Liberals Make U-Turn on F-35 Fighter Jet Purchase, Secure $19B Deal With Lockheed Martin

The Liberal government secured a $19 billion deal to replace Canada’s aging military aircraft and purchase a new fleet of F-35 fighter jets, despite earlier promises to not buy the aircraft and instead boost navy spending.

On Monday, Ottawa finalized an agreement to purchase 88 F-35 fighter jets from Lockheed Martin Corp (NYSE: LMT) for $19 billion, which will also cover the costs of setting up the infrastructure, as well as weapons and other added parts. Defence Minister Anita Anand stated that delivery of the F-35s will start in 2026 and the fleet will be fully operational sometime between 2032 and 2034. She also highlighted that the F-35 is the most advanced fighter currently on the market and is the best option for Canada when it comes to replacing its aging CF-18s.

The aircrafts’ lifespan is expected to last until 2070, but government officials are estimating their maintenance costs will average around $70 billion. According to Anand, the purchase and maintenance of these fighter jets will provide a $425 million boost to Canada’s economy each year, and create around 3,300 jobs annually. The move comes after a 2015 Liberal promise whereby Prime Minister Justin Trudeau vowed to not purchase F-35 fighter jets and buy cheaper aircraft instead, using the saved funds to boost navy spending.

At the time, Stephen Harper’s Conservative government had plans to purchase 65 F-35s for the RCAF at a price tag of $44 billion for the jets’ 40-year lifespan, but the procurement process was halted after the auditor general accused Ottawa of making misleading project costs and failing to conduct adequate research.

Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply