Joly says Canada ‘didn’t get enough’ benefits out of F-35 procurement deal

OTTAWA – The Liberal government believes Canada was short changed on industrial benefits out of its contract to purchase American-made F-35 stealth fighter jets, Industry Minister Mélanie Joly said Tuesday.

“We believe that we didn’t get enough when it comes to the F-35,” Joly told reporters on Parliament Hill.

“The industrial benefits are not enough. There needs to be more jobs created out of the F-35 contract. That’s clear to me and clear to this government.”

Joly’s comments come as the Swedish firm Saab considers whether to set up shop in Canada to build its Gripen fighter jets, dangling the prospect of adding 10,000 domestic jobs in Canada.

The remarks landed during a week when Saab company brass were meeting with Canadian government officials in Ottawa as part of a business delegation accompanying Sweden’s royal family on a state visit to Canada.

When asked for comment, F-35 builder Lockheed Martin countered that it is creating economic industrial benefits within Canada — and warned that those benefits would diminish if Canada reduces the size of its order.

The company said in a media statement it expects Canada’s plan to procure 88 F-35 aircraft will produce upward of $15.5 billion in industrial value over the course of five decades, from 2007 to 2058.

“(The figures) have potential to grow as Canada further defines sovereign sustainment requirements,” said Chauncey McIntosh, F-35 vice president and general manager at Lockheed.

“Economic benefits are commensurate with a country’s program of record, and they will shrink if Canada ultimately purchases fewer than 88 aircraft.”

There are about 30 active Canadian suppliers involved in the F-35 program, the firm said.

The federal government has committed to buying the first 16 F-35A jets out of a planned purchase of 88 to replace Canada’s aging fleet of CF‑18 Hornets.

The government launched a review of the rest of the procurement project in the spring, after U.S. President Donald Trump launched a trade war with Canada.

Saab’s CEO Micael Johansson has said Ukraine’s hunger for its Gripen fighter jets would double the company’s production requirements, forcing it to expand its manufacturing capacity in Europe or — possibly — in Canada. 

Ukraine is seeking to build up its air force with modern jets, including some 100 Rafale fighters from France and more than 100 Gripens from Saab.

Joly said Ottawa will have to kick the tires on the new offer by the Swedish defence company — but it’s speaking the right language

“We’re really interested in seeing what can be done because there was an unsolicited bid that came up,” she said. “Ten thousand jobs is indeed a very interesting offer. So we have to look at what our military capabilities need, and at the same time, what are the number of jobs created across the country.”

Saab also said recently it’s looking to build its Global Eye surveillance aircraft entirely within Canada, a development that could bring 3,000 jobs.

Joly said last month the federal government has not ruled out purchasing a mixed fighter fleet. She said one option for Ottawa is to move forward with a small fleet of F-35s while also acquiring a separate fleet of Gripens.

Proponents of the F-35 have warned that building up a mixed fleet of aircraft could be an expensive and complicated proposition, and that the stealth jets are the most advanced fighter available.

Tom Lawson, former chief of the defence staff, told The Canadian Press that “nothing comes close” to the F-35 as a modern fighter aircraft.

He said any other choice would be “so inferior that to force the air force to get them and fly them for the future relegates them to decades of futility in any operations they might be asked to go on.”

But Joly also said in French on Tuesday that Ukraine’s efforts to build a fleet from various suppliers demonstrates that a mixed fleet is “possible” — even during a war.

Proponents of the Saab aircraft — such as Wesley Wark, a senior fellow at the Centre for International Governance Innovation — argue the Canadian manufacturing contributions to the F-35 are relatively small compared to those from other countries, and that the Gripen jets would be the ideal choice to fly over the Arctic.

A 2025 report by the anti-armament group Project Ploughshares, a Canadian non-governmental organization, states that the U.S. gains the lion’s share of the F-35’s overall production subcontracts — nearly 70 per cent.

Cabinet’s review of the F-35 procurement continues, even though Defence Minister David McGuinty said months ago that Prime Minister Mark Carney would render a decision by the end of summer.

Secretary of State for Defence Procurement Stephen Fuhr told the House of Commons defence committee that an F-35 review report produced by the Department of National Defence was sent to the Prime Minister’s Office and Carney has likely opened it.

A PMO spokesperson would not comment on whether Carney has finished reviewing the report, adding only that the review is ongoing.

This report by The Canadian Press was first published Nov. 18, 2025.