Federal government inks deal to buy fleet of F-35 fighter jets

Canada has signed off on the final contract to buy F-35 jet fighters to replace the air force's aging CF-18s, Defence Minister Anita Anand said Monday.

The final agreementfor 88 warplanes involvingthe Canadian and U.S. governments and the jet's manufacturer won't see itsfirst delivery until 2026 and the first F-35 squadrons will not be operational until 2029, senior defence officials said during a technical briefing before the minister's announcement.

The project's budget of $19 billion remains the same as originally forecast by the Liberal government when it signalled the purchase last year. Anand and other governmentofficials are sticking to that projection despite the likely effect of inflation which has caused budgets for other major programs to risedramatically.

"The F-35 is a modern, reliable and agile fighter aircraft used by our closest allies in missions across the globe," Anand said in a virtual news conference.

"It is the most advanced fighter on the market and it is the right aircraft for our country."

A senior defence official, speaking on background, said the F-35 will be purchased in phases and that the first tranche of four aircraft will cost$85 million US per plane.

The deal represents a dramatic turnaround for the Liberal government, which promised not to buy the F-35 and to instead purchase a cheaper jet fighter and use the savings to bolster the navy.

The Conservative government under Prime Minister Stephen Harper first announced plans to go with the Lockheed-Martin-built jet in the summer of 2010.

The plan was shelved in the face ofcriticism from both the parliamentary budget officer and the auditor general, who questioned the cost and whether defence officials had done enough homework on other aircraft that might meet the air force's needs.

WATCH | Anand announces $19B deal for F-35s:

Minister announces $19 billion investment in new fighter jets

2 years ago

Duration 2:11

Defence Minister Anita Anand says the new fleet will include 88 new F35 fighter jets, with the first four aircraft expected in 2026.

The F-35 has experienced some high-profile glitches and mechanical problems over the years.

A second senior defence official, also speaking on background Monday, said that Canada will get the latest version of the F-35 Lot 18, Block 4 which has the most advanced technology.

Anand said Monday that, because the government waitedto purchase until now, Canada will be buying a proven aircraft that other allies are using now. She saidthe stealth fighter's technologyhas evolved to the point where itno longer has issues, and Canadians can be confident the government did its due diligence.

"It was a fair and open and competitive process run out of [Public Services and Procurement Canada]," Anand said.

"The aircraft has also evolved and matured.Eight countries have declared an initial operational capability. And I want to reiterate that, in addition to ensuring that our country will be protected and our obligations to NORAD and NATO will be maintained, we are also ensuring that economic benefits from this procurement will flow to the Canadian economy."

Conservative defence critic James Bezan was scathing in his response to the announcement. He saidit took the Liberals far too long to come to the conclusion that the F-35 is the appropriate aircraft and accused the government of engaging in"political games" to avoid embarrassing Prime Minister Justin Trudeau.

'Trudeau has to eat crow'

"This is a situation where he originally said he would never buy the F-35 and did everything in his power to stop it from actually happening, but at the end of the day, this is the only modern fighter jet that can deliver the capabilities Canada so desperately needs," Bezan said.

"And so here we are today, where Justin Trudeau has to eat crow and do what's right for Canada, do what's right for the Royal Canadian Air Force, anddo what's rightfor our NORAD and NATO allies."

The federal government insisted Monday that the deal will add as much as $425 million annually to Canada's gross domestic product.

In a traditional purchase of military hardware, the federal government insists on a dollar-for-dollar reinvestment. In other words, if the value of the contract is $19 billion, the expectation is that the contractor will return that sum to Canada by buying goods and services here.

But the F-35 programis different from other major defence contracts. Canada opted to join the U.S.-led F-35 development program in 1997 and has contributed tens of millions of dollars toward its research and development costs. In return, Canadian aerospace companies have been allowed to bid on F-35 contracts.

A senior federal government official speaking on background at that technical briefing said that Lockheed Martin has agreed to make targeted investments in Canada as part of the deal. The official did not elaborate on what that means.

Alan Williams, a former senior defence official who was among the fiercest critics of the Conservative plan, said he is now satisfied that the government met the duediligence teston thepurchase.

He said that what worries him now is the consequenceof makingthe Department of National Defence absorb the cost ofthe fighter jets and the navy'snew frigatesat roughly the same time. He said he fearsthose two procurement deals will eat up a lot of the department's capital budget in the coming years, leaving little room to acquire other necessary capabilities.

"I haven't seen any sort of costing laid out where the government sort of says, 'OK, for the next 30 yearsthis is the amount of money in your budget as anticipated to buy, maintain and operate your capital needs," Williams said.

It's the government's responsibilityhe said, to demonstrate it has "provided all the money necessary to support not just these two programs, but all the other programs that are currently operational and are coming up.

"I have not seen that and I'm dubious that that's doable."