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CAE on deck for $500-million defence program

 

By David Pugliese , Canwest News ServiceFebruary 13, 2009 11:02 AM

 

Prime Minister Stephen Harper will be in Montreal Friday where he is expected to announce a new aerospace training facility that will provide work to CAE and other high-tech firms in Canada.

 

The contract to CAE and its partners, which could over time be worth up to $500 million, arrives at a time when the Harper government needs to be seen to provide work and create jobs for Canadians during the recession.

 

Last year, the government selected CAE as the winner of a Defence Department program known as the Operational Training Systems Provider or OTSP. But the actual awarding of the contract was delayed, at first by the election and then by other political developments.

 

OTSP will see the creation of aerospace training facilities to teach Canadian Forces aircrews how to fly new transport planes and helicopters, as well as aircraft to be bought in the future for search and rescue. It is unclear at this point how many new aerospace jobs will be created.

 

Montreal-based CAE, one of the world’s largest aviation simulation firms, had been deemed by the federal government as the only qualified bidder for the program.

 

Defence officials privately say the OTSP program, which will include new training facilities and simulators at different locations in the country, will provide the air force with a common infrastructure for teaching crews on a number of aircraft. The project would run over the next 20 years and include training on new C-130J transport aircraft and other planes that will be purchased in the future.

 

The final value of the deal will depend on how much training for various aircraft fleets will be eventually be included. The initial deal for CAE will focus on the C-130J aircraft and is expected to be worth around $250 million.

 

The CAE team that will work on the project includes Xwave Defence and Aerospace in Ottawa; MacDonald Dettwiler of Richmond, B.C.; NGRAIN of Vancouver; Atlantis Systems International of Brampton, Ont.; Bombardier of St-Laurent, Que., and: Simgraph of Laval, Que.

 

The announcement is seen by the Tories as a good news story as the Harper government has faced criticism from domestic aerospace and defence firms for not spending enough money in Canada. The government has earmarked more than $8 billion for new aircraft purchased from U.S. firms but Canadian companies have complained they have seen little work from those projects.

 

On Thursday, parliamentarians were also calling for stricter oversight on how the Defence Department spends tax dollars after yet another internal audit found a lack of management oversight on a major equipment support project.

 

The Ottawa Citizen reported that Defence Department auditors concluded the government has no idea whether it is getting value for money from a Canadian Forces communications project worth more than $290 million because it is not enforcing the terms of the contract.

 

Defence Minister Peter MacKay found himself answering questions in the Commons from both the NDP and Liberal parties about ongoing problems with military procurement and the growing secrecy over such troubled deals. But according to MacKay the department has strict review policies already in place. “The procurement process is accountable and is transparent,” he noted.

 

But Liberal defence critic Denis Coderre pointed out that previous audits had raised concerns about multi-billion dollar equipment purchases.

 

“Clearly there needs to be big changes made on how this department can be made more accountable and responsible,” added NDP defence critic Dawn Black. “They spend billions and billions of dollars and Canadians have a right to know about what is going on.”

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