Canada scraps buying 18 Boeing fighter jets amid trade dispute


The Canadian government is contemplating buying used F/A-18 Hornets from Australia instead of procuring new Super Hornet planes directly from Boeing, a move that would be a major blow to the company's fresh new aircraft line, Defense News reports.

Canada was expected to buy 18 new Super Hornets from Boeing, but sources told Reuters Tuesday that Ottawa will announce plans to buy used Australian F/A-18s next week instead, as the older planes are the same model that Canada now has in its fleet.

Boeing filed a trade complaint against Bombardier last April, alleging the Canadian plane maker used unfair government subsidies to clinch an important contract for 75 CS 100 planes to Atlanta-based Delta Air Lines at "absurdly low" sale prices.

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The government's decision to buy Australian fighter jets stands to increase tensions with Boeing, which has repeatedly warned that billions of dollars in business activity in Canada are at stake in the ongoing dispute.

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". "With Canada, it was about $17 billion", the president said Tuesday in a meeting with Senate Republicans, according to Canadian news site Global News.

"We have tremendous losses with Mexico and losses with Canada, and covered by NAFTA".

Australia's F-18s are nearly certain to be cheaper than Super Hornets, and easier to incorporate into the existing fleet, since they are nearly identical to Canada's own CF-18s.

Commerce sided with Boeing in rulings in September and October and slapped preliminary import duties totalling 300 per cent on C Series planes.

Canadian Prime Minister Justin Trudeau has said the country "won't do business with a company that's busy trying to sue us and put our aerospace workers out of business".

However, Boeing Defense President and CEO Leanne Caret's reaction might offer observers a hint. "It's not just the company but countries" that they're targeting, Bombardier chief executive officer Alain Bellemare said at an investors conference in Boston last month. "Unfortunately, I think they're taking advantage of a [political] context that's favorable to them".

News of the development comes as Mr. Trump once again has taken the occasion to complain about trade deficits with the U.S.'s neighbors.

As relations between the two sides deteriorated, Ottawa slammed Boeing for not acting as a trusted partner and began looking at the Australian jets.