Canadian Manufacturing

Canada invests another US$70M in F-35 development despite no commitment to buy

Staying in the program has advantages, as partners get a discount when purchasing the jets

May 6, 2020  The Canadian Press

OTTAWA — The federal government has made another multimillion-dollar investment into the development of the F-35 stealth fighter jet, even as it weighs a new extension to the $19-billion competition to replace Canada’s aging CF-18s.

Canada made the annual F-35 payment to the U.S. military last week, spending US$70.1 million to remain one of nine partner countries in the fighter-jet project. Each partner is required to cover a portion of the plane’s multibillion-dollar development costs to stay at the table.

Staying in the program has advantages, as partners get a discount when purchasing the jets and compete for billions of dollars in contracts associated with building and maintaining them. The F-35 is being built by U.S. defence giant Lockheed Martin.

While the new payment brings Canada’s total investment in the F-35 to US$541.3 million since 1997, the government says Canadian companies have also secured US$1.8 billion in work related to the stealth fighter.

“This participation provides Canadian industry with contract opportunities that are only available to program participants,” Defence Department spokesman Daniel Le Bouthillier said in an email.

“Our membership will also allow us preferential pricing and sequencing in the build schedule should the F-35 aircraft be successful in the current future fighter capability program.”

Canada actually started to shoulder more of the development costs last year. That is because the Liberal government increased the number of new fighter jets that Canada plans to buy to 88 from 65, even though it has not committed to buying the F-35.

News of the payment comes as the federal procurement department confirmed it was considering another extension to the $19-billion competition to replace Canada’s CF-18s. The F-35 is one of three planes in running along with Boeing’s Super Hornet and the Saab Gripen.

The extension was recently requested by one of the three fighter-jet makers. Public Services and Procurement Canada did not confirm which company asked for the extension, but Boeing had previously left the door open to a request because of the COVID-19 pandemic.

“We can confirm that we are currently evaluating a request from industry to extend the deadline for preliminary proposals,” Public Services and Procurement Canada spokeswoman Michele LaRose said in an emailed statement.

“We remain committed to providing members of the Royal Canadian Air Force with the fighter aircraft they need to do their jobs, and ensuring the best possible value for Canadians.”

The three companies were originally supposed to submit their bids at the end of March, but that was pushed back to June 30 following a request by Saab. Despite the pandemic, the federal procurement department insisted last month that it still expected companies to meet that deadline.

— By Lee Berthiaume


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