Canada Cancels F-35 Deal, Opts for Gripen in Geopolitical Shift with Washington

Ottawa Prioritizes Sovereignty and Industrial Control Over American Oversight in Major Aerospace Decision

OTTAWA — What appeared to be a standard procurement decision has quietly evolved into a geopolitical split. In a move described by insiders as deliberate and firm, Foreign Affairs Minister Mélanie Joly has ended Canada’s F-35 agreement with the United States, surprising Washington and leaving the Pentagon seeking explanations.

The announcement, made in a brief late-afternoon statement, confirmed months of speculation: Canada will not proceed with its planned purchase of 88 F-35 Lightning II fighters. The deal, valued at approximately $19 billion, had been considered a key element of Canada-U.S. defense cooperation.

With the F-35 option closed, Ottawa immediately turned to a significantly different approach: a strategic partnership with Sweden’s Saab JAS 39 Gripen fighter program. Officials state that this move could create over 10,000 high-tech jobs in Canada, revitalize its struggling aerospace sector, and transform the country from a buyer to a manufacturer in global defense production.

“This is not about buying a plane,” Joly told reporters. “This is about building an industry. This is about sovereignty. This is about Canadian control over Canadian security.”

The reaction has been immediate and divided. Washington expressed anger, while Ottawa quietly celebrated. Analysts are calling it one of the most significant defense decisions since Canada canceled the Avro Arrow in 1959 — but in reverse. This time, Canada is not abandoning domestic production; it is demanding it.

Sources close to the negotiations indicate that the decision followed months of increasing frustration. Three issues, in particular, proved insurmountable: rising F-35 costs, strict U.S. technology controls, and the extensive American oversight embedded in the program’s sustainment model.

Under the F-35’s current framework, partner nations must rely on a U.S.-controlled global supply chain for maintenance, software updates, and even some spare parts. Canada would have been a buyer, not a co-owner. For a nation with a proud aviation history and an active aerospace workforce, this arrangement had become politically unacceptable.

“The F-35 comes with a leash,” said Philippe Lagassé, a defense procurement expert at Carleton University. “The Gripen comes with a toolbox.”

The Gripen offer, in contrast, included something Washington would not match: full technology transfer, domestic assembly lines on Canadian soil, and a long-term industrial roadmap designed to establish aerospace capability at home. Saab has proposed constructing a final assembly and checkout facility in Quebec or Ontario, with Canadian suppliers providing airframes, avionics, and landing gear components.

“This is a once-in-a-generation opportunity to rebuild Canada’s aerospace sector,” said a senior industry official who spoke anonymously to discuss the negotiations. “With the F-35, we would have assembled a few parts and then watched the supply chain stay in the United States. With Gripen, we become a real partner.”

The figures are substantial. Saab estimates that a Canadian Gripen program would create or support over 10,000 direct and indirect jobs, generate $6 billion in annual economic activity, and position Canada as a potential export hub for future Gripen sales to other nations.