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Ottawa entering final talks to procure Lockheed Martin F-35 fighter jets: minister

Click to play video: 'Ottawa says final talks underway with Lockheed Martin to procure F-35 fighter jets' Ottawa says final talks underway with Lockheed Martin to procure F-35 fighter jets
WATCH: Ottawa says final talks underway with Lockheed Martin to procure F-35 fighter jets – Mar 28, 2022

The Canadian government is moving forward with finalization talks towards procuring Lockheed Martin F-35 fighter jets, according to Procurement Minister Filomena Tassi.

In a press conference Monday, Tassi said that officials from three departments unanimously recommended moving into final talks with the bidder that had the highest marks during the evaluation process, and she agreed.

“Neither myself nor my colleague was told which bidder was top-ranked,” Tassi said.

“I agreed with the recommendation. This morning, officials informed me that the top-ranked bidder is Lockheed Martin and officials will now enter into the finalization process.”

Read more: Boeing is out of the running to replace Canada’s fighter jet fleet

The announcement is not a formal contract award but moves the decade-long process of replacing the country’s ageing CF-18s into the finalization stage, where talks narrow to one preferred bidder.

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Officials noted several times during the press conference that the final talks are not a “guarantee” that Lockheed Martin will get the contract, which is expected to be signed later this year.

Initial deliveries of the jets are expected in 2025.

The competition narrowed to just two final candidates in December 2021 as Boeing exited the contest, leaving Lockheed Martin’s F-35 and Saab’s Gripen jet as the remaining bids.

The announcement comes amid questions about the demands placed on the Canadian Forces in the midst of Russia’s invasion of Ukraine.

That invasion, billed by Canadian and Western leaders as an existential threat, has renewed concerns about Russia’s intentions in a remilitarized Arctic and about Canada’s capacities to meet growing demands in both the NORAD and NATO military alliances.

Click to play video: 'Anand says fighter jet process weighed ‘important’ NATO role' Anand says fighter jet process weighed ‘important’ NATO role
Anand says fighter jet process weighed ‘important’ NATO role – Mar 28, 2022

Defence Minister Anita Anand said Monday that Canadians are now facing a “new reality” and that the Royal Canadian Air Force needs a jet that is “flexible” and “agile.”

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“The F-35 from Lockheed Martin, with the United States government, has emerged as the top bidder,” said Anand.

“It has proven to be a mature, capable and interoperable aircraft and that is why we are moving to the finalization stage of this procurement.”

Read more: Arctic at ‘inflection point’ as Russia’s Ukraine invasion raises questions: officials

Global News asked Anand whether the decision indicates a shift from Prime Minister Justin Trudeau’s view of defence and security back in 2015, when he said the purpose of Canadian fighter jets was primarily continental defence, and as a result, Canada did not need the capabilities offered by the F-35.

Anand said part of the process was looking at how future fighter jets can contribute to “multilateral” operations as well.

“The reality is that our obligations from a defence perspective rest with not only continental defence and NORAD but also with our NATO alliance,” she said.

“In fact, we are seeing our contributions to NATO as being important as we speak with regards to the war in Ukraine and the defence of NATO airspace that our RCAF are participating in.”

One Canadian defence official added that the evaluation of the bids looked at some of the typical mission profiles for both NORAD and NATO as part of the process.

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Click to play video: 'RCAF will buy ‘interim’ fleet of CF-18 fighter jets from Australia' RCAF will buy ‘interim’ fleet of CF-18 fighter jets from Australia
RCAF will buy ‘interim’ fleet of CF-18 fighter jets from Australia – Dec 12, 2017

Canada’s fleet of Boeing CF-18 fighter jets is ageing. When announcing the launch of a competition to replace them in 2017, the federal government also said it would buy 25 used jets of the same model from Australia as a bridge toward a longer-term fleet replacement.

But with increased demands on the Canadian military, pressure has continued to mount on the government to speed up procurement in the process that has been underway for more than 20 years.

While the government has been in talks about the F-35 since the late 1990s, the former Conservative government formally announced its intent to buy 65 of the stealth fighter jets in 2010.

Deliveries at the time were projected to begin in 2016.

Read more: Canada launches contest for 88 fighter jets, with clause taking aim at Boeing trade challenge

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High costs and concerns about inaccurate budgeting dominated headlines over the subsequent years though, with the auditor general in 2012 criticizing the handling of the sole-sourced deal.

By the time of the 2015 federal election, then-Liberal leader Trudeau vowed to abandon federal plans to buy the stealth fighter jet, saying the country needed a “more affordable aircraft.”

“A Liberal government will also do what the Harper Conservatives ought to have said years ago: we will not buy the F-35 fighter jet,” said Trudeau in September 2015 campaign speech.

“Instead, we will launch an open and transparent competition to replace the CF-18s, keeping in mind the primary mission of our fighter aircraft is the defence of North America.”

Despite that promise, the government did not exclude Lockheed Martin from entering the contest for a replacement fleet, even as it openly disadvantaged the bid by Boeing — the manufacturer of the CF-18.

The penalization of Boeing in the fighter jet competition came after the company launched a separate trade tribunal challenge against Bombardier for allegedly unfairly receiving subsidies from the Canadian government.

That decision to disadvantage Boeing, which effectively penalized the company’s fighter jet bid, came after the American firm launched a separate trade tribunal challenge against Bombardier over claims it was receiving subsidies from the Canadian government.

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Click to play video: 'Ottawa takes aim at Boeing with competitive warning' Ottawa takes aim at Boeing with competitive warning
Ottawa takes aim at Boeing with competitive warning – Dec 12, 2017

The penalization weighed heavily on the Boeing bid, with the firm notified late last year that it would not be moving forward in the process. That left just Lockheed Martin and Saab as contenders.

Lorraine Ben, chief executive of Lockheed Martin Canada, said in a statement on Monday the company is “honoured” with being selected for final talks.

“The F-35 will help strengthen defence of the Canadian arctic and North American security,” Ben said.

“The F-35 is the most advanced, most survivable, best value fighter to replace the Royal Canadian Air Force CF-18 fleet. As a cornerstone for interoperability with NORAD and NATO, the F-35 will strengthen Canada’s operational capability with our allies.”

She added: “The F-35 gives pilots the critical advantage against any adversary, enabling them to execute their mission and come home safe.”

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It’s not clear what the final costs of the process will be at this stage. The original fighter jet replacement project had been budgeted in 2017 at $19 billion to acquire 88 jets.

Half a decade later, there are few answers so far on whether that budget will hold.

The auditor general pegged the four-decade cost of the F-35 jets at $44 billion before the deal was scrapped over cost concerns, and that number was for 65 jets — 23 fewer than the current Liberal plan.

Anand said costing details still need to be “further refined,” while Tassi said those won’t be released publicly until contracts are signed — which is expected in about seven months.

“Until the contract is signed, we can’t share the details,” Tassi said.

Click to play video: 'Procurement minister says too early to share cost of fighter jet process' Procurement minister says too early to share cost of fighter jet process
Procurement minister says too early to share cost of fighter jet process – Mar 28, 2022

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