BUILDING A STRONGER ECONOMY TOGETHER

Leveraging Defence Procurement:

Aerospace Outlook

Presentation Outline

• Leveraging industrial benefits from defence and major Canadian Coast Guard investments

• Canada’s Defence Policy

• Aerospace future capabilities & procurements

• Marine projects/ procurements (separate presentation)

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Leveraging Industrial Benefits from Defence Procurement

• Defence Requirements – Supporting Economic GrowthCanadian Forces require domestic capabilities in four areas: ü Maintenance, repair and overhaul (MRO)

ü Shipbuilding

ü Training

ü Ammunition

• Industrial and Technological Benefits (ITB) Policy (including Value Proposition)

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• Canada’s new Defence Policy released June 2017

• Strong at home, Secure in North America, and Engaged in the world.

• Fully funded – policy identifies projects and capability areas required to fulfill Government of Canada objectives.

o $20.1 billion over the next 20 years for 17 new equipment projects for the Royal Canadian Air Force

• Innovation for Defence Excellence and Security – new program “to generate solutions”

Canada’s Defence Policy

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• Replace the CF-18 fleet with 88 advanced fighter aircraft, through an open and transparent competition, to improve CAF air control and air attack capability

• Recapitalize next generation strategic air-to-air tanker-transport capability (CC-150 Polaris replacement)

• Invest in medium altitude remotely piloted systems

Aerospace – Future Capability Requirements

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• Sustain domestic search and rescue capability, to include life extension of existing systems

• Acquire next generation multi-mission aircraft (CP-140 Aurora maritime patrol aircraft replacement)

• Replace utility transport aircraft (CC-138 TwinOtter replacement)

Aerospace – Future Capability Requirements (2)

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Aerospace Procurements• CT-114 Tutor Trainer Engine (J85) Propulsion Group

Sustainmento LOI closed in May 2017 o LOI (2) – Fall 2017 (TBC)o Expected to be competed FY 18 (TBC)o Budget: TBC

• Cormorant Mid-Life Upgrade (MLU)o Options Analysis phase -currentlyo extend the all-weather rotary wing search and rescue capability to at

least 2040 o Return full SAR capability to the Trenton main operating base o Provide capability improvements to enhance its overall mission

effectiveness.o Value is estimated $800M (TBC)

• Future Aircrew Training (FAcT) Projecto Options Analysis/

Definition Approval 2018/19o Contract Award 2021

Budget: TBC

Aerospace – Procurements• Fixed-Wing Search and Rescue Aircraft Replacement

(FWSAR) Projecto Contract awarded to Airbus Defence (and PAL Aerospace) on

December 2016. o Contract includes:

- delivery of 16 C295W aircraft - infrastructure and set-up activities, such as training and engineering services

- construction of a new simulator-equipped training centre in. Comox, British Columbia

- maintenance and support services- contract for the initial period of 11 years is valued at $2.4 billion

• Mercury Global Strategic Deployed Terminals o To acquire ground stations to support Canada’s participation in the

U.S. led Mercury Global program. This will provide interoperability and strategic SATCOM wideband communications capabilities

o Contract award: fall 2017/ early 2018 (TBC)

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BUILDING A STRONGER ECONOMY TOGETHER

Leveraging Defence Procurement:Marine Outlook

NSS Combat Work Package (Irving Shipbuilding)

Arctic Offshore Patrol Ships (AOPS)o Acquisition of up to six Arctic Offshore Patrol Ships to conduct armed

sea-borne surveillance in Canada's waters, including the Arctico Key sub-contractors – Lockheed Martin Canada, General Electric,

Odense Marine Technology, Fleetway, Lloyd’s Registero September 2015 – construction began with cutting of steel at ISIo August 2016 – shipyard cut steel on second vesselo First vessel delivery expected in 2018o Project Budget: $3.5B

Canadian Surface Combatants (CSC)o Acquisition of up to 15 warships to replace the Canadian Navy’s

destroyers and frigateso 12 companies have been prequalified to bid on the procurement o RFP released to pre-qualified bidders in October 2016o Once the bid period has closed, Canada and Irving Shipbuilding Inc.

will evaluate the proposals. o Selection of the design will be completed in 2018o Project Budget: Under Review

Marine Procurements

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NSS Non-Combat Vessels Work Package (Vancouver Shipyard)

Offshore Science Vessels o Acquisition of 3 Offshore Fisheries Science Vessels (OFSV) and

1 Offshore Oceanographic Science Vessel (OOSV)o The vessels will provide a platform for scientific research and

ecosystem-based management.

OFSV - First OFSV delivery anticipated for late 2017- Construction began in June 2015 - Project Budget: $687M

OOSV - Build contract to be awarded in 2018- Anticipated delivery date is 2020- Project Budget: Under Review

Marine Procurements

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NSS Non-Combat Vessels Work Package (Vancouver Shipyard)

Joint Support Shipso Acquisition of 2-3 support ships to provide refueling and replenishing of

ships at seao Design contract awarded to TKMS in 2013o First vessel to be delivered in 2021o Project Budget: Under Review

Polar Ice Breakero Replacement of the CCGS Louis S. St-Laurent with a new ice breaker

that will enhance on-water capability in the Arctic year-roundo Contract award expected in 2021o Anticipated delivery 2023o Project Budget: $1.3B

Marine Procurements

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Small Ship Construction

o Vessels at less than 1,000 tonnes displacement.

o Competitive process excluding Irving & Seaspan in order to spread more work throughout the shipbuilding sector.

o DND to procure large tugs and small tugs

o Coast Guard to procure new vessels of various classes including: • Channel Survey and Sounding Vessels (2)

• Near-Shore Fishery Research Vessels (2)• Search and Rescue (SAR) Lifeboats (12-15)

• Specialty Vessels (3)

• Special Nav-Aid Vessels (2)

• Mid-Shore Science Vessels (2)

Vessel Repair, Refit and Maintenance o $500M-$600M annually for repair, refit and maintenance requirements

Marine Procurements

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Other Marine Projects

Victoria In Service Support Contract (VISSC)o In-Service Support (ISS) for four Victoria Class Submarineso Contract Awarded to Babcock Canada in 2008 for 5 years of ISS (up to

15 years renewal)o Contract renewed for additional 5 years on July 4, 2013

Arctic/Offshore Patrol Ship and Joint Support Ship In Service Support (AJISS) o In-service support for the two classes of naval ships: AOPS & JSS for up

to 35 years.o Contract Award expected in Fall 2017 o Estimated Contract Value: $5.2B

Marine Procurements

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Other Marine Projects

Interim Auxiliary Oiler Replenishment (AOR) - Project Resolve o Project Resolve will provide one fully operated AOR ship for the Navy for

an interim solution to the Joint Support Shipso Contract awarded Fall 2015 to Chantier Davie/Federal Fleet Serviceso Delivery of the vessel is anticipated for Fall 2017

Halifax Class In-Service Supporto Long-term support for the Canadian Navy’s 12 Frigates beyond 2018

for up to 18 years. o Project consists of 3 separate contracts:

o Design Agent ISSo Combat Systems ISSo Work Period ISS

o Industry engagement currently ongoingo RFPs anticipated in 2017/2018

Marine Procurements

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