The 2010 winter olympic games
The 2010 Winter Olympic Games held in Vancouver in February put Canada under the world's sporting and security spotlight - setting standards for a several sporting events, most notably the FIFA World Cup Finals being held in South Africa. More than 100 Canadian government agencies were involved in border security and measures to protect the events from terrorism, including nonconventional attacks. The Olympics cost the government CAD900mn (US$720mn) and was the country's biggest ever and most expensive security operation.
Meanwhile, in March 2010, Prime Minister Stephen Harper announced a five-year spending cuts package amounting to CAD17.6bn, which will mean reduced expenditure on defence from 2011, after the Canadians withdraw troops from Afghanistan. The cuts will result in the armed forces receiving CAD2.5bn less than previously planned between 2012 and 2015. While the spending level of 2009-10 is slightly more than CAD18bn, it does not include the costs of the Afghanistan involvement and other military operations. But the government claims that that the slowdown will not adversely affect the Afghanistan mission.
However, the spending cuts are likely to endanger expenditure plans for several programmes - including offshore patrol vessels and aircraft and the replacement of aged naval destroyers, supply ships and fighter aircraft. According to Vice Chief of Defence Staff, -Admiral Denis Rouleau, the military is working on a “mitigating strategy” to take the slowdown into account but could not confirm planned capital investments, such as replacement of CF-18 fighters - expected to cost many billions of dollars -will be affected. The reduction in spending coincided with the publication of a report on Military Procurement published in March 2010 by the Canadian Association of Defence and Security Industries (CADSI), which outlined recommendations for improvements to military procurement to enable effective spending on defence during the current difficult economic period.
In industry news, General Dynamics Land Systems-Canada continues to supply vehicles for the all-important MRAP (Mine Resistant Ambush Protected) programme for the Afghan theatre. In February 2010, a CAD227.4mn contract was awarded from US Marine Corps Systems Command (MCSC) to supply 250 RG-31 Mk5E vehicles, while a USD$29.2nn contract was also granted from the MCSC to supply 127 TAK-4 independent suspension kits for RG-31Mk5EMs already delivered.
Domestic security in this quarter was dominated by the Vancouver Winter Olympics in February, which passed off without incident - other than the apprehension of a spectator with false accreditation who got into the VIP area during the opening ceremony and situated himself within metres of US Vice President Joe Biden.
The Canadian authorities mounted a CAD900mn (US$720mn) security operation, the most extensive and expensive in the country's history - and five times more than the original bid estimate. In preparation for 300,000 people attending, some 1.6 million ticket holders were screened, and protection was provided for 5,500 athletes and officials. Led by Royal Canadian Mounted Police (RCMP) with some 31,000 volunteers drafted in to assist in security, the operation included small-boat patrols by the Coast Guard and RCMP, together with U.S. police crews, along several kilometers of the sea border. Codenamed Operation Shiprider, the patrols were an extension of a specially arranged US-Canadian arrangement to enhance border security. At the venues and surrounding areas at least 1,000 CCTV watched areas where crowds congregated and pedestrians passed by during the events, including high-traffic areas and street intersections.
For air surveillance, the US NORAD enforced a 48-km restricted airspace area around Vancouver, with Canadian CF-18 Hornet aircraft tasked with intercepting airborne intrusions. All private aircraft bound for Vancouver from the US were routed through 16 US gateway airports for additional checks in security and customs. The Games were not without pre-event scares, however: RCMP officials investigated the disappearance of two tons of ammonium nitrate - an explosive frequently used by terrorists - from a 6,000-bag shipment delivered to a pipeline and energy storage company, Kinder Morgan, in January. It was first believed to have been ‘lost' through a clerical error.
From December 2009 the Canadians adopted US-level screening for passengers flying on Canadian airlines bound to, coming from, or flying over the US, who are only allowed to board once cleared by the US Department of Homeland Security. ‘Secure Flight' included some 80% of Canadian flights to the Caribbean and to Europe - which overfly the US. Canada already has a system for airline checking against the FBI's no-fly list, which includes about 16,000 names of suspected terrorists.
In early March the Canadian Security Intelligence Service (CSIS) embarked on a corporate-outreach programme to heighten business awareness of cyberattacks, particularly from Chinese hacker networks. Having commenced in the 1990s and abandoned after 9/11, the increasing threat has prompted its renewal to protect Canada's national interests,
In the first week in March, Prime Minister Stephen Harper announced a five-year package of spending cuts amounting to CAD17.6bn, which will mean reduced expenditure on defence, international aid and government operations. The cuts are designed to to make Canada the first G7 Seven country to wipe out its deficit resulting from the global financial crisis. Defence and foreign aid spending cuts will make up at least a third of the savings, which are to last until 2015, but military spending cuts will not kick in until after the withdrawal of Canadian from Afghanistan in 2011. In effect, defence spending will increase but, as succinctly put by Finance Minister Jim Flaherty, “more slowly.”
Due to the government spending cuts announced in March 2010, growth in military spending will slow down, resulting in the armed forces getting about CAD2.5bn less than previously planned between 2012 and 2015. According to Vice Chief of Defence Staff, -Admiral Denis Rouleau, the military is working on a ‘mitigating strategy' to take the slowdown into account but could not confirm planned capital investments, such as replacement of CF-18 fighters would not be affected.
The budget amounts do not include ‘incremental funding' for Canada's role in the Afghanistan campaign or for military civil support for the 2010 Winter Olympics. The government claims that the slowdown will not adversely affect the Afghanistan mission and that defence officials have time to adjust their expenditure planning, having already begun a comprehensive strategic review to estimate how savings can be made.
Prior to the government cuts package, polls showed varying and divided opinions among the public about whether the government should reduce military spending to reduce the federal deficit when the Afghanistan mission is concluded. In one poll, half of respondents said that defence expenditure should not be reduced, even if other services had to suffer in order to reduce the deficit. Around 40% of respondents, primarily from Quebec, thought it should be reduced.
Some civilians still feel that increased military budgets are taking much needed funding from areas such as job creation, but have underestimated the role of military spending in job creation. Over half of Canadians agreed with the poll question “we should spend what the military needs” to sustain the war on terror in Afghanistan, and provide the requirements for domestic security. Some critics of the government think that it has underestimated public support for military spending in making its budget decision, which could jeopardise the capabilities of all the forces.. According to John Thompson of the Mackenzie Institute, interviewed in late February before the budget, the military had already been requested to make cost savings approaching CAD180mn in the 2009 fiscal year and that any reduction in operational spending could jeopardise the safety of Canadian soldiers.
The slowdown in the military budget from 2012 onwards - announced by the government in March 2010 - is likely to endanger spending plans for several programmes - including offshore patrol vessels and aircraft, as well as the replacement of aged naval destroyers, supply ships and fighter aircraft. In addition, according to Col. Brian MacDonald (Rtd), speaking at the Conference of Defence Associations, CAD1-CAD1.5bn would be needed to replace outdated and worn-out equipment used during the Afghanistan mission.
Nevertheless, the Canadian defence sector may, in Q210, bear witness to increased levels of overall capital investment.
In March the Canadians took delivery of an Aurora CP140 aircraft equipped with several onboard systems integrated by General Dynamics Canada, including a new Data Management System (DMS), Acoustic Suite subsystem, and Integrated Mission System. The prototype Block III, CP140 is intended to improve the operational effectiveness of long-range patrol aircraft and is being hailed as an achievement for the Aurora Incremental Modernization Project (AIMP) and its partners. The integrated mission system and sensors will give the Aurora with surveillance capabilities that are essential for current domestic and international missions.
General Dynamics Land Systems-Canada continues to supply vehicles for the all-important MRAP (Mine Resistant Ambush Protected) programme for the Afghan theatre. In February 2010, the company won aCAD227.4mn contract from US Marine Corps Systems Command (MCSC) to supply 250 RG-31 Mk5E vehicles, while a USD$29.2nn contract was also granted from MCSC to supply 127 TAK-4 independent suspension kits for RG-31Mk5EMs already delivered. The TAK-4s, made by US-based Oshkosh, will enhance the MRAPs' robustness for additional protection against IEDs and will also improve ride qualityy.
The 2010 Olympics also provided opportunities for security and defence companies, such as Thales Canada and Lockheed Martin Canada, which won a contract to develop two radar surveillance systems for the venues.
In March 2010, Prime Minister Stephen Harper announced a five-year spending cuts package amounting to CAD17.6bn, which will mean reduced expenditure on defence from 2011, after the Canadians withdraw troops from Afghanistan. The cuts will not only slow down military spending but will result in the armed forces receiving CAD2.5bn less than previously planned between 2012 and 2015. Although from 2012 the military budget is still projected to continue its upward trend, as outlined in the Canada First Defence Strategy (CFDS), critics are opining that ‘up is down' - claiming that while the spending level of 2009-10 is slightly more than CAN19bn - it does not include the costs of the Afghanistan involvement and other military operations. Projections for 2011-12 have also not included an annual increase of 2.7% promised by the government in its 2008 defence strategy. A Ministry of Finance official also confirmed that the military would receive a base budget of CAD22bn in 2017-18, three years later than expected.
In January 2010 the Canadian government signed a CAD723mn extension contract with Lockheed Martin for a package of in-service support for the C-130J Hercules, for a period lasting until July 2016.
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