In a memorandum to the MND dated 14 September 1964, Air Chief Marshal Miller echoed the views of the RCAF by strongly recommending that DND select the McDonnell Douglas F4C
Phantom II aircraft from the list of tactical fighter aircraft under consideration.
15 Of interest, but perhaps not surprising, given Hellyer’s years as Associate Minister in DND during the late 1950s, Miller tried to persuade his boss, based upon
economic as opposed to
operational grounds. Quoting the views of the Minister of Defence Production, Bud Drury, Miller pointed out that selection of a fighter aircraft needed to maximize employment in the Canadian aircraft industry. He brazenly suggested that the government order 108
Phantom IIs, and added that costs could be mitigated by taking advantage of an offer by the British government for a joint British-Canadian program to build the F-4 under license in Canada with Rolls-Royce
Spey engines.
16 These aircraft, powered by the British engines, were highly sought after by the Royal Navy. Miller and the RCAF clearly favoured the F-4 as a replacement for the CF-104
Starfighter, and for the CF-101
Voodoo air defence interceptor, but the CDS knew he had to justify the choice based more upon national industrial benefits than upon operational needs. “Selection of a cheaper aircraft than the F-4 would ease our financial difficulties but would not seem to assist Mr Drury in solving his problem (that of maximizing national aircraft production and employment.)”
17
As is implied in his biography, Hellyer initially accepted Miller’s recommendation with respect to the F-4 because it was a suitable replacement for both the CF-104 and the CF-101 fleets, in addition to being suitable for a conventional attack role.
18 However, he later concluded that this aircraft was unacceptable for the same reason it had been earlier rejected in 1959 as a replacement fighter for the F-86
Sabres and CF-100
Canucks of the Air Division – namely its prohibitive cost.
19 Even pressure from senior members of Defence Production, who were as supportive of the joint Anglo-Canadian F-4 program as the CDS and the RCAF’s senior leadership, could not convince Hellyer to buy the
Phantom II. As will be explained later, the MND’s options were clearly somewhat limited, given the direction of the incumbent Finance Minister, Walter Gordon. But Hellyer’s own actions indicate that his rejection of the F-4 was based as much upon his views about the air power needs of the RCAF as they were upon financial grounds.
There were two issues in Miller’s memorandum that ran counter to Hellyer’s views on Canada’s air power needs. First, the CDS once again unequivocally endorsed the demands of his old service for an expensive, multi-role fighter aircraft, instead of a less sophisticated but less expensive option designed exclusively for the conventional ground attack role. Second, Miller’s recommendation of the F-4 was to come at the expense of purchasing the de Havilland
Caribou II medium transport aircraft. These aircraft were considered highly suitable for support of UN missions, a role that had been placed at the top of the Pearson government’s defence priorities. Equally important for Hellyer was that the
Caribou was built by a firm located near his political riding in Toronto. If Hellyer had any faith left in Miller’s competence and his ability to remain unbiased in his role as the senior uniformed member in an integrated armed forces following the C-119/C-130 incident earlier in the year, this remnant of trust ended with the Miller’s subsequent recommendation to buy a high-priced fighter at the expense of yet another transport aircraft.
Hellyer’s next challenge was to mitigate any political fallout generated from not endorsing the popular F-4
Phantom II. He told Cabinet that a better opportunity to purchase this fighter had been squandered by the previous Conservative Government in 1959, when they decided to buy the CF-104 as a replacement aircraft for the Air Division. A subsequent 10-year financial commitment to the
Starfighter left the Liberals no defence funds for the
Phantom. In addition to attributing the existing poor financial state of DND to the Conservative’s decision to buy the CF-104, the MND also had to overcome the aforementioned strong lobby by the RCAF and the aircraft industry, which he felt were one and the same, to acquire the
Phantom II. Hellyer would overcome these pressures, exerted by both the RCAF and from those within his own Party, by presenting the options before Cabinet in such a manner that he knew the outcome would go his way.
Hellyer offered Cabinet two options. They could either approve $215 million for the acquisition of six to eight squadrons of ground support aircraft, or they could approve an annual increase in the DND estimates of four per cent for the five-year period 1965 to 1970 if they insisted upon the acquisition of the F-4 RN (Royal Navy) for industrial reasons.
20 Hellyer knew perfectly well that the latter option was
not an option for a department that was already struggling to find funds to meet existing capital programs. He also knew that the senior officers representing the army and navy would not approve an expensive air force project that would have jeopardized their own acquisition priorities
