Those moderately familiar with the seemingly endless saga of replacing our aging fleet of F-18 fighters cannot be faulted for thinking "just get on with the job!". It has been back and forth for what seems like decades. (It has been - the F-35 development program started in the 1990s and the debates over whether Canada should buy them have been raging since 2010 or so.
That was then, this is now. In 2010, the US was a reliable partner for trade and defence. Then January 2025 happened, and all that changed. The geopolitical context shifted as the US entered Trump's second term as president. Alliances that had been tried and true since WWII were called into question, the US started throwing up trade barriers everywhere, and so on.
Suddenly, Canada's earlier decision to replace the F-18s with F-35s fell into question, and in fact our whole approach to defence did. An ally we had long looked at as "a good neighbour" suddenly was making noises about annexing Canada.
The parameters of the decision around the F-35 changed enormously. Concerns about everything from parts supply and maintenance to rumours of Washington having a "kill switch" available that rightly spooked a lot of people. The newly elected government in Canada, led by Mark Carney committed to reviewing the F-35 decision.
In response, Sweden's Saab group sweetened its offer around the Gripen - promising partnership and helping Canada set up a military aviation manufacturing capacity, where the F-35 deal ultimately restricts Canada's ability to service its own aircraft, with regular servicing having to be done by Lockheed Martin, and there is no visibility for Canada into the software systems that manage the aircraft. Suddenly, even if the F-35 is the technologically superior aircraft, it is no longer clear that it would be suitable for Canada, especially if Canada finds itself in a standoff with its neighbour.
Amid the backdrop of negotiations with the US for a renewed CUSMA, ongoing threats from the Trump administration, and the Canadian government reaching out around the world to forge new trade agreements outside of the multilateral agreements like CUSMA, Canadians are getting increasingly concerned about decisions that would tie us more closely to the US.
Like the Auto Strategy that the government released a few weeks ago, the new Military Strategy released this week marks a sharp turn away from the existing structures that depend so much on the US. It's an ambitious plan, one that will shift Canada's economic and military posture significantly (and one that will no doubt make certain corners of the Trump Administration angry).
There are some very interesting objectives in the framework that warrant consideration, in light of Canada's recent deposit on a further 14 F-35s. Now, this deposit appears to be a "keep Canada's place in the production queue" move, but it certainly sparked concern among many who want to see Canada step away from the F-35. The Military Strategy lays out some goals that make that deposit seem questionable at first:
The long-awaited plan, which was developed more as a response to NATO’s call for industrial clarity among allies than to annexation threats by the Trump administration, sets a goal of awarding 70 per cent of federal defence contracts to Canadian firms within a decade.
It also proposes to raise the servicability rates of Canadian military equipment to 75 per cent of the navy’s ships, 80 per cent of the army’s vehicles and 85 per cent of the air force’s planes.
These numbers are interesting. First, they indicate a desire to ramp up Canada's military production and servicing capabilities significantly. Second they give an indication that the decision around the F-35s is shifting. Although fighter craft are only one part of the Canadian Air Force's fleet, that "85%" number indicates a significant proportion of Canada's air fleet has to be serviceable in Canada, and whatever fighter craft we do choose needs to be serviceable _HERE_ - and a fleet of F-35s at present would be a significant stumbling block to reaching that goal.
So, in the context of upcoming trade negotiations, what does this potentially mean? I see a couple of scenarios playing out here. I'll start with what I consider to be the least likely scenario and progress from there to the scenario I think is most probable.
Scenario 1 - It's A Bargaining Chip
In this case, we presume that the upcoming CUSMA negotiations will go forward and will be more of a negotiation than the US simply trying to dictate terms. Here, Canada comes to the table with the F-35 deal in hand and basically tells the US that Canada requires much more direct ability to service and supply these aircraft.
Ideally, the US acquiesces to this, recognizing that not only would this be net beneficial, but the sectors that depend on CUSMA the most (such as the auto sector) will benefit from the resulting stability.
As I said, in the current environment, this seems a relatively unlikely outcome. I don't think it necessarily fits with Carney's actions on other fronts, nor do I think that the Trump Administration is particularly interested in securing anything under a renewed CUSMA. Further, an arrangement that would create thousands of jobs in Canada isn't going to sell well to a Trump who believes that "a deal" is only good when "he is the winner" - creating jobs in Canada is not going to be something he sees as "a win".
Scenario 2 - Poison Pill
Similar to Scenario 1, here we assume that sliding this issue into the CUSMA negotiations is intended to blow the negotiations up. The expanded demands Canada would be making would be seen as so offensive to the Americans that they would pack up and leave the negotiating table.
This would be a tactic under which the Canadian government would be creating the justification to publicly sign a deal with Sweden for the Gripen. However, I don't think it's particularly likely because of the way that Carney has conducted himself on other fronts. He's very good at transactional deal making where there are trade-offs for both parties (see the Alberta "Pipeline MOU" for an example). Poison pills don't seem to be Carney's style.
Scenario 3 - Keeping The Americans Quiet
The deposit Canada placed on a second tranche of F-35s last week was a "keep our place in the production queue" move. If we hadn't made that payment, we would have fallen out of the queue entirely, and would have ended up "at the back of the line" if we decided to continue with purchasing the F-35s.
The payment sends a signal to the Americans that the F-35 is still on the table, and in theory takes the F-35 issue out of the CUSMA negotiations - making for a more stable start to the negotiations.
It doesn't mean that the Gripen is out of the running here, just that the Canadian government is focusing on keeping things (relatively) quiet while the CUSMA negotiations take place.
I think this is definitely a part of the discussion where the Canadian government is concerned. In particular, keeping the auto sector going is part of the story. The plan laid out in Carney's Auto Strategy does depend on keeping the current arrangements going while the alternative paths are implemented. So, I can see Canada taking an approach which decouples the F-35 purchase from CUSMA as much as possible (knowing full well that Trump is notorious for making random decisions that create issues).
This scenario presumes that the "re-evaluation" process continues and has not reached a conclusion yet.
Scenario 4 - Watchful Waiting
The scenario I consider most likely is this one. I'll explain why I think it is the most probable once I have sketched out the broad strokes of it.
First, I do not think the CUSMA negotiations will go very far - Trump has repeatedly talked about simply cancelling the agreement. While there is considerable pressure on the US side from the auto industry, Trump has been aggressive about insisting that they move their manufacturing "back home". The negotiations might start, but I expect they will stall quite quickly with a missive from Trump on social media declaring how 'nasty' the Canadians are being. On this front, Carney is playing both home politics and diplomacy. While expecting Trump to cancel negotiations at any point, his goal is twofold: At home, his game is to not give the opposition Conservatives reason to accuse him of deliberately sabotaging the CUSMA talks, while at the same time letting the world see what the US is doing openly.
Second, I suspect strongly that negotiations with Sweden and Saab have been going on in the background ever since Carney's first trip to the EU. There are multiple reasons for this. Not antagonizing the Americans unnecessarily is part of the story - the entirety of the EU and NATO is carefully decoupling themselves from the US. A premature announcement could easily result in Trump lashing out at both Canada and the EU.
However, once Trump does what he's been signalling for some time - namely cancel CUSMA, the gloves are off, and there is little or no reason for Canada to continue with purchasing F-35s. It's not like we aren't already in a trade war, but Trump will treat the demise of CUSMA as a weapon and slap tariffs on everything out of Canada anyhow (which he's been itching to do for some time).
Granted, this scenario assumes a level of deliberateness to Carney's actions that might be over-estimating him as a politician. However, at the same time, he's spent considerable political capital in the last 6 months travelling the world and making a wide range of agreements in various countries. One thing that has been clear is that he views the EU as an important trading partner, so my suspicion is that the Gripen project represents a significant part of his plans.
In large part this is because the Gripen project gives Canada a second chance to build up its military aviation capabilities which have languished ever since the cancellation of the Avro Arrow project. Politically, a project that potentially creates thousands of new jobs in Canada and bootstraps a new industry is a huge win for Carney in an environment where a rival power is doing everything that it can to tank Canada's economy.
Basically, this boils down to a waiting game: wait for Trump to lose his cool over something and cancel CUSMA negotiations, then as the fallout of that plays out, Canada simply pivots to another option for fighter jets: Saab.
Selling the Gripen At Home
Let's say that Canada pivots away from the F-35 as a result of whatever does happen. How does a government go about selling the change? After all, in tests, the F-35 has shown itself to be "the superior aircraft", right?
First, technical superiority doesn't count for a lot if some or all of the functionality of the aircraft can be limited or disabled from Washington. While the F-35 might actually be a "better" aircraft on paper, there is a lot to be said for the idea of a blended fleet model even if that does increase maintenance costs.
Second, when the Canadian Government committed to purchasing the F-35s, it did so before the US decided to start a trade war with Canada (and every other nation on the planet) - hence the reconsideration of the purchase in the first place. What had been primarily a technical decision has suddenly become one with significant economic and geopolitical implications. There is a significant argument that part of the equation is now "which proposal expands both Canada's economy and its industrial base?
Then there is the often-fractious nature of inter-provincial politics. With Bombardier Canada an apparent "natural leader" should Canada choose the Saab Gripen option, the first glance would be that it "primarily benefits Quebec" - except that's not entirely true either. While Bombardier is based in Quebec, it has significant operations outside of Quebec as well, and we shouldn't ignore that. Ontario has a sizeable aerospace industry which could benefit.
Ah - what about Alberta? The current problem child of Canadian inter-provincial politics? Well, it turns out that the reborn De Havilland company operates out of Alberta. It would not be difficult to send some contracts to them as well - giving the Alberta government a political win in the diversification portfolio - an area where they are pretty weak.
There are a lot of upsides to the Gripen project in Canada, even if the aircraft isn't as sophisticated as the F-35.
Countermeasures
To be clear, a pivot to the Saab Gripen solution isn't a given. The US has a number of possible options it could choose to leverage, and some of them are more drastic than others:
1) Attempt To Tank Canada's Economy
As Canada's largest trading partner, the US does have the capacity to tank Canada's economy. That doesn't mean they will, because the impact of such a move would also be devastating to their economy - in the mid-term elections year. In more conventional times, such a tactic would be unthinkable because of the mutual economic harm that it would cause.
2) Offer Canada Greater Access / Control Over Their F-35s
Lockheed Martin could offer to set up facilities in Canada for servicing the Canadian F-35 fleet, and offer employment and training opportunities for that. While possible, this still leaves Canada vulnerable to whatever "remote control" switches that have been baked into the F-35 control systems. I do not expect Lockheed Martin to make that software openly available to Canada (even though Canada was a partner in the development of the F-35).
3) Annex Canada
This is not a possibility I postulate lightly. The current US administration could take the position that if Canada isn't going to be a compliant vassal state, that it will force the issue. This could begin with either invading Alberta (which would politically invite them in the door), or by rolling a massive amount of troops and armour across the border into Ottawa.
While unlikely today, I won't presume to think that it's impossible or even improbable.
Concluding Comments
These comments are speculative, and I certainly have my own biases at play here. I'm making some significant guesses as to Prime Minister Carney's thinking and motives here as well how the current US Administration might behave. I'm definitely on the "if the US doesn't want to behave in a reasonable fashion, then Canada can and should seek out other options" side of things.
Regardless of technical issues, I don't think Canada would benefit from the F-35 in the long run. Further, the Gripen gives Canada a chance to rejuvenate its military aviation sector in a way that we have been largely unable to do since the 1960s. In a world where Canada's economic status, sovereignty and freedom are under direct threat by the country that manufactures the F-35, I'm pretty sure that it's a good idea shift gears away from the integration with the US economy that has dominated Canadian economic performance since Mulroney's time.
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