ibusinesslines.com
ibusinesslines.com June 23, 2018


Canada cancels fighter-jet purchase from Boeing over trade dispute with US

07 December 2017, 06:36 | Kelvin Horton

Canada cancels fighter-jet purchase from Boeing over trade dispute with US

Boeing F-18's in formation over northern Iraq

The federal government will officially punish Boeing Co. for its trade dispute against Canada's Bombardier Inc., replacing the planned order of 18 new Boeing jets with the purchase of up to 30 second-hand fighters from the Australian military, sources said.

Canada was expected to buy 18 new Super Hornets from Boeing, but sources told Reuters Tuesday that Ottawa will announce plans to buy used Australian F/A-18s next week instead, as the older planes are the same model that Canada now has in its fleet.

The move underlines Ottawa's anger at a decision by Boeing to launch a trade challenge against Canadian planemaker Bombardier Inc (BBDb.TO), which the US giant accuses of dumping airliners on the American market.

Featured image courtesy of Wikipedia.

Some are also wondering whether the Liberals, who promised to launch a formal fighter-jet competition to replace the CF-18s before the 2019 election, now plan to hold off until after Canadians go to the polls.

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.

"We have tremendous losses with Mexico and losses with Canada, and covered by NAFTA".


The U.S. Department of Defence said in September that the contract for the Super Hornets could be worth up to $6.4-billion.

The Australian planes come with another built-in advantage, said defence analyst David Perry of the Canadian Global Affairs Institute: Canada has long since learned how to keep them in service. It would be a deeply unfortunate outcome.

In response, the Commerce Department in September imposed a almost 220-percent preliminary tariff on the C-series, but a final decision is not until 2018.

In buying older Australian Super Hornets, Canada would be buying a cheaper aircraft, not need to retrain its pilots, nor spend money on a new supply chain, one source said.

The final ruling in the case is expected next year, but the relationship between Boeing and Canada has nosedived since.

At a conference in Boston in November, Bombardier CEO Alain Bellemare said: "Boeing is underestimating what they are tackling".

As relations between the two sides deteriorated, Ottawa slammed Boeing for not acting as a trusted partner and began looking at the Australian jets.



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