Canada said to plan jet announcement as Boeing loses sale

[OTTAWA] The Canadian government is set to announce a stopgap measure to replace its aging fleet of fighter jets after abandoning plans to buy planes from Boeing Co because of a trade dispute.

Four of Prime Minister Justin Trudeau's Cabinet ministers are due to appear at a press conference in Ottawa later Tuesday, along with Canada's top soldier. The government didn't specify the reason, but two government officials, speaking on condition they not be identified, said it was related to the fighter jet replacement program, which is Canada's most pressing military procurement file. Canada is working to buy interim fighters as it prepares to launch a full bidding process for a replacement fleet.

The prime minister ruled out buying F-18 Super Hornets from Boeing in September due to the US company's trade challenge against Bombardier Inc over commercial aircraft, and began talks with Australia on buying used F/A-18s. Canada had earlier planned to buy 18 new Super Hornets as a stopgap, at an estimated cost of US$5.23 billion.

Boeing said in a statement Friday it respects the Canadian government's decision, and didn't give any indication it would drop its challenge of Bombardier, even if it means losing the Super Hornet sale. "We will continue to support all efforts to build an environment of free and fair competition marked by compliance with agreed upon rules," the company said.

Mr Trudeau's procurement minister, Carla Qualtrough, said in a television interview last month the government was considering the used Australian jets as a stopgap measure and expected to launch its competition for a full fleet replacement in early 2019. That competition may include Lockheed Martin Corp's F-35, she said, though Mr Trudeau campaigned in 2015 on not buying that jet.

"That's still the target and we're on line, we're definitely on track to do that," Ms Qualtrough told CTV in November, adding Canada is still looking for an interim way to "replenish our fleet until the full fleet replacement is in place." Defence Minister Harjit Sajjan said in February he "will not be buying used aircraft for our air force," a pledge that would be jettisoned by an acquisition of Australian planes.

Mr Trudeau's political opposition has criticized the purchase of used jets, with Conservative lawmaker Tony Clement urging against the "ill-advised purchase of a bucket of bolts."

BLOOMBERG