Article content continued

Had this been any other policy area, it would be easy fodder for a scandal

The Macdonald-Laurier Institute recently released a report on the Liberal government’s handling of the CF-18 replacement file. Much of the subsequent commentary has been on the letters by high-level U.S. defence officials and its impact on U.S.-Canada relations. Yet, it’s important to fully understand the broader context that led to these letters. They highlight one of the most contentious aspects of the government’s policies, known as the guaranteed offset provision. It requires companies to guarantee all money spent on their fighter abroad is reinvested back into Canada.

The government now seems to have relented on this point by no longer forcing all bidders to offer guaranteed offsets. Yet this is almost certainly a cosmetic change, especially given that bidders who do not make this commitment will be deducted points under the “industrial benefits” criteria. It allows them to continue the façade of a competition, without the embarrassment of the F-35 dropping out.

Photo by Max Faulkner/Fort Worth Star-Telegram/AP

If the Canadian government appraised the F-35’s industrial partnership contracts according their full value, it is likely that most, if not all, of the other aircraft would refuse to participate in a competition: there would be no way for them to compete. Other F-35 partner countries, including the Netherlands, Denmark and Norway, all waived legal guaranteed offset provisions in order to be part of the program. There is absolutely no reason to think that Ottawa has a superior industrial approach than eight other partners: that should be blatantly apparent to anyone after the past decade of mismanagement.