The US approved the potential sale of as many as 16 P-8 surveillance aircraft to Canada in a deal valued at as much as $6 billion for manufacturer Boeing Co., even as Ottawa said no decision had been made and Canada’s Bombardier Inc. pressed its own bid.
Under terms of the possible sale, Canada would get the US Navy’s top maritime surveillance and sub-hunting aircraft, along with spare parts and support options. The deal would still require US Senate approval.
Canada is under pressure from the US to upgrade its contributions to the North American Aerospace Defense Command, especially with China and Russia showing increased interest in the Arctic and after an alleged Chinese spy balloon transited Canadian and US territory before being shot down in February. Canada’s aging fleet of Lockheed Martin Corp. CP-140 aircraft is a particular concern.
“This proposed sale will increase Canadian maritime forces’ interoperability with the United States and other allied forces, as well as their ability to contribute to missions of mutual interest,” the State Department said in a statement. If it goes through, the contract would be Boeing’s largest-ever for an airplane that’s also used by Germany, Norway, South Korea, Australia and New Zealand.
The announcement came a day after Canadian Prime Minister Justin Trudeau returned home from a Nordic prime minister’s meeting in Iceland where Arctic security was a major topic. Canada also faces pressure from its NATO partners to bring defense spending up to the alliance’s goal of 2% of GDP.
Bombardier Challenges Boeing for Canadian Military Jet Contract
Under US foreign military sales procedures, Senate approval of the potential sale is often followed by months, if not years, of negotiations between the country and company involved over a signed contract that often ends up considerably less than the potential upper value that was cited.
Canadian officials said Tuesday they’d made no commitment to buy the P-8, although so far they have expressed a preference for the plane.
Tuesday’s notification by the US doesn’t “commit Canada to purchasing the P-8A Poseidon, and Canada continues to assess its options,” Defense Ministry spokesman Daniel Minden said in a statement. “The final decision will be based on Canada’s assessment of the offered capability, availability, pricing and benefits to Canadian industry and communities.”
Boeing’s bid is facing a late challenge from Montreal-based Bombardier, which has pressed the Canadian government to consider an adapted version of its Global 6500 business jet. The problem is that the Bombardier jet exists only on paper.
Bombardier had no immediate comment on the US announcement.
In a statement, Boeing said the Poseidon “is the only proven, in-service and in-production solution” that meets all of Canada’s requirements. Boeing said every P-8A contains more than CAD $11 million of Canadian content “and would bring decades of prosperity to Canada through platform sustainment delivered by our Canadian industry partners.”
--With assistance from Mathieu Dion and Danielle Bochove.
