Canada has ditched a plan to buy 18 Super Hornet jet fighters from U.S.-based Boeing and will instead buy 18 used F-18 fighters from Australia.
Prime Minister Justin Trudeau had previously warned that Canada would stop doing business with Boeing if it doesn't drop a trade complaint against Canadian plane maker Bombardier, and the government warned again on Tuesday that the company will have little chance of winning a new contract for 88 additional fighter jets under the status quo.
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Trudeau's government also said Tuesday it will assess companies' overall impact on Canada's economy before buying the 88 additional fighter jets to replace its aging F-18s.
"Bidders responsible for harming Canada's economic interest will be at a distinct disadvantage compared to bidders who aren't engaged in detrimental behavior," Procurement Minister Carla Qualtrough said.
Boeing spokesman Scott Day acknowledged that the statement was directed toward the company and said that Boeing respects the Canadian government's decision to buy the Australian planes. Day also said they will review the requirements for the new fleet and emphasized what he said was Boeing's long-term presence in Canada.
"I think you have to let our record speak for itself," Day said in an email.
Boeing claims Bombardier's new C Series passenger aircraft receives subsidies that give it an advantage internationally.
Canada had been in talks to purchase the 18 Super Hornet fighter jets from Boeing, rather than the used aircraft from Australia, in an effort to bridge the gap between its aging F-18s and the new fighter fleet that it plans to purchase.
But officials said the Australian jets will cost significantly less than Super Hornets and can be put into action two years earlier. "We have received an offer for sale of F-18 aircraft from the government of Australia, which we intend to pursue, and we have received an offer of Super Hornets from the U.S. government, which we intend to let expire," Qualtrough said.
Jonathan Vance, chief of the defense staff of the Canadian Armed Forces, said the Australian jets will work fine and that Canada can't meet its domestic and international obligations without some form of supplemental capability until the future fighter fleet is in place.
Canada will begin receiving deliveries of the used Australian jets next year. The value of the deal is about $388 million.
Vance expects the fleet of 88 next generation fighters to arrive in 2025, and the government said the competition would be open to all companies as bidding gets underway.
Analysts see Boeing rival Lockheed Martin's F- 35 as a likely contender in that procurement process, despite an earlier vow from Trudeau not to buy it on the grounds that it was too expensive. Trudeau has since softened that stance.
Defense Minister Harjit Sajjan said the new fleet of planes is required to meet Canada commitments to NATO and The North American Aerospace Defense Command.