Swedish defence giant Saab is making an aggressive pitch to establish a full-scale Gripen fighter jet production line in Canada, presenting Ottawa with a sweeping industrial package that would see the aircraft built from component parts to finished aircraft entirely on Canadian soil.
The proposal, detailed during a briefing at Saab’s Linköping headquarters, envisions a network of roughly 10 prime partners and 250 suppliers spread across several provinces, marking what company officials describe as the first start-to-finish Gripen production line outside Sweden. A ninth flag—currently a white banner marked “RESERVED”—hangs alongside those of Saab’s eight existing customer nations in the final-assembly hall, its destiny tied to Ottawa’s decision.
Canada has also been invited by Saab and the Swedish government to participate in Sweden’s next combat-aircraft programme, should the Gripen be selected. That long-term prospect forms part of a broader offering that includes plans for half a dozen “Saab innovation hubs” dedicated to research and development in artificial intelligence, cybersecurity, and Arctic innovation.
A Package Worth Billions
Saab’s vision extends well beyond the aircraft themselves. The company has previously announced partnerships with Bombardier, CAE, IMP Aerospace & Defence, Arcfield Canada, and Cohere. Internal documents outline a regional distribution model where Quebec would capture 50 per cent of production value, Ontario 26 per cent, the western provinces 14 per cent, and Atlantic Canada 10 per cent. Slightly less than half the work would involve production and mechanics, with the remainder encompassing research, development, and programme management.
Saab requires a minimum order of 40 Gripen fighters to make Canadian assembly viable. The company says it needs a third final-assembly line—joining those in Sweden and Brazil—to meet anticipated demand for the Gripen E model.
“We’re not trying to replace F-35. That’s a Canadian sovereign decision to go F-35,” said Saab chief executive Micael Johansson. “I don’t think Canada will give up F-35 completely. I have no clue how many.”
A minute later, he added: “It’s not replacing F-35. It’s both.”
The Trade War Factor
Saab’s charm offensive arrives amid a deepening trade rift between Canada and the United States, historically Canada’s largest military supplier. In 2022, Canada selected Lockheed Martin to purchase 88 F-35 jets to replace its aging F-18 fleet, with the first 16 aircraft now in production. When American tariffs were introduced a year and a half ago, Prime Minister Mark Carney ordered a review of the contract for the remaining 72 planes.
After trade talks collapsed late last month, Canada announced it would respond to President Trump’s latest levies with countertariffs due to take effect next week. The F-35 review—and any potential Gripen decision—now sits within the context of an intensifying trade conflict, with Washington reportedly pressing Canada to complete the full F-35 purchase while domestic calls mount to cancel the remainder of that order.
The office of Industry Minister Mélanie Joly confirmed it has maintained regular contact with both Saab and Lockheed Martin. “Her objective remains to create good-paying jobs for Canadians, especially at a time where Canada’s manufacturing sector is dealing with the impacts of the trade war,” said Gabrielle Landry, deputy director of media relations.
Johansson framed the decision in broader terms. “Canada has to decide, does it want the sovereign aerospace industry and is that important to them? That’s the first decision,” he said. “And then if they take that decision, Sweden and Saab is the best choice.”
Engine Concerns and Sovereignty Promises
Saab has also addressed one of the most significant hurdles: the Gripen’s reliance on American technology. The aircraft’s F414 engine, manufactured by General Electric, falls under U.S. International Traffic in Arms Regulations, giving Washington the power to approve, restrict, or refuse export of the technology.
“Every contract that we secure is also backed by a licence from the U.S.,” Johansson said. “It’s never been a problem, GE supporting us tremendously, and GE is also supporting doing things in Canada.”
On 22 July, GE Aerospace and Canadian company Magellan Aerospace signed a memorandum of understanding to overhaul the engines in Mississauga should Canada purchase the Gripen—ensuring repairs would occur in Ontario rather than requiring shipment to the United States. The arrangement was negotiated by Saab and GE, not initiated by Ottawa.
Saab also says Canada would maintain sovereign control over the aircraft’s military software, with a classified programme office based in Montreal under Canadian authority.
The Defence Investment Agency, the federal body handling procurement, stated that “engagement does not constitute the launch of a procurement process, a commitment to procure or an assessment against requirements,” adding that the F-35 procurement “is currently under review.”
Parallel Negotiations
Beyond the Gripen, Canada continues talks with Saab regarding the purchase of six GlobalEye early-warning aircraft. Johansson said a term sheet for that programme was expected by the end of August; the Defence Investment Agency said it had not yet been signed, noting discussions with Saab were “not related to trade discussions between Canada and the U.S.”
Mr Carney has signalled his intent to reduce reliance on American defence suppliers. Last spring, he declared: “The days of our military sending 70 cents of every dollar to the United States are over.”
Why it Matters
Saab’s proposal represents far more than a fighter jet purchase—it is an industrial strategy that could reshape Canadian aerospace manufacturing for decades. With trade tensions between Canada and the United States showing no sign of abating, diversifying defence procurement away from American suppliers has moved from aspiration to urgent necessity. If Ottawa proceeds, a Canadian Gripen production line would create high-skilled manufacturing jobs across the country while giving Canada greater control over critical defence technology. The arrangement would also cement a long-term partnership with Sweden, including potential involvement in its next-generation combat aircraft programme. Whether the government opts for the Gripen, proceeds with F-35, or pursues both, the decisions made in the coming months will define Canada’s defence industrial base for a generation.
