Examples of Backlash to Trump Tariffs in Canada

Canada is set to cancel the purchase of American F-35 fighter jets and build its own fighter jets instead.

The Canadian New Democratic Party (NDP) Leader Jagmeet Singh announced Sunday his party would cancel Canada's contract to buy U.S.-built F-35s and look for companies to build fighter jets in Canada.

"Purchasing from the States at this time is not in our national security interest," Singh told reporters just days after Canadian Defense Minister Bill Blair said Canada is reconsidering its F-35 purchase.

After years of delay, the Liberal government had signed a contract with the U.S. defense giant Lockheed Martin in June 2023 to purchase 88 F-35 jets. But now, as U.S. President Donald Trump ramps up his political and economic threats against Canada, Canadians are set to kill the $19-billion purchase and look elsewhere for aircraft, despite serious issues with tearing a contract between two countries with virtually incestuous relations.

In a news release, the NDP said it would launch a new bidding competition that "prioritizes Canadian jobs and independence from the United States." There is a proposal from Swedish company Saab, which says that the assembly of its Gripen fighter jet would take place in Canada and there would be a transfer of intellectual property, which would allow the aircraft to be maintained in Canada. Saab had finished second in the previous competition.

The NDP says if Canada buys F-35s from the U.S., that latter will retain "complete control" of the software and hardware upgrades needed to keep operating the plane, which the party says is a strategic vulnerability.

The irony in all of this is that the same "security" argument was used by the US to deny Chinese Hwawei cell phone manufacturer and Chiense-owned Tik Tok access to the US market.

For instance, the U.S. could in a hostile environment prevent upgrades or new parts or could install spying software and the like, but the entire Canadian armed forces have this problem. Canadian and American militaries are very interconnected.

"We're over indexing on one plane when it's a conversation about an overall capability," said one expert.

Meanwhile, Mark Carney, the country’s new prime minister, has ordered a review of the US military aircraft to see if there are other options available given the changing environment.

Mr Carney has asked Bill Blair, his defense minister, to work with the military “to determine if the F-35 contract, as it stands, is the best investment for Canada, and if there are other options that could better meet Canada’s needs”, a spokesman for the minister said.

A Lockheed Martin spokesman said the company values its strong history with the Royal Canadian Air Force and said “questions about Canada’s procurement of the F-35 are best addressed by the Canadian and US governments”.

German officials last week raised concerns about a US “kill switch” built into F-35 fighter jets, amid fears the US is retreating in Europe militarily. Portugal’s outgoing defense minister said that “recent positions” taken by the US had encouraged a rethink about whether to purchase F-35s.

Nuno Melo warned on Thursday that the US could in future impose limits on the aircrafts’ use, their maintenance or components, forcing Portugal to consider other options to replace its ageing F-16s.

In a related vein, U.S. firms that won $210M in Toronto city contracts over the past 2 years may encounter difficulty implementing those contracts.

How much business does Toronto give to American-owned companies through city contracts? Open data on all of the competitive contracts that Toronto has awarded to suppliers over the last two years is worth a collective $3.2 billion. Ten per cent of those were secured by American-owned companies worth a total of about $210 million.

Those contracts in jeopardy provide an idea of what U.S. businesses stand to lose — and what Canadian suppliers could gain in the trade war going forward if city council approves Mayor Olivia Chow's promised motion to bar American companies from all future city contracts later this month. American  businesses are going to take a hit and it's going to cost them jobs.

Colin Mang, an economist at McMaster University, says banning American bids would have a big impact on some of the city's largest contracts. The Ontario government has already banned U.S. companies from provincial procurement.

Looking ahead, Mang sees a lot of economic benefits for the city — and potentially the rest of the country — if Toronto limits its contracts to Canadian companies. "If the city is going to take tax money and they're going to pump that into local businesses that's going to get hiring started again in the Toronto area," he said. "If they're looking at other Canadian suppliers, that's going to be a good thing here in Canada to get job growth started again."