Canada has agreed to join the United States in developing next-generation stealth fighter planes, contributing more than $150-million (US) over the next 10 years to be a partner in the project. A memorandum of understanding between the two countries was signed at the Pentagon on Thursday.
The document defines Canada's role in what's known as the Joint Strike Fighter - or JSF - program, a U.S.-led multinational effort to build more than 3,000 stealth aircraft at a total cost estimated at $200-billion.
U.S. Defence Secretary Donald Rumsfeld made a surprise appearance at the signing, saying the agreement is "another example of a mutually beneficial pact" between the United States and Canada.
"It's obviously a sign of the close relationship between our two countries," Rumsfeld said.
Participating in the program will open up lucrative opportunities for Canadian aerospace companies, the Department of National Defence said in a statement in Ottawa.
The aim of the project is to produce affordable, high-tech jet fighters to fill a variety of roles. Three versions would come from a single aircraft design - one for air force duties, one for seaborne use and the third as a short-takeoff and landing plane to replace the Harrier ground-attack jet.
"This is an important agreement for both the Department of National Defence and Canadian industry," said Alan Williams, the assistant deputy minister for material who represented Canada at the signing.
He added that the project "will enhance interoperability with U.S. and allied forces, and will provide opportunities for Canadian industry to participate in this cutting-edge aerospace project."
Asked how many Canadian jobs the agreement would create, Williams said it could bring as many as 5,000 new jobs - depending on how successful Canadian companies are in the bidding process.
Both Williams and Edward Aldridge, U.S. undersecretary of defence for acquisition, technology and logistics, made clear that the agreement comes with no job guarantees, and that it was made solely to enhance both countries' defence interests.
Nonetheless, the Canadian aerospace industry is optimistic.
"This action will help secure substantial work opportunities for Canadian aerospace companies," Peter Smith, president of the Aerospace Industries Association of Canada, said in a news release.
"The experience (Canadian industries) gain from participating on JSF can be exploited to competitive advantage when bidding on new commercial aircraft programs."
Williams said Canada had made no decision on whether to buy any of the new planes.
He said Canada will continue to use the current fleet of CF-18s until 2017-2018, at which time a decision would be made on whether to purchase any of the new fighters.
The United States is scheduled to buy 2,700 JSFs. The Pentagon plans to use them to replace various older fighter planes being used by the air force, navy and Marine Corps.
Britain plans to buy 150 of the JSF planes and is pumping $2 billion into the project.
Aldridge said he hopes more countries would join the JSF project. Discussions are underway with the Netherlands, Italy, Norway, Denmark, and Turkey.
In October, the U.S. Defence Department awarded Lockheed Martin a $25 billion engineering and development contract that is expected to lead to contracts to build more than 3,000 of the planes.
The JSF is supposed to combine supersonic speeds with stealth technology to thwart enemy radar.
The first 22 planes are to be delivered in 2008. Each is expected to cost between $40 million and $50 million, depending on its configuration.