Spy planes $140M more than planned

The cost of three small surveillance aircraft Canada is buying from the U.S. government will be $140 million more than the Canadian military had estimated.

The three Beechcraft King Air planes, to be based at CFB Trenton in Ontario, will be outfitted with sensors and equipment to intercept cellphone and other electronic transmissions. Canadian special forces and, potentially, other government departments will use them for missions overseas and in Canada.

On Oct. 1 the Canadian Forces told Postmedia the three outfitted planes and initial in-service support would cost between $100 million and $249 million, as outlined in the Liberal government’s defence policy documents.

However, on Oct. 4 the U.S. Defense Security Cooperation Agency revealed the final tally, informing Congress that the deal was underway with an estimated cost of around C$389 million.

Canadian companies had wanted to provide the aircraft and on-board equipment, and several have formed alliances with U.S. firms who supply the Pentagon with the same or similar aircraft.

But the military decided it needed the planes more quickly than they believed Canadian companies could deliver, and that U.S. security regulations governing the on-board sensor equipment might cause delays. As a result, it determined the U.S. government was the only supplier capable of providing the planes.

The Canadian Forces says it hopes to get a better deal. The cost the U.S. government agency presented to Congress is not the final tally and the “final cost is anticipated to be much lower,” the Canadian Forces said in an email. “Over the coming months, we will work to more clearly define our interests and requirements for the purchase and negotiate an acceptable price with the U.S.,” the email said.

Department of National Defence spokeswoman Ashley Lemire said in an email the first plane would be delivered sometime between 2020 and 2021. The final delivery would be wrapped up by 2022.

The main contractor is Beechcraft in Wichita, Kan.

The Canadian government will run a separate program to allow companies to compete to provide in-service support for the planes.

The government expects to ask for bids for the 20-year contract in the spring of 2019, said Lemire. DND declined to provide an estimate of what that longterm support would cost taxpayers.

Industry representatives have complained over the years that the Canadian Forces cut domestic firms out of the project and reduced the role they could play. Lemire rejected that claim, saying Canadian firms would have a role in servicing the planes.