COVER

A POLITICAL DOWNDRAFT

TOM FENNELL March 22 1993
COVER

A POLITICAL DOWNDRAFT

TOM FENNELL March 22 1993

A POLITICAL DOWNDRAFT

COVER

TOM FENNELL

Bristling with high-tech electronics, the EH-101 is a combat pilot’s dream. For Defence Minister Kim Campbell, however, Ottawa’s purchase of 50 of the Britishand Italian-designed helicopters may become a political nightmare. Since Ottawa announced the $4.4-billion acquisition last July—payments and deliveries will be spread out over 13 years—opposition parties and peace advocates have attacked the choppers as unnecessary and too expensive. They stepped up their attacks last week in response to the publicity surrounding Campbell’s likely leadership bid. And representatives of several other potential leadership candidates, concerned about possible negative public reaction to the purchase, have approached the Ottawa-based Canadian Centre for Global Security, seeking advice on alternatives so that their candidates can distance themselves from the issue.

Under an agreement signed on Oct. 7, 1992, Ottawa will pay Montreal-based Para-

max Systems Inc., a subsidiary of the U.S. computer giant Unisys Corp., $1.4 billion to develop computer and electronics systems for the helicopters. A British-Italian consortium, Westland-Augusta SpA, will receive another $1.4 billion to build the helicopters at its plants in both countries. The remaining $1.6 billion will pay for a support contract and the cost of operating the EH-101s over 13 years. In return, the two firms have promised to create a total of 3,000 jobs across Canada. Of the total purchase price, Paramax spokesman John Paul Macdonald says, Quebec and Ontario will each receive $940 million in contracts, while companies in Atlantic and Western Canada will share $1.1 billion.

When the military first proposed the purchase in 1987, it was justified as a necessary Cold War measure against the potential threat from Soviet submarines. But critics say that the Soviet Union’s collapse has dramatically reduced that danger. And Brian MacDonald, president of Strategic Insight Planning and Communications, said that the money should instead go to equipping peacekeepers. To deflect such criticism, defence department officials say that the helicopters will also fly search-and-rescue missions and guard Canada’s coast against illegal fishing and drug smuggling.

Campbell has repeatedly stated that the new aircraft are needed to replace Canada’s 30-year-old Laborador and Sea King helicopters. But according to Tariq Rauf, senior analyst at the Centre for Global Security, the penalty clauses in the contracts may be so severe that it would be politically unacceptable to cancel them. As a result, Campbell is in the awkward position of having to defend a $4.4-billion expenditure that some analysts say is no longer needed.