Canada’s federal government in Ottawa has finalized a deal to spend $19 billion on the purchase of 88 F-35 fighter jets from U.S. defense contractor Lockheed Martin Corp. (LMT).
The first F-35s are expected to be delivered in 2026 and will replace Canada’s aging CF-18 fighter jets that were bought in the early 1980s.
Canada’s federal government has been trying for more than a decade to replace its fleet of CF-18 fighter jets, some of which are now more than 40 years old.
The Liberal government of Prime Minister Justin Trudeau was initially against buying the F-35s from Lockheed Martin due to the high cost.
The project includes costs for infrastructure set-up, weapons, and other expenses in addition to the purchase price of the aircraft.
The total lifecycle cost of the F-35s, which are expected to be in service until 2070, is $70 billion.
Canada is part of a consortium that helped develop the F-35 and Ottawa will pay the same amount for the aircraft as the other participants, including the U.S.
Through offset programs, production of the F-35 could contribute more than $400 million annually to the Canadian economy and create about 3,000 jobs, according to government estimates.
Lockheed Martin’s stock has risen 26% over the past year to $458.99 U.S. per share.
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