Clear as a bell
Thanks to Liberal Defence Critic Denis Coderre for letting the Canadian public know precisely where he and his party stand on the issue of strategic airlift for the Canadian Forces:
Clear as a bell, isn't he? And for once, I'd believe a politician's promise: after all, the Liberals have a solid track record of keeping such promises.
Denis Coderre, the Liberal defence critic, said that, were his party in power, he would cancel the contract.
"We don't need them. If I was Minister of National Defence, I wouldn't go for that. We don't need these C-17s. If I have a better deal to lease, then why do I need to buy these big planes?" Coderre said.
Clear as a bell, isn't he? And for once, I'd believe a politician's promise: after all, the Liberals have a solid track record of keeping such promises.
posted by Babbling Brooks at 9:16 a.m.
2 Comments:
I know that this can't be the only deciding factor (in fact I think it's a shitty one) but I have never, not once, seen a economic break down of owning versus leasing.
Depends....
If by leasing you mean 'holding the goods with exclusive access' while paying somebody, it is just a different financing scheme; it will depend on the cost of capital and the return the lessor expects. In general, there is little reason to expect a saving since the Government of Canada had the lowest cost of (Canadian dollar) borrowing in the world - and if you are talking about USD borrowing then you add on another set of risks as the two currencies move (which can be positive or negative). The argument (might) also run that a third party owner might do a better job on maintenance, etc and split the savings with the lessee - but in the case of military aircraft, I don't buy it.
If you are talking about a "lease as required" arrangement then the apparent costs will be much lower, since you are not paying the capital costs while the assets are not required (note - somebody is; and they will be trying to get that back from you and the other lessees). The problem there is in availability - the lessor will try to book as many users into the plane as he can - and if two of them want it at the same time then one of them is SOL. That obviously has a cost - but I suspect that Denis Coderre either discounts that, since it is paid in terms of reduced operational efficiency, or ignires it altogether.
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