Canada scraps buying 18 Boeing fighter jets amid trade dispute

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The federal government will officially punish Boeing Co. for its trade dispute against Canada's Bombardier Inc., replacing the planned order of 18 new Boeing jets with the purchase of up to 30 second-hand fighters from the Australian military, sources said.

Defence Minister Harjit Sajjan would not comment Wednesday on when the competition would be launched, saying only that it would be announced "at the appropriate time".

Instead, the Liberal government will announce next week it intends to acquire a used fleet of older Australia F-18 jets, the same kind of plane Canada now operates, said the sources, who asked not to be identified because of the sensitivity of the situation. 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 worldwide rules.

The Australian planes come with another built-in advantage, said defence analyst David Perry of the Canadian Global Affairs Institute: Canada has long since learned how to keep them in service.

In September, Boeing International president Marc Allen, talking to the Globe and Mail, invoked Boeing's $4 billion worth of annual business and 17,000 jobs in Canada, and said: "If Canada kicks Boeing out, I think that will be deeply unfortunate for us both. It would be a deeply unfortunate outcome", he said.

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Australian military officials had been in the Canadian capitol of Ottawa in late November for talks, two of the sources said.

A formation of U.S. Navy F-18E Super Hornets flies over northern Iraq, Sept. 23, 2014.

Canada had decided it needed Boeing's new Super Hornets to refresh its aging CF-18 Hornet fleet, but may have had a change of heart after the American manufacturer accused Canadian plane maker Bombardier of dumping in the commercial plane market.

The final ruling in the case is expected next year, but the relationship between Boeing and Canada has nosedived since.

However, Boeing Defense President and CEO Leanne Caret's reaction might offer observers a hint. It has been the standard line in Ottawa for months that Boeing, having failed to act as a trusted or valued partner, has effectively been shut out of any new federal contracts.

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