Canada canceling purchase of new Boeing fighter jets

Canada canceling purchase of new Boeing fighter jets

The Australian jets are being considered as interim fighters.

The move comes in response to a 220 percent tariff placed the USA on Canadian aircraft manufacturer Bombardier after Boeing accused the company of dumping airliners on the American market.

News of the expected delay comes as the government is moving ahead on the purchase of used fighter jets from Australia instead of brand-new Super Hornets from Boeing to temporarily bolster Canada's CF-18 fleet. RCAF now operates an ageing fleet of CF-18 fighters, which is due for replacement sometime in the next decade. The funding allowed Bombardier to significantly lower the cost per aircraft, Boeing argued. The Canadian company says Boeing, which did not offer any of its own aircraft to Delta, could not have been harmed by its actions, which it maintains were in line with worldwide rules.

Canadian defense sources say the air force - seeking to maintain close ties with its USA counterpart - has long preferred a US jet, which would narrow the race to the Super Hornet or Lockheed Martin Corp's (LMT) F-35 stealth fighter.

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

Canada began discussions in late August with the Australian government to assess the potential purchase of used F/A-18 fighter aircraft from that country. At the time, Prime Minister Justin Trudeau and his top ministers said Ottawa would not do business with Boeing as long as it was engaged in a dispute with Bombardier.

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Canada is due to officially announce the requirements for its new fighter fleet in early 2019.

The Liberals said last year that they planned to start receiving new fighters in about five years, or around 2021, at which point the 30-year-old CF-18s would start being phased out.

Australia's F-18s are nearly certain to be cheaper than Super Hornets, and easier to incorporate into the existing fleet, since they are nearly identical to Canada's own CF-18s. It would be a deeply unfortunate outcome.

"We have tremendous losses with Mexico and losses with Canada, and covered by NAFTA". It's not just the company but countries. "Unfortunately, I think they're taking advantage of a [political] context that's favourable to them".

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

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