Jeremiah Cushman is a senior analyst at Military Periscope, where he writes about weapons. He holds an M.A. in European and Eurasian Studies from the George Washington University. He can be found on Twitter @jdcushman. Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.
Title: Assessment of Canada’s Fighter Replacement Process
Date Originally Written: September 30, 2017.
Date Originally Published: November 6, 2017.
Summary: Canada’s aging CF-18 fighters need replaced. While the U.S. F-35 was expected to be the choice, domestic politics, rising costs, and development problems caused controversy. As such, both the Harper and Trudeau governments have hesitated to launch an open competition for a replacement. The current plan is to upgrade existing jets and acquire interim platforms while carefully preparing a competition.
Text: After more than three decades of service, Canada’s CF-18 Hornet fighter jets are due for replacement. This has proven easier said than done.
Delays and ballooning costs in the U.S.-led F-35 Lightning II stealth fighter program have made it a controversial option, despite Ottawa’s participation as a Tier 2 partner. Domestic politics and a trade dispute have become another obstacle. The Royal Canadian Air Force (RCAF) says with additional upgrades it can keep the Hornets in the air until at least 2025.
The Hornet replacement was not expected to be so difficult. Canada was an early contributor to the F-35 program and anticipated fielding the advanced fighter along with its closest allies. Participating in the program was seen as a way to obtain the latest technology, while minimizing costs. Interoperability with the allies Ottawa would most likely operate with was another bonus. For these reasons, the RCAF has continued to favor the jet.
As development problems arose, defense officials began to emphasize that Canada’s contributions to the program did not guarantee a purchase.
In 2008, the Canadian Department of National Defense decided to reduce its planned procurement from 80 to 65 jets to compensate for growing costs. The Conservative government of then-Prime Minister Stephen Harper continued to back the F-35 until in 2012 a government auditor reported problems with Ottawa’s procurement process and said that the purchase would cost more than publicized.
An independent review of the program reported in December 2012 that the full cost to buy 65 F-35s was around Can$44.8 billion (U.S. $36 billion), well above the Can$9 billion (U.S. $7.2 billion) indicated by the government in 2010. Harper decided to conduct a review of other options. The results were received in 2014, but no decision was made[1]. Instead, Ottawa announced that it would modernize the CF-18s to keep them flying until 2025[2].
The election of the Liberal Party led by Justin Trudeau in October 2015 began a new stage in the fighter replacement saga. During the election campaign, Trudeau pledged to end participation in the F-35 program and buy a cheaper aircraft. This move appeared to be driven by the growing costs outlined by the review in 2012 and ongoing development issues with the aircraft. Nevertheless, Ottawa has continued to make the payments necessary to remain a program participant.
Such a hard-line seems to be out of step with the progress of the F-35 program. The U.S. Marine Corps declared initial operational capability with its F-35s in July 2015, and the U.S. Air Force followed in August 2016. The manufacturer, Lockheed Martin, has reported annual reductions in unit costs for the jet. More North Atlantic Treaty Organization allies have signed on to the program, as well as countries such as Japan and South Korea. Such progress does not seem to have affected the Trudeau administration’s position.
The Trudeau government released its defense policy review in June 2017. The document made no promises on how a Hornet replacement might be procured or what platform might be best. The review included a new requirement for 88 fighters, instead of the 65 jets proposed by the Harper government. While the additional aircraft are a positive development given Canada’s myriad air requirements, the lack of clarity on the next step revealed the administration’s lack of seriousness. Ottawa has information on several options on hand from the Harper government’s review. There appears no good reason why a new process for selecting a Hornet replacement could not already be underway.
The government appears to be driven by a desire to keep its campaign commitment and not to purchase the F-35. Instead of setting up a competition to select a replacement, Ottawa proposed an interim purchase of 18 F/A-18E/F Super Hornets from the U.S. to fill an alleged capability gap. The U.S. Defense Security Cooperation Agency announced that the U.S. Department of State had approved such a sale on September 12, 2017[3]. This has been seen as a way to create a fait accompli, since it would make little financial sense to buy and maintain one jet only to switch to another later.
The slow pace of the procurement process so far might result in fewer options. The Super Hornet line is nearing its end and there are questions about how much longer the Eurofighter Typhoon will be in production.
In any event, the Super Hornet proposal has fallen victim to a trade dispute. Boeing, which builds the fighter, complained that Canadian aerospace firm Bombardier received government subsidies, allowing it to sell its C-series airliners at a significant discount. The U.S. Department of Commerce agreed with the complaint, determining in late September 2017 that the aircraft should be hit with a 219 percent tariff[4]. This dispute has for the moment paused any Super Hornet purchase and led Ottawa to explore the acquisition of used Hornet aircraft. On September 29, 2017, Public Services and Procurement Canada announced that it had submitted an expression of interest to Australia as part of the process to acquire used Hornets. The release also said that preparatory work for a competition was underway, raising further questions about why interim fighters are needed[5].
Meanwhile, the RCAF is preparing to spend between Can$250 million (U.S.$201 million) and Can$499 million (U.S.$401 million) on further upgrades for its CF-18s to keep them in service until at least 2025. Project definition is anticipated to begin in early 2018, with contracts being let in 2019[6].
As it stands, Ottawa appears to be trying to avoid selecting a new fighter. It makes little sense to invest significant sums of money in interim measures when those funds would be better channeled into a new platform. For reasons that remain unclear, it seems any decision will be postponed until after the next election, likely in 2020. In the meantime, the RCAF will have to continue to invest scarce resources in its aging Hornets and hope for the best.
Endnotes:
[1] Pugliese, D. (2015, September 22). Canada and the F-35 – the ups and downs of a controversial fighter jet purchase. Ottawa Citizen. Retrieved Sept. 30, 2017, from http://ottawacitizen.com/news/
[2] Canadian Press (2014, September 30). CF-18 upgrades will keep jets flying until 2025, Ottawa says. Retrieved Sept. 30, 2017, from http://www.ctvnews.ca/
[3] U.S. Defense Security Cooperation Agency. (2017, September 12). Government of Canada — F/A-18E/F Super Hornet Aircraft with Support. Retrieved Sept. 30, 2017, from http://www.dsca.mil/major-
[4] LeBeau, P. (2017, September 26). US slaps high duties on Bombardier jets after Boeing complains they were unfairly subsidized by Canada. CNBC. Retrieved Sept. 30, 2017, from https://www.cnbc.com/2017/09/
[5] Public Services and Procurement Canada. (2017, October 9). Exploring options to supplement Canada’s CF-18 fleet. Retrieved Oct. 9, 2017, from https://www.canada.ca/en/
[6] Pugliese, D. (2017, September 26). CF-18 upgrade plan more critical as Bombardier-Boeing spat puts Super Hornet purchase in doubt. Ottawa Citizen. Retrieved Sept. 30, 2017, from http://ottawacitizen.com/news/