Ottawa is considering two main options for its plans to commit $45-billion to controversial new fighter jets – and both point back to the Lockheed-Martin F35 as the clear front-runner, sources said.
The future of the single biggest military procurement in Canadian history gained more urgency on Thursday as the government announced the file is being sent back to cabinet. Shortly after, Prime Minister Stephen Harper used a high-profile new deployment of CF-18 fighters to Eastern Europe to underline the need for this hardware.
Nearly 18 months ago, Ottawa vowed to start from scratch after it received a damning audit of its plans for the sole-sourced purchase of new fighter jets, promising to scour the world market for rival jets.
Government and outside sources said the process is nearing completion, and the government is facing two main options: continue with its sole-source plans to buy a fleet of 65 F-35 Lighting IIs, or launch a competition that, based on technical and financial data obtained by the government, would lead to the selection of the same aircraft.
A third option would entail starting over – including rewriting the government's specs – but the process would take years and is facing resistance from the Canadian Forces.
Ottawa announced on Thursday that it is sending six CF-18s to be based in Poland, as part of NATO's response to growing tensions in neighbouring Ukraine. The F-35 is more modern and offers greater stealth capabilities than its rivals in the race to replace Canada's fleet of CF-18s, and is seen as outperforming them in the most dangerous types of wartime operations, sources said.
The government has struggled to deal with the massive military acquisition since the process ground to a halt in 2012, as the Auditor-General slammed Ottawa's plan to purchase a fleet of stealth F-35s without going to tenders.
Instead of launching a competition, the government decided to compare the rival jets that could potentially be used by the Royal Canadian Air Force. Detailed technological and financial information was obtained from Lockheed-Martin, Boeing (SuperHornet), Dassault (Rafales) and Eurofighter (Typhoon) as part of the "options analysis."
Public Works Minister Diane Finley confirmed on Thursday that the government will soon be in a position to make a final decision, with the matter expected to go to cabinet in June.
Sources said the options that will be presented to ministers remain in flux.
Still, the government will consider simply returning to the F-35 purchase, as first announced in 2010. A senior government source added that the second option – a competition based on the current Statement of Requirements (SoR) – would "automatically lead to F-35."
In addition to rewriting the SoR, the government could also decide to purchase a mixed fleet of fighter jets – most likely made up of SuperHornets and F-35s. However, there is opposition to the proposal in government, especially the RCAF, sources said.
The F-35 has been hit with production delays, technological setbacks and rising costs, leading opposition parties in Canada to call for a full-blown and open competition to purchase new fighter jets at the best possible price.
However, government officials are cautioning that holding a full and open competition would be more complicated than many people believe.
The problem isn't comparing the technical capabilities of the aircraft, which can easily be graded on their speed, range, weaponry and ability to evade enemy radars. However, cost is another matter, as sources said that getting a clear, long-term picture is fraught with uncertainty.
Maintenance and upgrading costs over the full life-cycle of the aircraft are hard to gauge, given the government is looking to operate the fighter jets into the 2060s.
"When you compete, you want to compete fairly," a federal source said. "It may sound straightforward, but when you look at the details, it doesn't mean that it is."
The aircraft most likely to cause an upset at this point is the Boeing SuperHornet, which is already under production and in military use.
"Their sustainment costs are very low. The challenge with the F-35 … is that the sustainment model hasn't been developed yet," a source said.
In the long term, however, the F-35 is seen as the safest choice. The feeling inside the government is that of the main contenders, the F-35 offers the greatest options over the coming decades to remain technologically up to date, with a number of other countries committed to investing in future upgrades.