As the cost of Canada’s F-35 purchase soars by 75%, could the Gripen have a window of opportunity?
June 11, 2025
Canada’s F-35 deal has ballooned in cost, according to a new report from the auditor general.
The cost allocated to the 88-strong aircraft program was originally pegged at CA$19 billion (around $14 billion). The auditor general, Karen Hogan, said the final bill was likely to be CA$27.7 billion ($20.2 bn), an increase of almost 50%.
On top of this, Hogan noted that other elements required for full operational capability, such as infrastructure upgrades and advanced weapons, would add at least another CA$5.5 billion ($4 billion) to the total cost.
Overall, the audit estimated that the eventual total cost of the F-35 project will be in the region of CA$33 billion ($24 bn), almost 75% more than originally planned.
What’s causing the rising costs of Canada’s F-35s?
The key culprits for the ballooning costs, as mentioned by Hogan, are fluctuations in foreign exchange values, inflation and rising infrastructure costs.
Pandemic delays are also cited as adding expense, alongside unforeseen costs relating to advanced weapons and facility expenses.
While some of these issues were outside of governmental control, Hogan considered some parts to be failures of National Defence.
“National Defence’s approach to managing risks related to the Future Fighter Capability Project had weaknesses, lacking proactive measures to minimize the impact of potential threats, and the project did not have robust contingency plans,” Hogan said in the report.
Also seen as a risk to the project, the construction of two new facilities to support operations is currently behind schedule by more than three years. An interim operations solution will now be required to support the jets, which will add to infrastructure expenses.
Hogan further notes that the timely introduction of Canada’s F-35, locally called the CF-35, is in jeopardy due to a lack of skilled pilots.
“In 2018, when we last audited Canada’s fighter force, we found that one of National Defence’s biggest obstacles was a shortage of qualified pilots,” Hogan says. “Six years later, that is still the case.”
Overall, the audit found that not all plans were complete or fully implemented, and that progress against planned milestones is lagging.
Could Canada’s F-35 deal be at risk?
Canada began considering the F-35 in 1997, with a formal purchase decision made in 2023 for the 88 aircraft. Deliveries were supposed to be taking place between 2026 and 2032.
The F-35 was to take over as the primary fighter jet for the RCAF, replacing the aging CF-18s, many of which have been in service for more than 40 years.
In March 2025, in the wake of Trump’s sweeping tariffs, Canadian Prime Minister Mark Carney initiated a review of the F-35 deal, citing concerns about reliance on US defence technology.
At the same time, he pledged to boost defence spending to the NATO target of 2% of GDP five years earlier than planned. Carney will be keen to see that money spent in the most effective way possible.
Defence Minister Bill Blair was tasked with reviewing what options are available to Canada apart from the F-35, suggesting other aircraft could be considered for its future fleet.
Alternative fighter jets on the table for Canada
Canada has already made a legal commitment of funds to purchase the first 16 jets – make no mistake, the CRAF will operate F-35s. At present no portion of the order has been cancelled.
But Canada is weighing its options, and as relations with its southern neighbour begin to sour, strategic autonomy is top of the wish list.
In 2022, then-Prime Minister Justin Trudeau evaluated the F-35 against a number of other options. The most obvious would be the F/A-18 Super Hornet, a familiar platform for CRAF but still a US product.
European alternatives including the Eurofighter Typhoon and Dassault Rafale could be contenders, but both rely on some US systems.
The front runner, if Canada does decide to vary its fighter jet fleet, is Sweden’s Saab Gripen. Flexible and cost effective, Saab has also offered Canadian assembly and sustainment, which would align with Ottawa’s goal of nurturing domestic defence capabilities.
But a mixed fleet comes with its own risks and costs. Dual tooling and simulators, separate supply chains, pilot training, higher costs… There are lots of reasons an all-F-35 fleet could be a better strategy.
Diversification could buy some independence, but at a high cost of efficiency. It remains to be seen if Canada believes this is a fair price to pay.
