Canada is reviewing its multibillion-dollar agreement with Lockheed Martin to purchase F-35 fighter jets. On Monday, Prime Minister Mark Carney announced the reassessment of the C$19-billion ($13.29 billion) contract, raising concerns over Canada’s reliance on the United States for defense.
The decision comes as Canada faces mounting trade tensions with the U.S. Former U.S. President Donald Trump had previously imposed tariffs on Canadian imports and even suggested making Canada the 51st U.S. state. This growing strain, coupled with Washington’s recent temporary suspension of intelligence sharing and weapons shipments to Ukraine, has prompted Canada to reconsider its dependence on American defense systems.
“There are a lot of people rethinking right now, ‘How reliable is access to American military technology going to be?'” said David Perry, president of the Canadian Global Affairs Institute.
In a report from Reuters, Carney emphasized the need for diversification, stating, “It is clear that our security relationship … is too focused on the United States. We must diversify.” He pointed out that around 80% of Canada’s defense budget is allocated to American-made weapons, which he believes limits the country’s security independence.
Potential Alternatives and Domestic Impacts
Although Carney did not mention specific firms, Sweden’s Saab, which had previously lost the fighter jet contract to Lockheed Martin, had proposed assembling its aircraft in Canada. This option could bring production jobs to the country and reduce foreign dependency.
Carney also highlighted the economic advantages of exploring new suppliers. “Given the need for value for money, given the possibility of having substantial production of alternative aircraft in Canada … it’s prudent and in the interest of Canada to review those options,” he said.
However, stepping away from the Lockheed Martin deal carries potential trade risks. Bombardier CEO Eric Martel warned that Washington could retaliate by targeting the company’s U.S. contracts if the agreement is canceled.
Ongoing Military Commitments
Despite the review, Canada’s defense ministry confirmed that the existing contract with Lockheed Martin remains active. Ottawa has already made a legal commitment of funds for the first 16 F-35 jets, with the initial delivery expected in 2026.
Canada’s aging fleet of Boeing CF-18 fighters will remain in service until 2032, by which time all 88 F-35 jets are expected to be fully operational. Some of these CF-18s have been flying for over 40 years, making the transition to a new fleet a priority.
Carney’s review also aligns with Canada’s broader plans to strengthen its military capabilities. Pressured by successive U.S. administrations to boost defense spending, Canada pledged billions of dollars last year to bring its military budget closer to the NATO target by 2030.
The prime minister noted that rising defense investments by European nations could open new business opportunities for Canadian firms. Moves by European countries to expand their military capabilities might create avenues for Canadian companies to increase their defense-related exports.
