Industry Minister Mélanie Joly set up a competition between two major defense companies on Tuesday regarding Canada’s fighter fleet. She expressed concerns that the $27-billion deal to purchase 88 F-35 jets from the U.S. does not offer adequate job opportunities for Canadian workers and does not meet public expectations. Joly revealed that discussions were ongoing with Swedish defense contractor Saab, which has pledged to generate thousands of aerospace manufacturing jobs in Canada through the assembly of its Gripen E fighter jet.
“We believe that military procurement can yield more benefits,” Joly stated to reporters. “That is why we are exploring the Gripen option.” She disclosed that Saab is proposing to create 10,000 jobs and emphasized the need to evaluate the tangible outcomes of this proposal while also considering what Lockheed Martin can offer.
These developments unfolded as Sweden made a strong push in Ottawa this week, with visits from the country’s royal family, business leaders, and senior political figures, including the defense minister. In 2023, Canada finalized a deal with Lockheed Martin, the world’s largest defense contractor, to procure F-35 stealth fighters as replacements for the aging CF-18 jets. This agreement followed an open competition where Saab’s Gripen E finished as the runner-up.
Last winter, amid trade tensions under the Trump administration, Prime Minister Mark Carney initiated a review of the F-35 purchase, which is still ongoing despite initial promises to complete it by September. Traditional defense procurement contracts typically require the winning bidder to invest in the Canadian economy through subcontracts, manufacturing, or other investments. However, the arrangement with Lockheed Martin differs as Canada has paid to be part of a consortium eligible to bid on F-35 work worldwide.
Opposition Conservatives, who have favored the F-35, criticized the government for risking existing Canadian contracts and jobs by conducting the review. They highlighted the extensive job opportunities tied to the F-35 program across the country and raised concerns about potential job losses if Canada shifts its approach.
While Saab’s proposal to manufacture Gripens domestically is appealing, some experts suggest that diversifying the fleet could offer cost-saving advantages. Lt.-Gen. Jamie Speiser-Blanchet, the new head of the RCAF, and other defense officials emphasized the necessity of acquiring a fifth-generation fighter like the F-35 to counter emerging threats from major global powers such as China and Russia.