Royal Canadian Air Force (RCAF) News and Discussions

[gf0012-aust]

And tie that in with the report the last few days that the unit cost of the F-35 will increase by approx. $1m per airframe (probably a US$1m too), because of the more than likely loss of the Canadian order of 65 airframes, then as a partner nation I'd be saying to LM, "reallocate the Canadian work share around, a few extra $100m or so to each of the partners".

That would seem to be fair to me, if it's going to cost another $100m or so for the Australian order of 72 airframes, give us a share of Canada's work to balance it out!

it will be interesting. I attended industry briefings a few years back where there was some hostility from other countries re the amount of work that canadian companies were getting ahead of others and yet they had not made committments.

There's not a lot of sympathy towards the canadian govt as the country is a victim of successive govts deferring major projects - except now the flow is now going to impact on others.

OTOH what it will do is release slots for Israel, Japan, Singapore and South Korea to get in earlier.

Although there is the usual trolling coming from the known anti-JSF commentariat re the end of the world as we know it, I'm not seeing that flow onto final outcomes. In fact even at the projected blow out costs which don't factor in bringing in the outsiders, the $100m is a blip in the contingency bucket.

BS and the "nnnn" strong brigade and co however must be pre-orgasmic

at the most fundamental level its a risk mitigation issue which had been factored in anyway as it was pretty apparent that canada was becoming more and more of a wild card - cref my prev on other players outside the 8.3 partner cohort. and cref my prev on the impact on the contingency bucket (and each country factors in contingency)

in fact contingency for major capital acquisitions can be up to 40% depending on how that country does its projections and forward acquisition estimates.

the other things which seems to be misunderstood is that the increase in the base acquisition price is not a through life fleet cost.

its not like a change in interest rates on a home loan - however that won't stop the known critics wringing their collective hands and predicting the end of all thats good in the world etc.....

 

[John Newman]

it will be interesting. I attended industry briefings a few years back where there was some hostility from other countries re the amount of work that canadian companies were getting ahead of others and yet they had not made committments.

There's not a lot of sympathy towards the canadian govt as the country is a victim of successive govts deferring major projects - except now the flow is now going to impact on others.

OTOH what it will do is release slots for Israel, Japan, Singapore and South Korea to get in earlier.

Although there is the usual trolling coming from the known anti-JSF commentariat re the end of the world as we know it, I'm not seeing that flow onto final outcomes. In fact even at the projected blow out costs which don't factor in bringing in the outsiders, the $100m is a blip in the contingency bucket.

BS and the "nnnn" strong brigade and co however must be pre-orgasmic

at the most fundamental level its a risk mitigation issue which had been factored in anyway as it was pretty apparent that canada was becoming more and more of a wild card - cref my prev on other players outside the 8.3 partner cohort. and cref my prev on the impact on the contingency bucket (and each country factors in contingency)

in fact contingency for major capital acquisitions can be up to 40% depending on how that country does its projections and forward acquisition estimates.

the other things which seems to be misunderstood is that the increase in the base acquisition price is not a through life fleet cost.

its not like a change in interest rates on a home loan - however that won't stop the known critics wringing their collective hands and predicting the end of all thats good in the world etc.....

I'm sure the anti F-35 brigade will all be jumping up and down salivating over the decision by the new Canadian Government and be saying it's the beginning of the end for the F-35 program, but really, nothing could be further from the truth.

Certainly on the negative side there is the uncertainty over Canada's order for 65 airframes, the Netherlands cut their order to 37 (down from 85), Denmark seems to be sitting on the fence with their planned order of 30 airframes.

On the positive side, there has been the orders from three 'non partner' nations, Japan 42 (and possibly more to eventually replace the 100 or so F-15's), Israel 33 (+17 options), South Korea 40 (+20 options), and of course that still doesn't include Singapore, possibly Belgium and Finland and others too, maybe with some of the issues that are happening in Europe, and increases in defence spending by various NATO members there will be others that will eventually join the 'F-35' club too.

I'd think that, even conservatively, the eventual production run is going to easily exceed 3,000+ airframes, and possibly considerably more as we move into the 2020's.

Yes it's sad to see the decision that appears is going to be made by the current Canadian Government, but it's far from the end of the world for the rest of the partner nations.

And if the Australian acquisition cost does increase by $100m, well that is a drop in the bucket in the very big scheme of things, and potentially be negated by spreading Canada's industrial work share around to countries that actually purchase the airframes.

 

[StingrayOZ]

what remains to be seen is whether there is an industry participation impact.I would imagine that remaining partners will want lockmart to reallocate canadian workshare as they no longer have the basis of the original contracts in place

From Wikipedia:

As a result of the Government of Canada's investment in the JSF project, 144 contracts were awarded to Canadian companies, universities, and government facilities. Financially, the contracts are valued at US$490 million for the period 2002 to 2012, with an expected value of US$1.1 billion from current contracts in the period between 2013 and 2023, and a total potential estimated value of Canada's involvement in the JSF project from US$4.8 billion to US$6.8 billion.[6] By 2013 the potential benefits to Canadian firms had risen to $9.9 billion

I would expect what they will lose more in work than will save from purchase. I see that Harper had already stated this. I would imagine this would pretty much kill what is left of the aviation industry.

Wonder if Canada is interested in some low miliage ex RAAF Superhornets. Australia could offload them (non growlers), pick up more F-35's and more F-35 workshare?

 

[gf0012-aust]

And if the Australian acquisition cost does increase by $100m, well that is a drop in the bucket in the very big scheme of things, and potentially be negated by spreading Canada's industrial work share around to countries that actually purchase the airframes.

Thats whats borderline hysterical - is that the clueless are trying to push the barrow again and predict the demise of the program - when it has bugger all impact on the contingency funds

we will have to go through this cycle again where all the armchair doom and gloomers will have their seconds in the sun - and then we'll see them disappear for another few years while the project maintains its course. (as has happened with the clown club in Oz)

you'd think that after 10 years of pompous predictions that have failed to materialise you'd think that they'd get a clue that the program is here to stay

 

[gf0012-aust]

Wonder if Canada is interested in some low miliage ex RAAF Superhornets. Australia could offload them (non growlers), pick up more F-35's and more F-35 workshare?

well, because of the way it has happened, I cannot see the USN necessarily taking the same approach and interrupting any delivery runs to help them out - and that will make life hard for them. and Aust can't hand over the Shornets or Growlers anyway - they revert back to State Dept acquisition items as soon as the FMS side of the contract dies.

when Obama goes, they will lose any opportunity for the USG to influence and assist. esp if a republican gets in

interesting times for them - and the CDF unfort will pay the price for idealogical decisions

 

[John Fedup]

I would expect what they will lose more in work than will save from purchase. I see that Harper had already stated this. I would imagine this would pretty much kill what is left of the aviation industry.

Maybe junior sees a "made in Canada" Rafale as a way to save Quebec's Bombardier, a horribly managed corporate welfare company.

 

[John Fedup]

well, because of the way it has happened, I cannot see the USN necessarily taking the same approach and interrupting any delivery runs to help them out - and that will make life hard for them. and Aust can't hand over the Shornets or Growlers anyway - they revert back to State Dept acquisition items as soon as the FMS side of the contract dies.

when Obama goes, they will lose any opportunity for the USG to influence and assist. esp if a republican gets in

interesting times for them - and the CDF unfort will pay the price for idealogical decisions

Obama has been no friend to Canada and it really does not matter which party wins next year, any USG will do what is in the best interest of the USA.

 

[John Newman]

Thats whats borderline hysterical - is that the clueless are trying to push the barrow again and predict the demise of the program - when it has bugger all impact on the contingency funds

we will have to go through this cycle again where all the armchair doom and gloomers will have their seconds in the sun - and then we'll see them disappear for another few years while the project maintains its course. (as has happened with the clown club in Oz)

you'd think that after 10 years of pompous predictions that have failed to materialise you'd think that they'd get a clue that the program is here to stay

Talking of the clown club.....

I've been a regular reader (and sometime commentator) for many years of the Canadian newspaper (online version), The Ottawa Citizen, with it's defence blog 'Defence Watch', and in the latest F-35 article, guess who made a little contribution? Yes you guessed it, a certain Mr P Goon!!

First time I've seen him pop his head up for quiet a while, I'm sure he's salivating over the Canadian decision, just like the rest of the anti F-35 brigade that frequent that site whenever there is an F-35 story!

 

[gf0012-aust]

First time I've seen him pop his head up for quiet a while, I'm sure he's salivating over the Canadian decision, just like the rest of the anti F-35 brigade that frequent that site whenever there is an F-35 story!

after all those years of whiteanting to feed their obsession they still haven't worked out that the people who count when making these decisions regard them as mad as cut snakes....

I enjoy watching them froth and flay in self righteous and pompous indignation that no-one can see their engineering brilliance....

if they're still alive they'll still be riding this horse into battle in 10 years time

 

[John Fedup]

With 35 million people, a bigger economy, I don't see why Canada would have to cut defence right back. Canada used to spend twice Australia's $ value on defence in the 70's and 80's and level pegged it during the 90's and 00's.

Compare the GDP numbers for Canada and Australia. Australia's GDP is not that much smaller than Canada's yet it has ~12 million fewer people. Our productivity sucks. The extra money for defence we had in the '70s now goes to social and welfare payments to many of these extra millions. Many of these extras are immigrants, totally lacking in skills necessary to add to Canada's productivity which could be overcome with training. However the cultural incompatibility of many of these new arrivals make training a waste of time.

 

[swerve]

2014 GDP per capita according to the World Bank is-

USD at purchasing power parity -
Australia - 43091
Canada - 44088

USD at market exchange rates -
Australia - 61887
Canada - 51271

The difference is due entirely to the exchange rate.

 

[John Fedup]

2014 GDP per capita according to the World Bank is-

USD at purchasing power parity -
Australia - 43091
Canada - 44088

USD at market exchange rates -
Australia - 61887
Canada - 51271

The difference is due entirely to the exchange rate.

World Bank data 2014

Australia GDP 1.454 T US with 23.5 M people
Canada GDP 1.787 T US with 35.5 M people

Australians are more productive.

 

[ngatimozart]

World Bank data 2014

Australia GDP 1.454 T US with 23.5 M people
Canada GDP 1.787 T US with 35.5 M people

Australians are more productive.

It's a cultural thing. The difference between Australia and Canada (and NZ) is that Australia was directly attacked during WW2 and they have never forgotten that. That is why they have such a strong defence ethic. Secondly they, like NZ, are an island nation and they are heavily dependent upon their SLOC for their economic survival and wellbeing. They understand that. NZ doesn't. Unlike Canada, they do not have a benign and friendly superpower next door who buffers them from potentially all enemy excursions.

 

[SpazSinbad]

QUE? 'ngatimozart' said: "...Unlike Canada, they [NZ? or Oz?] do not have a benign and friendly superpower next door who buffers them from potentially all enemy excursions." I'll take it you mean 'Oz' whilst 'Nz' is next door to 'Oz' wot protects them - somewhat. Alliances are all about that cuz.

 

[vonnoobie]

2014 GDP per capita according to the World Bank is-

USD at purchasing power parity -
Australia - 43091
Canada - 44088

USD at market exchange rates -
Australia - 61887
Canada - 51271

The difference is due entirely to the exchange rate.

Actually PPP is not something well liked as it over simplifies a situation while ignoring many many factors involved so it is pointless to use it to back up your view sorry to say. A quick google search will show plenty on the criticism towards it.

What we should base it off of is the historical average in exchange rates which from 1990 to 2015 for Australia and Canada to the USD has been around 75 and 81 cents respectively. In 2014 the average for the year for both has been around 90 cents, so for 2014 GDP figures based in USD we should be adjusting them accordingly.

2014/2015
Australia - $61,887 becomes $51,572.5
Canada - $51,271 becomes $46,143.9

Another more appropriate way to work it out would be to base it off the average Australian and Canadian exchange rates which historically have averaged 93.7 cents (AUD - CAD).

So Australia is generally more productive the Canada, though we can still make some massive improvements such as with Tax.. NZ has lower tax rate and collects around 40% more tax to there GDP then we do

 

[swerve]

Actually PPP is not something well liked as it over simplifies a situation while ignoring many many factors involved so it is pointless to use it to back up your view sorry to say. A quick google search will show plenty on the criticism towards it.

Indeed, a quick Google search will show criticism - but some of that criticism is ill-founded, & the rest is relevant mostly to specific classes of comparison, for example when a whole-economy PPP is (mis)used in a sectoral comparison. Nor is it 'not ... well-liked' - it depends on context, & in some contexts it is generally recognised to be the most useful measure.

Note that the Canadian economy is very closely linked to that of the USA. Canadian prices cannot deviate too much from those of the USA, or stuff will be simply driven across the border. Exports are a larger share of the Canadian than the Australian economy, & manufactured goods make up a large proportion of them (& mostly to the USA), further limiting deviation of the exchange rate from US prices. Australian exports are, pretty much, all commodities. Australia's exchange rate is therefore dictated by the prices of commodity exports, which nowadays means Australia's nominal GDP varies with the prices China pays for imports, not productivity in Australian industry. Australia is an extreme case of the inapplicability of exchange-rate converted GDP for international comparisons of productivity.

Your criticism is, I am afraid, ill-founded, & as expressed, meaningless. You do not say which factors you believe are being ignored, for example - in a whole-economy comparison (!). In this case, whole-economy PPP is exactly the right measure.

You are also mistaken when you say 'back up my view'. Reading my post without preconceptions would have shown that what I was doing was citing evidence & basing my view on that.

BTW, I think there's a good chance that I've been using figures such as these since before you were born (& long, long before there was Google, or even the internet, & to get hold of some studies I had to write to the authors), so please don't try to lecture me on them.

 

[John Fedup]

Note that the Canadian economy is very closely linked to that of the USA. Canadian prices cannot deviate too much from those of the USA, or stuff will be simply driven across the border. Exports are a larger share of the Canadian than the Australian economy, & manufactured goods make up a large proportion of them (& mostly to the USA), further limiting deviation of the exchange rate from US prices. Australian exports are, pretty much, all commodities. Australia's exchange rate is therefore dictated by the prices of commodity exports, which nowadays means Australia's nominal GDP varies with the prices China pays for imports, not productivity in Australian industry. Australia is an extreme case of the inapplicability of exchange-rate converted GDP for international comparisons of productivity.

While your comment above regarding Canadian exports is more or less spot on things are now changing. Prior to the shale boom, Canada was exporting over 2 million barrels a day to the US at $80-100 per barrel. That is gone now. Thanks to the peons running the province of Ontario, Canada's industrial heartland, business is in decline. Many in the auto sector are falling over each other in their rush to relocate to Mexico. The provincial energy plan to subsidize solar farms and windmills has driven energy costs to hugely uncompetitive rates compared to other jurisdictions. In addition to this, Canada's falling productivity is eroding our ability to compete. The federal government is aware of this, Ontario just ignores this sad fact. This is a good explanation to the fools here that think Canada should be building its own fighters. The world is a lot different in 2015 than it was in 1955.

 

[John Fedup]

Now that the Boeing team has lost the LRSB bid, I guess we can expect increased lobbing on the SH so they can preserve some combat plane business until F-XX happens.

 

[John Fedup]

On going debate in the Ottawa Citizen about the F-35. Good summary of why it should be selected.

Other fighter jets can’t match the F-35, says defence analyst | Ottawa Citizen

 

[John Fedup]

CASR has an article discussing the timeline for Canada's FWSAR replacement program. It is another excellent example of failed defence procurement.:el

FWSAR Project - Fixed-Wing Search and Rescue - Project Timeline - Procurement Delays - CASR - Canadian American Strategic Review - FWSAR PMO - Project Mangement Office - Air Force Procurement - CC-115 Buffalo - Buffalo Replacement - SAR Hercules - FW