The collapse of trade talks between Ottawa and Washington has cracked open a debate Canada hoped to keep sealed: whether the country’s most expensive military procurement should remain tethered to an American defence industrial base that is increasingly weaponising economic policy. With counter-tariffs set to land on September 8 and the F-35 programme frozen at just 16 aircraft, the Trudeau-to-Carney transition has left the Royal Canadian Air Force in a holding pattern — and Stockholm sensing an opening.
A Procurement Frozen in Political Amber
Mark Carney ordered a review of the 88-jet F-35 contract within weeks of taking office in March 2025. The move was framed as due diligence. Seven months later, the review grinds on. Canada’s legal commitment covers only the first tranche of 16 Lockheed Martin fighters — a fraction of the fleet needed to replace the ageing CF-18s and meet NORAD obligations.
Industry insiders describe the pause as unprecedented. “You don’t halt a programme of this scale without a credible Plan B,” said one defence analyst granted anonymity to discuss cabinet-level deliberations. “And right now, Plan B is a PowerPoint presentation from Saab.”
The Swedish firm has not been shy. At the Swedish Air Force centenary at Malmen Airbase last weekend, Gripen E fighters sat wingtip-to-wingtip with the F-35A — a visual argument designed for the Canadian delegation in attendance. Micael Johansson, Saab’s president and chief executive, struck a pragmatic tone when reached by *The Globe and Mail* on Saturday, hours after news of the trade breakdown broke.
“I don’t think Canada will give up F-35 completely,” Johansson said. “They will, of course, go forward with that to some extent. I have no clue how many.”
NORAD’s Uncomfortable Truth
The operational reality complicates the politics. Canada and the United States share the world’s only binational military command. NORAD relies on interoperable sensors, data links, and weapons systems. The F-35 was selected in no small part because it plugs seamlessly into that architecture.
Christopher Coates, former deputy commander of NORAD and now a director at the Macdonald-Laurier Institute, does not mince words.
“Certainly, in the case of the F-35, there is no better option from a Canada or from a NORAD perspective than the F-35,” he said. “It’s in Canada’s best interest to not let a rupture in trade affect its ability to defend North America alongside the U.S.”
But that argument assumes Washington remains a reliable partner. Sean Duffy, the U.S. Transportation Secretary, offered a blunt rejoinder on Fox News Sunday: it was “foolish” for Canada to think it could win a trade war. He also falsely claimed Canada lacks a military — a remark that drew sharp rebukes in Ottawa but underscored the contempt colouring the current administration’s view of its northern neighbour.
The Leverage Trap
Raquel Garbers, a principal architect of Canada’s defence policy during her tenure as director-general at the Department of National Defence, warns that Ottawa’s instinct to retaliate through procurement could backfire.
“While Canada’s relationship with the U.S. is based upon economics, the United States’ relationship with Canada is based upon defence and security issues,” she said. “If the U.S. judges Canada’s politically motivated procurement decisions as putting its own security at risk, the economic consequences for Canada may only worsen.”
Garbers, now a senior fellow at both the Macdonald-Laurier Institute and the Australian Strategic Policy Institute, argues Canada must become “indispensable” — not by threatening to walk away from American platforms, but by building niche capabilities the Pentagon cannot easily replicate. Arctic domain awareness. Undersea surveillance. Cyber resilience.
Eliot Pence, chief executive of Dominion Dynamics and a member of the Advisory Committee on Canada–U.S. Economic Relations, sees the same opening.
“We can create leverage for ourselves if we decide to invest in ourselves,” he said. “While other industries such as automotives are being punished by U.S. tariffs, the opportunity is there for Canada to pivot and build its strengths in areas such as defence.”
A Decision That Cannot Wait
The RCAF’s CF-18 fleet, procured in the 1980s, is approaching the end of its structural life. Extension programmes have bought time — not certainty. Every month the F-35 review continues, the risk grows that Canada will face a capability gap it cannot fill with interim measures.
Saab’s Gripen E offers a lower acquisition cost, higher sortie rates, and a industrial partnership model that would keep more maintenance and upgrade work in Canada. But it lacks the F-35’s sensor fusion, stealth profile, and — critically — the deep integration with U.S. combat clouds that NORAD demands.
No one in Ottawa is pretending this is a purely technical choice. The trade war has made it existential.
Why it Matters
Canada’s fighter jet decision was always a strategic bet on the U.S. alliance. Now that alliance is being stress-tested by a White House that views security guarantees as transactional. If Ottawa switches horses mid-stream, it risks degrading NORAD interoperability and signalling unreliability to every Five Eyes partner. If it stays the course, it hands Washington leverage over a sovereign capability at the moment that leverage is being abused. There is no clean exit — only a choice between two kinds of vulnerability.
