Canada Warns it May Cancel $2 Billion Super Hornet Buy Over Boeing Probe
Ottawa may cancel its planned purchase of 18 Boeing F/A-18 Super Hornet fighters over an investigation against Canadian plane maker Bombardier, initiated by its US rival, Boeing.
Canada may cancel the purchase of the Super Hornet fighters, which were to update Ottawa's aging fleet of CF-18 Hornets, over allegations raised by Boeing.
According to the US company, Bombardier receives subsidies from the Canadian government that allow it to sell CSeries passenger planes below the market price.
"The US market is the most open in the world, but we must take action if our rules are being broken," US Commerce Secretary Wilbur Ross said in a statement during a hearing into Boeing's claim in Washington.
The decision to initiate a probe was met with opposition in the Canadian government.
On Thursday, Canadian Foreign Affairs Minister Chrystia Freeland said the allegations are unhelpful to ongoing trade negotiations.
"The aerospace industries of Canada and the United States are highly integrated and support good, middle class jobs on both sides of the border," Freeland said.
"We strongly disagree with the US Department of Commerce's decision," she added, saying that Boeing's petition is "clearly aimed at blocking Bombardier's new aircraft, the C Series aircraft, from entering the US market."
But Freeland did not stop there. She added that Ottawa is now "reviewing current military procurement that relates to Boeing," a statement that was later supported by Canadian Prime Minister Justin Trudeau, according to CTV News.
According to various military experts, Freeland was most likely talking about the 18 Super Hornets purchase, a deal that could be worth up to $2 billion.
"Our government will defend the interests of Bombardier, the Canadian aerospace industry, and our aerospace workers," Freeland's statement read.
According to CBC, aerospace analyst Richard Aboulafia of the Teal Group said the Canadian government's move was inevitable, and it's up to Boeing to consider the next step.
"If Boeing is smart it'll press the do-over button and walk away," he said in an interview, adding that the military contracts the aeronautics giant risks losing are worth much more than any modest gains it could make from a successful trade complaint.