Canada halts planned F-35 purchase

Canada's review of their planned purchase of 65 F-35s is only the latest setback for the Joint Strike Fighter program.

In the latest setback for the Joint Strike Fighter program, Canada’s military made it official Wednesday night when officials announced they would re-examine whether they will purchase 65 F-35s from Lockheed Martin.

The move has been expected for months after the results of an audit found the program would cost the Canadians $45 billion over the life of the program.

Canada will stand up an independent panel to review the options for the Canadian air force as it looks to modernize its fleet. The panel will consider purchasing a version of the Boeing Super Hornet or maintain their plans to buy the F-35.

“We have hit the reset button and are taking the time to do a complete assessment of all available aircraft,” said Rona Ambrose, the public works minister.

If Canada decides to walk away from the program, it means the F-35 will become more expensive to the rest of the nations planning to purchase the fifth generation fighter, especially the U.S. Subtracting the 65 F-35s would not represent a substantial chunk of the 2,443 F-35s the U.S. plans to buy, but any setback hurts a program that has seen costs rise substantially since its start.

U.S. officials are counting on 10 other nations to buy 700 F-35s. The U.S. needs other countries to buy the stealth jet in order to increase the economy of scale and drop the price of the aircraft. U.S. and the coalition of nations planning to buy the F-35 plan for the per aircraft cost to drop below $106 million in the latter years of the program.

Those rising costs is the reason Canada will likely walk away from it. Canadian leaders had expected to the spend about $16 billion on the F-35 program. When word leaked that it had nearly tripled to $45 billion, many speculated the Canadians would halt the program.

The public release of the audit done by KPMG made the move official.