Government of Canada Awards Tactical Airlift Contract

[BORG]

GATINEAU, January 16, 2008 – The Honourable Michael M Fortier, Minister of Public Works and Government Services Canada, along with the Honourable Peter Gordon MacKay, Minister of National Defence, today announced that the government has awarded a contract to Lockheed Martin Corporation for the acquisition of the Canadian Forces new tactical lift aircraft.

"Canada has long been in dire need of renewed tactical airlift capabilities," said Minister Fortier. "The government is now delivering on commitments it has made to ensure the Canadian Forces are properly equipped with aircraft necessary to support its operations."

"The airlift requirements of the Canadian Forces is a top priority," said the Honourable Peter Gordon MacKay, Minister of National Defence. "We are confident that the C-130J will provide Canada with a cost-effective, operations-proven tactical airlift capability."

Tactical airlift is the lifeline of the Canadian Forces, providing reliable aircraft to quickly and safely carry passengers, heavy equipment and supplies over long distances in support of operations, or in response to crises, such as natural disasters.

The purchase contract for 17 C-130J Hercules aircraft is valued at approximately $1.4 billion U.S., with an additional amount to be added in 2009 for at least 20 years of in-service support.

Under the contract, Lockheed Martin Corp. is required to invest in the Canadian economy, dollar for dollar, what the Government of Canada spends in procuring and maintaining the aircraft over the life of the contract.

"We are continuing to make sure Canada's aerospace and defence industries obtain maximum benefit so they can build and sustain capacity to support these aircraft over the long-term," Mr. Fortier said. "Under the in-service support portion, the contractor will be required to spend in Canada 75 per cent of the total cost in direct industrial regional benefits – well above the 60-per-cent ratio negotiated by the previous government for purchases of this magnitude."

The Honourable Jim Prentice, Minister of Industry, believes Canadian firms will play a significant role in the project's progress. "Through the government's industrial benefits policy, we are delivering maximum, high-quality economic benefits to Canadians while providing the military with the best equipment for its needs," said Mr. Prentice.

Delivery of the first aircraft is expected in winter 2010.