Published: Thu, December 07, 2017
Finance | By Loren Pratt

Canada cancels Boeing fighter jet order amid trade spat

Canada cancels Boeing fighter jet order amid trade spat

Ottawa was planning to buy 18 F/A-18 Super Hornet fighter jets but has elected instead to buy used F-18s from the Australian government, some of which will be cannibalized for spare parts for the Canadian military's existing stock, Reuters said.

In addition, industry sources said it remains an open question whether Ottawa will be saving money by buying second-hand Australian jets that are almost as old as Canada's CF-18s.

Canada was in the midst of negotiations to buy the Boeing-made F/A-18s for an estimated $5.15 billion, but the country put talks on hold after the defense contractor in April filed a complaint with the U.S. Commerce Department against Canadian company Bombardier.

However, talks with Boeing over the planned acquisition were suspended by Canada after Boeing launched a trade challenge against Canadian plane-maker Bombardier in April, accusing the company of dumping its jet into the USA market and claiming the company received unfair subsidies from the Canadian government.

The move to try to acquire fighter jets from Australia coincides with the USA government's decision, based on a Boeing complaint, to hit Bombardier with nearly 300 per cent duties on its CSeries civilian passenger jet.

Canadian and United Kingdom officials, in turn, warned Boeing it could lose defense contracts in the countries over the complaint. 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.

Boeing declined to comment to Reuters. RCAF now operates an ageing fleet of CF-18 fighters, which is due for replacement sometime in the next decade. 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 global rules. That legal process continues with final rulings expected by the U.S. International Trade Commission early next year.

At a conference in Boston in November, Bombardier CEO Alain Bellemare said: "Boeing is underestimating what they are tackling". "Unfortunately, I think they're taking advantage of a [political] context that's favourable to them".

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