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Canada scraps plan to buy Boeing fighters amid trade dispute

Canada scraps plan to buy Boeing fighters amid trade dispute

Canada reportedly has ditched plans to buy new Boeing (BA) F/A-18 Super Hornets after a trade spat over Bombardier's (BDRBF) C Series passenger jet.

But the Australian jets are 30 years old - the same vintage as the CF-18s - and sources say the government is concerned about resurrecting memories of the four second-hand subs Canada bought from the U.K. One of those vessels, HMCS Chicoutimi, caught fire while crossing the Atlantic in 2004, killing a naval officer and injuring nine other sailors.

The Liberals - who said in late 2016 they wanted the Boeing jets as a stopgap measure - froze talks on the proposed deal this year after Boeing launched a trade challenge against Canadian planemaker Bombardier Inc.

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Defence Minister Harjit Sajjan would not comment Wednesday on when the competition would be launched, saying only that it would be announced "at the appropriate time".

Speaking to The Globe and Mail in September, Boeing International president Marc Allen said the federal government should not forget that Boeing does $4-billion a year of business in Canada, with 560 suppliers and an overall impact of 17,000 jobs. "It would be a deeply unfortunate outcome", he said.

Investors Business Daily notes that the move appears to be motivated by a 300 percent tariff Washington slapped on sales of Canadian Bombardier Series C jets. The aircraft will almost certainly be cheaper than the Super Hornets, and easier to incorporate into Canada's existing fleet, since they are nearly identical to the CF-18, and won't require new training or infrastructure.




In response, the Commerce Department in September imposed a almost 220-percent preliminary tariff on the C-series, but a final decision is not until 2018.

The final ruling in the case is expected next year, but the relationship between Boeing and Canada has nosedived since.

Bombardier denies any wrongdoing and says Boeing can not prove it was harmed by the Canadian company's actions because it did not offer Delta any planes of its own.

At a conference in Boston in November, Bombardier CEO Alain Bellemare said: "Boeing is underestimating what they are tackling. Unfortunately, I think they're taking advantage of a [political] context that's favorable to them".

In October, Mr. Trudeau said he warned U.S. President Donald Trump that the trade dispute was blocking "any military procurements from Boeing".

As relations between the two sides deteriorated, Ottawa slammed Boeing for not acting as a trusted partner and began looking at the Australian jets.