Ottawa's backroom bid for French helicopter ships sidelined by election

Canada was actively pursuing at the political level the possible acquisition of the controversial French-built Mistral-class helicopter carriers, several defence, diplomatic and military industry sources have told The Canadian Press.

The effort has ground to halt, however, largely because of the federal election campaign and it may slip away entirely because the French are now in a position to entertain bids from other countries for the 22,000-tonne ships, originally built for Russia.

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The original deal was cancelled because of Moscow's annexation of Crimea and its ongoing support of anti-government forces in eastern Ukraine, but it was only last month that the French government concluded a US $1.01 billion refund agreement, a plan that was approved Thursday by the lower house of the French National Assembly.

The sources, speaking on condition of anonymity because they weren't authorized to discuss the matter publicly, say Defence Minister Jason Kenney was until the election call "actively engaged" in sounding out the French, including a face-to-face exchange at the most recent NATO ministerial meeting in Brussels last June.

A series of international media reports including the French daily Le Monde, the International Business Times, Les Echos and La Tribune have long put Canada on the short list of potential buyers, along with Egypt, India and Singapore.

While there was no shortage of interest and backroom dialogue, the sources say, the French were unable to formally negotiate with interested nations until a deal was concluded with Russia. Now that has happened, "the matter is now with the Elysee Palace," the president's office.

The vessels could well be snapped up before a new government gets organized in Ottawa.

"We were unable to get into a position before the writ dropped where we could actively discuss (or) negotiate," said one source with knowledge of the file.

A spokesman for Kenney declined to comment when asked specifically about the government's interest in the ships and lobbying efforts last spring. Daniel Proussalidis would only say that "the Canadian Armed Forces is not pursuing the acquisition of these vessels at this time."

Little formal study on costs, hurdles

The idea of the Harper government buying the ships has percolated in the defence community for years.

Former chief of defence staff Rick Hillier advocated for such a capability as far back as 2006. Former Conservative senator Hugh Segal suggested Canada buy the Mistrals a few years ago, while an independent report last year from retired colonel George Petrolekas and defence analyst Dave Perry endorsed it as part of a larger strategy to recapitalize the navy.

Nobody knows if these ships will make sense for Canada because they haven't been considered as part of a comprehensive defence and foreign policy review.- Michael Byers, University of British Columbia defence academic

Word of the initiative came as the Liberals released their defence platform on Sunday, which promised to put more emphasis on rebuilding the Navy.

Although considered amphibious warfare ships and equipped with landing craft, the Mistrals have been used extensively by the French for disaster relief and evacuations, including in Lebanon in 2006.

The problem for Canada, according to defence sources, is that National Defence has done very little in the way of formal study on the long-term ownership costs and the hurdles of operating such sophisticated ships, which are capable of carrying 16 helicopters, 59 armoured vehicles, and more than 450 troops.

The Conservative government, National Defence and the Department of Public Works were roasted by the auditor general in 2012 for a lack of homework and incomplete public costing of the F-35 stealth fighter program, which has since been put on hold.

The Mistrals could potentially sell for $1.2 billion to $1.6 billion, according to published reports overseas, and if Canada did bid, they would require hundreds of millions of dollars worth of modifications to bring them in line with Canadian military standards.

Substantial risk

The ships were not mentioned in the 2008 Conservative defence strategy, nor were they considered under the national shipbuilding program. However, some in the defence community say the government's designated shipyards, which are in the process of being retooled for existing projects, are not yet technically ready to construct helicopter carriers.

"Nobody knows if these ships will make sense for Canada because they haven't been considered as part of a comprehensive defence and foreign policy review," Michael Byers, a political science professor and defence academic at the University of British Columbia.

"It would carry substantial risk. It would reorient the Navy and impact the Air Force in terms of maritime helicopters. There are lots of follow-on consequences that need to be considered before you move forward."The thinking in the political and defence sectors is that Egypt backed by Saudi Arabian cash and the other competitors have an edge because they already have established defence links with France; they are more aggressive and able to move faster than Canada in closing a deal.

"Egypt and Saudi Arabia are entirely ready to buy the two Mistrals," said a French official in Egypt, Le Monde reported.

Whether that is true remains to be seen because the Harper government has made it a priority to court France in the defence and security sector, notably with signing technical defence co-operation agreements earlier this year. The French shipyard, DCNS, has opened an office in Ottawa and has been lobbying hard to be part of the planned frigate replacement program.