Despite repeated government denials, CBC News has confirmed that some of Canada’s new Hercules military transport planes have counterfeit Chinese parts in their cockpits that could leave pilots with blank instrument panels in mid-flight.

Documents show the Canadian military has known about the bogus electronic chips in the giant Hercules C-130J aircraft since at least July 2012, but continued to hide the fact during a CBC News investigation months later.

The military continues to fly the new Hercs with the fake parts, and says it still has no immediate plans to replace them.

A 14-month investigation by the powerful U.S. Senate armed services committee concluded last year that counterfeit parts in the Hercules transports and other American-made military equipment are prone to failure with potentially "catastrophic consequences."

Failure of the parts could leave Canadian military pilots flying blind, potentially in a combat zone, with no information on altitude, speed, location, fuel supply, engine performance or warning messages.

'We don't have any particular concerns,' minister said

In response to the damning U.S. investigation, Canada’s then associate minister of defence Julian Fantino told CBC News last May that this country’s new fleet of Hercules was not infected with the bogus parts.

"At this point in time, other than continuing to be vigilant, we don’t have any particular concerns in this country," the minister said.

But weeks later, a memo from an official in Fantino’s department stated: "Suspect counterfeit parts have been identified by the original equipment manufacturer Lockheed Martin, as being present on several aircraft in their worldwide fleet, including some of Canada’s C-130J aircraft."

The memo identifies the bogus parts as microchips located in the Hercules cockpit displays, and indicates the components would be replaced during future routine maintenance of the aircraft "at no cost to Canada."

Months later, during extensive interviews on the issue with CBC News in October last year, National Defence made no mention of the memo or the existence of counterfeit parts in Canadian planes, much less any plans to replace the components.

Missing 'checks and balances'

The Harper government has consistently claimed it has sufficient "checks and balances" in place to guard against counterfeit parts getting into Canadian military planes and other equipment.

Internal Defence Department emails from top officials show that, as of last fall, there was no such system in place.

Confronted this week with the memo revealing fake parts in Canadian aircraft, the Harper government is publicly admitting their existence for the first time.

But it has apparently scrapped earlier plans to replace the bogus parts during routine maintenance.

In fact, Conservative MP Chris Alexander, parliamentary secretary to the minister of national defence, suggests the Harper government is content to go on using the counterfeit parts and hope they don’t fail in mid-flight.

In an interview this week, Alexander said the Canadian military "is satisfied the C-130Js are functioning properly, that any …counterfeit parts that there may be in the displays of those aircraft are not affecting their performance.

"If they need to be replaced, if they’re unsafe, if they’re not functioning, they will be replaced."

'We've been lucky'

The former head of procurement at National Defence says he is stunned his former department and the government are still debating whether to replace the bogus parts.

"Certainly, we should have reacted immediately," Alan Williams said in an interview.

"If they haven’t done it until now, steps should be taken immediately" to replace the parts. "We’ve been lucky so far. Let’s not press our luck."

NDP defence critic Matthew Kellway says forcing Canadian military personnel to fly on planes relying on Chinese knock-offs is "stunningly negligent behaviour on the part of this government."

National Defence claims in a memo that the plane’s manufacturer, U.S. Lockheed Martin, "has completed a full safety analysis … and determined that there are no safety concerns."

Some experts disagree.

The original manufacturer of the parts in question, for one, says the altered versions installed on the Hercules cannot be trusted.

Recycled, refurbished, remarked components

The U.S. congressional investigation reported the fake Hercules microchips were originally made by the Korean electronics giant Samsung in the 1990s, and more than a decade later, had been recycled, refurbished and remarked to appear genuine by a company in China.

Samsung told the investigation by the powerful U.S. Senate armed services committee "it is not possible to project the reliability" of the altered parts.

The U.S. investigation reported that the problems on the Hercules first came to light in 2010 when the instrument panel failed on an aircraft during active duty. No other details of the incident have been made public.

At the time, the supplier of the cockpit display systems, L-3 Communications, had the suspect counterfeit parts tested for authenticity and performance at a leading U.S. laboratory.

The lab reported the parts were fakes, and that 27 per cent of them had failed during stress tests.

'If electronics fail, nothing works'

Martine Simard-Normandin runs the Ottawa-based laboratories, MuAnalysis, one of Canada’s leading test facilities for suspect counterfeit parts.

CBC asked her to review the U.S. lab findings on the Hercules knock-offs. Her assessment was blunt.

"I would not feel comfortable flying that aircraft, knowing they have used parts of essentially unknown traceability.

"And I certainly wouldn’t be comfortable recommending our men and women in uniform do so."

She says that any time electronic components are altered, there is an inherent and significant safety risk.

"Everything these days depends on electronics, and if electronics fail, nothing works."

The problem of bogus Chinese parts in new Hercules transport planes first became public in the fall of 2011 during the U.S. congressional investigation hearings.

Those hearings also revealed that Lockheed Martin had kept the U.S. military in the dark over the counterfeit Hercules parts for more than a year.

In response to the congressional probe, the American military immediately undertook to "aggressively" replace the bogus parts in U.S. aircraft.

It is a different story in this country.

Today, six months after the government publicly confirmed there are counterfeit parts in the Hercules, no one has done anything to replace them.

In a written response to CBC, the government’s federal contracting authority states: "Discussions with Lockheed Martin remain ongoing on this issue."

One of the big mysteries of this saga is how Canadian military and other government officials — if they haven’t been lying to the public — could not have known there were bogus parts on Canada’s new fleet of Hercs before last summer.

The parts were first identified as fakes by the U.S. testing lab in the summer of 2010, just as Canada was taking delivery of its first of the 17 Hercs.

More than a year later, in November 2011, the whole issue became front-page news in both the U.S. and Canada when the existence of Chinese parts in the American-made Hercules was revealed during extensive testimony before the congressional committee.

It was also the first time the Harper government confidently proclaimed there were no knock-offs on the planes Canada had bought.

Six months later, the U.S. Senate committee released its scathing report, saying it had found over a million bogus parts — mainly from China — in U.S. military equipment including the Hercules aircraft.

In fact, it devoted an entire section of the report to the Hercs, and the potentially catastrophic consequences of a counterfeit part failing in mid-flight.

It was in response to the investigation’s findings that Canada’s associate defence minister Fantino publicly shrugged it all off, claiming he had no knowledge of any counterfeits in Canadian military planes.

Inside government, senior military officials made the same claim.

Shortly after the release of the U.S. Senate report, Fantino’s office sent an email to his top Defence Department officials. The tone was decidedly testy.

"For clarity, kindly confirm whether, yes or no, counterfeit parts have ever been found/discovered/reported to be found on CF equipment or within the supply chain."

A senior bureaucrat wrote back: "We do not have any information regarding counterfeit parts in CF equipment or in the supply chain."

Only weeks later, Fantino’s department was issuing the memo admitting for the first time its new fleet of Hercs is indeed infected with counterfeit parts.

The memo was written in response to an inquiry from Halifax researcher Valerie Mansour, who was helping to prepare a documentary on international counterfeiting, airing Jan. 10 on the program DocZone.

A copy of the note was provided to CBC News by the documentary team.

We requested information and interviews with Hercules manufacturer Lockheed Martin, and electronics company L-3 Communications, which made the cockpit display systems.

Neither has responded.