I am of the view, and have been since the ‘70s, that Regional Development (using the defence procurement budget), Regional Industrial Benefits and Offsets are all chimaeras (defined as: grotesque products of the imagination).
I am prepared to concede that the very first offset programme may have worked – it was, I believe, invented in the Netherlands during their scandal plagued Long Range Patrol Aircraft procurement, Canada followed suit on our version of the same project but ours didn’t work very well because there was no (useful) competitor for LocheeLockheed-140 – our AF wanted a North American made propeller driven aircraft, the (UK) Nimrod was offered but was effectively, in the competition for show only.
I am convinced that:
We pay, 100% and often (usually?) more, for every dollar we describe as benefits; and
Defence related jobs, especially in Canada but – as I think the marketplace reveals - in the US, too, are not ‘good’ long term, high flow through jobs which build communities. They tend to be short(er) term – GMDD/General Dynamics (London) being one of the exceptions which proves the rule. The more evident rule, exemplified by Boeing and GD, is that the defence industry chews up companies, and jobs and investments, from the inside out.
I, personally, would favour a lowest fully compliant bid wins process – then spend some money on supporting (subsidizing) companies which make goods (and services) we sell in the world market. Some of those companies, sometimes will be defence related companies – viz GMDD/GD(London)’s LAVIII. I am happy to make a few exceptions to the general rule, for example:
• I have no problem with a Canadian maritime construction strategy which aims to keep X Canadians yards open, up-to-date and productive by building Canadian ships in Canadian yards against a made-in-Canada requirement/schedule – IF such a monster can be created; and
• I believe that major, long-life cycle systems (aircraft and helicopters come to mind) should be 100% supportable from within North America. That means we can buy a European, Asian or Brazilian system IF the prime contractor established 3rd line support facilities here.
Otherwise. I say: establish and validate a military operational requirement, secure funding from cabinet, pass the SOR and money to an arm’s length (‘reformed’ and accountable Crown Corporation) procurement agency; and it buys a fully compliant product from the lowest (life cycle cost) bidder.