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The Wednesday Report
Canada's Aerospace and Defence Weekly
Volume 8, Number 34             December 7, 1994

Comment:
1994 Defence Policy White Paper
  More so than any other previous defence white paper, one aspect of the Liberal government’s defence policy paper is consistent with the times: it has a more recent date on it. 
Reluctantly one has to admit that this alleged oracle for the next 15 years does reflect the present-day government’s main concern. After a year of consulting with (seemingly) each and every one of some 28 million Canadians -- and their dogs, cats and cows -- it wallows, as ever, in the miserable concept of the "D" word. D-E-B-T. 
"The new policy respects the government’s commitment to reducing deficit," said Minister of National Defence David Collenette, last Friday. As a blueprint for the future the new defence policy paper cuts the capital defence budget by some $15 billion over the next 15 years.

Air Command will take it on the chin to the tune of some 25 percent in reductions. The number of operational fighter aircraft will be reduced, annual flying hours will be cut back, and personnel will be reduced. The CF-5 fleet, with an estimated life expectancy to 2000 after an extensive refit, will be retired. The Canadair-built fighter-trainer entered the Canadian inventory in 1968.


 "To enable us to meet defence requirements in the post-Cold War era, the Department Of National Defence and the Canadian Forces will fundamentally change the way they do business in the coming years," said Collenette. That is made bluntly obvious by the white paper’s planned job cuts. 

Adding to high unemployment levels, and continuing the trend of the past four decades, the strength of the Canadian Forces Regular Force will be further reduced from the current level of 74,900 to 60,000 over the next five years. The CF’s primary Reserve Force will be reduced to 23,000 from 29,400, meanwhile civilian staff cuts will also be extensive, in the vicinity of 12,500. The Department of National Defence’s personnel cuts will eventually total 33,800.
NDHQ will experience some significant cutbacks and reductions through the remaining 1990s, as will others of DND’s various support operations. Collenette says the government hopes that the savings will be better spent on combat forces.
Mobile Command, the "army", will get a booster shot in the arm; three thousand extra troops will theoretically make the army more capable and more flexible to meet the growing demand for ground forces in Canada’s bid for Global Security as part of its various collective security alliances. "Peacekeeping" is the byword. The army will also get new armoured vehicles to match its blue helmets.
New armoured personnel carriers are on the government’s shopping list although that has happened before without result. The white paper recommends that new APCs be in service by 1997.
Canada’s commitment to NATO remains at a constant although its participation will be reduced as a reflection of the CF’s reduced capability."We will have a military in step with the 21st century, protecting Canadians and upholding our values and vital security interests, domestically and internationally," said Collenette last Friday.
For Maritime Command, our navy, slightly used Upholder-class submarines have become a key target on Collenette’s shopping list. What’s this? The Liberals are now going to buy submarines? Well, they always said we needed diesel-electrics, not nukes.
John Major and Malcom Rifkind have been contemplating selling off as many as half a dozen of the British-designed SSKs. The Chretien government likes the idea. Canada’s waterlogged Oberon-class submarines should have been paid out some time ago, perhaps because they are prone to leak badly. But the white paper says the government will only explore the possibility. Well, you don’t have to be a modern-day Christopher Columbus to know that the Pinta, Nina and Santa Maria are no longer up to the task. We have debated the old Oberons’ replacement with suggestions of everything from Rubis to Trafalgars, hybrids to Walrus’s, and gosh knows what else since the early 1980s. We are now considering the "possibility"? We trust the Chretien government will consult with Washington to make certain the Jesuits approve the concept, before consulting with Canadians. Why not make it an election issue? Or just buy the damn things.

After dumping overboard a billion dollars or more from DND’s helicopter budget and after killing one year ago a Major Crown Project and a Crown contract to buy replacement helicopters for the CH-124A and the CH-113, the Liberal government has announced that it has discovered an urgent need to buy replacements for the Sea King and Labrador fleets. How do you feel?
It should at least please Maritime Command to know that aircraft to replace the Sikorsky-built CH-124A shipborne helicopters -- at a cost yet unknown -- are to be in service by 2000. That timing also applies to replacements for the Boeing Vertol-built CH-113/113A search and rescue helicopters. 
Both aircraft types up for replacement were introduced into service in 1963. The CH-113 Labrador and 113A are derivatives of the Boeing Vertol BV107/UH-46. The CH-113A was originally an olive drab army machine named the Voyageur, but was subsequently converted to search and rescue operation. The name was dropped. The intended successor to these venerable relics along with the CH-124A was to have been a Canadianized version of the EH Industries EH-101, a modern three-engined maritime machine considerably larger than the Sea King. 
Don’t entirely rule out an inexpensive Bell helicopter solution to the present replacement problem. The Liberal’s have said they will do the job for much less cost than the Tories’ EH-101 project. And the Grits are more than $1 billion in the hole at the starting gate. 
Don’t let these tales of ambitious(?) capital equipment programmes blow your mind. An average one-billion-dollars-per-year will be cut from DND’s already haggard procurement budget. Statutory costs to run the department will also drop as force size is reduced over the next few years.
In all, this butchery done on National Defence at the end of 1994 is the best piece of axe work since the Tory budget of April 1989. The Canadian Forces is becoming The Incredible Shrinking Whipping Boy as the Canadian national debt grows and grows and grows. 
The 1994 white paper is kind of a sad statement of reality. At a time when Canada is deep in debt, it has lost interest in national security. The new policy is not unexpected.
Mike O’Brien


HMCS HALIFAX COMPLETES SHOCK TRIALS
HMCS Halifax (FFH 330), the first of the new Canadian Patrol Frigates (CPF) to be commissioned, has completed shock trials compulsory for the first of every new class of ship within NATO. Over the period November 16th to 19th, the vessel was subjected to underwater explosions, the effects of which were documented by gauges and high speed cameras installed for the trial. It was conducted in an area about 180 nautical miles southwest of Halifax, Nova Scotia which had been selected after consultation with over 30 different organizations to insure minimal impact on marine life. In addition a number of other naval vessels operated in support of the trial to make sure the test area was clear of all shipping. The results of the trial will be analyzed in considerable detail and a final report is expected in the summer of 1995.


CANADIAN FORCES BIOLOGICAL EXPERTS IN IRAQ
Two Canadian Forces officers started work yesterday inspecting biological facilities in Iraq. They will serve in the United Nations Special Commission in Iraq (UNSCOM) until December 22. UNSCOM was established by the U.N. Security Council’s Resolution 687 in April 1991 and is charged with inspecting and, if needed, destroying Iraq’s biological, chemical and nuclear weapons. Two other Canadians are already serving on the Commission.


UNDOF ROTATION
The planned rotation of 90 persons of the Canadian Logistics Battalion in the United Nations Disengagement Force on the Golan Heights was completed last Tuesday, November 28. The 215-person Canadian contingent which provides logistics, communications and technical support for the force, has been part of UNDOF since its formation in 1974.


ROCKWELL INTERNATIONAL/CANADA YEAR END
Based in Ottawa at 350 Albert Street, Rockwell International of Canada Ltd. has reported record sales of $562.4 million in its fiscal year ending September 30, 1994. This latest result exceeds the same period for 1993 by some 32 percent. Export sales of $326.4 million comprised 58 percent of total sales and exceeded the previous year by $89.4 million. The company’s net income was $84.8 for the report’s period, some 74 percent higher than the $48.6 million earnings in the company’s 1993 fiscal year. Total employment of the company increased by 15 percent to 1,894. The firm made capital expenditures of $17 million in 1994, up $13 million over the same period in 1993.


"CAE ELECTRONICS" NOW AN AUSTRALIAN NAME
CAE Electronics has acquired the assets of Ferranti Computer Systems (Australia) Pty Ltd. from Ferranti International Plc. A new company has been created out of the deal, CAE Electronics (Australia) Pty Ltd. It will report to CAE Electronics in Montreal.
The new company will be established as a regional headquarters representing the CAE Aerospace and Electronics group of companies within Australia and the South East Asian region.
"This is a relatively small but important strategic acquisition for CAE. It will establish a Centre of Excellence in the training equipment and control systems sectors in the South East Asian Region -- one of CAE’s fast growing markets," said John Caldwell, CAE’s CEO.


TORONTO AIRPORT TO GO TO CAA
Last week, Transport Minister Doug Young signed a conditional letter of intent to negotiate the transfer of Lester B. Pearson International Airport (YYZ) to a Canadian Airport Authority (CAA). Under the federal government’s National Airports Policy, a CAA is a not-for-profit corporation headed by boards of directors nominated by the federal, provincial and municipal governments and by other participating trade, consumer and labour organizations. The negotiations are expected to lead to a long-term lease. Transport Canada will continue to provide air navigation facilities and services after the transfer of operations. The Minister also announced a similar letter of intent relating to St. Andrews Airport in Winnipeg.


CANADIAN MARCONI WINS LORAL CONTRACT
Canadian Marconi of Kanata, Ontario has won an Interactive Defensive Avionics Systems subcontract from Loral Federal Systems of Owego, New York. CMC will supply Integrated Electronic Warfare Processors -- derivatives of CMC’s CMA-2074 interface unit -- under a contract valued at $1.7 million. CMC will deliver the systems to prime contractor Loral for integration on the U.S. Air Force Special Operations MH53-J Pavelow helicopters. As part of the contract CMC will qualify the processors and deliver 5 units. Future options include the potential for delivering 39 production units.


ARIANESPACE FLIGHT 70 LOST ON THIRD-STAGE MALFUNCTION
On December 1 in Kourou, French Guiana, at 10:55 UTC, an Ariane 42P launch vehicle failed in its third stage. Early analysis indicates that after some 740 seconds of operation in the third stage the engine was operating at or less than 70 percent of its steady state thrust value, insufficient to complete the mission. Arianespace is doing further evaluations to understand the causes of the failure and determine corrective measures


JAPAN BOOSTS SPAR CONTRACT BY $2.7 MILLION 
Spar announced Monday that its contract for the Japanese Experiment Module End Effecter programme, a Japanese contribution to the international Space Station, has been increased by $2.7 million.
Scope changes to the core contract in the areas of interface design, performance enhancement and supply of additional hardware, are the reason for the increase. The additional work brings the total value of the contract to $23 million. 
The contract was originally awarded to Spar by Toshiba Corporation in April 1993 to provide two end effecter units. The end effecter, a sort of robot hand, is the same type of mechanism used at the hand of the Canadarm. The unit will be modified for use on the Space Station. 
Spar Aerospace Limited is developing two robots for the Space Station, the remote manipulator system and the special purpose dexterous manipulator. The end effector will allow for common payload interface between Japanese and Canadian robotics.


"BUILDING A MORE INNOVATIVE ECONOMY" -- FEDERAL GOV’T PLAN
A strong economy is the essence of a strong society. My government will focus on a jobs and growth agenda. We will work together with all our partners -- provincial governments, business, labour, voluntary groups and individual Canadians. -- Prime Minister Jean Chretien, Quebec City, September 18, 1994
In the spirit of the foregoing remarks of the PM, Industry Minister John Manley has released a government-wide action plan that sets out some 30 initiatives the federal government will undertake to help Canadian business grow. The document says the federal government will build a positive entrepreneurial climate and help small businesses grow; expand markets for jobs and growth through trade; create an efficient and modern infrastructure; and make technology work for Canada.
Transportation, telecommunication and information networks are seen in the plan as key elements needed by business to function effectively in what the Industry Minister describes as an innovative economy. The plan offers a stronger government focus and expenditure on the Information Highway and smarter regulation in the areas of transportation and telecommunications.
"An efficient and competitive transportation system is critical," says the plan. "A new policy framework will apply business principles to many of the operational aspects of Transport Canada’s activities, enabling the department to focus on its regulatory and safety responsibilities for an efficient, affordable and integrated transportation system."
Commercializing operations is an area of particular interest to the aerospace industry. "We will," says the plan, "commercialize major airport operations and the air navigation system by 1996. We will also announce policy changes for Canada’s airline industry."
Expanding foreign trade using "new approaches" such as the Trade Team Canada partnership with the provinces and private sector is also central to the government’s new trade plan. According to Industry Canada’s Building a More Innovative Economy, "Increasing global trade and advances in technology are changing the world economy. Countries that ignore what is happening and take a "business-as-usual" attitude will fall behind. On the other hand, countries that take bold actions by adapting to new technologies and the realities of today’s economy will meet the challenges of tomorrow head on, seize new opportunities, and build a better country."
"Canada is well placed to push the current economic recovery beyond what economists are predicting. The economy is picking up and, in this year already, some 270 000 new jobs have been created. In partnership, we can use our ideas, skills, and natural resources to sustain and build on this recovery."
In the category of small business the plan sets out that: "Small business creates jobs -- almost 90 percent of the new jobs in our economy. Our priority is to make sure that nothing stands in its way, by removing obstacles to growth and targeting government support more effectively.
Cutting paper burden: "Entrepreneurs should spend more time growing their businesses and less time filling out government forms. We are committed to reducing the federal paper burden substantially, and quickly. We will work closely with small businesses to identify the problem areas and to set specific targets for their reduction, reporting annually on our progress in meeting those targets."
Buying from small business: "New procurement policies will increase the value of goods and services that government buys from small businesses. These policies target up to $1.5 billion of federal buying. They include a program giving preference to small and Aboriginal businesses for contracts under $125 000, stronger support for small businesses in developing new technologies, and a procurement program for Aboriginal firms."
The Small Businesses Loans Act: "We will increase the lending ceiling under the Small Businesses Loans Act (SBLA) program, while putting it on a cost-recovery basis as part of reducing business subsidies."
Encouraging investment in small business: "We are starting a pilot project -- the Canada Community Investment Plan (CCIP). It will reduce the costs of matching informal investors and other local sources of venture capital with local firms looking for small amounts of equity. We will provide $5 million a year for the next four years."
Simplifying small business programs: "Finding a way through the maze of 700 federal and provincial business programs is extremely complicated and time consuming for most companies. We will streamline, reduce overlap and waste, and cut the number of our small business programs substantially by 1998. We invite the provinces to work with us in this effort to create a smaller, more flexible set of programs that are easier to use."
Canada Business Service Centres: "Canada Business Service Centres provide quick, single-window access to government information. To improve and expand service, we will increase our investment in our network of centres by $15 million annually, and expand the network by using existing community organizations such as Chambers of Commerce and Economic Development Commissions."
Lower UI premiums: "We will reduce Unemployment Insurance premium rates through a series of cuts once the UI account is healthy again. As a first step, the UI premium rate will be lowered in 1995 to $3.00 from its current level of $3.07."
The federal government promises, in its Building a More Innovative Economy:
Regulatory reform in telecommunications: "We believe that competition in the telecommunications market is the key to jobs, growth and consumer choice. We want to have an integrated policy, and we have asked the Canadian Radio-Television and Telecommunications Commission (CRTC) to hold public hearings and report back in 1995. With this report and the advice of the Information Highway Advisory Council, we will develop policies that are best for the industry and for the consumer."
New communications services: "We will soon announce policies and regulations for more competitive wireless services, including new radio-based services like digital broadcasting, personal communications devices, advanced mobile satellites, and wireless cable-TV."
To extend the CANARIE network: "In 1993, the federal government joined businesses, educators and researchers to create the Canadian Network for the Advancement of Research, Industry and Education (CANARIE).CANARIE has a plan to develop the information highway faster. We will support it with $80 million over four years, matched with about $396 million from the private sector and the provinces. This phase of CANARIE will create a high-speed experimental network and will help innovative companies get more products, services and content on the information highway. As well, the speed of the Canadian Internet will be increased, and it will be extended into the Yukon and Northwest Territories by the end of 1995."
Last June, the federal government launched what it describes as a comprehensive Science and Technology Review, now nearing completion. The government says more than 2,200 Canadians from all walks of life have contributed to the review.
Building a More Innovative Economy pins its science and technology focus on the yet to be completed federal Science and Technology Review and promises new initiatives shortly after the release of the Review next year. 
According to the plan, there are six important ways Industry Canada can assist in building a more innovative economy through science and technology: 

  • 1) To ensure a high return on our investment in science and technology, Canada must pursue a more systematic approach to move new ideas from conception through to the development of commercial products and services. 

  • 2) Canada needs a stronger science culture to ensure that entrepreneurship and innovation are valued and rewarded. 

  • 3) Canada must develop more forward-looking planning and support mechanisms for technologies that are critical to industry competitiveness. 

  • 4) The government must therefore set clear priorities and measurable goals for our investment in science and technology. 

  • 5) As the largest performer of research and development, the government should ensure that its laboratories play an effective role in commercializing technology. 

  • 6) Technology diffusion is critical to industrial competitiveness. Measures to support the rapid dissemination of technical knowledge to industry are essential.


The federal government says its plan "does not involve new funding or spending increases". Instead of throwing money at new programmes, the federal government says it looked carefully at the programmes already in place and tuned them up. "This plan is not a beginning nor an end. It is a step toward change."
Micheal J. O'Brien

BOEING OPENS SPARES CENTRE IN CHINA
One of the largest aircraft spare parts centres in the world was opened last Thursday in China by representatives of Boeing and China Aviation Supplies Corp. Located at Beijing’s Capital Airport, the Boeing centre offers next-day shipment of more than 15,000 stocked parts and can dispatch urgent parts within two hours. The 38,100 sqare foot centre replaces the previous consignment store and offers service on a par with Boeing facilities in London and Singapore. In addition to Boeing items, the centre will stock more than 1,100 key parts from 18 suppliers. Boeing will also provide warranty and logistics support training to airlines.
The new spares centre will be computer-linked to other Boeing spares centres so that if a part is not on the shelf in Beijing, it can be accessed at any location and rushed to China on the next available flight.
Fifteen airlines in China operate more than 200 Boeing aircraft. The government is investing significant funds in airports and related infrastructure projects in order to accommodate traffic that has been growing more than 20 percent annually since 1991.


PEOPLE: STAN TODD NOW HEADS ROLLS-ROYCE CANADA
Stan Todd is now President and Chief Executive Officer of Rolls-Royce Industries Canada Inc. Barry Eccleston, former President and CEO has been named CEO and President of International Aero Engines located in Glastonbuury, Connecticut.
Born in England, Todd has been associated with Rolls-Royce since 1966. In the past three years he has served as project director for the Rolls-Royce Trent engine due to enter service next February. Todd has an MBA from Manchester Business School and is a graduate mechanical engineer. He is also a Toronto-area private pilot.


MD’s EXPLORER HAS FAA CERTIFICATION
The McDonnell Douglas MD Explorer helicopter has received type certification from the U.S. Federal Aviation Administration, clearing the way for deliveries of the new technology rotorcraft to customers around the world. The certification of the twin-turbine, eight-place helicopter, came just 23 months after the ship’s first flight on December 18, 1992. The aircraft is the first new-design passenger and utility rotorcraft certificated by the FAA in more than 10 years.
The first MD Explorer is expected to be used in aero-medical service. In that configuration, the aircraft will carry two patients, two attendants and life support equipment in addition to the flight crew. Other uses include law enforcement, general utility, off-shore transportation, tourist flights and corporate aircraft.
Among the advanced-technology advantages incorporated into the Explorer it has an all-composite, bearingless main rotor, flexbeam and blade system; a major portion of its primary structure made from composite materials; a liquid crystal instrument display system; the latest-design crash-worthy occupant restraint systems; and more extensive fire protection measures built into the design.
Other aircraft design features include McDonnell Douglas’ exceptional NOTAR system for anti-torque and directional control, which significantly enhances the safety of the aircraft and helps to qualify it as one of the two quietest helicopters flying. The other is McDonnell Douglas’ MD 520N, which is the quietest helicopter ever certificated by the FAA.
The liquid crystal Integrated Instrument Display System replaces traditional cockpit instruments by presenting aircraft operating information in a digital format and with icon symbology on two six-inch screens. The system also records operating data for on-board monitoring, providing technicians with accurate information for performing maintenance functions.
The company says it expects to deliver more than 1,000 MD Explorers over the next 10 years. McDonnell Douglas has some 200 certificates of interest for the helicopter, which are scheduled to be converted to orders when the helicopters are one year from delivery.


UPDATE: ORION 1 

Last week’s launch of Orion 1 (See The Wednesday Report, Volume 8, November 30, Orion 1 Was Put Into Orbit Yesterday.) will likely intensify the competition for international satellite services in Western and Eastern Europe says Orion Atlantic. 
The Orion 1 satellite -- a $340 million project involving multinational partners from Japan, Italy, Canada, France, the United Kingdom, and the United States -- will provide the largest two-way satellite-based data network in Europe.
"The launch of Orion 1 provides new telecommunications options for multinational companies," said W. Neil Bauer, president of Orion Atlantic. "Furthermore, Orion’s expanded presence promises to intensify competition within the international satellite market."
Constructed by Matra Marconi Space, using the Eurostar 2000 satellite bus, the satellite will provide digital voice, data and video communications to multinational companies. The satellite will support and enhance the deployment of a variety of private video and data networks in North America and Europe when it reaches its final orbital location in early 1995. In addition, a full range of satellite services -- featuring compressed digital video services for satellite news gathering and broadcasting -- will be offered to establish the satellite as the "digital satellite" in the Atlantic Ocean region during its 10.5 year mission life.
"The Orion 1 will allow us to provide specialized satellite services at competitive rates with a new standard for customer service and flexibility," said Bauer. "The satellite’s advanced switching capabilities and high powered beams will enable Orion to offer customized telecommunications services including desktop-to-desktop multimedia business communications."
Located at longitude 37.5 West, the Ku-band satellite carries 34 transponders and is capable of multiple spot-beam coverage and broad-beam transatlantic and regional coverage in North America and across Eastern and Western Europe