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37th PARLIAMENT, 1st SESSION

Standing Committee on National Defence and Veterans Affairs

EVIDENCE

CONTENTS

Thurday, March 14, 2002

1530

Mr. Price

Mr. Richard Thompson (Commercial Director, Airbus Military Company)

1535

1540

Mr. Price

Lieutenant-General (Retired) Allan DeQuetteville, Vice President—Canada, The Boeing Company)

1545

1550

Mr. Price

1555

Mr. Jean-Jacques Blais (Lockheed Martin Aeronautics Company)

1600

Mr. Peter E. Simmons (Communications Director, Air Mobility Programs, Lockheed Martin Aeronautics Company)

Mr. Price

Mr. Jean-Jacques Blais

Mr. Price

Mr. Benoit

1605

Mr. Richard Thompson

Mr. Leon Benoit

Mr. Richard Thompson

Mr. Leon Benoit

Mr. Price

Mr. Leon Benoit

Mr. Richard Thompson

Mr. Leon Benoit

LGen Allan DeQuetteville

Mr. Leon Benoit

Mr. Peter Simmons

1610

Mr. Leon Benoit

Mr. Jean-Jacques Blais

Mr. Price

Mr. Richard Thompson

Mr. Bachand (Saint-Jean)

LGen Allan DeQuetteville

Mr. Claude Bachand

Mr. Peter Simmons

Mr. Bachand (Saint-Jean)

Mr. Richard Thompson

Mr. Peter Simmons

Mr. Bachand

Mr. Peter Simmons

LGen Allan DeQuetteville

1615

Mr. Richard Thompson

Voices

LGen Allan DeQuetteville

Mr. Richard Thompson

Mr. Claude Bachand

LGen Allan DeQuetteville

Mr. Bachand (Saint-Jean)

Mr. Richard Thompson

Mr. Bachand (Saint-Jean)

Mr. Richard Thompson

Mr. Bachand

LGen Allan DeQuetteville

Mr. Bachand

Mr. Peter Simmons

Mr. Bachand

Mr. Richard Thompson

Mr. Claude Bachand

LGen Allan DeQuetteville

Mr. Claude Bachand

Mr. Peter Simmons

Mr. Claude Bachand

Mr. Richard Thompson

Mr. Claude Bachand

LGen Allan DeQuetteville

Mr. Claude Bachand

Mr. Peter Simmons

Mr. Claude Bachand

Mr. Richard Thompson

Mr. Price

Mr. Stan Dromisky (Thunder Bay--Atikokan, Lib.)

1620

Mr. Richard Thompson

LGen Allan DeQuetteville

Mr. Peter Simmons

Mr. Stan Dromisky

Mr. Peter Simmons

1625

Mr. Stan Dromisky

Mr. Peter Simmons

Mr. Stan Dromisky

Mr. Peter Simmons

Mr. Jean-Jacques Blais

Mr. Stan Dromisky

Mr. Peter Simmons

Mr. Price

Mr. Anders

Mr. Peter Simmons

Mr. Rob Anders

Mr. Peter Simmons

Mr. Rob Anders

Mr. Peter Simmons

Mr. Rob Anders

LGen Allan DeQuetteville

Mr. Rob Anders

LGen Allan DeQuetteville

Mr. Peter Simmons

Mr. Rob Anders

1630

LGen Allan DeQuetteville

Mr. Anders

LGen Allan DeQuetteville

Mr. Rob Anders

Mr. Richard Thompson

Mr. Rob Anders

The Vice-Chair (Mr. David Price)

Mr. Anders

The Vice-Chair (Mr. David Price)

Mr. Anders

The Vice-Chair (Mr. David Price)

Mr. Claude Bachand

LGen Allan DeQuetteville

Mr. Claude Bachand

Mr. Peter Simmons

Mr. Claude Bachand

Mr. Richard Thompson

Mr. Claude Bachand

LGen Allan DeQuetteville

Mr. Bachand

Mr. Peter Simmons

Mr. Claude Bachand

1635

Mr. Peter Simmons

Mr. Claude Bachand

Mr. Richard Thompson

Mr. Bachand

Mr. Peter Simmons

Mr. Claude Bachand

Mr. Richard Thompson

Voices

Mr. Richard Thompson

LGen Allan DeQuetteville

Mr. Claude Bachand

Mr. Peter Simmons

Mr. Bachand

Mr. Peter Simmons

Mr. Claude Bachand

Voices

Mr. Peter Simmons

Mr. Bachand

The Vice-Chair (Mr. David Price)

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.)

Mr. Richard Thompson

Mr. Carmen Provenzano

Mr. Richard Thompson

Mr. Provenzano

Mr. Richard Thompson

Mr. Carmen Provenzano

Mr. Richard Thompson

1640

Mr. Carmen Provenzano

Mr. Richard Thompson

Mr. Carmen Provenzano

Mr. Jean-Jacques Blais

The Vice-Chair (Mr. David Price)

Mr. Provenzano

Mr. Price

Mr. Rob Anders

Mr. Richard Thompson

1645

Mr. Rob Anders

Mr. Price

Mr. Bachand (Saint-Jean)

1650

Mr. Richard Thompson

Mr. Bachand

LGen Allan DeQuetteville

Mr. Peter Simmons

Mr. Jean-Jacques Blais

1655

Mr. Price

Mr. John O'Reilly (Haliburton--Victoria--Brock, Lib.)

Mr. Jean-Jacques Blais

Mr. Peter Simmons

1700

Mr. Price

LGen Allan DeQuetteville

Mr. Richard Thompson

Mr. Price

1705

Mr. Richard Thompson

Mr. Peter Simmons

Mr. Price

Mr. Peter Simmons

The Vice-Chair (Mr. David Price)

LGen Allan DeQuetteville

Mr. Richard Thompson

1710

Mr. Price

LGen Allan DeQuetteville

Mr. Peter Simmons

Mr. Price

Mr. Jean-Jacques Blais

1715

LGen Allan DeQuetteville

Mr. Price

LGen Allan DeQuetteville

The Vice-Chair (Mr. David Price)

Mr. Richard Thompson

Mr. Price

Mr. Rob Anders

LGen Allan DeQuetteville

Mr. Rob Anders

1720

Mr. Peter Simmons

Mr. Anders

Mr. Peter Simmons

Mr. Anders

Mr. Peter Simmons

Mr. Rob Anders

Mr. Price

Voices

The Vice-Chair (Mr. David Price)

Mr. Peter Simmons

The Vice-Chair (Mr. David Price)

CANADA

Standing Committee on National Defence and Veterans Affairs

NUMBER 047

1st SESSION

37th PARLIAMENT

EVIDENCE

Thurday, March 14, 2002

[Recorded by Electronic Apparatus]

¹ (1530)

[English]

The Vice-Chair (Mr. David Price (Compton--Stanstead, Lib.)): Good afternoon. I'd like to call this meeting to order.

I welcome all of you gentlemen here today. It's interesting to see such a large group and such a competitive group. It looks like it could be interesting.

What we're going to do is have a 10-minute presentation from each group, and then we'll go to questions. We'll start off with Airbus, and Mr. Thompson.

Mr. Richard Thompson (Commercial Director, Airbus Military Company): Mr. Chair and honourable members of the committee, on behalf of Airbus Military, I thank you for this opportunity to explain how we believe we can meet the long-term airlift needs of the Canadian Forces. We also believe we can offer Canadian industry a unique opportunity to participate in an important international military aircraft program that we are confident will enjoy worldwide success.

I would like to introduce myself. I'm Richard Thompson, vice-president, commercial, for the Airbus Military Company, the French-based subsidiary of Airbus. As most of you know, Airbus is the number one commercial aircraft company in the world.

Today, I'm joined by Major General Claude Lafrance. General Lafrance served as a pilot in the Canadian Forces, retiring after 34 years of distinguished service. In the 1980s, he spent four years as assistant deputy minister for aviation at Transport Canada, and is currently the president of EADS Canada.

EADS Canada is the Canadian subsidiary of the European aerospace and defence giant that is second in size only to Boeing. EADS is the principal shareholder in Airbus. The other Airbus shareholder is BAE Systems in the U.K. Airbus Military was formally set up in January 1999 to respond to a European air force staff requirement for a future transport aircraft. The other shareholders in Airbus Military are Flabel, of Belgium; TAI, of Turkey; and OGMA, of Portugal.

After a series of competitive processes in Europe against the C-17, the Antonov-70, and the C-130J, followed by a series of protracted negotiations, Airbus Military signed a contract in December 2001 with eight European nations for a total of 196 A400M aircraft worth approximately $16 billion U.S. It is estimated that more than 400 total sales of A400M aircraft will be achieved over time, such is the attractiveness of a new generation aircraft that operationally slots in between the often too small C-130J and the often too large C-17.

The program schedule is now fixed with first flights to take place in 2006 and deliveries to begin in 2008, to the air forces of Germany, France, Spain, the U.K., Turkey, Belgium, Portugal, and Luxembourg. As early as 2008, some of the production is earmarked for export and could be reserved for Canada should the Canadian Forces select the aircraft.

With your permission, I shall now attempt to describe our understanding of Canada's long-term airlift needs. Canada operates a mixture of old and not-so-old CC-130s in a variety of tactical and substrategic airlift roles, as well as air-to-air refuelling, search and rescue, and liaison and training missions. Since the end of the Cold War, Canada has found itself having to deploy forces in support of humanitarian, peacekeeping, and peacemaking missions further afield and with increased frequency. However, missions like East Timor and Afghanistan are thankfully still the exception rather than the norm.

Perhaps what we should be considering—and what indeed may emerge from the forthcoming defence review—is to look at the entire airlift equation and not just at the strategic end of the business. Any long-term airlift or equipment plan that might emerge from such a review process would have to consider maximum fleet flexibility, versatility, and affordability as the key drivers, and not just the ability to take large objects over a long distance. It would not surprise me, therefore, if such a review process concluded that Canada's long-term airlift needs were not too dissimilar to those of the principal European NATO air forces.

¹ (1535)

The Europeans also have aging C-130 fleets that will need eventual replacing. They too need to carry outsize loads—that is, loads that do not fit inside a C-130—further afield and more often. But they also need to retain the backbone capability, tactical attributes, and flexibility of the smaller aircraft. Nor can they afford to buy and operate strategic transports like the C-17 in sufficient numbers. As a consequence, they have seized the opportunity of the need to embark on phased replacement programs for their C-130 fleets, joining forces in a collaborative program for a new aircraft that fits between the smaller C-130 and the larger C-17. That will significantly cut operating, training, and maintenance costs by eventually reducing to one the number of aircraft types in their transport inventories.

I shall now briefly describe the A400M. The aircraft is a high-speed turbo prop that is about twice the size of the Canadian Forces CC-130 Hercules, and about half the size of the C-17. European air forces specified the aircraft to satisfy needs that neither of the other two contenders can meet as effectively. The A400M is designed to meet both strategic and tactical military airlift requirements. Although it's a turbo prop, it flies as high as the jet-powered C-17, and almost as fast. Because it is a turbo prop, it can demonstrate operating costs some 20% lower over a 30-year life cycle than those of an equivalent jet aircraft.

We have been told by DND that our aircraft, unlike the C-130J, will accommodate all the equipment that the Canadian Forces wish to move by air. However, the A400M can operate from any small, austere airstrip that can accommodate a C-130. That is an important factor for operations in the Canadian north, let alone in many overseas theatres.

Given the timing of a potential Canadian requirement, and the high degree of competence of Canadian aerospace industries, I have enquired from my shareholders if Canada, should it commit to buy the aircraft, could join the industrial program in some form of privileged capacity not dissimilar to that of the original European launch nations. The shareholders have authorized me to negotiate to that end with Canadian industry. I do not want to enter into the details of such an offer at this stage. Suffice it to say that Canadian work content in the program would be of extremely high quality, and the return on investment associated with a Canadian buy of the A400M, under conditions similar to those of European nations, would typically be in the approximate ratio of 3:1 over the life of the program. In other words, it's a very good deal for Canada.

To some extent, the Airbus Military proposal to Canada resembles the Joint Strike Fighter arrangements, but there are significant differences. Like it is for the JSF, Canada would be a founding member of a large aeronautical program. The JSF arrangements did not commit Canada to a purchase of the aircraft, nor do they assure specific Canadian industrial participation. In contrast, Airbus Military is prepared to offer Canadian industry participation in the program, based on the number of aircraft that Canada would buy. In short, this would represent a real opportunity buy for Canada.

We're very much aware of the desire in DND to obtain a new airlifter before our 2008 delivery date, and we understand this concern. Assuming that DND could obtain a military transport capability from one of our competitors in 2005—which I believe is DND's target date—the problem is reduced only to a potential three-year gap in capability. The question therefore poses itself as follows: What might be the number of major Canadian Forces deployments that might have to take place during that three-year period, versus the benefits to Canada of purchasing the more flexible, versatile, and cost-effective solution with outstanding benefits for Canadian industry?

¹ (1540)

In the context of waiting another three years before beginning to acquire the necessary capability, it is important to note that Canada is not alone in making use of chartered airlift in times of emergency. Of the nineteen countries participating in Afghanistan, all but two have relied on chartered or so-called borrowed assets.

Indeed, Mr. Chairman and honourable members of the committee, we believe the A400M can benefit Canada in two ways. It can meet the long-term airlift needs of the Canadian Forces with what we believe is the most versatile and cost-effective solution. It can also offer Canadian aerospace industry the high-quality opportunity to be part of an exciting international aeronautical program at a time of depressed demand within that industrial sector.

Again, Mr. Chairman and honourable members of the committee, on behalf of Airbus Military, I thank you for this occasion to explain what we see as a golden win-win opportunity for the Canadian Forces and the Canadian aeronautical industry. We will be pleased to answer your questions.

Thank you.

The Vice-Chair (Mr. David Price): Thank you very much, Mr. Thompson.

We'll now go to General DeQuetteville.

Lieutenant-General (Retired) Allan DeQuetteville, Vice President—Canada, The Boeing Company): Mr. Chairman, members of SCONDVA, good afternoon.

In this committee's interim report dated November 7, 2001, your recommendation 10 clearly identified the need for Canada to acquire adequate airlift capacity. Subsequently, difficulties in moving the Canadian contingent from Edmonton to Kandahar once again highlighted the strategic dilemma this country faces. On behalf of the Boeing Company, I thank you for this opportunity to explain our perspectives on these issues.

Some might ask why strategic airlift has become such an issue. Hasn't Canada always coped in the past? What has changed? In his recent appearance before this committee, Colonel Pat Dowsett clearly dealt with these issues and the strategic changes that have taken place since the Cold War. In order to condense my opening remarks, I will assume you were satisfied with his explanation, but I'm prepared to come back to this issue during questioning. I would like to move directly into some of the issues implicit in your recommendation 10 of last November.

Firstly, in responding to a global crisis, there is a premium on getting at least a portion of the Canadian contribution there quickly if a Canadian flag is going to be part of the international operation. This normally comes at a time when the rest of the participants are also scrambling for limited strategic airlift assets.

There are few commercial strategic airlifters available for lease. If there is any capacity for leasing during a crisis, it normally comes with the supply and demand premise, “Let the buyer beware”. For example, I understand certain lease assets were commercially offered to Canada for the current scenario in Afghanistan, at approximately $800,000 per flight. In any event, it turned out the aircraft in question could not even operate into the Kandahar airfield due to its runway conditions and the security issues in place at the time.

Accordingly, DND has placed a high priority on assured strategic lift in all its key planning documents. In fact, I note that of some 32 capability goals that the Canadian Forces must be able to carry out consistent with current defence policy, only two of these are considered as having serious deficiencies, but where a high capability is essential. One of these is strategic mobility.

So DND clearly sees this as a major problem. While discussing assured assets, let me address the issue of sovereignty. Deputy Prime Minister Manley has stated that sovereignty is about making choices that are in our national interests. Surely, being dependent on others in order to change our military and disaster response assets is not consistent with a global nation that wants to make its own choices.

Ironically, strategic airlift itself is one of the choices Canada might opt to commit to the United Nations, NATO, or coalition operations, in lieu of exposing other Canadian assets and personnel in a hostile operation. Often overlooked, but equally important, is the fact that indigenous airlift also gives Canada a critical ability to extract its personnel and equipment on its terms should an operation turn badly.

Your recommendation 10 also correctly made the distinction between strategic and tactical airlift. A strategic airlifter is capable of flying high, fast, and far, like a commercial airliner, while carrying troops and all of their equipment, much of which is referred to as large outsize cargo. As you know, the Canadian army is being modernized around vehicles like the LAV III, a world-class armoured personnel carrier, and the HLVW, which you and I might better recognize as a 10-ton truck. These examples of heavy outsize vehicles can only be transported, ready to fight, without disassembly, by a strategic airlifter.

This is not to denigrate the need for tactical airlift. Canada has received yeoman service from its fleet of C-130 tactical transport aircraft, and will continue to have this need. It's somewhat analogous to the moving company that has a transcontinental business. You need the large moving van to move efficiently across the country, but something smaller for the jobs that are more localized. Canada has recently upgraded and modernized its fleet of C-130s to address this tactical reality, and I have no doubt that some of these assets will eventually need to be replaced with airplanes of similar capability.

¹ (1545)

The reality of this strategic-tactical distinction is also evident in the government's recent decision to modify two of its Airbus A310 aircraft for strategic air-to-air refueling requirements even though the Canadian Forces already have five KC-130 aircraft for tactical air-to-air refueling needs.

This committee has acknowledged that last September 11 is driving some dramatic shifts in domestic national security assumptions. North American readiness criteria, previously measured in weeks and months, is now being assessed in hours and days. We must now consider a rapid domestic response to natural disasters and terrorist attacks, situations in which large outsize cargo, like generators, graders, helicopters, etc., must be moved quickly throughout the challenging expanse of a country like Canada, into short, semi-prepared airfields, often under adverse weather conditions.

Let me now turn to the options available to satisfy this strategic airlift requirement. A recent study done by DND by an outside agency looked at five such options. It is generally accepted that only four of these could address the strategic airlift problem. Two of these four are on the drawing board and may never materialize; if they do, they will be a decade or so away. A third is an aging, leased asset that is available in limited quantities, and for which no assurance for Canadian crisis use can be economically guaranteed.

The only realistic option available today to ensure the strategic capability you have called for is the Boeing C-17 Globemaster III cargo aircraft. That aircraft is exactly how our forces arrived in Kandahar. In 66 C-17 loads, all of the Princess Patricia's Canadian Light Infantry battalion and the Lord Strathcona's Horse and their Coyote reconnaissance vehicles were landed at night, under blackout conditions, onto the shortened and damaged runway at Kandahar—a very tactical end to a very strategic mission.

The C-17 is the most versatile airlift aircraft ever designed. It performs both long-range strategic missions and short-field tactical missions. It carries heavy and outsize cargo, performs airdrops, and can accomplish aero-medical evacuation. It can globally transport all Canada's major units: Joint Task Force Two; the Disaster Assistance Response Team, or DART; the Immediate Reaction Force; and the lead elements of the Vanguard brigade with their full kit.

The humanitarian potential for either domestic or international employment is unlimited. This has been demonstrated already by the United States Air Force many times in responding to crises in the U.S. and around the world. In fact, during the Manitoba floods of 1997 and the ice storm of 1998, U.S. C-17s brought outsize power generators and other equipment into relief airheads in Canada, at Winnipeg and Mirabel.

There are critics who say the C-17 is too big or too expensive. They are wrong. The life-cycle costs of the airplane make it the cost-effective answer to Canadian needs when looked at over the twenty to thirty years of its performance. The inclusion of C-17s into the support system of the United States Air Force or the Royal Air Force on a pro rata basis under an existing trademarked program called Flex Sustainment will dramatically reduce the life-cycle support costs of this airlifter. Furthermore, with fewer aircraft necessary and only a crew of three required to lift over 80 tons of equipment and personnel, operating costs are further advantaged and far fewer spares, support equipment, and personnel are utilized.

Canadian acquisition of the C-17 would facilitate interoperability with our closest allies, particularly the U.S. and the U.K., and would demonstrate that Canada is not only pulling its weight internationally, but is also ready to assist other countries with airlift of their equipment and personnel.

¹ (1550)

The C-17 will enable the Canadian government to respond more quickly to domestic crises. Canada has four times as many airfields that are sized for C-17 capability than it has for other large airlifters like the Antonov An-124.

Within the United States, the C-17 is considered the model program for acquisition. Currently, the United States Air Force has 120 aircraft on contract, and Congress recently approved the buy of an additional 60. That follow-on buy should be contracted within the next month. This would allow cost savings for a companion procurement to accrue to Canada.

Canadian aerospace firms have already benefited from the original U.S. buy of 120 aircraft. Currently, more than 20 Canadian companies have contracts over the next 5 years, totalling approximately $100 million. Building on this existing activity, the Aerospace Industries Association of Canada has identified that an early decision on strategic airlift and the associated offset obligations set by Industry Canada could jump-start an aerospace sector seriously wounded by the economic fallout of last September.

Finally, in support of this opening statement, I have tabled a short video, in both English and French, and two charts to try to summarize the domestic and overseas capabilities of the C-17.

Your interim report of November 7 made a clear case for assured strategic airlift for Canada. I hope I have demonstrated today that the solution to that recommendation is equally clear: the Boeing C-17.

Thank you, and I look forward to your questions.

The Vice-Chair (Mr. David Price): Thank you very much, General.

We'll now go to our last presenter, the Hon. Jean-Jacques Blais.

¹ (1555)

[Translation]

Mr. Jean-Jacques Blais (Lockheed Martin Aeronautics Company): Thank you very much, Mr. Chairman and members of the committee. First of all, thank you for the invitation and congratulations for your initiative.

Today, I am representing Lockheed Martin. On my right is Mr. Peter Simmons, who will share my time. I will speak to you about the C-130J-30.

[English]

My intention today is to bring to the issue of strategic deployment the perspective of a former Minister of National Defence responsible for both defence and defence procurement. My presentation will be centred on three issues of public policy: the first one, the resources context; the second, the need; and the third, the adoption of realistic goals.

The Chrétien government is committed to fiscal stability. It has built its reputation on the elimination of the deficit. The government and the people of Canada are not interested in deficit spending, and there are competing interests for public spending, as you all know. In a vibrant democracy like ours, social programs win out over national defence every time. In your own caucuses, you know full well that social programs are really leading the debate.

The last budget exercise is a case in point. Even after the events of September 11, and after withering criticism of the government for the state of the armed forces, its equipment, and the stretching of resources in the face of increasing commitments, only a modest amount was made available to national defence. In my view, then, I'm suggesting to you that DND will continue to be budget-constrained. These constraints will dictate that historical procurement factors will continue to apply. We will continue to focus on versatility and operational cost-effectiveness in procurements. We don't buy Cadillacs, we search for multipurpose capabilities.

Canada has identified a requirement for rapid response—it was echoed in your report—for getting resources into the field within a reasonable timeframe. This committee has heard volumes of evidence as well about the shortages of resources not only in terms of transportation facilities, but in terms of the resources themselves being in short supply—those that you would want to get into the field.

Because of the fiscal framework I previously described, we can't deal with the strategic lift dimension of the Canadian Forces requirements in a vacuum. We have to take into account other DND priorities, including additional personnel and their equipment. Just the issue of the Afloat Logistics and Sealift Capability, the major, multipurpose supply ship, is another major capital requirement that is under study.

Given the other demands on the budget, the procurement of a highly specialized and expensive piece of equipment of limited utility is not a realistic objective. I had the good fortune of being Minister of Supply and Minister of Defence during one of the most important Canadian Forces re-equipment programs, including the frigates, the CF-18s, the small arms program, and the wheeled vehicles, among many others. What strikes me from my experience is the importance of a realistic approach to procurement, one that is sensitive to the political environment and the fiscal framework.

You have heard presentations that will add billions of dollars for a marginal capability. At the best of times, major procurement programs are difficult to bring to fruition even when there is strong and evident justification. To bring a sense of unreality into one just makes it impossible and perhaps gums up the works for other required procurement programs.

A great deal has been said about needing to own strategic airlift to maintain Canadian sovereignty. In my view, what is of primary importance in enhancing Canadian sovereignty is having well-equipped army, navy, and air force personnel who are able to respond when needed to ensure international peace and security. How we get there has little to do with sovereignty. My use of a taxi to get to where I want to go does nothing to limit my personal autonomy. On the contrary, it may provide me with increased flexibility and mobility.

[Translation]

Members of the committee, I would now like to ask Peter Simmons to ask you to speak about the aircraft. Peter.

º (1600)

[English]

Mr. Peter E. Simmons (Communications Director, Air Mobility Programs, Lockheed Martin Aeronautics Company): Thank you.

Good afternoon, ladies and gentlemen. My name is Peter Simmons, and I am here from Marietta, Georgia, the home of the C-130, the aircraft this committee and Canada know so well.

The committee has heard a lot about the requirement for strategic airlift. I would like to point out that strategic capability encompasses speed and range, not just outsize cargo capability. Our new C-130, the C-130J, now known around the world as the Super Herc, has strategic speed and range, as well as a substantially increased cargo carrying capability.

The Super Herc is a brand new, all-digital aircraft that has been redesigned from the ground up. It requires only a two-man flight crew and represents the absolute latest in current-generation aerospace technology. The Super Herc achieves an enormous advance in terms of performance and capability in comparison to its predecessors, and can load 90% of the United States, NATO, and Canadian airlift requirement.

Canada's military partners—the United States, Great Britain, Italy, Australia, and Denmark—are now re-equipping with Super Hercs, and three other European nations will be following soon. In addition, armies of the future are re-equipping with lighter and more mobile equipment. As a result, everything that is being built today for the United States Army, as well as the British Army of the future, is being built to fit in a Super Herc. This is not a desire, this is now policy in both countries.

I understand Canada will shortly be defining its future total airlift requirements, and we are confident that the Super Herc will prove to be a versatile and cost-effective solution for the Canadian Forces, just as it is for so many countries already. We believe a phased, incremental replacement of Canada's older Hercules aircraft with a smaller number of Super Hercs offers the optimum solution to Canada's total airlift requirement from both operational and economic perspectives.

I would like to close with a summary of the major issues that I feel need to be considered. The issue of sovereignty has been raised on several occasions, just recently by my learned friend. A strategic airlift fleet will require strategic aerial refuelling support from an ally such as the United States, with KC-135s or KC-10s. Deployment will therefore again be other-nation dependent.

Once at a staging area, C-130s will still be needed for forward deployment. Super Hercs can carry troops and cargo right to the forward area without the need for special runway preparation. The Super Herc can carry 35,000 pounds from Trenton to Europe nonstop, unrefueled. It has a total capacity of nearly 47,000 pounds.

We have put together a funding profile showing that we can replace Canada's existing old Hercules fleet using the existing operational on a sustainment budget. The Super Herc has 40% more of everything—range, speed, payload—costs less to operate, and is the new airlifter of choice around the world. The Super Herc is available, affordable, risk-free, and meets all of Canada's national requirements and 90% of its strategic requirements.

Lockheed Martin thanks you for your time, and we look forward to assisting you in any way we can with Canada's need for a global airlift capability.

Thank you.

The Vice-Chair (Mr. David Price): Thank you very much, Mr. Simmons and Mr. Blais.

Mr. Jean-Jacques Blais: You noticed that his was a southern American accent.

The Vice-Chair (Mr. David Price): Yes, from the Deep South, for sure.

We'll go to questions now. Just so you're clear on how the questions work, Mr. Benoit will start off the first round. He'll have seven minutes, but that seven minutes includes your answers. If you want to get out more information, you'll keep your answers fairly short. We also hope he'll keep his questions fairly short so that he gets the most information.

Mr. Benoit.

Mr. Leon Benoit (Lakeland, Canadian Alliance): Mr. Price, you know I'll keep my questions short. You've been in a committee with me before.

Gentlemen, thank you very much for being here today. I sincerely mean that. This is a very important issue that we're dealing with today, and one we all know the Canadian military is going to have to face up to in the very near future.

Now, I've had a bad day and I'm feeling kind of mean, but my meanness is directed at the Liberals from a previous committee. You don't care about that, but what I want you to do is get into the same spirit I'm in, into a mean spirit. I want you to point out the weaknesses in your competitors. Compare your product to those of your competitors. Get down and dirty, but you have to do it really quickly because we have a very limited amount of time.

If you could focus on the suitability for overseas deployments and for domestic use, I want you to look at the cost, including the cash flow considerations Mr. Blais pointed out. Look at delivery dates and the fit with the current C-130s and Airbuses that we have now.

Let's start with Airbus, go to Boeing, and then down the line.

º (1605)

Mr. Richard Thompson: I will not criticize my competitors here—

Mr. Leon Benoit: Compare.

Mr. Richard Thompson: —because they both have very good machines that are very capable in their own right.

My argument, I repeat, is that the European air forces that have specified the A400M have done so after considerable long and hard studies of replacing their existing fleets, which are largely C-130-based.

The C-130J brings a lot of improvements over the H version in terms of a digital cockpit, modern engines and propellers, and one or two other systems, but their actual cargo hold and what you can put in them is still a 1955 design.

Mr. Leon Benoit: Can I just make a short intervention on that?

With the C-130J, should we even really have the gentlemen here from that company, considering that many wouldn't consider them to be providing the same kind of strategic airlift that your two companies would provide?

The Vice-Chair (Mr. David Price): Mr. Benoit, I think we invited them here, as we normally do.

Mr. Leon Benoit: Yes, but I'm pointing out, Mr. Chair—

Mr. Richard Thompson: Again, I will not comment on that.

I will say that at the other end of the spectrum, the C-17 is an awesome and superb machine that has fulfilled the requirements of, again, a very demanding customer, the United States Air Force, for a specific role.

What I'm here to say is that the A400M is designed to fit between those two aircraft, and for a very good reason, the reason being that those European air forces that have studied this requirement long and hard have decided that they need something that goes a bit faster and a bit further, and carries a bit more than a C-130. They cannot afford to go the full stretch to a C-17-based fleet, yet require nevertheless the strategic capability that a C-17 would provide from time to time. It's that flexibility of an aircraft that fits between the two, providing both ends of the spectrum in a single machine, that is the strength of the A400M, and I'm sure it's what would be interesting to Canada as well.

Mr. Leon Benoit: Thank you.

LGen Allan DeQuetteville: Mr. Benoit, likewise, it's not my purpose here today to try to get into a dogfight with my friends from the other competing companies. I think DND has already had three serious analyses of this problem done, most recently by an independent agency. I think that has been reported to you, and that the information is available. They have measured things against DND requirements. They have all of the information from the contenders, so they are best placed to make the comparisons.

As I said, the analysis seems to have distilled it to the fact that the C-130J is not able to carry the equipment of Canada's foreign commitment. On the other hand, of course, the Airbus is still a future airplane, so there's risk attached to it. That has been very thoroughly assessed by the evaluators in DND.

Mr. Leon Benoit: Thank you.

Mr. Peter Simmons: I would like to address a couple of your questions. Firstly, we were pleased to be invited here, and we are pleased to take the opportunity to explain the benefits of the aircraft as it suits Canada's requirements.

I would answer you by saying that, in terms of overseas deployment, if you require a strategic fleet, you have no ability to perform air-to-air refuelling of that aircraft. You will still be dependent on an ally such as the U.S., currently the only people who have strategic tanking capability. The tankers you are having converted for CF-18s are hose-and-drogue. The C-17 needs a boom, therefore you are limited to a 2,000-mile operating radius with a strategic aircraft until it can find a tanker.

On availability, I would say we have a production line that is currently building. It has built twelve of the new C-130Js, and will build fourteen this year. We are delivering those around the world.

I will also just correct my friend slightly. The A400M is in fact not replacing C-130Js anywhere in the world. There are air forces that are just beginning their equipment deliveries of C-130Js.

The overriding point that I would like to make, I believe, is that in acquiring a strategic fleet, you are doing so for only 10% of your cargo requirement. The inherent cost of operating a strategic fleet, I feel, would be a tremendous burden to the Canadian taxpayer because of the limited usage of that fleet, the cost of operating it, and the fact that it applies to only 10% of your requirement. For example, for DART and Vanguard, it actually says “percentage oversize”, which under the Canadian definition means it won't go in a Hercules. That was actually 10% for both of those.

I hope that answers your question.

º (1610)

Mr. Leon Benoit: Thank you.

Mr. Jean-Jacques Blais: To reiterate the point that Peter made, the Americans and the British are indeed now insisting that all their equipment be C-130J transportable, because they want to be able to use the C-130J in order to be able to get their kit into the field.

The Vice-Chair (Mr. David Price): Thank you, Mr. Benoit.

Monsieur Bachand.

[Translation]

Mr. Claude Barchand (Saint-Jean, BQ): First I would like to congratulate you for the quality of your presentation and thank you for meeting with us. I would like to especially say hello to Mr. Blais. Parliamentary solidarity oblige, no? He is a former member of Parliament, a former minister, therefore, he knows a lot about national defence.

I have prepared a list because I compare what we're doing today to how I approach buying a car, in approaching Ford, Chrysler and GM. I ask a series of questions, and I then try to decide. I think that this will be useful, even if I need a second round. Mr. Price hasn't told you, but we will have a second round. I have seven minutes for the first round, and then I will have an additional five minutes.

So I don't know if you will have the time to answer my questions, but one thing is sure, I will find out who the good students are because I have specific questions, and I need you to answer within three seconds. I think that this is possible. We will go one by one, and if I haven't finished my list, I'll come back in the second round.

First, let's talk about transport capability. I am comparing the Airbus A400M, the Boeing C-17 and the Hercules C-130J. What is the transport capability for each of these planes. What is it for the Airbus?

[English]

Mr. Richard Thompson: For the A400M, the maximum payload is 37 tonnes.

[Translation]

Mr. Claude Bachand (Saint-Jean, BQ): For Boeing?

[English]

LGen Allan DeQuetteville: It's 160,000 pounds, or 80 imperial tons.

Mr. Claude Bachand: It's 80 imperial tons.

[Translation]

And Hercules?

[English]

Mr. Peter Simmons: It's 47,000 pounds.

[Translation]

Mr. Claude Bachand: Now, let's talk about capacity, the metric space for the hold. Can you answer that? Some are looking in their notes. Your report card marks will be lower.

[English]

Mr. Richard Thompson: The A400M's volume is 356 cubic metres.

Mr. Peter Simmons: The CC-130's is 6,000 cubic feet.

Mr. Claude Bachand: It's 6,000 cubic...?

Mr. Peter Simmons: Feet.

LGen Allan DeQuetteville: And I would have to do some very sophisticated calculations to figure it out for the C-17.

º (1615)

Mr. Richard Thompson: I'll do it for you.

Voices: Oh, oh!

LGen Allan DeQuetteville: Oh, okay.

Mr. Richard Thompson: The C-17's is 592 cubic metres, the A400M's is 356 cubic metres, and the stretched C-130J-30 is 171 cubic metres while the short version is 129 cubic metres.

Mr. Claude Bachand: This guy's ahead, eh?

LGen Allan DeQuetteville: Well, that's fine. But I think it's also important to appreciate that just cubic metres may not be terribly meaningful if equipment won't fit into that space.

[Translation]

Mr. Claude Bachand: I will come back, in any case, for more specific questions. Now, what is the full-load range limit for the A400M?

[English]

Mr. Richard Thompson: In general terms, with a 20-tonne payload, you're looking at just over 3,550 nautical miles unrefueled. I'd like to point out, though, that the A400M is refuelable by Canadian Forces tankers because it is not a boom refueled aircraft, it's a hose-and-drogue refuelable aircraft. The A400M itself can also act as a tanker, so you can have buddy-buddy as well. And with a 35-tonne payload, the range is just over 2,555 miles.

[Translation]

Mr. Claude Bachand: OK. Thank you.

[English]

Mr. Richard Thompson: And that's in nautical miles.

Mr. Claude Bachand: Fine.

LGen Allan DeQuetteville: For the C-17, it's between 3,000 and 4,000 nautical miles, depending on the payload.

[Translation]

Mr. Claude Bachand: What about the Hercules?

[English]

Mr. Peter Simmons: A 20-metric-tonne load is 4,000 nautical miles non-stop, unrefueled.

[Translation]

Mr. Claude Bachand: Now let's talk about sale price. What's the selling price for the A400M?

[English]

Mr. Richard Thompson: As I said just now, 196 airplanes were signed for last year for approximately $16 billion U.S. That works out to about $80 million U.S. per aircraft, and that includes a certain number of optional pieces of equipment on the aircraft, as well as initial logistics support.

[Translation]

Mr. Claude Bachand: What's the price on the C-17?

[English]

LGen Allan DeQuetteville: The baseline cost for the current contract being negotiated with the United States Air Force for the additional 60 was $152 million in 1999 dollars.

[Translation]

Mr. Claude Bachand: What is it for the Hercules?

[English]

Mr. Peter Simmons: With a baseline C-130J-30 stretched Super Herc, it's going to be in the mid-$90-million range, and that's in Canadian dollars.

[Translation]

Mr. Claude Bachand: Now let's talk about delivery period. If Canada says this it is ordering aircraft today, did I understand you correctly, Airbus, when you state that delivery would be slated for 2008?

[English]

Mr. Richard Thompson: That's correct, sir.

[Translation]

Mr. Claude Bachand: What about the C-17?

[English]

LGen Allan DeQuetteville: The RAF received its first airplane one year and one day after it placed its contract a little over two years ago.

[Translation]

Mr. Claude Bachand: It would be the same for us: one year and a few weeks.

What about the Hercules?

[English]

Mr. Peter Simmons: At the current production rate, if you signed on the dotted line today, it would be fourteen months.

[Translation]

Mr. Claude Bachand: Fourteen months.

You are doing well. Now, let's talk about warranty. When I buy a car, I look at warranty. Are their warranties for planes? If it crashes from the start, are we reimbursed?

[English]

Mr. Richard Thompson: Yes, but this is slightly different from buying a car. It's basically a two-year guarantee, assuming about 1,000 flying hours per year. In effect, what you then have is a service life policy that would cover you in an agreement between us and yourselves, depending on how you want to maintain the aircraft and what maintenance options you adopt. The service life policy would cover that. The maximum would be, for example, a fleet service arrangement wherein, in effect, we guarantee an aircraft to be on the apron 365 days a year, 24 hours a day, and it would be us who would look after the maintenance and any repairables and things of that nature. It's up to you.

The Vice-Chair (Mr. David Price): Mr. Dromisky.

Mr. Stan Dromisky (Thunder Bay--Atikokan, Lib.): Thank you very much.

I'd like to start with the analogy that has been drawn already. I don't think you guys could make car salesmen, but I'm going to put you in the same category. When I buy a car, I know there's going to be a certain amount of equipment in it so that the car is going to run when I turn the key. However, when I take a look at the list—and it's an extremely extensive list no matter what model you're buying—there are a multitude of options that really enhance the price dramatically.

You've given us basic prices for each of your units. However, I know you have to follow certain safety regulations and that certain equipment must appear on there according to international aeronautical rules, regulations, and so forth, in the industry. Rules and regulations will also be imposed upon you in the manufacturing of your planes if they're going to fly over certain sovereign states. They're going to be there; however, they could make a big difference in the price.

I don't know what the specification charts will demand as far as the Canadian military is concerned, but those will come later and we'll be able to see them. Can you envisage a dramatic increase from the basic price for each unit if you are fortunate enough to be chosen and we're going to purchase several planes from you? Would there be a dramatic increase in order to meet the needs of a military operation?

º (1620)

Mr. Richard Thompson: Your question is a very good and very relevant one.

Given the degree of work that has gone into specifying the A400M for eight European air forces, I would like to think it would be highly unlikely that Canada would have significantly different requirements that would demand significantly different and tailored equipment for Canadian use, but I may stand corrected. I don't know.

As I said, the contract that has been signed in Europe is a simple division of $16 billion U.S. by 196 aircraft, and each one of those nations has specified a number of additional equipments. All of the aircraft have to comply with international regulations. These aircraft will be certified under JAR-25 regulations, or the Joint Aviation Requirements for Large Aeroplanes—that is, civil regulations—as well as the military release regulations of each of the individual nations. Therefore, they will have to conform to both civil and military operational requirements and practices. And the contract is a fixed-price contract, so that is what it comes out at.

So my answer to you is that it is unlikely that there would be any significant increase in the price of the aircraft.

LGen Allan DeQuetteville: Mr. Dromisky, thank you.

There is virtually no latitude on the C-17 in terms of options per se. The airplane is an air force airplane that was designed by the U.S. Army, so it was designed from the ground up to support the army and army loads. It's in the interests of the countries that operate the airplane to maintain a common standard so that they can share in the life-cycle interoperability of the airplane and thereby reduce the life-cycle support costs. Everything has been designed that way from the ground up.

Mr. Peter Simmons: One of the things we decided to do when we set about designing and building the new C-130J was to pick a specification standard for the aircraft that was higher than the military standard. We have actually certified the aircraft to Federal Aviation Administration certification, making it the first military aircraft that actually received FAA certification before going into military service.

The aircraft is also designed for global interoperability, and all of the operators to date actually belong to the C-130J users' group so that they can actually share operational requirements. There is a very limited difference between the operational requirements of any country currently getting C-130Js, and that fact would also apply to Canada. In fact, we've done substantial amounts of research into Canada's requirements for airlift, and no operational requirements are outside the envelope of the aircraft right now.

Mr. Stan Dromisky: Okay, I'm just going to throw a monkey wrench into this. I can still continue to follow through with the analogy of comparing you to car salesmen. We get a lot of cars manufactured in the United States. They cross the border but do no have block heaters, okay? Just keep that in mind.

To follow through with the second part of my question, I know one company doesn't have its model out yet, the A400M, but it's in production. The others have their planes out and they're being tested by various countries. Can you talk about maintenance costs pertaining to safety factors and so forth? Do we have any kind of evidence being generated by those countries? What percentage of the fleet is being maintained at any given time? What are the weaknesses of the aircraft, and so forth? Do we have any kind of information on those things?

Mr. Peter Simmons: We currently have 85 C-130Js being delivered to customers around the world. That's against the current order book of 118, with another 300 to go. We are therefore getting stable numbers coming back from the field. In fact, the deployment in Afghanistan has given us some substantial numbers. Even though it's a brand new airplane, it has been deployed there.

We are looking at a 40% reduction in maintenance costs and support costs for the aircraft. The operational cost is substantially lower, by about 40%, not least of all because you only have a two-man flight crew. We are looking at maintenance tasks being 70% lower in some instances when compared to what you're used to with the existing C-130s, and—

º (1625)

Mr. Stan Dromisky: Without breaking regulations?

Mr. Peter Simmons: No, this is each country's own maintenance being done on their airplanes. For example—

Mr. Stan Dromisky: The reason I ask is that it's easy to keep the maintenance costs down if you don't follow the country's regulations regarding safety checks on a regular basis. And safety checks come in various degrees.

Mr. Peter Simmons: Right, but we are not maintaining the aircraft. The aircraft are being maintained by trained maintainers within each country, like Italy, Australia, the United Kingdom, and places like that. We have actually trained their maintainers, so the numbers are coming from the operators. It's not like a commercial aircraft that the operator looks after, etc.

So we're looking at it those. In fact, as strange as it may sound, one operator has actually complained that the aircraft is too reliable, that their people don't have enough to do. That's actually in a letter from a sovereign air force, actually stating that their guys are getting bored because they have no maintenance work to do.

Mr. Jean-Jacques Blais: We're getting one of those Maytag ads run up soon.

Mr. Stan Dromisky: The next question that I'll ask is related to those comments. Are those planes being used?

Mr. Peter Simmons: Those aircraft have been to Afghanistan.

The Vice-Chair (Mr. David Price): Thank you, Stan.

Mr. Anders.

Mr. Rob Anders (Calgary West, Canadian Alliance): Thank you, Mr. Chairman.

I'm going to let you know, gentlemen, that what it boils down to for me is whether or not you can move LAV IIIs or armoured Bradley main battle tanks. For example, there was an A400M demonstration here with a Griffin helicopter. Admittedly, I'm not as concerned about the Griffin because it can fly, but with regard to the LAV IIIs and the Bradley tanks, they can't.

Humbly, I appreciate the presentation that we've had here with regard to the C-130s, but I know you can't do a Bradley tank. What types of modifications do you have to make to move a LAV III?

Mr. Peter Simmons: The Canadian LAV IIIs are slightly different from most of the LAV IIIs being delivered to other forces. They have an attachment on the top of the turret. It's a receiver that needs to be removed. Like most wheeled vehicles with an in-built pneumatic suspension system, though, you can then lower it and it will fit into a C-130.

Mr. Rob Anders: Do you know how long it takes to reassemble the top of the LAV III when you go ahead and disassemble it?

Mr. Peter Simmons: From what I understand, the analysis was that once you are on the ground, it takes less than an hour from the time the aircraft stops to the time your equipment is ready to go, whereas everybody else has roll-off-and-fight capability with their LAV IIIs, which are being specifically designed to go in a C-130.

Mr. Rob Anders: When you're putting the LAV III on, does it take an hour to disassemble it as well?

Mr. Peter Simmons: I don't have specific numbers in front of me, but my guess at this stage is that the time required would be about the same for disassembly as it is for reassembly, yes.

Mr. Rob Anders: Okay.

When it comes to the C-17, I know Mr. Blais called it a Cadillac, but I have to let you know that I'm partial to the Cadillac in this circumstance. I know it can handle three Bradley armoured fighting vehicles. I therefore assume it can also handle three LAVs.

LGen Allan DeQuetteville: That's correct.

Mr. Rob Anders: That's correct? Okay.

Do you know how many times we've used that particular vehicle to move Canadian troops and equipment to Afghanistan?

LGen Allan DeQuetteville: It took 66 flights to move the Canadian contingent from Ramstein directly into Kandahar. The assets went out of Edmonton on C-5s. In Ramstein, they were transshipped onto C-17s for the flight into Kandahar because the C-17 was the only aircraft able to get into the airfield at Kandahar. The C-5 could not do that.

Mr. Peter Simmons: I would actually like to point out that the C-130s had been in Kandahar for a long time prior to the C-17s.

Mr. Rob Anders: I'm sure it has been for much smaller loads. I don't doubt that for a second.

With regard to the C-17 once again, are you aware how many times in the past ten years we have used them to transport Canadian troops either abroad or within Canada, like during the ice storm?

º (1630)

LGen Allan DeQuetteville: I cited the two examples of the Manitoba floods of 1997 and the ice storm of 1998, and they've been into Afghanistan. Of course, I don't know of other circumstances that have been discussed for the deployment of Canadian troops. Sometimes they've gone by other means.

Mr. Rob Anders: So it would be over a hundred times, I'm sure, that we've borrowed somebody else's C-17s because we frankly just don't have the lift.

LGen Allan DeQuetteville: Yes.

Mr. Rob Anders: With regard to the A400M, I understand it can lift a LAV III. Tell me if I'm wrong.

Mr. Richard Thompson: It can lift two LAV IIIs without any strip-down or preparation. They would be rolled on and rolled off.

On the Griffin helicopter, of course, you're absolutely right that it can fly, but when you want to deploy utility helicopters out of one theatre and into another theatre, you obviously want to transport them in a strategic transport aircraft and deploy them at the other end, where they would then fly operationally. That's why we demonstrate the possibility of carrying two Griffin helicopters.

I'd like to point out that the height of the A400M cabin, the cargo hold, is identical to that of the C-17. Therefore, every load the C-17 can carry, the A400M can carry as well, with exactly the same degree of strip-down. The one exception is the Abrams M1 tank, which does not appear as a requirement in the European operational requirements for transporting loads into combat, of course—rapid reaction, that is.

Mr. Rob Anders: Right.

With regard to the Airbus, the other two are up and running. We can buy them right off the shelf, in a sense.

The Vice-Chair (Mr. David Price): I'm sorry, Mr. Anders, but your time is up.

Mr. Rob Anders: Oh, what a shame, Mr. Chairman.

The Vice-Chair (Mr. David Price): I'm sure you'll have another shot.

Mr. Rob Anders: I hope so.

The Vice-Chair (Mr. David Price): Monsieur Bachand.

[Translation]

Mr. Claude Bachand: I am continuing with my shopping list, Mr. Chairman.

As for the guarantee, we settled the Airbus case. We're probably now looking at Boeing. What warranty would Boeing offer for the C-17?

[English]

LGen Allan DeQuetteville: Monsieur Bachand, I think the guarantee for the Boeing C-17 is the fact that there are 87 of those airplanes in production now, and they're winning awards for their reliability. The C-17 was the winner of the Collier Trophy three years ago. Its reliability has now made it the strategic airlifter of choice for the United States Air Force. That's the guarantee that comes with this airplane.

[Translation]

Mr. Claude Bachand: OK. What about the C-130J?

[English]

Mr. Peter Simmons: The warranty on the aircraft really is based upon your calculated flight hours, so your warranty can run.... It's not for the whole airplane, it's system-dependent, so it can go from a year to however many flight hours you manage to stretch out over a period of time. It's dependent on your usage of your aircraft, but, yes, all aircraft come with warranties, just like cars do.

[Translation]

Mr. Claude Bachand: Now, we will look at maximum speed. I guess you'll tell me that the speed...Does the maximum speed differ depending on whether the aircraft is loaded or not? I am not a great physicist, but can you travel at the same speed even if the aircraft is loaded? I would like to hear from Airbus. What is the maximum speed for the Airbus?

[English]

Mr. Richard Thompson: I'm not a pilot, but the pilots among us no doubt will enlighten you further on this. Airspeed can be measured in different ways. The cruising speed of the A400M Airbus—and that would be a laden aircraft—is Mach 0.68 at its cruising altitude. Its maximum cruising speed is Mach 0.72.

[Translation]

Mr. Claude Bachand: OK. What about the Boeing?

[English]

LGen Allan DeQuetteville: For the Boeing, it's approximately Mach 0.75, and it doesn't vary much depending on whether it's empty or full.

[Translation]

Mr. Claude Bachand: And the Hercules?

[English]

Mr. Peter Simmons: Being a pilot, I'll give you it in understandable numbers. It's 355 knots, and it makes almost immeasurable difference whether it's loaded or not. It does have a 250-knot ramp at the back, so you can slow down to 250 knots for airdrops.

[Translation]

Mr. Claude Bachand: OK. Three hundred-fifty-seven nautical knots per hour, how much is that in Machs?

º (1635)

[English]

Mr. Peter Simmons: I don't have a conversion chart.

[Translation]

Mr. Claude Bachand: OK. I'll do the math.

[English]

Mr. Richard Thompson: That's Mach 0.55.

Mr. Claude Bachand: It's Mach 0.55?

Mr. Peter Simmons: There isn't an instrument in the cockpit that actually shows it as a percentage of Mach. It measures in knots, so I'm—

[Translation]

Mr. Claude Bachand: OK.

Now, what is the minimum size strip that your Airbus needs to land?

[English]

Mr. Richard Thompson: Why do you always pick me first?

Voices: Oh, oh!

Mr. Richard Thompson: According to JAR-25 requirements—in fact, that's all I can give you—the landing distance is 1,530 metres for a maximum-weight landing of the aircraft, and that's clearing a 50-foot obstacle prior to actually landing, assuming there are obstacles such as trees and things on the way in.

[Translation]

Mr. Claude Bachand: And what about the Boeing?

[English]

LGen Allan DeQuetteville: Again, for maximum, all-up weight, it operates in and out of airfields at 3,000 feet. Essentially, it's the same as the C-130 Hercules.

Mr. Claude Bachand: At 3,000 feet, like the C-130?

Mr. Peter Simmons: Yes, for take-off and landing, the maximum is 3,000 feet for both, but that is an actual requirement, and as Mr. Price has found out, the aircraft can actually get off the ground in 600 feet.

Mr. Claude Bachand: I was with him in that plane, as a matter of fact.

Mr. Peter Simmons: So you know just how quickly—

Mr. Claude Bachand: I was almost ejected from the back of the plane.

Voices: Oh, oh!

Mr. Peter Simmons: Absolutely.

I think I'll rest my case on the performance of the airplane on take-off.

[Translation]

Mr. Claude Bachand: It's over?

[English]

The Vice-Chair (Mr. David Price): Yes, your time's up.

Mr. Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): Thank you, Mr. Chair.

First, I'd like to thank the representatives of Boeing and Lockheed Martin for providing copies of their written submissions. They've been helpful. There's a fair amount of information to digest, so my first question would be to the representatives of Airbus Military, to either Mr. Thompson or General Lafrance, about whether they intend to send along to the committee a copy of a written submission that will detail the presentation that was made today.

Mr. Richard Thompson: Sir, you've caught me at a loss there, because I understood that this had been done.

Mr. Carmen Provenzano: Well, I've been asking. Perhaps it has just been—

Mr. Richard Thompson: I apologize that you have not received anything.

Mr. Carmen Provenzano: No, I didn't receive it, but that clarifies that.

I had actually asked the clerk, and it was indicated that this submission seemed to be missing, but now I have it, and I thank you for that.

As another question to Airbus Military, I understand that the prototype has not yet been built for the plane described in your submission, but that it's expected in 2005, I think. The production is anticipated to begin five years from now, in 2007.

Mr. Richard Thompson: In terms of the actual dates, the first flight of the first prototype will be in 2006. The production line will actually start in 2005, and the first delivery to the French Armée de l'air will be in 2008.

Mr. Carmen Provenzano: Thank you.

I'm a lot like my friend Mr. Dromisky. I'm not entirely clear on the significance of a presentation that's being made on the basis of a prototype. What assumptions should the committee be aware of when we're hearing about a plane that hasn't been built yet?

Mr. Richard Thompson: First of all, like every aircraft program that has ever been launched, it is going to be designed and produced against a very detailed specification that has been defined with the eight European air forces over a period of about four years, in great detail, covering all aspects of the aircraft in terms of its design and its required performance.

On top of that, following what Airbus calls “the commercial approach”.... In other words, in the approach that Airbus takes when it launches its commercial airlines—and Boeing does the same, by the way—aircraft are bought by the airlines before the prototype has actually flown. What you do to overcome that is give very specific performance guarantees to the customer, based on the detailed specification that has been defined jointly with the customer. If there was a shortfall in performance at any time, be it an actual operational flying performance or in terms of carrying capacity of the aircraft, etc.—or in terms of the maintenance guarantees that we've had to give in our case, for that matter—we would face some very stiff commercial penalties.

Clearly, it would completely destroy our business case if we had to actually pay any penalties. Therefore, just like you do for a commercial airline venture, you build sufficient margin into the design of the aircraft to make sure that even if you fall short of certain specific performance points in the design, you're still above the specifications that you've agreed to with the customer.

º (1640)

Mr. Carmen Provenzano: Is it fair, Mr. Thompson, to conclude that if the prototype will not take its first flight until 2005, if we were to sign on the dotted line today, delivery would be five years from now at the soonest?

Mr. Richard Thompson: I mentioned in my presentation that the first delivery to Canada would be 2008.

Mr. Carmen Provenzano: It would be in 2008, so it would be five to six years.

The next question that I have would be to the representatives from Lockheed Martin. There's a fair amount of discussion—certainly you're aware of it—relating to the current fleet of Hercules. I believe it was your company that produced those aircraft.

Do you have or have you examined any data that allows you to make any statement as to what the remaining life of the fleet might be? I know that poses some difficulties, but do you have the kind of intimate data about our current fleet that allows you to make some projections as to when we might need to replace those aircraft?

Mr. Jean-Jacques Blais: I might just use that comment, Mr. Provenzano, to indicate to you that in terms of the utilization of the C-130, Canada's record is the best of any of the utilizers of the C-130. We have put more hours on and have made more use of the C-130s than any of the utilizers that have been using the aircraft. The thing is, we have 19 C-130Es. Those are the older model, and they are close to 40 years old, of course, with some that are over 40 years old.

The Vice-Chair (Mr. David Price): I'm sorry, Carmen, but you're quite a bit over your time.

Mr. Carmen Provenzano: Oh, I'm sorry.

The Vice-Chair (Mr. David Price): Thank you very much.

Mr. Anders.

Mr. Rob Anders: Thank you, Mr. Chairman.

I'll finish up with the question I was beginning to ask these folks with regard to the A400M.

I think the biggest obstacle you're up against is the fact that you don't already have a plane. The second biggest obstacle that you're up against, frankly, is the fact that the Canadian procurement and decision-making process is not always the fastest and the most reliable. The Sea Kings are a good example of that.

As a result, if you're going to be able to do any of the things you want to do on the timeline that says the decision has to be made this year, are you optimistic the decision is going to be made and you're going to get what you need as a nod?

Mr. Richard Thompson: Obviously, I have absolutely no control over how fast Canada makes a decision. I think Canada has demonstrated that it is perfectly capable of making a decision when there is a train about to leave the station, like it did in the case of the JSF.

I think another train is about the leave the station. What you term quite correctly as one of the things we're up against—that is that we don't actually have a flying aircraft today—is also the greatest opportunity for Canada in terms of the opportunity that we can offer to Canadian industry to be in at the beginning of the development program in a way that is of far greater value to Canadian industry than what would be represented by a straightforward, industrial-benefit package that would be associated with a straight, off-the-shelf purchase.

So, no, we don't have a flying aircraft today, but we will in 2006. Airbus has a sterling reputation for meeting complex aeronautical programs on time and within budget. At the same time, there is an opportunity for Canadian industry to be in at the beginning of this program and to really benefit from it, like its European counterparts have.

º (1645)

Mr. Rob Anders: I'm going to wrap up with what I consider to be a comment. I've travelled on the HMCS Calgary. Just being on that ship, you understand the issue of the Sea King versus the EH-101. Not having folding rotors is an incredibly big pain in the arse. To take those rotors off to fit the machine inside the housing and to then have to reassemble everything is ridiculous.

I raise that because, while I respect that the C-130 is a fine aircraft and is probably economical and all that good stuff, with the stuff our sailors have to go through with regard to the Sea Kings and everything else, or which the air force people who work in conjunction with the sailors have to go through, I would not want to put our good service people in the armed forces through that same scenario with regard to Griffin helicopters or with regard to LAV IIIs and the inability to carry main battle tanks. So I'm sure it's a fine craft, but it just breaks my heart to think we'd have to put them through that same scenario.

I'm sure you have a comment in response. You can comment afterwards if you want to, but I'm just giving you my thoughts here.

In terms of the other two aircraft that we've had presented today, I happen to like the C-17 because I know it works, I know it does all those things, I know it carries main battle tanks, and I know it can do the job. While the A400M is capable of it potentially, it's not ready yet.

I guess I'll leave it at that, and I'll let the Liberals or whoever divine what they want out of those statements, Mr. Chairman.

The Vice-Chair (Mr. David Price): Thank you, Mr. Anders, I think.

Monsieur Bachand.

[Translation]

Mr. Claude Bachand: This time, I am going to take another approach, because I have a lot of things left to cover. What I suggest is this: I'll take your business cards later and I will send you the final list that I've got because I think I am going to run out of time. Of course, I want to talk to you about funding, maintenance contracts, the time required to prepare the aircraft for quickest possible take-off. These are more technical points that I don't think we'll have the time to cover one way or another here.

What I am saying is, since this is probably my last chance to speak, you have to understand, gentlemen, that we are the elected representatives of the people. You know that each month, in my riding, I meet people who have very modest means. When we talk to them about a plane that costs 80 million or 160 million dollars, they say it's too expensive. You have to understand that we are somewhat the guardians of taxpayers' money. It is very important that we get an idea, even if sometimes I consider that we don't have much input. We can't say that we can decide on one thing, and the people making the decision will follow what we say. That's not the way things happen. We try to influence things, and at a given time we try to find the best possible product for the taxpayers' money. This is very important. I think that you should understand that.

There is one thing that the taxpayer follows closely, as well. When he gives his money to the Canadian government and it gives the money to National Defence, can the taxpayer require some Canadian content? I thought I heard Airbus earlier invite us to a great adventure and told us it was ready...Mr. Thompson probably said that his company was perhaps ready to set up a small plant in Canada to ensure some Canadian content. That interests me because this is a way for the Canadian taxpayer to get a return for his money. The taxpayer shells out, but it means jobs for Canada. That is important, as well.

I thought I understood that Airbus was open to this. I certainly will not ask you how many jobs would be created, but I would like to hear the others on this, because I think that this is a very important factor in awarding a contract.

º (1650)

[English]

Mr. Richard Thompson: You're absolutely right, sir. That's what I did say. The stage the program is at today would afford Canadian industry the ability to participate in the program as a partner, with responsibilities across a great number of aircraft design disciplines. That would enable the industry in Canada to take part in the design and certification process of whole sections of aircraft, along with systems and subsystems associated with the aircraft.

In terms of the return on taxpayers' money, which you mentioned, sir, the interesting thing is that this would not just be in terms of the aircraft that Canada bought, this participation would be across the entire number of aircraft that have been bought by the other European nations and would last for the duration of the life of the program. That means Canada would also benefit from all the aircraft we were able to export around the world, and the life support of the aircraft as well. So you're looking at about at least a thirty-year involvement of Canadian industry, with a return ratio on investment typically of 3:1, as I said. For every dollar put in by the Canadian taxpayer, Canadian industry would be expected to receive in return, over the life of the program, three dollars.

[Translation]

Mr. Claude Bachand: What would the scenario be if it were Boeing?

[English]

LGen Allan DeQuetteville: Boeing is already placing $1.5 billion worth of work into Canada each year, through a vast supplier network of some 200 suppliers in every province of the country, in four facilities that we have here in Canada. We estimate that leads to some 32,000 direct and indirect jobs as a result of that procurement.

Specifically on the C-17, I mentioned in my opening remarks that on the U.S. contract for the first 120 airplanes, there are currently some 26 Canadian companies, in Canada, that are already getting $100 million over the next five years. Presumably, in the buy of the next 60 and if Canada were to go into its own procurement, there would be an offset program that would be part of that industrial participation.

We currently have over $400 million worth of offset obligations in the country that we're discharging on or ahead of schedule, and that figure can be verified with Industry Canada. So other than Bombardier and Pratt & Whitney, the Boeing footprint in Canada is the largest of any aerospace industry.

Mr. Peter Simmons: I'm very pleased you asked that question, because I think it's the first question addressed to what I think is one of the fundamental issues of the acquisition, and that is the fiscal responsibility behind it. You're absolutely right. If you suddenly throw out a number of $2.5 billion Canadian and there's something of limited application, then as my friend stated earlier, yes, you are going to suffer in your ridings with the questioning that's going to come as a result of that.

In terms of Canadian industry, there's already a tremendous infrastructure supporting the existing C-130 fleet, and it is very much involved in the next generation of aircraft. More importantly, as I pointed out in my opening remarks, we have already studied the current cost of operating your Hercules fleet, and it's going up exponentially. We have the numbers on the estimated cost to maintain the aircraft that will be kept in service, let alone the ones that are taken out. Because of the age of the airplanes, it's getting very expensive just to keep them flying. We've had to unfortunately publicly watch what happens when the aircraft aren't available, and none of us likes appearing on the front page of a newspaper.

What we did was actually look at the projected cost of maintaining the fleet. Without capital cost, we can then actually do a rolling replacement with new aircraft while using your existing O and S budget. You don't have to spend or make a capital investment up front at all.

[Translation]

Mr. Jean-Jacques Blais: Also, obviously, Lockheed Martin has been in Canada for over two generations, and there are Canadian companies here. I sat for six years on the Lockheed Martin Canada board of directors when the company had a board of directors in Canada. Lockheed Martin has a company in Canada. I don't have the figures with me, but I would be happy to submit them. Lockheed Martin is in fact an integral part of the Canadian defence industry, and has always supplied not only Hercules aircraft, but, as you know, the GSF is also a Lockheed Martin creation.

º (1655)

[English]

The Vice-Chair (Mr. David Price): Thank you very much, Mr. Bachand.

Mr. O'Reilly.

Mr. John O'Reilly (Haliburton--Victoria--Brock, Lib.): Thank you very much, Mr. Chairman.

Thank you very much for attending today, gentlemen. I'm very impressed.

I had a good day today, as I do most days, not like some of the other people. And I certainly won't compare you to car salesmen, because this is entirely different. You'll be happy to know this committee won't make the decision on the purchase, but the committee will certainly have some input into it, as it did through recommendation 10 of the committee's report. That recommendation was that Canada acquire additional heavy transport aircraft to replace older models, and that's where you come in.

I know the aircraft will be based on a statement of requirements from the military, and it will be based on DND's decision, with some of the minister's input, and obviously on politics—regional advantages, jobs, employment, and the many things that go into major purchases with Canadian taxpayers' dollars.

There is a split right now. I realize we're dealing with retired military and retired or semi-retired politicians. They may not be fully retired, but still working for companies that all have impeccable records.

I have no qualms. I've flown on most of the aircraft that you're talking about, except for the future one, of course.

What recommendations would you have for us as individuals, to deal with the split in the analysis being carried on right now at the senior level at National Defence Headquarters? I would be interested in why there would be so many differences in what they think the requirements should be. Obviously, this committee would recommend—or I think we would recommend—that we want the best aircraft to carry out the operations in which the military will be required, and at the lowest cost, but not necessarily the cheapest. I'm interested in your political analysis in regard to what the statement of requirements will be—I don't think they're issued yet; if they are, I haven't seen them—and how you'll be able to meet those statements of requirements.

And I know I'm the parliamentary secretary to the Minister of National Defence, but he didn't give me anything to talk to you about. Those are my own thoughts.

Mr. Jean-Jacques Blais: Mr. Chairman, the matter has not reached the minister's desk, evidently. As I understand it, it is still an issue that is within the air force. It's not a DND recommendation by any means. DND is dealing with a large number of priorities that it will indeed have to identify within the budgetary allocation. That's the reason I made my comments in my opening statement. Indeed, we're at a stage now that is relatively preliminary in the sense that there is a study relating to strategic airlift that is internal to the air force. Certain recommendations are making their way within the air force, eventually to the senior levels of DND, and then to the minister's office from there, but we're not there yet by a long stretch.

Mr. Peter Simmons: If I could just add to that, when I leave here today, the one thing I would like to feel I've imparted is that I think it's incumbent upon this committee, as this process moves along, to look at airlift as an overall requirement.

If you go back three years to the airlift road map, which recommended a way forward for Canada's airlift requirement, including strategic, tactical, and homeland use as well, it actually came out with a road map of how to do that. That has now moved away from the overall airlift requirement—what Canada needs to move, where, when, and how, and what it can afford to do—and everything but strategic is being left out of the equation. Things have been moved into a very narrow set of goalposts, and this has been very focused. I think we need to step back and look at the overall picture of what has been moved.

My good friend was demonstrating that we have to partially dismantle, but we have no interest in moving that. That's what you would put in another aircraft, because that fits into the 10% that won't go in a C-130. But if you look at troops, for example, we can actually carry more troops and equipment in a C-130 than you can in a strategic lifter. So we need to have a look at what the overall requirement is, at the budget balance against that, and then at what's needed for that 10% and what's needed for the rest.

Because you have new technologies coming along, as in the case of the Super Herc, you could actually achieve a far greater percentage of your overall lift at a much more affordable cost than you could if you just concentrated on that strategic part of your airlift requirement.

» (1700)

The Vice-Chair (Mr. David Price): Thank you.

LGen Allan DeQuetteville: I think it's safe to say that the Department of National Defence is looking at the total mobility need, and that's not just airlift, it's airlift and sealift, because sealift will be an important component of how National Defence deals with moving things in the future. They will rationalize the number of C-130s that would be needed as a tactical airlifter to supplement the strategic airlift equation.

Much has been said about limited application and 10% of the requirement. It seems to me that if you have formed units of the Canadian Forces that have indigenous to them equipment like Griffin helicopters, the 10-ton HLVW trucks, LAV IIIs, and MLVW trucks that are 2.5 tons when loaded, and they don't fit into your tactical airlifter, even if that's only 10% of your load, you can't move your formed units strategically. That's the dilemma.

In terms of overall affordability, I think it's also important to look at the equation in a life-cycle sense. The acquisition of these assets will represent roughly one-third of the total thirty-year cost of ownership. I think it's imperative again that this committee and officials look at the total life-cycle costs. As opposed to twelve or twenty or whatever, having only six airplanes obviously has some significant advantages in terms of life-cycle cost of ownership.

Mr. Richard Thompson: To some extent, the study that has been alluded to—the independent study that DND conducted recently—is a pointer to the status of the statement of operational requirement. You're quite right in saying this is still within the air force and that it hasn't been formally endorsed or released yet. But it was used as a basis of the independent study. It's interesting to point out that, as a result of that independent study, only two aircraft were seen as being completely compliant with the requirement of lifting formed units, as General DeQuetteville has said, and also the DART disaster relief teams Canada is famous for.

In turn, the message I would like to leave here, however, is that whether we're talking about 10% or not 10%, whether we're talking about how often we're going to use the strategic capability or not, the beauty of the A400M is that many people thought for many years about how to specify this aircraft, given the fact that they were given the opportunity to start with a clean sheet of paper. They specified an aircraft that could do the strategic lift capability, but all that time when it was not doing that 10%—if you choose to put it that way—it could continue to do the day-to-day work of the tactical aircraft that this aircraft will be replacing in service with those European air forces. It is that modularity about the A400M, that ability to straddle both ends of the spectrum, that I'd like to leave with you as a thought for you to ponder.

Thank you.

The Vice-Chair (Mr. David Price): I guess I'll take a couple of questions myself, because I do have a couple of questions.

First of all, you mentioned stepping back, and I think that's one thing we're going to have to look at. Obviously, everything we've been looking at is really coming out of the 1994 white paper, but we're going to be stepping back. We're going to be doing a defence review, so that gap will probably narrow even more once we're done with that.

I have a couple of questions that may be a little on the technical side, but I'd like to ask them in regard to all three of the aircraft. As we end up flying anywhere from Alert to the Gulf coast, we run into the extreme temperatures at both ends. We're talking about aircraft here that are glass cockpit and fly-by-wire, and their biggest enemy is heat and cold. Granted, the airplanes are designed for that.

What I'm looking at is what happens in breakdowns of heating, air conditioning, and those types of things? What thought has gone into the design on those aspects? For example, take the C-130, which I am familiar with. It's able to cope with that type of situation right now, granted, but you're going to glass cockpits and more fly-by-wire, so I'd be interested just to hear from each one of you on this—and I'll give you a break this time by starting at the other end.

» (1705)

Mr. Richard Thompson:

Thank you so much.

Mr. Peter Simmons: As you've rightly observed, the C-130 is being built for everything from the Arctic Circle to the tropics, and it has been built for those extremes for many years. In coming up with a new design, one of the requirements we looked at was...when you're running modern avionics suites, glass cockpits, heads-up displays, and things like that, yes, you need a much more stable environment for those a lot of the time. But rather than trying to critically design the ambient temperature within the aircraft—that would be difficult to maintain—we actually developed a more ruggedized system to cope with temperature variants. Just because it's a glass cockpit, that does not mean you're dealing with temperamental electronic systems that don't like temperature differences. We have actually designed ruggedized digital systems that can cope with those changes in temperature.

As is don with all aircraft, we actually do our cold soak testing in Alberta. We have C-130s that will be very soon deployed to Alaska for the United States Coast Guard there; the United States Coast Guard is getting new C-130Js, and the first deployment will be to Alaska. So yes, they are perfectly capable of coping with those extremes.

On the other end of the temperature range, on the heated end, one of the things the jumpers don't like is getting into the back of an airplane that has been sitting on the ramp for several hours and has been getting very warm, somewhere like Fort Bragg. One of the things we specifically looked at was increasing the cooling in the back of the aircraft for the jumpers. We can reduce that temperature to a very comfortable level so that the jumpers aren't so uncomfortable when they get into the airplane that all they want to do is jump out of it again, which I think is the subliminal plot in paratrooping anyway.

The Vice-Chair (Mr. David Price): But my question was about what happens when that cooling system or heating system breaks down. Do you have to scrap the mission, or can you still go ahead?

Mr. Peter Simmons: Oh, no, you can still go ahead. The pilot just puts on a warmer set of gloves and keeps right on going.

The Vice-Chair (Mr. David Price): Thank you.

General.

LGen Allan DeQuetteville: Mr. Price, I think it's safe to say all three of the candidate aircraft before you will be designed to very similar environmental standards, but that doesn't mean each airplane, as it does goes through its development cycle, doesn't present some problems that have to be resolved.

In the case of the C-17, I mentioned that we've delivered 87 of those airplanes now, at 15 per year. We reached full production in 1996, but the first flight was actually in 1991. It took us five years to get from first flight to full production, and some 5,000 flight-test hours to work out exactly the sorts of issues you've addressed. But I'm not aware of any known issues involved with the C-17 in terms of environmental controls.

Mr. Richard Thompson: I'd like to echo that. All three aircraft would have been designed or will be designed to similar standards and norms defined within NATO, and also to any specific requirements that any of the nations that actually commission these aircraft will have had.

All the statements that have been made so far about the ruggedization of modern electronic systems would also apply to any new aircraft that is built. Indeed, the later you design and build an aircraft, the greater advantage it can take of the latest advances in technology that would apply and of the experience that has come before, obviously.

I would just like to add that in extreme circumstances, of course, the specifications of all these aircraft would call for special operating procedures that would be applied to make sure missions would not have to be aborted in said extreme circumstances. But it's a combination of the specification of the equipment in the first place and the testing that goes with that to make sure it survives extremes of temperature, conditions, and such things as sand storms and things of that nature as well. Ultimately, however, when everything else fails, the specific operating procedures would take over.

» (1710)

The Vice-Chair (Mr. David Price): I have another one that I'll ask you. You mentioned that the A-400 did have buddy-buddy refueling. Do the others have that capability? Do you have air-to-air refueling between two C-17s?

LGen Allan DeQuetteville: The C-17 is refuelable in flight, and we are looking at options to make it an air-to-air refueler in order that it could refuel other airplanes.

Mr. Peter Simmons: The C-130J does come with that. In fact, the Italian Air Force is doing exactly that. Their new force structure includes C-130Js that are both tankers and fuelers, and they can do both. And the Royal Air Force is also in the process of doing the same to six of its aircraft.

The KC-130Js, the new tankers the U.S. Marine Corps is now getting and will use to support their F-18 deployments, are being looked at in terms of being refuelable down the road as well.

So we're already delivering aircraft that can take on fuel and can give fuel, yes.

The Vice-Chair (Mr. David Price): I'm sure all of you have looked very carefully at our white paper. You've looked at what the possible needs could be. In each case, how many aircraft of each particular type would you say we need if you were supplying them?

Again, I'll start with the C-130s.

Mr. Peter Simmons: I don't have an airplane in terms of outsize cargo, because we are not a strategic airlifter. But if you look at troop deployment, you need fewer aircraft, so you're looking at a lower number. For example, for the 750 troops who needed to be transported, you actually would have needed fewer C-130s than you did C-17s to transport 750 troops. In terms of the number of aircraft you would need if you take out the oversized cargo, it's a function of how quickly you want to get there. That's what I'm talking about: looking at the overall airlift requirement.

The Vice-Chair (Mr. David Price): But that's what I'm asking you. Looking at the overall requirement—I'm sure you've looked at it very closely—what would you suggest as the number of C-130s we would need? I realize there is that other part of the lift that you can't supply, but what about the part you can supply?

Mr. Jean-Jacques Blais: The beauty of the C-130J-30 and its 40% increase in capacity in terms of distance, in terms of speed, and in terms of load, is that it would be in a position to replace the 19 C-130Es that should now be replaced, with 40% fewer aircraft needed to meet the same requirements. Plus, the fact is that the C-130Es now are facing a rate of use that is much less than their potential because they are old aircraft. As Peter whispered to me in answer to Mr. Provenzano's question, indeed, they ought to have been replaced two years ago.

One of the problems—and I've been following this file for some time now—is that the concentrated effort on strategic airlift and the C-17 has really diverted the attention of officials from considering the needed replacement for the C-130Es. That, in my view, is a priority over the C-17 or the strategic airlift, because by going to the new aircraft, the C-130J, you are absorbing a portion of the strategic airlift requirement. In my view, that is very clear from its capacity and its performance.

[Translation]

Mr. Bachand, we you look at cars, you look at what is available and what you can afford, obviously, we need transport aircraft. Here, we have the opportunity to have a transport aircraft manufacturer that adapts to existing Canadian Forces infrastructures and replaces planes that can no longer meet the maximum load capacities.

Therefore, we are in fact able to meet Canadian needs, with flexibility and within existing budgets.

» (1715)

[English]

LGen Allan DeQuetteville: Mr. Price, I think the answer is that the evaluators at DND and the independent study that was done have both analyzed things to meet the white paper commitments. For strategic lift, you're talking about six C-17's, twelve A400Ms, or an infinite number of C-130s. As well, with deference to my colleague Mr. Blais, I'm looking at a quote here from Colonel Dave Burt, the Director Air Requirements, in which he talks about the modernization of the Canadian Forces fleets:

I feel passionate that we do something to make these aircraft last for a longer period of time. And through the process, we're going to have some pretty awesome aircraft. The CC-130 Hercules, for example, now has a significantly expanded lifetime and a much better instrument capability.

So efforts have been underway to in fact modernize a portion of the C-130 fleet, but the immediacy of that replacement doesn't seem to be echoed by the air requirements people themselves.

The Vice-Chair (Mr. David Price): But what I actually asked for was your opinion. Do you just agree with the opinion that has been put forward by the study?

LGen Allan DeQuetteville: That's correct.

The Vice-Chair (Mr. David Price): Okay.

Mr. Thompson.

Mr. Richard Thompson: Again, I would not pretend to know enough about the exact requirements and future plans of the Canadian Forces and how they're going to tackle the overall lift question, which includes sealift, as has been mentioned already. All I will do is echo what General DeQuetteville just said about the independent study, which pointed to a possible requirement for up to six C-17s, the equivalent of which would be up to twelve A400Ms.

I'd just like to leave you with the thought that, however many airplanes you would actually procure in the end, you could get twice as many A400Ms as C-17s for the same number of dollars, and they're aircraft that would perform the strategic lift requirement. Because you could afford twice the number of airplanes for the same number of dollars, that would give you far greater flexibility in terms of availability and operation of the fleet.

Thank you.

The Vice-Chair (Mr. David Price): Thank you.

Mr. Anders, did you have a short question?

Mr. Rob Anders: Yes, since we still have time.

I'm actually asking this question for Mr. Bachand, because he raised a question with regard to cost. This is therefore to the lieutenant-general with regard to the C-17s.

Mr. Bachand asked a question by saying these planes cost a lot of money. This is true. Now, my understanding is that with all the times we've borrowed C-17s, it has not just been a case of the Americans or anybody else. In terms of Kosovo or someplace else, wherever it was, we were actually considering even using the Russians in terms of some of their aircraft and whatnot for the big stuff.

With the hundred-plus flights for which we've borrowed those large aircraft over the last ten years—it may be more than a hundred—by how much has Canada had to compensate those other air forces? In other words, I understand there's some sort of quid pro quo arrangement whereby, if we use one of their C-17s—which we do—we compensate them somehow. Are you aware of how much that comes to?

LGen Allan DeQuetteville: Mr. Anders, I'm afraid I'm not. You'd have to ask the Department of National Defence about whatever arrangement was put in place for this most recent deployment with the C-17s. Often, some quid pro quo is arranged for something else that we do for the U.S. Air Force in return, so it may not be a direct exchange of money. But I'm not privy to that information, I'm afraid.

Mr. Rob Anders: I understand that, but for Mr. Bachand, I'm raising the idea that we are paying for it, all right.

Mr. Simmons, you talked about how your plane would be very efficient at moving troops. I respect that. In a push-comes-to-shove scenario, though, I bet you they could probably be moved on WestJet if we absolutely needed to move them—

» (1720)

Mr. Peter Simmons: Absolutely.

Mr. Rob Anders: —but I guarantee that WestJet couldn't move main battle tanks, LAV IIIs, or Griffin helicopters if need be, is that right?

Mr. Peter Simmons: That's true.

Mr. Rob Anders: Okay, thank you.

Mr. Peter Simmons: Actually, on your issue of cost, I was interested in your analogy that basically said that through repeated use of another nation's aircraft, you would effectively pay for the aircraft, so why not just buy your own? What you actually pay is the operating costs of the aircraft, not the capital acquisition costs. You have to take the money and add it to the cost of acquiring the aircraft, amortized over the number of times you use it.

Mr. Rob Anders: On this matter, I would actually argue that we do pay, but I don't mean that in terms of direct dollar costs for the capitalization. I think we pay in terms of our ability to exert power overseas, I think we pay in terms of our status as a nation among the other groups of nations, and I think we probably even pay for it in foreign policy and maybe even in trade deals, because we're not able to project power in a way that other nations can. So I think we do pay a huge cost for it.

The Vice-Chair (Mr. David Price): Thank you, Mr. Anders.

Well, I have just one question, and it's probably the most important one you'll hear today: How many cup holders are in each one?

Voices: Oh, oh!

The Vice-Chair (Mr. David Price): Okay, you don't have to answer that.

Mr. Peter Simmons: Seriously, do you want the answer? Four cup holders and a microwave oven are standard in every airplane.

The Vice-Chair (Mr. David Price): Well, since we seemed to be talking about the used car scenario, I thought it might be important, but I guess we can skip that one.

I want to thank you very much for sitting on the hot seat, gentlemen. I know we did heat it up a little bit, but it was not too bad, though. You handled it all very well, and you were very gentlemanly. I thank you very much for appearing. We'll continue on with our deliberations, and hopefully we'll come up with something a little more solid.

Thank you very much. We're adjourned.