Canada to buy used Australian jets, not Boeing planes

By Barry Ellsworth

TRENTON, Canada (AA) - Canada will purchase used fighter jets from Australia, the government said Tuesday.

The announcement shoots down a deal Canada had considered to buy 18 new Super Hornets from Boeing, but killed the idea because the American aerospace giant filed a challenge to Canadian aircraft manufacturer Bombardier.

The challenge was backed by the U.S. government when it slapped a 300 percent duty on any Bombardier-made passenger jets sold in the American market.

That situation caused the Canadian government to say Boeing was “no longer a trusted partner” – the canceled deal was worth about CAN$19 billion.

There was no price tag announced for the Australian deal which will see the used jets begin arriving in 2019 as a stop-gap measure until Canada launches a competition to replace its fleet of aging jets with 88 new aircraft.

That new purchase will be worth between CAN$20 billion and $26 billion and a contract is expected to be awarded in 2022.

But the government also announced a new wrinkle in the contract -- a clause that says any companies that bid will now be assessed on their economic effect on Canada.

“Applications will be rigorously assessed on cost, technical requirements and economic benefit,” Procurement Minister Carla Qualtrough said at a news conference Tuesday. “Our government feels it is important to maximize economic impacts; as such, the evaluation of bids will also include an assessment of bidders on Canada’s economic interests.

“Bidders responsible for harming Canada’s economic interests will be at a distinct disadvantage compared to bidders who aren’t engaged in detrimental behavior,” she added.

It was clearly a warning based on the trade dispute with Boeing.

The company argued Bombardier was guilty of dumping passenger aircraft on the American market at low prices thanks to subsidies from the Quebec government.

Canadian officials were livid over the Boeing challenge, but the Chicago-based company refused to drop its objections.

The American government, however, must still approve the Australian jet sale to Canada, because although the CF-18s are nearly three decades old, they are still considered advanced warplanes that were manufactured in the U.S.A.