March 25, 2018

Canada dumps Boeing fighter jet deal over trade dispute with US

07 December 2017, 02:42 | Melvin Schneider

Canada to buy surplus Australian F-18s, says report

Report: Canada canceling purchase of new Boeing fighter jets

The Canadian government has canceled a planned fighter-jet purchase from Seattle-based Boeing, apparently in retaliation for a trade dispute with the Trump administration, the Reuters news service reported Tuesday.

The Canadian government is due to cancel a $5.23-billion purchase of eighteen F-18 Super Hornet fighter aircraft, in apparent retaliation for Boeing Co.'s trade-violation complaint that led the U.S. Commerce Department to investigate sales of Bombardier C-Series passenger jets to Delta Air Lines. The new F/A-18 fighter jets would have been a temporary measure for Canada, to allow the country to meet its commitments to the North Atlantic Treaty Organization (NATO) and the North American Aerospace Defense Command (NORAD).

But - in what the sources said was a worst-case scenario - a government angry at Boeing and unconvinced by other US options may end up facing off against a Canadian air force that dislikes the idea of a European jet.

Defence Minister Harjit Sajjan has said Canada can not meet all of its obligations to the North American Aerospace Defence Command (NORAD) and the North Atlantic Treaty Organization (NATO) with its current fleet of CF-18s, arguing new fighter jets are needed before the entire fleet is replaced in the next decade.

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The move to try to acquire fighter jets from Australia coincides with the US government's decision, based on a Boeing complaint, to hit Bombardier with nearly 300 per cent duties on its CSeries civilian passenger jet. Prime Minister Justin Trudeau said at the time the country would not engage in business with Boeing till such time its dispute with Bombardier continued, a sentiment he repeated to President Donald Trump in October.

The Australian jets are being considered as interim fighters. That could explain why 28-30 of the older planes would be bought instead of 18 new ones. "It would be a deeply unfortunate outcome", he said.

That move by Boeing, however, scuttled the Super Hornet deal and prompted Canada to look elsewhere for jets. "It's not just the company but countries" that they're targeting, Bombardier chief executive officer Alain Bellemare said at an investors conference in Boston last month.

Shares of Boeing fell 0.86 percent during Tuesday trade on the New York Stock Exchange.

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