A Canadian Army LAV III secures a village in Afghanistan's Kandahar province in 2007. With money tight, the Army wants to cancel its acquisition of a new Close Combat Vehicle and upgrade the LAV III. (Canadian Forces)
VICTORIA, BRITISH COLUMBIA — Canada’s Army is in a tug of war with the government over whether to proceed with the purchase of a new armored vehicle fleet that the service worries it can no longer afford.
The ruling Conservative Party government announced in 2009 that it would purchase 108 close combat vehicles (CCVs). The CCV would provide the Army with a medium-weight infantry fighting vehicle between 25 and 45 tons.
The project, estimated to cost CAN $2 billion (US $1.93 billion), includes the option to purchase up to 30 additional vehicles.
But the Army, dealing with a 22 percent budget reduction that has cut into its training, has lobbied to cancel the CCV project, say military, government and industry sources, and wants to redirect the money to offset budget reductions. But the government so far has refused.
A senior government official noted that it was the Army that originally lobbied for the vehicles, which it claimed were vital for combat operations.
“After making a very strong case they needed the CCVs, they changed their minds and they expected us to shut the process down,” the official explained. “Well, it just doesn’t work like that.”
The official noted that the military has yet to put forward a convincing argument that the purchase should be canceled.
BAE Systems Hägglunds AB bid the CV-90 for the project while General Dynamics Land Systems Canada has offered the Piranha 5. France’s Nexter Systems entered its VBCI in the competition.
The Department of National Defence and Canadian Forces would not comment on the Army’s desire to scuttle the CCV project. Instead, a Defence Department spokesman sent a link to the government’s CCV website, which noted that the winning bidder would be announced sometime in the fall.
Industry sources say a winning bidder has been selected, but no announcement is slated at this point.
The Army’s push to dump the CCV has garnered some high-profile support. Retired Gen. Rick Hillier, a former chief of the Defence Staff, has argued it makes sense to shut the project down.
Hillier told the CTV television network on Sept. 23 that ongoing upgrades to the Army’s existing fleet of light armored vehicles, known as LAV IIIs, negate the need for the CCV.
“I actually think we no longer have a need for the close combat vehicle, and we could save ourselves about $2 billion right there and help mitigate the rest of the cuts across the Canadian Forces,” Hillier said.
A similar conclusion was contained in a Sept. 18 report produced by two left-leaning think tanks, the Canadian Centre for Policy Alternatives and the Rideau Institute.
Canada is upgrading 550 LAV IIIs, improving their survivability and maneuverability and making them nearly as heavily armed and armored as the CCVs, authors Michael Byers and Stewart Webb argued in their 40-page report, “Stuck in a Rut.”
“By spending $2 billion on vehicles the Canadian Army neither wants nor needs, the government is abdicating its responsibility to equip and train our soldiers properly, and to provide fiscal accountability,” Byers said.
Canada’s Army is bearing the bulk of government-ordered defense spending cuts and has been forced to reduce training and delay some key equipment programs. This year, the Army’s commander, Lt. Gen. Peter Devlin, and other officers confirmed that the service’s budget was being cut by 22 percent.
The Army’s budget will drop from the $1.51 billion in 2011 to $1.17 billion by 2015.
Before retiring July 18, Devlin set in motion a series of initiatives to reduce training in an effort to save money. He ordered the Army to cease training in jungle, desert and mountain environments and to scale back training activities in the Arctic.
The Army also is disposing of its main air defense systems as well as some of its tube-launched, optically-tracked, wire-guided missiles to save money. The move to dispose of the Air Defence Anti-Tank System leaves the Canadian Forces without a primary air defense system.
Army officers say that decision is risky, but the service has determined it is acceptable in the short term.
The Army planned to introduce a new air defense system around 2017, but work on that project has been delayed because of lack of funding. Other projects, such as the purchase of a multiple rocket system for the Army, have also been delayed.
Mike Duckworth, a senior vice president with Nexter, said the upgrade program for LAV IIIs extends the life of the vehicles until 2035 and provides the Army with much-needed improvements for that vehicle, but it lacks the same armor protection and mobility as the CCV.
“The upgraded LAV IIIs are still not comparable to the more robust, well protected CCV,” Duckworth said.
The CCV project has faced issues over the past several years. The contract was supposed to be awarded in 2011, with deliveries to start in 2012.
But in the summer of 2010, Canada rejected all the bidders for not meeting technical specifications, particularly in armor protection. In May 2012, all bids for the project were rejected again for technical reasons, not made public, forcing procurement officials to restart the process.
The Canadian government has pointed out that the CCV will provide a high level of crew protection, incorporating mine blast resistance and protection against both improvised explosive devices and ballistic threats. The CCV also will incorporate a protected main weapon station.