Canada took 4 months to send money after deciding to buy air defence system for Ukraine

It initially took Canada four months to get into the queue after deciding to join a plan by the United States to buy urgently needed National Advanced Surface-to-Air Missile Systems (NASAMS) for Ukraine.

Defence Minister Bill Blair insists the lag did not contribute to the slow pace of acquiring the high-tech defensive capability, which is still months away from being delivered.

A proposal for the federal government to purchase the system was first discussed by former defence minister Anita Anand and U.S. Defence Secretary Lloyd Austin in late November 2022 at the Halifax International Security Forum, CBC News has learned.

It came at a time when Russia was engaged in a brutal ballistic missile campaign intended to wipe out Ukraine's electricalgrid, a series of attacks that hit civilian targets and killed scores of innocent people.

Anand announced the planned $406-million purchase in January 2023, but as the Defence Department recently told CBC News, the federal government didn't transfer funds to the United States to pay for the system and start the process until March 2023, at the end of the fiscal year.

"I don't believe that that contributed in any way to the delay," Blair said in a recent interview with CBC News.

"It required more than just a conversation and an agreement between the secretary and the minister. There had to be a contract. And because we were purchasing through the United States, it required congressional approval as well. And so there is actually a legal process in the United States to enable them to acquire and purchase munitions that they would send to another government."

WATCH | Ukraine won't get air-defence system purchased byCanada until 2025:

Canada delayed payment for air-defence system for Ukraine

1 month ago

Duration 2:13

It took Canada four months to send its payment after deciding to join a plan by the United States to buy urgently needed National Advanced Surface-to-Air Missile Systems for Ukraine, a lag Defence Minister Bill Blair insists has not contributed to the slow pace of acquiring the high-tech defensive capability.

Washington, however, could not begin to negotiate a contract with the manufacturers until it had both its own funds and Canada's money in hand.

The U.S. Congress gave the green light in May 2023.

Blair expects delivery by end of this year

The Liberal government has faced repeated criticism for the glacial pace of acquiring the capability, especially as the civilian death toll in Ukraine increases.

The most expedient way to buy the NASAMS was through Washington and to piggyback on a purchase the United States was already making, Blair said.

On the margins of the Ukraine peace summit in Switzerland in June, Ukrainian Foreign Minister Dmytro Kuleba said his country is in urgent need of weapons and wished the air defence system Canada promised was already in place.

In his interview with CBC News, Blair said the latest information is that 10 NASAMS ordered by the United States will be delivered by the manufacturers Raytheon and Kongsberg Defence and Aerospaceby the end of this year.

"Ours will be among that tranche of deliveries and we'll immediately get it to Ukraine" in early 2025, the minister added.

Earlier this year, Blair blamed the holdup on the Americans and the challenges Washington faced in financing its portion of the deal. The Republican-dominated Congress held up funding for Ukraine, Israel and Taiwan for months in a political standoff with the Biden administration.

There was one additional wrinkle, according to defence trade publications:One of the manufacturers, U.S.-based Raytheon, asked the Pentagon to waive provisions in the Truth in Negotiations Act (TINA) in order to speed up the process of delivering NASAMS.

U.S. defence officials were reluctant because the legislation requires them to demonstrate how long-term contracts save money, and in the case of donations to Ukraine that is difficult to establish. Complying with TINA, according to the publication Defence One, adds another six to nine months to the procurement process.

When Ukraine approached the United States about acquiring air defence systems at the onset of the full Russian invasion, the government in Kyiv was initially told it would take up to five years an answer that left Ukrainian officials dismayed.

The average time to build a new NASAMS is two years, the CEO of Raytheon, Gregory Hayes, has been quoted as saying.

First systems have 100% interception rate

The U.S. announced in July 2022 that it was buying two NASAMS for Ukraine,then two months later added six more to the order.

The first systems, taken from an existing Pentagon order, arrived in Ukraine within 71 days of the contract signing, according to U.S. government data.

Once in action, the NASAMS had a 100 per cent success rate intercepting drones and cruise missiles from Russia, Austin told the Halifax conference where he struck the deal with Canada to finance an additional system.

Thomas Withington, an analyst who studies air defence systems and electronic warfare at the U.K.-based Royal United Services Institute, said the struggle by Canada, the U.S. and other nations over the last two years to acquire protection against missiles and drones has ramifications beyond the war in Ukraine.

"We've lived, in many ways, through a gilded age where, by and large, the air threat to NATO writ-large has been reduced," said Withington.

"We've not faced the prospect of our own countries being attacked en masse with air delivered effects, so missiles, bombs, that kind of thing. That situation has now ended, and in many wayswe find ourselves back in a similar situation to where we were during the Cold War, where we faced significant air threats and we faced significant missile threats."

Canada's recently updated defence policy pledges to acquire ground-based air defence systems to protect critical civilian infrastructure.

The military is currently trying to purchase an air defence system to protect troops on the ground overseas, but in a recent statement to CBC News the Defence Department said such equipment could also be deployed to protect Canadians at home.

WATCH | Anita Anandspeaksin January 2023 about air defence system:

Canada buying advanced air defence system for Ukraine

2 years ago

Duration 9:31

Canada is set to spend $406M on an advanced air defence system and associated missiles for Ukraine. Defence Minister Anita Anand tells Power & Politics the Canadian government is "working with the United States to get it to Ukraine as soon as possible."

Defence contractors struggle to handle flood oforders

Withington said either way, the country could be in for a long wait because as Ukraine demonstrated part of the problem involves the capacity of defence contractors to absorb the flood of new orders.

"You've got production lines in the major missile houses where they are configured to produce a set number of missiles in a set amount of time for a set number of customers," he said.

"There is a degree of flexibility within those production lines to account for new customers but they have a finite capacity, and that's dictated by the number of employees."

He also said any decision to add new production lines would have to be carefully thought through by the defence contractors because air defence is a specialty product.

In the medium term, Withington said he could see a number of NATO countries wanting to acquire those systems to protect themselves against the kind of attacks they've seen in Ukraine.

"I would argue yes, there definitely needs to be a ramp-up in production levels for ground based air defences," hesaid.

"I think if you show as an alliance you're deadly serious about this, and you are prepared to get the air defence assets you need, and more, so you're saying to Mr. Putin NATO is not to be trifled with."

Blair couldn't give a timeline for when Canada would acquire its own system, but said it is among his top purchasing priorities.