Canada gets second thoughts about F-35

Canada’s Justin Trudeau says he’ll cancel plans to buy the troubled F-35 Joint Strike Fighter.

Stephen Harper’s Conservative government may not be the only casualty in Monday’s electoral upset in Canada.

Justin Trudeau, the leader of Canada’s victorious Liberals and soon-to-be Prime Minister, has vowed to cancel the country’s purchase of 60 F-35 Joint Strike Fighter jets from Lockheed Martin  and instead focus on bolstering its Navy.Trudeau’s victory marks another setback—albeit a small one—for the military program as Lockheed Martin continues its efforts to drive down the per-aircraft price of the F-35 by boosting production rates. However, Lockheed’s loss will likely translate into someone else’s gain as Canada shops for a less expensive alternative to replace its aging CF-18s fighter jets.

Canada has been part of the F-35 program essentially from its origins in 2001, when Lockheed Martin beat out Boeing for the privilege of building a new fighter jet. Canada pledged $150 million to aid the aircraft’s development, alongside several foreign partners including Japan, Norway, Denmark, Australia, and the U.K. That initial investment bought Canada—and the Pentagon’s other foreign partners—the right to acquire F-35s later at a lower price.

Canada’s Conservative government had previously announced it would acquire at least 60 jets, likely purchasing between four and eight F-35s each year at $80 to $100 million per aircraft starting in 2017. Monday’s Liberal victory puts that order in serious doubt since Trudeau intends to scrap the Conservative’s F-35 buy.

If Trudeau follows through on the promise, Canada will lose the $150 million already invested in the F-35’s development, and Lockheed would lose what would have been billions of dollars in sales to the Royal Canadian Air Force (and likely millions more on follow-on contracts for ongoing maintenance).