Industry Minister Mélanie Joly set up a competition between two major defense companies on Tuesday regarding Canada’s fighter fleet future. She stated that the $27 billion deal to purchase 88 U.S.-made F-35 jets does not offer sufficient job opportunities for Canadian workers and that a better agreement is expected by the public. Joly publicly disclosed that discussions were ongoing with Swedish defense contractor Saab, which has pledged to generate thousands of aerospace manufacturing jobs in Canada through its Gripen E fighter jet assembly.
“We believe military procurement can yield more benefits,” Joly informed reporters. “This is why we are exploring the Gripen option.” She mentioned that Saab has proposed creating 10,000 jobs. “We will evaluate the feasibility of this proposal, while also considering Lockheed Martin’s capabilities,” Joly added.
Sweden made a strong push this week in Ottawa with a high-level delegation, including the royal family, business leaders, and senior officials, emphasizing Saab’s proposal for Canadian job creation. In 2023, Canada signed a contract with Lockheed Martin, the world’s largest defense contractor, for F-35 stealth fighters to replace the aging CF-18 jets. The initial delivery of 16 fighters is scheduled between 2026 and 2030, following an open competition where Saab’s Gripen E secured the second position.
After the onset of a trade dispute by the U.S. under President Donald Trump, Prime Minister Mark Carney initiated a review of the F-35 purchase last winter. The ongoing analysis was initially supposed to conclude in September but has yet to be finalized.
The conventional defense procurement model involves the winning bidder investing in the Canadian economy, either directly in the fighter program or through other investments. However, the Lockheed Martin deal differs, as Canada has been contributing to a pool of countries eligible to bid on F-35 work. Lockheed Martin estimates that the F-35 program could bring over $15.5 billion in industrial benefits to Canada from 2007 to 2058.
Opposition Conservatives, supporters of the F-35, criticized the government for jeopardizing existing Canadian contracts and jobs by initiating the review process. The debate also considers the option of a mixed fleet due to potential cost savings, as well as the need for a fifth-generation fighter like the F-35 to counter global threats from countries such as China and Russia.