt and screws

Still with me. Does it sound about right?

Canada becomes the shaftee and the US becomes the shafter

It did not say that Navistar has to spend money on "said" washer and bolts Canada company. It just said that they will buy $274 million in Canadian goods. It could be toilet paper for all we know. I do not think Navistar sign $274 million dollars worth of contracts with other companies.