Gov't inks $3.4B deal to buy Boeing jets : CTV
Updated Thu. Feb. 1 2007 11:37 AM ET
David Akin, CTV News
OTTAWA -- The government of Canada has finally inked a $3.4-billion deal with Boeing Co. to buy four C-17 Globemasters -- giant jets the Canadian Air Force will use to transport tanks and other large pieces of military equipment all over the world.
CTV News has learned that government officials will announce details of the contract on Friday.
The government had earlier announced that it wanted to buy these jets from Boeing and was negotiating with the Chicago-based company on the terms of the deal.
But those negotiations got tripped up by demands from Sen. Michael Fortier, the public works minister who is the Conservative political minister for Montreal, that Boeing should spend a significant portion of the contract buying goods and services from Quebec-based aerospace companies.
Under the terms of most military contracts, the Canadian government requires a vendor who wins a deal to supply Canada with military equipment to spend $1 buying goods and services from Canadian suppliers for every dollar it receives from the Canadian taxpayer. These are known in procurement circles as industrial regional benefits or IRBs.
Because the Quebec aerospace industry accounts for about 55 or 60 per cent of Canada's overall aerospace sector, Fortier had asked that Quebec firms get at least 40 per cent of the IRBs.
But CTV News has learned that Fortier's pleas for Quebec to receive as much a $1.4 billion in industrial benefits from Boeing have not been convincing and that Quebec will receive only about $850 million or 25 per cent of the IRBs.
Ontario aerospace firms and suppliers with links to Boeing can also expect about 25 per cent.
Western Canadian provinces, particularly Manitoba, can expect about 20 per cent of the IRB pie and Atlantic Canada can expect between five and 10 per cent.
Vic Toews, the Treasury Board President and political minister for Manitoba and Peter MacKay, the foreign affairs minister and political minister for the Atlantic region, had also lobbied hard to make sure their regions benefited from the contract, one of the largest the Canadian government has ever signed.
Canada could take delivery of its first C-17 as early as this summer. The others will be delivered over the next few years.
The Air Force has decided that it will station the C-17s at CFB Trenton, in southern Ontario.
