The Government of Canada says it is considering “alternatives” to Lockheed Martin’s (LMT) F-35 fighter jet and may cancel a multi-billion-dollar contract to purchase the U.S. made aircraft.
Canada has ordered 88 F-35 stealth fighter jets from Lockheed Martin in a deal worth $13 billion U.S. (C$18.58 billion).
However, the full lifecycle of the F-35 program is expected see the Canadian government spend more than $50 billion U.S. on the state-of-the-art military aircraft, including maintenance and upgrade costs over the years.
That contract is now in jeopardy amid an ongoing trade battle between the U.S. and Canada.
Canadian Defense Minister Bill Blair said in a recent interview that Ottawa is “examining other alternatives” to the F-35 amid the trade skirmish with the U.S.
Canada’s federal government was planning to use the new F-35 fighter jets to replace its aging fleet of CF-18 fighter aircraft, many of which have been in operation for more than 40 years.
Overall, Lockheed has received about 3,500 orders for the F-35 airplane, with about 1,100 of the jets currently operational around the world.
The F-35 is a fifth-generation stealth fighter and regarded as the most advanced military jet.
Analysts say that Canada could look to Europe for less advanced fourth-generation fighter jet options.
Airbus (EPA:AIR) makes the fourth-generation Eurofighter Typhoon, and Saab (STO:SAAB-B) makes the fourth-generation Gripen fighter jet.
Lockheed Martin’s stock has declined 3% so far in 2025 to trade at $467.61 U.S. per share.
