Ottawa is moving on a sole-sourced purchase of high-tech U.S. fighter jets to replace its CF-18s despite furious last-minute lobbying by rival manufacturers.
Industry and government sources said the cabinet is expected in coming days to approve the launch of negotiations on price and delivery schedules with Lockheed-Martin, the U.S.-based manufacturer of the Joint Strike Fighter F-35.
The government is moving early on buying 65 new aircraft in a bid to "lock up the price" long before the jets start entering into service in 2017, sources said.
The contract worth up to $9-billion would be awarded without competition, with the Harper government set to argue the only other aircraft that could eventually meet the needs of the Canadian Forces would be built in China or Russia, and that such a purchase "wouldn't fly" in Canada.
But that hasn't stopped the manufacturers of jets such as Boeing's Super Hornet from trying to whip up a storm in Parliament and the defence community.
Lobbyists have been contacting journalists and parliamentarians in an attempt to put out the story that Canada could get new aircraft at a cheaper price, and with more Canadian content, by opening up tenders.
"An open competition to select Canada's next-generation fighter would enable Canada's government and military to obtain access to detailed Super Hornet performance data, enabling a thorough and accurate evaluation of its advanced, proven capabilities," said Boeing spokeswoman Mary Brett in a statement.
Officially, Defence Minister Peter MacKay responded to the speculation in the House on Monday by promising that his government is set to "invest in the next generation of fighters."
"Stay tuned," Mr. MacKay said in response to NDP attacks against a sole-sourced contract.
Privately, government officials are saying Ottawa already made a decision in the 2008 "Canada First" defence policy to buy a next-generation fighter plane, and that Boeing lost the competition in the United States to build that aircraft in 2001.
"Boeing has been driving the town crazy," said a senior government official directly involved in the project. "This is a classic firestorm in Ottawa, with lobbyists stirring up the town trying to stall the acquisition of equipment for the Canadian Forces."
The Joint Strike Fighter is being developed by Lockheed-Martin, which won a competition to produce the next generation of stealth single-seat aircraft. Canada has invested $160-million so far in the development project, which will cost hundreds of billions of dollars. The U.S. Forces will buy about 2,400 of the F-35s.
The 65 new fighters that the Canadian government plans to buy will replace its current fleet of 80 CF-18s starting in 2017.
Competing aircraft manufacturers say that despite the federal investment, the Joint Strike Fighter might not be the way to go. The overarching theme among manufacturers is that they want to be able to participate in a competition, and that the government will get a better deal - and more regional industrial benefits spread out across Canada - if it opens up a tendering process.
"Competition guarantees the best value for Canada," Boeing stated in a presentation to Conservative ministers last fall.
Boeing is insisting in its material that it will continue to produce its Super Hornet into the next decade, and that the U.S. Forces will continue to have more than twice as many of these planes than the Lockheed F-35s.
But Mr. MacKay signaled in the House of Commons on May 27 that his mind is made up. He initially spoke of the Joint Strike Fighter as the designated replacement for the CF-18s, before stating that a decision has yet to be made.