Boeing to get $200 million deal to maintain C-17s
Canada is set to approve a $200 million deal that would see Boeing maintain the military’s C-17 aircraft despite claims by the Liberal government it is getting tough on the U.S. firm for its complaint against Bombardier.
July 5, 2017 By The Ottawa Citizen
Liberal ministers have said all military procurement with Boeing is being reviewed as a result of that company’s decision to file a complaint with the U.S. government against Bombardier. Boeing is alleging Canada is unfairly subsidizing Bombardier’s C Series civilian transport aircraft.
The Liberal government has also threatened to back away from the proposed purchase of 18 Boeing Super Hornet fighter jets.
Boeing, which built the C-17 transports, currently helps maintain those planes for the Royal Canadian Air Force. That agreement expires on Sept. 20, according to Public Services and Procurement Canada. To walk away from a new deal would jeopardize the operation of the RCAF’s fleet of five C-17s, military officers say.
Canada purchases C-17 maintenance and support from the U.S. government through what is called a foreign military sale. Boeing, however, does most of the work. The new deal on C-17 maintenance will cost Canadian taxpayers $195 million U.S.
The U.S. Congress was informed of the Canadian deal in late April.
“The Liberals don’t have much choice on the C-17 maintenance,” said Martin Shadwick, a defence analyst who teaches strategic studies at York University in Toronto. “Boeing is the prime contractor on that aircraft and a lot of the work will be done at Boeing.”
According to the U.S. government, the work on the Canadian C-17s will be done at Boeing’s facilities at Long Beach, Calif., and in St. Louis, Missouri. Lockheed Martin will also be involved.
In addition, the U.S. government noted that there are currently 13 employees from Boeing now in Canada who provide C-17 technical support on a regular basis.
The Liberal government declined to provide a list of the Boeing contracts or procurements it is reviewing. Instead Anthony Laporte, press secretary for procurement minister Judy Foote, repeated in an email that, “Canada is reviewing current military procurement that relates to Boeing. ”
Foreign Affairs Minister Chrystia Freeland announced that review in May. Shortly before Freeland made her statement, a Boeing-built military communications satellite, paid for by Canada and other countries, was launched in the U.S. Canada contributed $340 million to the Wideband Global satellite built by Boeing. Defence Minister Harjit Sajjan praised the project, noting that the satellite will provide key communications for the Canadian military.
Sajjan said Boeing’s complaint against Bombardier is “not the behaviour of a trusted partner.” He called on the U.S. firm to withdraw its complaint but Boeing has declined. “This is a commercial matter that Boeing is seeking to address through the normal course for resolving such issues,” the firm noted in a statement.
Sajjan said Canada has had a good relationship with Boeing over the decades but the firm’s actions have now damaged that.
The Liberals are continuing to review the Super Hornet jet proposal and whether they should continue with the purchase. But Liberal ministers acknowledge Canada continues to have discussions with the Pentagon over the acquisition of the Super Hornets. If it proceeds, the Super Hornet purchase is expected to cost between $5 billion and $7 billion.