Introduction
Canada is on the verge of one of its largest military procurements in history: a plan to replace its aging fleet of CF-18 Hornets with 88 state-of-the-art F-35A Lightning II fighter jets. The deal, with a total program cost of up to CAD $27.7 billion over the aircraft's lifetime, represents a monumental investment in next-generation air power.
However, despite selecting the F-35 in January 2023, the Canadian government is now conducting a comprehensive review, signaling the decision is far from final.
This reassessment is more than a negotiation over price; it represents a potential paradigm shift in Western military procurement, forcing a difficult balance between alliance interoperability and the pressing realities of industrial sovereignty.
The reasons for this pivot are more complex and strategically significant than they first appear.
It’s More About Economics Than Firepower
A primary driver for the review is Canada's firm demand for stronger domestic economic benefits, framing the purchase not just as a military acquisition but as a cornerstone of national industrial strategy. Ottawa is using its massive purchasing power as leverage, insisting any deal must deliver significant, long-term value through local jobs, crucial technology transfer, and guaranteed industrial participation for Canadian aerospace firms.
However, this calculation is complicated by the fact that Canadian companies already participate in the F-35’s global supply chain, meaning a shift could disrupt existing manufacturing and maintenance contracts.
This review, however, is not driven by economic concerns alone. It is also fueled by documented operational readiness and infrastructure challenges. Reports from Canada's Auditor General have highlighted potential delays in constructing specialized hangars and implementing the advanced training systems required for the F-35.
Furthermore, the review reflects a broader strategic interest in diversifying defense suppliers to avoid overreliance on a single nation. It was in this context that Industry Minister Mélanie Joly publicly noted that the fleet could be reduced or supplemented, signaling that Ottawa is prepared to alter the deal if its terms are not met.
Sweden’s Fighter Jet Perfect for Canada’s North
As Ottawa re-evaluates its options, Sweden's Saab Gripen E has emerged as the leading alternative. Saab’s previous offer directly addresses Canada’s economic and industrial demands with a comprehensive package that includes 88 aircraft, the establishment of local assembly lines, significant technology transfer, and the creation of an in-country maintenance and upgrade center, potentially located in Montreal.
Beyond the industrial benefits, the Gripen presents key operational advantages tailored to Canada’s unique geography. It is specifically designed for operations from shorter and more austere Arctic runways—a critical capability for defending Canada’s vast northern territories.
The Swedish jet also offers lower operating costs and easier maintenance and sustainment compared to the F-35. Adopting the Gripen would also provide Canada with greater control over its own software and upgrades, a factor many analysts believe would significantly increase the country's strategic and industrial independence.
The Unexpected Solution: A "High-Low" Fighter Fleet
Perhaps the most surprising option on the table is a "mixed fleet" strategy. This approach would involve Canada procuring a smaller number of the high-end, costly F-35s while also purchasing a larger fleet of Gripen E jets. Under this model, the two aircraft would serve distinct roles.
The F-35s would be reserved for demanding international missions requiring deep integration with allies within NATO and NORAD. The more economical Gripen E fleet would be tasked with domestic roles, such as patrol and regional defense.
This "high-low" mix is a compelling option because it addresses the core trade-offs at play. Supporters of the F-35 correctly note that it provides a level of interoperability, advanced sensors, and fifth-generation stealth and networking capabilities unavailable in any other aircraft, making it essential for seamless operations with key allies.
A mixed fleet retains this high-end capability where it is most needed. At the same time, it balances this against the Gripen's lower costs and the strategic autonomy gained by diversifying the supply chain, avoiding overreliance on a single, complex platform for the nation's entire fighter capability.
A Balancing Act for the Future
Canada's reassessment of the F-35 deal is a complex balancing act. The final decision is no longer a simple choice of aircraft but a strategic calculation weighing the F-35's unmatched interoperability with allies against the Gripen's compelling offer of lower long-term sustainment costs and substantial domestic industrial benefits.
The outcome now hinges on whether negotiations with Lockheed Martin can produce improved terms that satisfy Canada's economic and strategic objectives.
As allied nations confront the immense lifetime costs and supply chain dependencies of 5th-generation fighters, will Canada's blended approach of prioritizing industrial sovereignty alongside high-end capability become the new blueprint for middle-power air forces?
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