Liberals launch negotiations to buy F-35 fighter jets

The Canadian government has chosen the F-35 as its preferred replacement for the air force's four-decade-old CF-18 fighters and will open negotiations with the stealth jet's manufacturer, Lockheed Martin.

Public Services and Procurement Minister Filomena Tassiand Defence Minister Anita Anand made the announcement Monday.

The decision to open negotiations is the latest step in a process that has been underway for more than a dozen years. It also represents a major reversal for the Liberal government which pledged in 2015 to never buy the F-35.

"It is the most significant investment in the RCAF in more than 30 years," Tassi said.

"Our government promised Canadians a competitive procurement process to ensure we are getting the right aircraft at the right price while maximizing economic benefits to Canadians.We committed to running an open, fair and competitive process and we are delivering on that promise."

Tassi listed the steps the government took such ashiring an independent fairness monitor and insisted that politics played no role in the decision. The minister said that sheand Anand were not informed who the winning bidder was until just before the announcement.

That didn't stopthe Opposition Conservatives from wondering aloud whether entering contract negotiations is another way for the governmentto delay making a final decision.

"After losing so many years for purely political reasons, we want to have a real response," said Conservative MP Pierre Paul-Hus in question period. "Will the F-35 be Canada's final choice or is this yet another time-stretching announcement?"

A lock for Lockheed-Martin?

The decision Monday all but guarantees Lockheed Martin the $19 billion contract for 88 of the ultra-modern fighters.

Under the federal government's procurementsystem, Ottawa chooses an aircraft and then tries to negotiate a contract with the manufacturer. If that negotiation fails, the government turnsto the second-place bidder in this case the Swedish aircraft-maker Saab, which offered the latest version of its Gripen fighter jet to the competition.

The project to replace Canada'sfighter jet fleet has been a political football for more than a decade.

The government of former prime minister Stephen Harper signalled its intention to sole-source a contractto buy 65 F-35s in the summer of 2010. The bidcollapsed following criticism from both the auditor general and the parliamentary budget officer both of whom questionedthe cost and whether the Conservative government had done enough homework to ensure that the stealth fighter was indeed the right choice.

The Liberals' reversal on the F-35

As a result of that criticism, the Liberals vowed in 2015 to never buy the F-35. Prime Minister Justin Trudeau went even further;shortly after being elected, hequestionedwhether the stealth fighter which has had a number of development glitches actually worked.

Tassi tried to square that earlier opposition by arguing the Liberal government did its homework and held an open competition to the benefit of all involved, including the defence industry.

WATCH: Procurement minister discusses fighter jet purchase on CBC's Power & Politics

Minister defends 'rigorous process' that brought government back to F-35s

2 years ago

Duration 8:26

Procurement Minister Filomena Tassi discusses her government's decisions to purchase F-35 fighter jets.

"There is a difference from speculating and saying in a sole-source contract, 'We think this bidder is going to give us the best deal we can possibly get,' and actually going through the process," she said.

"I think the competition will absolutely drive the bidders to come forward with a better position. That's what this process was meant to do. I think it's one thing to say at the end of the day you end up with the same plane but really when you look at it, we are basing this decision on fact and on evidence, based on all the evaluations that have been done."

Government had details on aircraft options in 2015

But the government had access to a trove of dataabout the warplane replacement project datacompiled by theConservative governmentbefore it was defeated in 2015.

A detailed, independent evaluation of the warplanes on the market was compiled by a panel of respected experts:Keith Coulter, a former fighter pilot and senior government official; Philippe LaGass of the University of Ottawa;public policy expert James Mitchell; and Rod Monette, a former comptroller general of Canada.

Ordered in late 2012, the analysis looked at the Lockheed Martin F-35, Boeing's SuperHornet, the EADS Eurofighter, also known as the Typhoon, Dassault's French-built Rafale; and the Saab-manufactured Gripen from Sweden. The analysis was largely discarded by the Liberal government when it came to power in 2015.

A few years later, in what looked like a political move to avoid buying the F-35, the Liberal government planned to buy a handful of Super Hornets as an "interim" measure until it could run a full competitionfor a permanent replacement. The deal fell apart after Boeing's commercial aircraft division launched a trade complaint against Canadian aircraft-maker Bombardier.

It's not clear how much of a political price the Liberals will pay for the reversal especially given the urgentnature of the war in Ukraineand the possibility of a confrontation with Russia.

"There's so much water under so many bridges on this file that it's I think, it's tough to situate exactly who will pay what price," said Dave Perry, president of the Canadian Global Affairs Institute, an independent foreign policy and defence think-tank that has received event sponsorship from defence contractors on occasion.

"I think really, honestly, there's all kinds of people that have had a hand in it taking over a decade and the most recent iteration of finally getting [to the] a point of buying an airplane. I think ...the Trudeau government did itself absolutely no favours at several points along the road."

The government should negotiate several aspects of the purchase withLockheed Martin,Perry said especially theprice, since the bids were submitted before inflationskyrocketed.

When asked Monday whether the $19 billion price tag is still good, Anand said it was in the process of being "further refined."

There is also the issue of maintenance for the F-35, which must return to the U.S. manufacturer for major overhauls. Negotiating some kind of sustainment facility in Canada should be a priority, Perry said.

Also, given the potential for open conflict between NATO and Russia over Ukraine, Perry said it would be prudent for the federal government to negotiate some kind of earlydelivery of a handful of jets.

"Their current fleet of fighter aircraft that Canada operates now is unacceptably old and unacceptably outdated and acquiring a truly modern aircraft is imperative," he said."So we need to get our hands on this aircraft asabsolutely quickly as we can."

In Washington on Monday, the U.S. Air Force unveiled its 2023 budget and announced it was buying 15 fewer F-35s than originally planned something that could open the door to a swifter Canadian purchase.