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Showing posts from March, 2016

BUDGET 2016: More kicking of the can.

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Well...  That was...  Expected.

The Liberal Party of Canada's first Federal budget since forming the government is finally here.  To the surprise of pretty much no one, defense spending is once again put on the back-burner.  This, despite an eye-watering $29.4 billion deficit projected for this year.

Those hoping for increased funding will have to wait until 2020 before funding for large scale projects (CSPS, CF-18 replacement, etc) takes effect.  This is precariously close to the end of Prime Minister Justin Trudeau's mandate.  In all possibility, this increase in funding could very well hinge on the outcome of the next federal election.  (insert groan here)

One might view this as a possible return to the "Days of Darkness" that occurred under Prime Minister Jean Chretien...  And rightly so.

To be fair, however, this budget does not make an about-face in Canadian military spending.  The previous Stephen Harper-led Conservative Party of Canada started down this roa…

WILL BOMBARDIER FACTOR IN DND'S REBUILDING?

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Any Canadian reading the business news lately knows that Bombardier is in trouble.

Layoffs, less-than-hoped demand for the C-Series, and requests for bailouts have made headlines for the Canadian aerospace company.  Some of the blame for this is directed at Bombardier's management practices.  Bombardier utilized a two-tiered investment structure, in which shares owned by its two founding families (Bombardier and Beaudoin) are worth far more than shares available to the general public.  Thanks to this, 13% of the shareholders enjoy a 54% of the voting power.  Combined with Bombardier's niche position in the marketplace, investors are likely to think twice.

The question is:  Do we let Bombardier fail?

Some may be tempted to let natural selection take its course.  "Darwinism" and all that.  Doing so would pretty much devastate Canada's aerospace industry, however.  Canada would still have plenty of smaller firms like IMP Group, but we would no longer be a nation …

POLITICAL PROBABILITIES

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Aviation buffs always get caught up.

When the talk centers around fighter aircraft, they debate the merits of each by comparing top speeds, payload capability, wing-loading and such.  By using these empirical measurements, they can argue for their favorite based on hard facts.  Much like buying a car or a microwave, the selection usually comes down to choosing the right balance of features and price.

Multi-billion dollar military procurement contracts do not work that way, however.

In my last post, I focused on the government ministers whom will be ultimately responsible for Canada's next fighter aircraft acquisition.  Why?  Because politics determine fighter sales far more than stealth or the ability to supercruise.

Putting aside each aircraft's performance and other capabilities, how politically palatable are the CF-18 replacement contenders?

F-35 Lightning II:  Down but not out. Five years ago, Canada's purchase of 65 Lockheed Martin F-35 Lightning II was almost a fo…