Liberals fork over another $30M to keep Canada at F-35 table
Lee Berthiaume, The Canadian Press
Published Thursday, May 25, 2017 1:02PM EDT
Last Updated Thursday, May 25, 2017 4:49PM
EDT
OTTAWA -- Canada has quietly paid another $30
million toward development of the F-35 -- money that could become insurance in
the trade dispute between U.S. aerospace firm Boeing and Canadian rival
Bombardier.
The annual payment was made to the U.S.
military at the end of April, the Department of National Defence says, and will
keep Canada at the table as one of nine partners in the fighter jet project for
the next year.
Canada has paid US$373 million into the
program since 1997, National Defence spokeswoman Jessica Lamirande said in an
email.
Staying in the program has advantages, as
partners can compete for billions of dollars worth of contracts associated with
the building and maintaining F-35. They also get a discount when purchasing the
plane.
That latter point wasn't considered much of a
benefit when Canada paid its annual installment last year, as the Liberals had
promised during the 2015 election not to buy the stealth fighter.
The government instead went out of its way
last July to highlight the potential benefits to Canada's aerospace industry
when explaining why it had decided to stick with the program.
Those industrial benefits continue to accrue,
Lamirande said, with Canadian companies having secured US$926 million in
F-35-related contracts over the last 20 years -- including US$114 million in
the last year alone.
But the trade dispute between Boeing, which
builds Super Hornet fighter jets, the F-35's main competitor, and
Montreal-based Bombardier casts the decision to stick with the stealth-fighter
program in a new light.
Citing an urgent need for more fighter jets,
the Liberal government announced last November plans to buy 18
"interim" Super Hornets until a competition could be held to replace
Canada's entire CF-18 fleet.
But then last week, the government threatened
to scrap the Super Hornet purchase after Boeing persuaded the U.S. Department
of Commerce to launch an investigation against Bombardier.
Boeing alleges Bombardier sold its CSeries
jets in the U.S. at an unfair discount thanks to subsidies from the Canadian
government, while Bombardier says its planes never competed with Boeing.
Many defence analysts and former air force
officers have questioned whether "interim" fighter jets are needed
and instead want an immediate competition to replace all of the CF-18s.
But if more jets are truly needed on a
short-term basis, the decision to stay at the F-35 table could be used to get a
better deal on interim stealth fighters -- or even as a bargaining chip against
Boeing.
"If the government is in fact serious
about re-evaluating its dealings with Boeing, then this could be part of
showing that," said defence analyst David Perry of the Canadian Global
Affairs Institute.
"Because the F-35, at least in my mind,
would be a possible alternative if the government remains committed to buying
separate interim aircraft."
Three other alternatives exist -- the Saab
Gripen, Eurofighter Typhoon and Dassault Rafale -- but all are made by European
companies and the government has emphasized the need for a U.S. design.
Lockheed Martin, the company behind the F-35,
has remained relatively quiet about the government's plan to buy interim Super
Hornets, but is now chomping at the bit for a chance to fill any potential gap.
The U.S. company "would openly welcome
discussions about interim fighter solutions," spokeswoman Cindy Tessier
said, adding that Lockheed has partnered with Bombardier on another military
project.
The government is providing little
information as to what next steps it might take as the dispute between Boeing
and Bombardier continues to play out.
Boeing, for its part, has emphasized its
longstanding relationship with Canada, even as representatives from its defence
division have scrambled to meet and smooth the edges with Canadian officials.
The U.S. International Trade Commission,
which heard arguments from both aerospace companies in a hearing last week,
isn't expected to issue a ruling until June 12.
The U.S. Department of Commerce would then
decide whether to penalize Bombardier.
Original post: ctvnews.ca
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