Wednesday, February 5, 2014

For every upside, there is a downside: do Diane Finley & Rob Nicholson know this?

The one thing one learns early in life is there’re few good things that come with no downside. I’m no pessimist, but I was reminded of that lesson when I read that the Tory government is chatting up a change to how we purchase military equipment.

The National Post reports that the federal Conservative government claims to have “the solution to years of troubled projects marked by delays, cost overruns and rigged requirements.”

Tory Public Works Minister Diane Finley and Defence Minister Rob Nicholson seem to believe they have a strategy to leave behind such military procurement embarrassments as the F-35 Joint Strike Fighter, search-and-rescue planes, Sea King helicopters and armoured vehicles for the army.

The foregoing represent examples of military procurement projects that went terribly wrong for taxpayers, and were/are major headaches for Prime Minister Stephen Harper’s government.

So now there is a new defence procurement strategy that like Tylenol 3 will fix the governments’ headaches—let’s hope this new strategy also fixes the cause of the headaches and not just the symptoms.

According to the report I read, Nicholson said in a press release:

Today’s launch of the defence procurement strategy reaffirms the government’s commitment to develop and maintain a first-class, modern military that is well-equipped to take on the challenges of the 21st century.”

Apparently, a major thrust of the strategy is, as the Post puts it, “turning the billions of dollars the government intends to spend on new military equipment in the coming years into jobs for Canadians.”

Not many Canadians will disagree with Minister Finley who reportedly said the new approach:

will also leverage our investments to create high paying, highly skilled jobs right here in Canada.”

Canadians need jobs and our manufacturing sector could certainly do with a boost that defence spending could give it. And I’m all for a well-equipped, modern military and a made-in-Canada strategy, but there’s a rub.

The defence and security lobby is powerful and one that has a habit of exaggerating the economic activity it generates for the country. Furthermore, if Canadian companies know they are certain of landing contracts, are they likely to offer their best prices?

And, if foreign companies are given contracts on condition of launching branches in Canada, will they not tend to load up the contract with start up cost that would not be present if the work was done outside the country?

I’m sure these concerns can be managed. But are our politicians and bureaucrats really up to the task? The best predictor of future performance is past performance, and that’s not good news for Canada’s long-suffering taxpayers.

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