The Second World War gave us delusions of grandeur. There would someday be a reckoning. Part of it would come when our military-industrial complex’s war-bred fantasies about all-Canadian armaments were shot down by a prairie populist. John Diefenbaker was right to kill the Avro Arrow because Canada could not afford its out-of- control costs. But then the myth-makers got to work and convinced our politicians never to dare tamper with another sterling Canadian megaproject. Hence the CANDU reactor; hence the Canadair Challenger; hence Hibernia - even as we systematically starved our military.1

Conclusion.

In his lecture The Battle For History. Re-Fighting World War Two, the eminent British military historian John Keegan remarked:

The history of the Second World War has not yet been written. Perhaps in the next century it will. Today, though fifty years have elapsed since it ended, the wounds it inflicted still cut too deep, and the unresolved problems it left still bulk too large for any one historian to strike an objective balance.”2

Perhaps the same could be said about the “dogfight” (to use an aviation term) surrounding the history of the Arrow programme. “No incident in the history of Canadian foreign relations,” opined Donald Story, “has produced such vitriol, heated emotion, prejudice, and unforgiving blame than the Arrow affair.”3 In the popular literature surrounding the Arrow programme, responsibility for the Arrow’s cancellation is invariably ascribed to the Conservative government and, more often than not, John George Diefenbaker himself is held personally responsible: “He was condemned as if he had left all Canadians naked before armed aggressors."4 Even James Floyd, Vice-President of Engineering at Avro, recognized this imbalance in this literary genre: “Blame for the cancellation of the Arrow has, almost without exception, been laid squarely on Diefenbaker, but he was in some ways only the Pontius Pilate in the crucifixion of both the Arrow and the company.5 Defeat in the election of 1957 evidently saved the Liberals from having to accept any responsibility for the Arrow programme, and thus the role of the government of Louis St. Laurent in this weapons acquisition process is under-emphasized or ignored altogether. As Michael Bliss wrote:

If C.D Howe had had to scrap the Arrow, his reputation as a dynamic builder might have been permanently tarnished. Since it was Diefenbaker, the bumbling Prairie lawyer, who had done the deed, Howe’s role in the Arrow débâcle - it developed almost directly from his over-rating of his own, the government’s, and the nation’s accomplishments during the war - could be largely forgotten. The fact that it was a wasteful sacrifice of Canadian taxpayers’ money on suspect altars of economic nationalism and high technology could be forgotten. Then a whole new Arrow mythology could develop: the world’s greatest fighter plane cruelly and mistakenly brought down by Canadian’s lack of enterprise and vision. If Dief had only had the faith to stand by Crawford Gordon and the Avro team...just a few more million....

The Arrow myth, like the Howe legends, flourished in the 1960s and afterwards because Canadians became so confident of their country’s wonderful wealth and boundless future that they had trouble understanding that there were limits to the capacity of the northern economy. All those resources, all that growth, surely meant that government was doing something right. It must have succeeded. Canada was a land of big developments, big accomplishments. Unless they were frustrated by little men, disbelievers.6

Though Diefenbaker, as Prime Minister, is ultimately responsible for the decision to cancel the Arrow programme, this thesis has shown that the widely held conventional wisdom about the project is neither a fair nor objective assessment of the historical record. The decisions which led inevitably to the cancellation of the project were made during the Liberals' tenure in office. “If the Liberal administration had been obliged to face up to an additional $800 million to complete the project,” General Charles Foulkes, the Chairman of the CSC, later recalled, “the chances of the survival of the programme [would] have been very slender.”7 John Holmes came to a similar conclusion:

When the Conservative party came to power in 1957 they proceeded without question to the culmination of a continental defence association by hastily approving NORAD, and when they had buried the great nationalist Liberal adventure in aircraft building, the Arrow, they promptly sought in Washington a new agreement of defence production sharing....A Liberal government would almost certainly have done all the same things.8

But even Diefenbaker appeared to have understood that he alone would bear the judgement of history when he was asked about the Arrow programme in later years:

The responsibility finally rests with the Prime Minister. No one else. He takes the best advice he can get. But decision on all vital matters must finally receive his approval. The Cabinet Minister who heads the portfolio directly concerned with the decision made by the Cabinet often speaks about what he has done with a tone of subdued personal adulation. But when things turn out badly “the old man,” they said, “was always responsible.”

To use the words of Harry Truman, over each Prime Minister’s desk there is an imaginary plaque. It carries the message, “The buck stops here.” Take for example the Avro Arrow decision....The Cabinet took the decision on ending production of the Avro Arrow. That decision should have been taken before the Liberals left office. Indeed, St. Laurent and Howe decided they would close it out...but decided not do so before an election. That was a very hard decision to make for my colleagues and me. The responsibility for the decision finally rested on the Prime Minister. No one else....That decision had to be made even though I realized that there would be the strongest opposition. When hard decisions conscientiously arrived at have to be made, leaders must make them.9

Undeniably, the Arrow programme will be forever linked in the public’s mind with an administration that has itself been judged harshly by many political scientists and historians. As Richard Gwyn quipped, “in almost everything Diefenbaker did, farce was inseparable from tragedy.”10

This case study has shown that the decisive factor leading to the cancellation of the Arrow programme was the escalating overall cost of the project, largely attributable to the acceleration and expansion of the project from one to four systems - the Arrow airframe, the Iroquois engine, the Sparrow II missile, and the Astra electronics system. These costs were only vaguely calculated during the initial phase of the project, but concern over the costs increasingly became an obsession of the civil and military decision-makers as the project unfolded and as defence budgets shrank. What was certainly feasible in the budgetary
environment of 1952-53 was proven uneconomic in the fiscal climate of 1958-1959. Given the financial implications of the project, J.L. Granatstein concluded that the decision to cancel the project was the correct one and “the only one possible in the circumstances. Despite arguments then and later about the CF-105's technological sophistication, Canada could simply not afford to pay the costs involved in creating a modern weapons system....The only error in the government’s decision was that it had not been made earlier.”12 Desmond Morton concurred, writing that the cancellation was “the right choice made the wrong way”13 and further noting that it is “easy to blame politicians for the confusion of the Diefenbaker government but when ministers look bad, departments share the responsibility.”14

According to John Porter “the Arrow signified a coming of age of the Canadian aircraft industry. It proved to be an extraordinarily costly symbol.”15 Unlike the US, where until the end of the Cold War security considerations and procurement decisions were almost always driven by strategic factors, in Canada procurement decisions have invariably been driven by economic factors.16 With the cancellation of the Arrow programme, Canada began to experience “structural disarmament,” a phrase coined by Thomas Callaghan, Jr.:

Structural disarmament occurs when the market represented by a nation’s defence budget plus exports (the “structure”) is too small to bring armament development and production costs down “to a level either politically acceptable for governments or, equally, affordable to industry.”

The most celebrated explication of this trend comes from Norman R. Augustine, chairman and chief executive officer of Martin Marietta Corporation in the United States, who observed in 1980 that the unit cost of high-technology equipment seemed to be increasing by a factor of four every decade (by a factor of two in the case of ships and tanks)....The problem, as Augustine pointed out, was that “other relevant parameters, e.g. the defence budget” either did not grow at an equal rate or have actually declined.17

According to Alistair Edgar and David Haglund, Canada became “the first of the larger defence industrial countries of the postwar era to succumb to Augustine’s Law, effectively abandoning domestic development of all major weapons systems or platforms.”18 From the late 1950s onward, the proportion of the federal budgets devoted to defence would decline sharply in relation to the burgeoning expenditures on health and welfare programmes; “the welfare state,” Reg Whitaker and Gary Marcuse concluded, “decisively won out over the warfare state.”19

The harsh financial reality of “structural disarmament” due to the skyrocketing costs of developing modern weapons systems had the most detrimental effect on the Arrow programme. But another factor which made the project unviable was the “creative destruction” it suffered due to dramatic strategic shifts driven by the rapid pace of development of other kinds of modern weapons. As has been shown, by the late 1950s a market had been created for a new technology - the guided missile - which partially destroyed the market for an old technology - the manned interceptor. The steady growth in the strategic and tactical significance of the missile, both as a threat in the form of the ICBM supplanting bombers and as a means of defence in the form of the BOMARC replacing interceptors, concomitantly had a negative impact on the Arrow programme. The inclusion of ICBMs in the Soviet arsenal and BOMARCs in the RCAF’s arsenal came at the expense of the Arrow programme as both deployments led inexorably to a RCAF operational requirement for interceptors in 1959 one-tenth of what had been anticipated in 1952. As Jon McLin noted, the “story of the gradual expansion of this program is a classic case of the difficulties which all but the greatest Powers have in the missile age of keeping up with armaments technology.”20

This thesis has also revealed that the key to understanding why the Arrow programme unfolded as it did is an appreciation of the weapons acquisition process itself. Though the project was allowed to accelerate and expand beyond salvage while the Liberal government was in power, it did so not at the direction of those at the “top” of the decision-making process - the MND, the CDC, and the Cabinet - but rather at the direction of those at the “ bottom” - the RCAF acting through the CSC. However, though the RCAF was good at advancing its organizational interests, the RCAF’s best laid air defence plans came to nought in the end:

The RCAF proved to be far better at the political gamesmanship involved in weapons acquisition than either of the other services...Ironically, however the RCAF’s insistence of a defence system embodying both the BOMARC and the CF-105 Arrow without an appreciation of the government’s ability to financially support both programs ultimately undermined that service’s plans....this was remarkably shortsighted of the RCAF; indeed [it was] self-destructive to its top priority - a new manned interceptor.21

Thus, until the demise of the Arrow programme, the defence decision-making structure functioned in such a manner that defence procurement largely determined defence policy, rather than vice-versa. Dan Middlemiss confirms the existence of this feature of the defence decision-making process:

Over time...each service developed a professional ethos tightly wedded to the continued acquisition of major weapons systems suited to largely alliance- driven doctrinal norms and roles. So long as the main organizational pillars of Canadian defence policy remained unchanged, each service continued to advocate procurement of those systems which protected and advanced its own conception of it organizational essence.

Thus defence procurement became infused with an equipment replacement syndrome, whereby major weapons were replaced with improved versions of essentially the same weapons on roughly a one-for-one basis. Accordingly, Canadian defence policy became largely a matter of defence procurement, with existing equipment generally determining the numbers and type of weapons to be procured. This closed loop of defence procurement made it very difficult for politicians, had they been disposed, to propose significant changes in Canadian defence policy.22

“Generals, it is often said,” wrote R.J. Sutherland, “prepare for the last war rather than the next.”23 It was this kind of tactical and strategic logic which led to the Arrow programme. To use another aviation term, the RCAF and the CSC were “flying blind” when they initiated the project. The emerging threat posed by Soviet bombers and ICBMs was far from clear when the RCAF set the performance and operational requirements for an interceptor designed solely to meet massed bomber attacks of the kind familiar to those officers who had served during World War Two. The romance of a single pilot in his Spitfire flying sortie after sortie against the Luftwaffe during the Battle of Britain remained a powerful institutional memory for the RCAF, but the reality of aerial warfare in the atomic age was that there would likely be no protracted warfare and an interceptor would likely be used only once. The real value of modern weapons systems like the Canuck, the Arrow, the BOMARC et al, was in deterrence, not in defence - i.e., protecting the retaliatory capability of SAC. As James Eayrs rightly surmised, “a battle over North America could under no imaginable circumstances promote the national interest of either country of the continent. The role of fighter interception in the 1960s will be to help insure that such a battle is never fought, not to take part in it.”24 Other than for identification purposes of unidentified and unresponsive aircraft, in the atomic world the utility of an advanced interceptor such as the Arrow over a less advanced interceptor or a cheap and efficient missile was certainly debatable. But the RCAF, “ devoted to their aeroplanes like cavalry to its horses,”25 chose to fiercely support the procurement of both missiles and the world’s finest interceptor, inopportunely at a time of financial, political, and strategic uncertainty. The RCAF’s dual procurement goals, wrote David Cox, reflected the fact that air defence questions in the 1950s were contentious and paradoxical: “Prudence and tradition required an air defence capability, but strategic doctrine suggested there was little point to extensive anti-bomber defences.”26

In addition to tactical and strategic concerns, the technological possibilities for weapons system development were rarely well understood by those involved in the Arrow programme because the RCAF decision-makers generally failed to make a thorough assessment of the technological horizon before they launched their new venture. The RCAF routinely compounded the unknowns the project faced by setting performance requirements far beyond the state of the art. The RCAF was also “flying blind” when it imposed concurrency on a project that was intended to make a great leap forward technologically. In the final analysis, the RCAF rushed headlong into a project that needed to proceed in a more orderly and thoughtful manner. If the RCAF and the CSC were “flying blind,” so to were the MND, CDC, and Cabinet in that they were overly reliant on the flow of information and advice on a body which had made neither rational strategic nor manageable fiscal plans. As a result, the Arrow programme was “a weapons acquisition accident waiting to happen.”27 The Arrow programme was, therefore, poorly served by the formal “Command Era” national security bureaucracy decision-making structure that existed in the post Second World War period: “misplaced priorities, missed opportunities, and an aversion to decision have been common characteristics of the history of Canadian aircraft acquisition.”28 This point of view is confirmed by Major-General D.G. Loomis:

the gap between military programming and budgeting left the Minister of National Defence and the Government with no alternative but to cut-back military programs each year in the course of the budget review. The choices and decisions in forces and major weapons systems acquisition often had to be made without adequate information as their future cost implications or their cost effectiveness relationships in terms of the missions they were designed to perform, and all within the few weeks allotted to the budget review process. Consequently, choices with important long range resource implications were often forced to decision prematurely or without adequate consideration of all the major alternatives, and the limited time for decision often led to over-commitment. Later these decisions frequently resulted in uneconomical program “stretch outs” or outright cancellation of projects on which large sums had already been invested....29

The Arrow programme, though the largest in sheer scale, was also not the last flawed weapons acquisition process that the CAF and the government would suffer.30 Dan Middlemiss wrote that all that followed - airforce, army, and navy - would have elements in common with the Arrow programme:

There are some common threads underlying these cases. First, a lack of realistic, full-scope, initial cost estimates did not allow for the design changes inevitable in risky military development projects. Second, and related to this, inadequate project management controls and reviews permitted development costs to balloon. Third, the export potential of projects was not explored fully and carefully at the outset. Fourth, and most important of all, costly (and sometimes fatal) delays often resulted from weak government support for pursuing projects vigorously and expeditiously to a successful conclusion.31

When it comes to buying military equipment, the Canadian Armed Forces have traditionally been perfectionists. “Nothing but the best” has been the guiding principle and this has certainly contributed to the high level of performance of our forces over the years. But more and more the propensity to have our equipment tailor-made to our own rigid requirements has cost us dearly. This “Canadianization” of large military systems, particularly aircraft, is becoming a luxury we can scarcely afford, because it tends to be very expensive nowadays. Thus, it is now an established principle that, in proposing equipment buys to Cabinet, DND will not ask for more than we really need in terms of numbers and performance. With this in mind, and in the knowledge that many of the fighter aircraft on the market today are truly multi-role, highly capable machines, DND has decided to accept what is available “off-the-shelf,” (i.e. a standard model off an existing production line), keeping changes to an absolute minimum. “Canadianization” will be allowed only where it can be clearly justified on a cost effectiveness basis.32

For a force for which the sky was the environment, rather than the limit, nothing seemed impossible....The cancellation of this project seven years later, after the aircraft had reached the prototype stage of development and more than a billion dollars [would have to be] spent on it, dealt to the prestige and morale of the Air Force a blow from which it never fully recovered. Pride led to hubris, hubris to the CF-105.33

© Copyright Russell Steven Paul Isinger, 1997. All rights reserved.

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