Swedish defense firm Saab has reignited the battle for Canada’s skies, offering a partnership with Bombardier that promises up to 10,000 new manufacturing and research jobs. Saab proposes full technology transfer and local assembly of the Gripen E, casting doubt over Canada’s costly F-35 commitment.
In March 2025, Canada’s Minister of National Defense shocked experts worldwide by confirming a serious review of the 88-aircraft F-35 contract with Lockheed Martin. Originally pegged at $19 billion, costs have ballooned to $27.7 billion, with lifecycle expenses reaching $33 billion—figures sparking alarm over fiscal sustainability.
Ottawa’s reconsideration marks an extraordinary break from tradition, as no NATO ally has openly challenged the flagship US stealth program after formal adoption. This signals a deeper strategic recalibration, where Canada weighs long-term autonomy against alliance obligations amid escalating geopolitical tensions.
Canada’s fraught journey with the F-35 dates back to 2010, when it controversially bypassed competitive tendering to order 65 jets. Fierce backlash erupted over transparency and suitability concerns, fueling a decade of studies, debates, and delays that culminated in the 2023 procurement of 88 F-35As.
The CF-18 Hornets, Canada’s aging fleet, have become increasingly expensive and obsolete, pressing urgency for replacement. Yet, doubts about the F-35’s true cost-benefit ratio have intensified, especially after Auditor General Karen Hogan’s June 2025 report underestimated expenses and looming budget overruns.
Trade tensions with the US under President Trump amplified Canadian skepticism towards Washington’s influence. Threats of punitive tariffs and calls to make Canada the “51st state” ignited national outrage, transforming defense procurement into a crucible for sovereignty and political identity.
Saab quietly maintained ties with Canadian officials, emerging as a serious fallback. August 2025’s framework agreement between Canada and Sweden on Arctic defense cooperation underscored geopolitical shifts, with Saab emphasizing Gripen’s suitability for harsh northern conditions mirroring the Canadian Arctic.
Saab’s industrial proposal reshapes the debate into one about economic self-reliance. The offer to build and upgrade Gripen jets domestically signals potential for thousands of jobs, appealing strongly to Canadian policymakers determined to deepen industrial benefits from defense spending.
Industry Minister Melanie Jolie publicly acknowledged the need for greater industrial returns, reinforcing Saab’s advance. Saab’s representatives highlight Gripen’s evolutionary upgrade potential as a strategic advantage over fixed-generation platforms, appealing to officials wary of long-term technological lock-in with US systems.
A compromise surfaced: accepting the first 16 F-35s already built, then completing the fleet with domestically assembled Gripens. The idea balances allied expectations with national ambitions but provokes complex operational, financial, and diplomatic dilemmas.
2021 assessments revealed decisive technical superiority of the F-35 over Gripen: mission effectiveness scored 97% to 22%, and upgrade potential 100% to 28%, raising serious questions about compromising combat capability. Canadian military experts warn that mixed fleets could undermine deterrence.
Concerns extend to industry. Bombardier executives caution that abandoning the F-35 risks jeopardizing lucrative US government contracts, cascading losses across Canada’s aerospace supply chain. Meanwhile, the Gripen’s reliance on US-made engines means Washington’s export approvals remain a lever of influence.
Rumors of a “ switch” disabling F-35s have fueled public distrust despite Pentagon denial. The reality involves US control over software updates essential for operational readiness, a dependency that erodes traditional sovereign control over military assets and raises strategic vulnerabilities.
Further Auditor General findings spotlighted internal program issues: cost overruns, staffing shortages, and infrastructure gaps. Introducing a second fighter platform risks exacerbating these problems, making Canada’s decision more fraught than ever.
As of January 2026, Ottawa remains indecisive. Prime Minister Mark Carney’s government accepts delivery of the initial 16 jets but keeps the fate of the remaining 72 open. Negotiations with Lockheed Martin aim at securing deeper industrial benefits, while Saab and European partners remain active contenders.
Defense Procurement Minister Steven For acknowledges full withdrawal from t
he F-35 program is unlikely but maintains all options on the table. The ongoing debate embodies a national crossroads between alliance loyalty and sovereign strategic autonomy in an era of intensifying global rivalry.
Canada’s defense community faces a defining moment: will it prioritize cutting-edge interoperability or reclaim control over its military-industrial future? The decision will shape national security, economic policy, and international relations for decades, under a cloud of unprecedented uncertainty and high stakes.
