Government awards $307M contract to Colt Canada to manufacture over 65,000 rifles for the Canadian Armed Forces
OTTAWA – The Liberal government awarded a contract worth $307 million to Kitchener-based manufacturer Colt Canada on Thursday, to produce 65,402 rifles for the Canadian Army.
The procurement will come in two phases, with the first 30,000 Canadian Modular Assault rifles set to be delivered over the next three years. The remaining 35,000 will be acquired in four years, at a cost beyond the initial $307-million investment.
The procurement will replace the CAF’s aging arsenal of C7/C8 rifles that have been in service for nearly 35 years.
“I’m being told that it’s well past its expiration date,” said Secretary of State of Defence Procurement Stephen Fuhr, in an interview with the National Post.
“It’s not 35 years past, but it should have been replaced several years ago, and that’s what we’re doing today.”
Fuhr added that this is the weapon of choice by the regular forces and reservists.
Colt Canada, formerly known as Diemaco, is a subsidiary of parent company Colt CZ Group, based out of Prague, Czech Republic.
Fuhr said the manufacturer will have to add more people to its staff in Kitchener, Ont., to meet the demands of the contract, going from 130 to 200 employees.
The weapons manufacturer also recently signed a contract with the Danish Ministry of Defence last month, to supply the Danish Armed Forces with 50,000 C8 modular rail rifle carbines.
In terms of industrial benefits, Fuhr said the company has committed to using 80 per cent Canadian content and promises the contract will generate $10 million a year to Canada’s GDP.
“Canadian investment, and you know, buying Canadian enables them to scale in a way that they have the capacity, not only to provide for us and our needs here in Canada, but the capacity to export to our allies.”
This is the fifth procurement contract announced under the newly formed Defence Investment Agency.
Opposition parties have criticized the agency for being just another redundant bureaucracy, but Fuhr said the agency is pulling from existing resources in departments and getting procurement done faster. The agency’s CEO, ex-banker Doug Guzman, is a former colleague of Prime Minister Mark Carney.
The Liberal government is also in a race to meet its spending targets under the North Atlantic Treaty Organization (NATO), with a new defence contract announcement every day this week.
Defence Minister David McGuinty said Canada will meet its two per cent of GDP defence spending target by March 31.
The next large procurement under the DIA will be a multibillion-dollar contract for 12 new submarines. Final proposals have been submitted by Germany’s ThyssenKrupp Marine Systems, in partnership with the government of Norway, and Seoul-based Hanwha Ocean.
Fuhr said a final decision will be made this year, with the first submarine in the water by 2032.
“It’s going to come down to economic benefit to Canada, and they’re both really putting their best foot forward,” he said.
National Post
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