Our Very Own Arms Broker

By John Bacher

The Mulroney decision on the Strategic Defense Initiative (Star Wars) is an excellent barometer of the strength of the Canadian peace movement, the tasks before it, and the amazing degree to which Canada is integrated into the American military machine. Although the decision is an important symbolic victory for the peace movement, it does not mean what the government wants the Canadian people to believe. The decision's stated emphasis on declining "government to government" negotiations on Star Wars hides the fact that all Canadian arms sales proceed on this basis. It wrongly implies that our tax dollars will not be used to assist in the development of these dangerous arms.

Active Government Help

The major victory that the peace movement has won in the Star Wars decision is that the Mulroney government has conceded that the further militarization of the nation is not the road to greater political popularity. This was not the case at the beginning of the new Conservative federal government. Former Minister of National Defence Robert Coates's surprisingly frank comments at arms bazaars made it appear that the government was contemplating the public pursuit of the Cold War as the road to economic recovery. Since then, however, the government has given up trying to convince us that the way out of the unemployment line is through the gates of an arms factory. We will be spared TV ads featuring nuclear shields in space.

For the peace movement, the key difficulty with the Mulroney decision is that it does not truly reduce the government's ability to further the U.S. Star Wars program. The National Research Council has already supported that branch plant product, the "Canadarm" of the space shuttle, which is an important part of Star Wars. Also, the University of Toronto's Aerospace Department is currently doing Star Wars-related research, funded by the U.S. Air Force. Universities whose basic facilities come out of tax dollars are free to apply for any Star Wars contracts they can get. Also, Defence Industry Productivity Program grants are available to Canadian industry for assistance in developing the research and development capabilities needed to obtain Star Wars contracts. But what is most significant in the long term is the assistance the Canadian government gives to arms exporters under the Canada/U.S. Defence Production Sharing Arrangement. (DPSA).

No Tariff on Arms

The DPSA was developed in 1958 after the decision to scrap the Avro Arrow airplane. The Diefenbaker government concluded that an independent Canadian arms industry-one making complete weapons-was too costly. It was decided that Canadian arms makers would be compensated instead by preferred access to the U.S. arms market. The DPSA provides that no customs duties be charged on the sale of Canadian arms to the U.S. or on the sale of American supplies to Canadian arms exporters. The Buy American Act and the U.S. balance of payments directives are also waived under the DPSA. The Canadian government does not require such trade to have an export control permit. In return for the lifting of trade barriers, the Canadian government is required to purchase an equivalent value in arms from the United States.

In a 1965 Voice of Women brief to a parliamentary committee, Ursula Franklin argued that the prime foreign policy objective of the Canadian government was to win arms contracts under the DPSA. She says that the government's response to this brief was to withdraw all public information regarding the DPSA. Previously it had been readily available in government publications and the Financial Post and such material had provided the basis for the Voice of Women's ill-fated brief.

Fortunately, the secrecy of the Canadian state has been somewhat reduced by the new Access to Information Act. The Access Register, produced as a result of the Act, lists a document known as the Production Sharing Guidebook. I obtained this publication as a result of a formal request to External Affairs made under the Access to Information Act.

Access to Information Act

The Production Sharing Guidebook spells out for Canadian arms makers the many ways in which the Canadian government seeks to help them sell arms to the U.S. market. It instructs manufacturers that they should keep in mind that, "regardless of the channel through which a Canadian firm receives a solicitation from a United States acquisition agency, any response must be submitted to the Canadian Commercial Corporation, Ottawa." The CCC is a crown corporation whose directors are appointed by the Canadian government. The company's 1981-82 annual report notes how the CCC provides "access to requests for government-to-government procurement and alerts Canadian firms to bid opportunities from international organizations." The company "makes tendering easier and less costly...often limiting the need for some documentation, bonds, and guarantees." The CCC also "encourages foreign agencies to deal with less well-known Canadian firms, because buyers have the 'comfort' of contracting on a government-to-government basis.” Such services reduce &ldqldquothe complexity of export sales, making them almost eas easy as those to the domestic market.” The CCC also serves to assure the U.S. Department of Defense that "proposed Canadian suppliers are considered by the Government of Canada to be financially and technically capable of conforming with bid specifications, contract terms, and supplier warranties." One Star Wars contract, already negotiated by the CCC, was the one that brought Spar Aerospace and NASA together-the one which resulted in the production of Canadarm.

Help Prepare Bids

The Production Sharing Guidebook notes that after contracts are put on bid by "U.S. military acquisition agencies," the CCC submits them "to close scrutiny to determine whether they are suitable for Canadian buyers." It will then help the Canadian firms it considers suitable for such contracts to prepare their "bid proposal or quotation." The CCC signs the actual contract with the U.S. government. After this is completed, it then places "a backto-back contract with the Canadian company concerned." The CCC's role illustrates how deeply involved the Canadian government has been with Star Wars since the U.S. has been developing this program. Any company interested in exporting this kind of weaponry is required to go to the CCC to prove it can do the job. The CCC in turn keeps an eye on all developments in this field which may be profitable for Canadian business. The government will assume the costs of marketing for firms that want to take part in Star Wars.

The symbolic nature of the Star Wars victory shows the necessity for the Canadian peace movement to go beyond its current focus on the development of new weapons systems and to challenge Canadian integration into American military planning. To have the decision become a significant denial of taxpayers' subsidies to Star Wars requires a denial of the facilities of the CCC for contracts related to the program and of loans and grants under the Defence Industry Productivity Program. Controls would also have to be established over the contracting activities of publicly funded bodies such as universities and the National Research Council to prevent the use of their resources for the development of future Star Wars.

Peace Magazine Feb-Mar 1986

Peace Magazine Feb-Mar 1986, page 6. Some rights reserved.

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