On March 28, Canadian Procurement Minister Filomena Tassi and Defense Minister Anita Anand rendered a long overdue decision about the fighter jet finally succeeding Canada’s fleet of CF-18 Hornets.
Seven years after the election of Justin Trudeau as Prime Minister in 2015, who explicitly pledged to never buy F-35s, Canada will ultimately start negotiating with Lockheed Martin for the procurement of 88 units of, which could reportedly cost up to $15.1bn (CAN$19bn), with deliveries taking place between 2025 and 2032.
While being now presented as “essential [to protect] the safety and security of Canadians”, and well fitted to “Canada’s unique northern geography”, plans to purchase F-35 fighters were harshly judged back then, when Trudeau was stating that Stephen Harper’s government “never actually justified or explained why they felt Canada needed a fifth-generation fighter.”
This recent decision is likely to be the last chapter of a long and deplorable saga, stretching way back to 1997, when Jean Chrétien’s liberal government first signed onto the nascent Joint Strike Fighter (JSF) program, before committing to a $160mn investment in 2002, making Canada a Tier-3 partner in the program.
The story of Canada’s new fighter jet procurement process, marked by repeated political interferences, is full of lessons and is worth looking back on its (mis)steps chronologically.
Initial contacts and early opposition (2006-2010).
At the time of Stephen Harper’s election in February 2006, media reports indicated that Canadian authorities were in talks with Lockheed Martin and the United States to spend around $10bn in the JSF program. This amount would make it Canada’s main defense transaction in decades.
In December, a Memorandum of Understanding was signed, covering Canada’s industrial participation in the program for the next 40 years. Two years later, government officials indicated their intent to purchase 65 jets (with first deliveries then expected for 2017), down from the 168 CF-18s procured between 1982 and 1988, from which only 80 were operational at that point.
While expensive, such a deal would have been line with Canadian firms’ involvement in the JSF: 50 to 75 aerospace companies had already been awarded contracts, worth approximately $250mn overall, and a total of $9bn in contracts were expected by 2035.
Stephen Harper decided to choose the F-35 in 2010 without any competition, but the context of financial crisis and budgetary austerity made it difficult for him to formalize one of the biggest weapons purchase in the country’s history. At this point, the F-35 was experiencing delays and its unitary cost turns out to be higher than expected; the decision faces vocal political opposition, and even led to a no-confidence vote against Stephen Harper, who had come short of communicating the financial details of the potential deal to the Parliament.
Turning away from Lockheed Martin, but quarrelling with Boeing (2011-2017).
While the subsequent 2011 Federal election gave Harper an absolute majority for the first time, the deal was yet to be signed. Damning reports from Canada’s Auditor General and the Parliamentary Budget Officer questioned the honesty of the selection process, as well as huge uncertainties over the cost of the project, which was put on hold as a result.
Campaigning for the Liberals in the 2015 federal election, Justin Trudeau promised to deliberately ignore the F-35 and to organize of a “transparent and open competition”. But once in office, he faced a legal obstacle: Canadian law forbids from barring a competitor from such public tenders. With an ageing fleet of only 77 CF-18 Hornets in 2016, plans to buy 18 Super Hornets from Boeing to bridge a “capability gap” were announced.
Even more importantly, building a fleet of Super Hornets on top of this would have been the most politically acceptable way to bypass a competition in which Lockheed Martin would unavoidably take part. That was however without reckoning with Boeing’s dumping against Bombardier in mid-2017, perceived as an outrage by the Canadian government. The Super Hornet procurement plans were abandoned in retaliation, resulting in the purchase of 18 second-hand 30 years old Hornet jets from Australia. This affront also prompts the government to ultimately launch a competition in late December 2017… with offers from both the brazen Boeing and the unwelcome Lockheed Martin.
Life and death of a crumbling competition (2018-2021).
In addition to the F-35 and the F-18, the competing fighters included Dassault’s Rafale, Saab’s Gripen, and the Eurofighter. In January 2018, Canada outlined some key requirements, among which “5 eyes,” NATO and NORAD interoperability standards. NORAD, or the North American Defense Command, is a binational command providing integrated airspace early warning and protection for Canada and the US. But the political and technical constraints brought by this intelligence-sharing network make it very unlikely for a European offer to win the competition. In November 2018, Dassault Aviation was the first one to pull out, considering the integration of such equipment into its aircraft too costly, and possibly denied by US authorities. In July 2019, three NORAD requirements were outlined by the government: the ability to interconnect with other weapons and reconnaissance platforms; the ability to operate as a command platform; and a high rate of survivability.
For basically the same reasons as Dassault, Airbus decided to withdraw its Eurofighter in September 2019. While Saab maintained its offer, the ultimate nail in this living-dead competition came in December 2021, when the Canadian government ruled Boeing’s offer “not compliant”, without any further justification. At this point, the F-35 was therefore left with the Gripen as sole competitor. Not exactly the best bargaining power position any national procurement authority can dream of… And Canada announced on March 28 to enter a 7-month-long finalization phase of the procurement process with the “top-ranked bidder”, Lockheed Martin. Good luck with the final price negotiations, Justin!
Outcome and lessons.
Even though this decision was probably taken two years ago, Russia’s reckless invasion of Ukraine was a good opportunity to make this complete about-face decision public, pleading that Canada could not reasonably wait anymore to provide its Air Force with the means to protect the country’s sovereignty in the Artic against Putin.
Yet, these many years of wandering and hesitation from Ottawa were catastrophic for the country, with hundreds of millions of dollars invested in an old fleet of CF-18s to keep the RCAF afloat, and quite likely, dozens of missed opportunities for Canadian companies to integrate the F-35 supply-chain. While some firms were able to catch the train in the 2000s (as of January 2020, Canadian companies had received $980mn in F-35 work over 12 years),
Lockheed is now promising $16.9bn to Canadian companies until 2058 —a figure that no one should take at face value, but which gives a sense of the time and money lost in this protracted procurement.
At every step of the process - regardless of the company, the product, the candidate, the party and the circumstances - Canadian authorities have shot themselves in the foot, so as to paint themselves into a corner where no advantageous decision could be taken.
Such a mess is even more appalling after a long series of similar Canadian military procurement failures, such as the notorious Sea King helicopter replacement, the doomed Upholder/Victoria-class submarines purchase, or the protracted Canadian Surface Combatant bid.
But after 7-years, the itching goes on. In fact– military procurement wise - Public Services and Procurement Canada seems to be run by Itchy and Scratchy!