Canada’s aerospace repair industry is in peril because Ottawa isn’t buying the rights to data needed to maintain $13-billion worth of new military aircraft, the CEO of a leading maintenance firm says.
Ken Rowe, owner of Halifax-based IMP Group International, is angry because a plan to buy 37 aircraft from Lockheed Martin Corp. and Boeing Inc. doesn’t include licences that would grant access to vital engineering know-how.
Without this intellectual property, Canadian companies will have difficulty maintaining the aircraft on their own, Rowe said in an interview.
"It’s a threat to the growth of our industry, and it’s a deterioration of our national security because we won’t have the same direct control over what’s happening to our equipment," he said.
"We’ll be under contract to the Americans," and that will "fragment and decimate our domestic support industry."
Rowe’s privately held firm, which employs 1,800 in Nova Scotia and 1,000 in Quebec, has built up a prosperous business repairing and refurbishing Canada’s existing fleet of long-range patrol aircraft and military choppers.
Rowe recently submitted an article to a defence journal that argued that Canada’s failure to purchase intellectual property for maintenance of the Cormorant search and rescue helicopters has created headaches.
"As a consequence," he wrote, his company "experienced significant problems because the process for acquiring data is cumbersome and protracted."
On April 17, the combative 70-year-old executive appeared before the House of Commons standing committee on defence, saying he knew of no other developed country that does things this way.
Other Canadian firms, including Cascades Aerospace in Vancouver, and L-3 Communications Spar Aerospace in Edmonton, could also be hurt by Canada’s new contracts.
"Over time . . . the engineering capability, the high-end management, the configuration of the airplanes, all of that knowledge will be held in the U.S.," said an industry source who asked not to be named.
"We’ll maybe turn the wrenches or do the lower value stuff."..
Dan Ross, assistant deputy minister of materiel at the Defence Department, was unavailable for an interview.
However, Ross has spoken in favour of the "total package procurement approach," in which a single contractor is responsible for provision and maintenance of the equipment.
"The total cost of ownership is lower, providing better value to the Canadian taxpayer," Ross recently told a Commons committee.
Ross has also said he supports the plan to buy the Globemasters, saying the government has already signed an agreement with the U.S. air force to maintain the jets.
"For a fleet of four aircraft it was absolutely unaffordable to bring that piece to Canada," he said, referring to the maintenance contract.
An e-mail from the Defence Department also says that for "every contract dollar awarded, the contractor will commit a corresponding dollar in economic activity in Canada."
But such an arrangement could compromise national security, said Geoff Regan, the Liberal MP for Halifax West.
"Can you imagine a situation of crisis? Whose aircraft are they going to deal with first?"
