Domestic production of Skyranger 35s would strengthen our national defence, create high-tech jobs, and make Canada more resilient.
With the United States becoming a less and less trustworthy military partner with each passing day, Canada must look elsewhere to source new weapons for our military.
Since we haven’t made many big military purchases lately – aside from the F-35s that won’t be fully delivered until the mid 2030s – we have a big opportunity to get things right in the long-term.
Ironically, had the government made huge purchases of US-made weapons a few years ago, we would find ourselves dependent on a country that now acts with thinly-veiled hostility towards us.
However, this only works to our advantage if we go take immediate action to build new defence relationships and ensure that our long-overdue military buildup includes domestic production.
It’s important to note that this is not an either/or proposition.
We don’t have to choose between buying more weapons from allies in Europe and Asia or building things here at home, because many of our prospective sellers are more than willing to build new plants that will enable Canada to produce domestically, if we are willing to invest what is necessary to make it worth their while.
Two of Canada’s most likely defence industry partners – Germany and South Korea – are quite eager to set up new factories to ensure a long-term defence partnership.
With that in mind, in the coming days and weeks we’ll be looking at specific weapon systems Canada should purchase from our European and South Korean partners, and – when applicable – how we can start building those systems right here in Canada.
Today, we’ll start with a Short Range Air Defence system from Germany:
Oerlikon Skyranger 35 Mobile Air Defence System (Rheinmetall – Germany)
Whether in the North – which Canada may have to defend largely unaided, or in Eastern Europe, where Canadian troops are deployed and where a major global conflict could be set off if Russia invades a NATO country – defending against drones is a non-negotiable for modern militaries.
Thus, Short Range Air Defence (SHORAD) is essential. Otherwise, our men and women in uniform will be lost in large numbers.
While some defence can be provided with electronic jamming and by providing shotguns to troops, that still leaves our troops exposed to fibre optic drones and the danger of overwhelming drone swarms. Further, since Canada’s focus should be on building a medium-sized but highly-equipped ground force (quality over quantity), we should never want our troops to be used in hopeless Russian-style mass casualty ‘meat assaults.’
This means well-armoured SHORAD is a must.
And that’s where Rheinmetall’s Oerlikon Skyranger 35 comes in, as you can see in the video below:
The Skyranger 35 is the spiritual successor to the Gepard system, which has performed quite well in Ukraine against Russian drones despite being a very old platform.
An updated Gepard-style system would thus be expected to perform even better. It would help ensure that Canadian infantry fighting vehicles, tanks, and dismounted troops had protection against drones. And – due to being heavily armoured itself – it would ensure high levels of crew survivability. After all, equipment can always be replaced, but the lives of our soldiers cannot.
The Skyranger 35 system can also be integrated with Canada’s existing Leopard tank hulls. Converting 10 or so of our existing Leopard 2 tanks would allow us to gain experience operating the system.
At the same time, Canada should purchase 100 or so Skyranger 35s from Rheinmetall. Those initial orders would be produced in Germany, ensuring Canada can quickly acquire the critical SHORAD capability to ensure the protection of our currently deployed troops.
But that would just be the first step.
As we get our initial Skyranger 35s in place, we must start producing them here at home.
Canada already has a decent start in this regard, given the fact that Rheinmetall Canada is already working on ultra-short range air defence systems and the provision of enhanced recovery capability, meaning there is a pre-existing relationship between Canada and the large German defence firm, as you can see below:
What it would take to produce Skyranger 35s in Canada
So, let’s take a look at how we could expand Rheinmetall Canada’s operations in a two-year timeframe to ensure that Canada produces Skyranger 35’s starting in 2027.
First, the government should declare the construction of SHORAD platforms to be a strategic defence priority, and invoke the Defence Production Act (discussed in a previous article). This would enable the government to bypass Canada’s sclerotic procurement process and rapidly direct public funds towards facility construction, the purchase/sharing of intellectual property, and incentives to ensure Rheinmetall provides the necessary technology and training staff for Canada to jumpstart production.
Canada would need to either repurpose an existing facility (perhaps an auto plant if our auto industry gets weakened by US tariffs) or build a new facility to construct both new Leopard-style hulls & repair/repurpose current hulls. And that’s not all.
We would also need a facility to produce the 35mm ammunition used by the Skyranger 35.
Here’s an estimated timetable:
Negotiation & contract signing with Rheinmetall: 3-4 months
Production facility construction and installation of manufacturing equipment: 9-12 months
Workforce training & initial production ramp-up: 6-9 months
Product testing: Parallel with production
Estimated cost
Now, let’s look at the estimated costs:
Factory construction & logistics infrastructure: $400-$600 million
Technology transfer/licenses: $200-$300 million
Equipment & machinery: $300-500 million
Workforce training & worker recruitment: $100-150 million
Initial production of 50 Skyranger 35’s: $1.0-$1.5 billion
Purchase of 100 Skyranger 35’s built in Germany: $2.0-$3.0 billion (based on doubling homegrown production estimate, but likely cost would be lower as German production would initially be more efficient due to pre-existing production experience)
Purchase of 50 Skyranger 35’s for Ukraine: $1.0-1.5 billion (Given that Ukraine’s survival is both a moral imperative for Canada and a strategic imperative since it reduces the risk of a further conflict in Europe that could draw Canada in, purchasing Skyrangers for Ukraine – essentially paying for Germany to produce more – would be a wise move for Canada)
Product testing: $50-$100 million
Contingency fund: $200-$300 million
Total cost estimate: $4.5-$6.5 billion
These are estimates based on real-world figures. For example, in 2019, the Canadian government gave General Dynamics Land Systems a $2 billion contract for 360 Light Armoured Vehicles (LAVs), so it’s realistic to think the construction of 50 Skyranger 35s would be around $1.0-$1.5, given that it’s a new system.
In terms of factory costs, Rheinmetall recently invested $300 million Euros ($469 million CAD) in a new ammunition plant, so a $400-$600 million estimate for the factory seems realistic.
Thus, we can be confident that our overall cost estimate is within a realistic range. Further, Europe is desperate to build up its defence sector, so investment from Canada and the opportunity to expand production capacity would likely be quite welcome.
And as for the affordability of this overall investment, consider that our overall defence budget (which is far below what it should be) is about $41 billion, meaning the investment in producing Skyrangers in Canada would be a relatively small portion of the massive rearmament this country needs.
We also have to look at why this investment is so important. As noted at the outset, our country could be facing conflict in the North and/or Europe. Those conflicts will require powerful SHORAD capability to ensure Canadian troops are protected from the devastating impact of drones. We must do everything we can to protect those who serve our nation, and with that in mind, I would argue that we can’t afford not to invest in building Skyrangers domestically.
The end goal after two years should be for Canada to have produced 50 Skyranger 35s domestically, along with having stockpiled 100 German-built Skyranger 35s, and helped fund 50 Skyranger 35s for Ukraine.
This would set us up with well-developed domestic expertise and production experience that can enable a more rapid scaling up of additional SHORAD production capacity and ensure Canadian soldiers – and allies deployed alongside our soldiers – are the most well-protected in the world, all at a relatively affordable cost.
In the next post, we’ll look at a weapon system Canada should purchase from South Korea.
Spencer Fernando
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