Beset on many trade fronts during the chaotic reign of Donald Trump, Canada continues to be bullied by the Biden administration and now threatens to fight back against subsidies for the purchase of American electric vehicles and new countervailing duties on timber. Canadian work. Even Boeing seems to have fallen prey to the relentless Commercial Hulk that Canada has become.
The passage of Donald Trump has not been easy for the government of Justin Trudeau. Not content with imposing punitive tariffs on steel and aluminum exports, the populist ex-president forced the renegotiation of the North American Free Trade Agreement and forced Canada to adopt in turn punitive countermeasures in the steel and aluminum cases.
It is also in this bellicose context that Canada adopted the Boeing clause in response to the countervailing duties of more than 300% that the US Department of Commerce had just demanded in September 2017 on an order for 75 planes. from Bombardier’s C Series to Delta Air Lines.
Boeing had complained to the American government that Bombardier was selling its aircraft at a price lower than its production costs and that the Montreal aircraft manufacturer was benefiting from undue subsidies due to the participation of the Quebec government in the C Series program and that of the Caisse de dépôt in Bombardier Transport.
The federal government, which had hitherto tended to turn its back on the disproportionately bellicose salvos from its trading partners, reacted swiftly by canceling an order for 18 Super Hornets, at a price of 6 billion, which it had placed. a few months earlier without a call for tenders to Boeing.
The message could not be clearer: you no longer attack a Canadian company without suffering immediate repercussions.
The Boeing clause also provided that the commercial behavior of a company would be taken into account when participating in a Canadian government tender.
However, the ax seems to have fallen on Boeing’s head. The news has not yet been officially confirmed, but Ottawa has reportedly informed the American manufacturer, according to three industry and government sources, that its bid to replace the CF-18 fighter fleet had not been made. detention.
The call for tenders for the purchase of new fighters for the Canadian army had initially attracted the candidacy of five manufacturers: Boeing and its Super Hornet, Lockheed Martin and its F-35, Dassault and its Rafale, EADS and its Eurofighter, as well as Saab and its Gripen.
The Dassault and EADS groups withdrew from the race on the pretext that the Canadian government had already decided to favor an American manufacturer. With the expected withdrawal of Boeing, all that remains is the Swedish group Saab and its fighter Gripen in contention against Lockheed Martin’s F-35.
The way clear for the F-35
Officially, the Canadian government is said to have informed Boeing that the new generation of F-18 Super Hornets did not meet the requirements of the tender. However, we are talking about an improved version of the F-18s that the Canadian army has used for 40 years.
In the fall of 2016, the Liberal government even decided to buy 18 Super Hornets to reinforce part of its dilapidated F-18 fleet, an interim order which suggested that the entire contract to replace the 77 aircraft of the The Royal Canadian Air Force would be won by Boeing.
Rather, Ottawa’s decision would pave the way for the acquisition of F-35 stealth fighters from Lockheed Martin, a company with which Canada has worked for 20 years in the development of the new aircraft. Saab’s Gripen option now seems to be just for show.
It was the government of Jean Chrétien, in 1997, that was the first to enter into a partnership to develop the fifth generation hunter. Over the past 20 years, the federal government has invested $ 750 million in the F-35 program, which has enabled dozens of Canadian aerospace companies to land contracts worth $ 2 billion. Additional spinoffs of $ 10 billion are expected over the next 25 years for these Lockheed contractors.
“Even though the aircraft is imperfect and there are still reliability issues to be resolved, the F-35 remains the most logical choice for the type of missions Canada wants to achieve. It ensures greater integration with the American fleet and more long-term benefits for Canadian companies, ”observes Mehran Ebrahimi, professor in the department of management and technology at UQAM’s School of Management Sciences.
At the time of its election in 2015, the Trudeau government wanted to know nothing about the F-35 and clearly seemed to favor the acquisition of Boeing’s Super Hornets, but the accumulation of commercial retaliation and those launched by Boeing itself transformed the apparent docility of Canada in well-assumed hostility.