Canada to spend C$5 billion on military vehicles

Wed Jul 8, 2009 2:52pm EDT
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TORONTO (Reuters) - Canada will spend about C$5 billion ($4.3 billion) on light armored vehicles for its military, the government said on Wednesday.

About C$1 billion will be used to upgrade the current fleet of light armored vehicles, with the remainder to go toward a new generation of combat vehicles and their upkeep.

The Canadian Forces will start using the new vehicles by 2012, with a fully operational fleet intended for 2015.

"The government is committed through its Canada First Defense Strategy to renewing the Canadian Forces' core equipment," Defense Minister Peter MacKay said in a statement.

"In addition to a renewed commitment to domestic security, this defense investment creates jobs, brings economic benefits to Canadian industry, and creates and sustains long-term employment for Canadians."

The government said it is currently looking at procurement strategies and specific requirements for the projects. It said all winning contractors will be required to spend one dollar in Canada for every contract dollar awarded.

General Dynamics Land Systems - Canada, a unit of U.S.-based General Dynamics, which developed the military's current fleet of LAV IIIs, will work with the government to upgrade the current fleet.

Contracts for three new fleets of combat vehicles are expected to be awarded for 2011. The government said the new fleets would include close combat vehicles, tactical armored patrol vehicles, and force mobility enhancement vehicles.

The government said it would award contracts for the manufacture and assembly of the vehicles as well as for engineering and support services over the next 25 years.

($1=$1.17 Canadian)

(Reporting by John McCrank; editing by Rob Wilson)

<p>A Canadian soldier walks on a tank at Forward Operating Base (FOB) Masum Ghar in Kandahar, May 30, 2009. REUTERS/Jorge Silva</p>