Federal negotiations for F-35 jets heat up

Canada’s decade-long search for a new fighter jet to replace its aging CF-18s came full circle on Mar. 28 as the Liberal government announced negotiations with U.S. defence giant Lockheed Martin to purchase the F-35.

Yet even as the end to that circuitous search appeared to finally be in sight, many unanswered questions remained: how much the aircraft will cost? When they will start to arrive in Canada? And were the past 12 years of debate and delays worth it?

Procurement Minister Filomena Tassi and Defence Minister Anita Anand confirmed during a news conference that Lockheed Martin’s stealth fighter beat out Sweden’s Saab Gripen in a competition many had long considered the F-35’s to lose.

The government will now launch formal negotiations with the company this week for the purchase of 88 F-35s to replace Canada’s CF-18s, with officials anticipating the talks will take about seven months and result in a final contract by the end of the year.

Tassi and Anand emphasized the negotiations do not mean a deal for the F-35 is done, and that the government retains the option to talk with Saab about its Gripen fighter should discussions with Lockheed Martin stall.

Despite what Anand described as a “rigorous” competition designed to ensure Canada gets the best fighter jet at the lowest cost with the most economic benefits, a senior procurement official indicated the scope of the negotiations will be broad.

“We need to discuss capability requirements, we need to discuss costs, we need to discuss timelines, when are we going to get these aircraft,” said Public Service and Procurement Canada assistant deputy minister Simon Page.

“So there are still quite a few parameters and variables to bring home with the company.”

As for the anticipated $19-billion cost, Anand said that will be “further refined.”

Officials did express optimism that a deal will be finalized in the next seven months, and that the first F-35 will arrive by 2025 and the last around 2032.

Lockheed Martin Canada chief executive Lorraine Ben in a statement welcomed the launched of negotiations, while Saab Canada spokeswoman Sierra Fullerton said the firm respected the government’s decision while leaving the door open to future talks.

The move into final negotiations for the F-35 has also prompted questions about whether Ottawa should have pressed ahead with its original deal more than a decade ago.

In the meantime, the government has been forced to invest hundreds of millions of additional dollars into the CF-18 fleet to keep it flying until a replacement can be delivered. By 2032, the CF-18s will have been around for 50 years.

Canada has contributed US$613 million into the F-35’s development since 1997, with another multimillion-dollar payment due in the coming weeks, but the stealth fighter is being used by the U.S. and a growing number of allies.

Many observers had seen the Boeing Super Hornet and F-35 as the only real competition because of Canada’s close relationship with the United States, which includes using fighter jets together to defend North American airspace on a daily basis.

Those perceptions were only amplified after two other European companies dropped out of the competition before it even started, complaining the government’s requirements had stacked the deck in favour of their U.S. rivals.

In particular, both Airbus and Dassault had complained about what they saw as onerous requirements associated with adapting their aircraft — the Eurofighter and Rafale respectively — to meet Canada’s intelligence-sharing requirements.