Vehicle Cancellation Is Sign of Cutbacks in Canada

The cancellation of the Canadian military’s Close Combat Vehicle (CCV) program is the first major equipment casualty of ongoing budget reductions, with industry officials expecting other procurement projects to be delayed or cut.

Gen. Tom Lawson, chief of the Defense Staff, announced the CCV cancellation on Dec. 20 but denied government budget cutbacks were to blame. Instead, he said the CAN $2 billion (US $1.9 billion) project was recently deemed unnecessary; an existing program that upgraded the Canadian Forces’ fleet of light armored vehicles provides a similar capability.

In addition, improvements to intelligence, surveillance and reconnaissance capabilities, as well as counter-improvised explosive device equipment, negated the need for the CCV, which was supposed to provide added protection for soldiers being transported on the battlefield, he said.

Industry representatives and military officers privately counter that budget cuts were indeed behind the CCV cancellation. Conservative government officials also confirmed last spring the Army had asked for the armored vehicle project to be canceled to save money.

The Army had originally wanted to buy 108 CCVs. Defense contractors Nexter, BAE Systems and General Dynamics Land Systems were competing for the contract.

According to government spending estimates released in 2013, the Department of National Defence’s budget has dropped from $20.2 billion in fiscal 2011-’12 to $17.9 billion in fiscal 2013-’14. The government’s fiscal year runs from April to April of the set period. Further cuts in the defense budget are expected in the coming fiscal year of 2014-’15.

Defense analyst Martin Shadwick said the CCV cancellation is the most high-profile casualty so far of ongoing budget cuts.

“Other projects will likely disappear like CCV,” said Shadwick, an analyst with York University in Toronto. “But it’s hard to predict at this point which ones will be eliminated or reduced in scope.”

He noted the Canadian military could deal with budget cuts by delaying or canceling proposed equipment programs or scaling back on numbers of systems to be acquired. It also could take equipment out of service to cut costs, Shadwick added.

On Dec. 3, the Royal Canadian Navy acknowledged it was temporarily reducing the activities of some of its coastal defense vessels to save money in maintenance and in-service support.

The Canadian Army confirmed Dec. 17 that a number of logistic support trucks were being taken off the road to save money. The vehicles are too expensive to maintain, Army officials noted.

And former Air Force officers said they expect the purchase of new maritime patrol aircraft to replace the fleet of CP-140 Aurora surveillance planes to be delayed well beyond the 2018-2020 period. In March, the Air Force Association of Canada released a statement noting that it was becoming increasingly evident the acquisition of the new maritime patrol aircraft outlined in the Canada First Defence Strategy “will not happen in a timely manner.”

The association, made up of 7,000 retired military personnel, called on the government to deal with the delay by upgrading the fleet of Aurora aircraft so they could operate until 2030.

The Canadian Forces and Defence Department have already been trying to save money by eliminating more than 1,100 civilian jobs.

Other savings are expected to come from temporarily putting on hold a plan to increase the size of the regular forces to 70,000 from the current 68,000.

In addition, the Army has eliminated a number of weapon systems and vehicles from its inventory. Thirty-four air defense anti-tank systems and the inventory of missiles for the systems have been taken out of service. Also to be removed from service are tube-launched missile launchers and 2,200 wire-guided missiles.

Ninety-six Leopard 1 tanks and variants, older howitzers, landmine detection and flail systems, and 4,500 light assault radios also are being removed from service.

The Royal Canadian Air Force has pulled its personnel out of the NATO airborne warning and control system program, and it has withdrawn from NATO’s Alliance Ground Surveillance program, which is to acquire a fleet of unmanned aerial vehicles.

In light of military spending cuts, Defence Department officials are reviewing the government’s 2008 Canada First Defence Strategy. The strategy called for spending up to $60 billion on new equipment over the next two decades.

That included the CCV, maritime patrol aircraft, search-and-rescue planes, a replacement for the CF-18 fighter jet, trucks for the Army, supply ships and new surface combatants for the Navy.

Tim Page, president of the Canadian Association of Defence and Security Industries, noted the CCV project cancellation points to the need for a “renewed and affordable” Canada First strategy.

Such a policy paper would provide the predictability needed for better procurement, he added. “The situation is evidence of a compelling need for urgent consideration and articulation of a renewed and affordable Canada First Defence Strategy.”

Lawson told journalists last February that cutting costs would be a priority for the Canadian military in the coming years. “It will be our center of gravity for a year, two years, three years to come,” he said. [via]