Making dollars and sense of replacing the CF-18

Avatar for Mike ReynoBy Mike Reyno | June 25, 2021

Estimated reading time 9 minutes, 16 seconds.

As we approach the finish line of Canada’s Future Fighter Capability Project (FFCP) — the competitive process to replace the legacy CF-18 — Boeing, Lockheed Martin, and Saab are scrambling to demonstrate why their proposals are the best fit for Canada and the Royal Canadian Air Force (RCAF). With capability, affordability, and economic benefits to Canada playing unequal, but important roles in the process, Canada must make the right decision to ensure the RCAF can continue to deliver on a proud tradition of excellence in tactical fighter capability — today, and well into the future. But after years of covering this story, a common-sense solution has emerged; we can no longer afford the Lockheed Martin F-35. Allow me to explain.

Boeing, Lockheed Martin, and Saab have submitted proposals for the RCAF’s Future Fighter Capability Project to replace the almost 40-year-old CF-188 Hornets. Mike Reyno Photo

Capability is the highest point-getter in the Request for Proposal (RFP), and many would argue it should be. All three fighters boast an incredible array of next-generation capabilities. An honest assessment of technical progress reports, historical timelines, and field-demonstrated performance will expose who is delivering, who isn’t, and where the risks lie. The evidence in this regard is apparent and overwhelming. 

Still, affordability is not considered by the RFP to be as important as capability; but the link is undeniable, especially in a post-COVID economy.  

The last defense review — Strong, Secure, Engaged — determined Canada needed more fighter aircraft to protect its sovereignty and deliver on its defense partnership agreements than initially projected. That number grew from 65 to 88 fighters, and Canada’s current competitive fighter replacement process must deliver this quantity of aircraft as a mandatory requirement. This is the point where the Lockheed Martin F-35 option could fall out of contention. 

Canada’s military procurement programs have a long history of being plagued by cost overruns and delays. But with no guarantees on costs, and numerous examples of allied nations abandoning their original F-35 order numbers, practical reality tells us the F-35 is simply unaffordable. The Dutch and British have cut their orders for F-35s nearly in half; the Italians by a third; and there is now credible talk of the United States Air Force (USAF) reducing its original planned F-35 intake by 40 percent. It appears the USAF has recently seen the value in upgrading proven and affordable airframes with the latest technologies — with the introduction of the Boeing F-15EX and big talk about a next-generation F-16 effort that would fall short of any stealth capabilities. The United States Navy (USN), the second-largest air power in the world, has chosen to invest heavily in the Boeing Block III Super Hornet and will operate nearly three times the Super Hornets than it will the F-35C. The USN’s massive investment and commitment to the Super Hornet will ensure it remains tactically relevant for several decades to come. 

All remaining competitors can lay claim to being Arctic platforms. Canada has already proven the F/A-18's credentials in the high North, the U.S. will base two combat F-35 squadrons in Alaska, and Sweden has developed the Gripen with Arctic operations in mind. Boeing's Super Hornet Block III concept that is expected to be offered to Canada, is shown here. Aaron Foster Image
Boeing’s Block III Super Hornet. Aaron Foster Image

There is also no relief in operational costs with the F-35 option. Depending on your source, it will cost $36,000 per hour (on the low end) to operate the F-35, with an “effort” to reduce its cost per flight hour to $25,000 by 2025. Lockheed officials are on record indicating that this particular claim is using fiscal 2012 dollars, which puts you right back to where you started at $36,000 an hour using an average annual inflation rate of 2.63 percent. 

The debate over the F-35’s fiscal challenges or its tactical relevance vis-a-vis Canada’s requirements are vastly overshadowed by its technical problems. In a post-COVID economy, it is simply unaffordable given the funding envelope of the FFCP. The economic benefits of this fighter replacement effort will matter now more than ever as Canada looks to recover from the new economic realities left behind by the global pandemic. 

Of the three offerings, Boeing and Saab appear to be in a two-horse race to offer Canada affordable solutions that come with some significant economic benefits. Saab is the only company to offer a “built in Canada, by Canadians” solution. But there is little detail of what that actually means over the life of the procurement program. This would be the first time since Canadair manufactured the CF-5 Freedom Fighter that a fighter jet would be manufactured in Canada, which would be a significant win for the Canadian aerospace sector. However, given the small order of 88 fighters for Canada — plus the (at most) several hundred Gripens that are projected to be in service worldwide — would there be enough in economic spinoffs and job creation over the duration of the program for Canada when compared to, say, Boeing?

Working in Boeing’s favor is the fact that the USN is expected to operate at least 600 Super Hornets and Growlers for several decades to come.  Several hundred more Super Hornets will be operated by other air forces around the world, which would potentially push the number of Super Hornets in service to more than 800. That could potentially mean more economic spinoffs for Canadian aerospace companies. 

Saab’s Gripen E. Jamie Hunter Photo

According to the economists at Ottawa-based Doyletech Corp, Boeing claims it will deliver $61 billion to the Canadian economy and create 250,000 jobs over the life of the project through a contractual guarantee.  

Comparatively, Lockheed Martin will not commit to a contractual guarantee, but suggests the F-35 could yield $16 billion in economic benefits should its fighter be selected.  

The Canadian aerospace sector needs support now more than ever, and the FFCP represents an important opportunity to provide that support.  

So, where do we land? There is no question that all three fighter aircraft in the running would usher in a well-needed next-generation fighter capability for the RCAF. After covering Canada’s fighter replacement program for more than a decade, the choice is becoming more evident given the attributes of the remaining contenders. 

The passionate, and often heated, bar banter will continue about the technical merits of each contender, and what fighter aircraft is right for Canada. But when it comes down to dollars and cents, there are only two choices that provide a minimum risk to the Canadian taxpayer, and would generate solid fiscal support to Canadian aerospace for decades to come: the Boeing Block III Super Hornet and the Saab Gripen E. Each of their capabilities are as different as their economic benefits to Canada.

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  1. The Super Hornet is the best option for Canada. A Saab purchase is not wise, Canada Defense needs to be tied to the United States not Europe. The Super Hornet has two engines and will be the most cost effective. Canada does not need a first strike fighter.

    1. “The Super Hornet has two engines and will be the most cost effective.”
      Care to elaborate on this?
      Wouldn’t running two engines per mission result in nearly twice the cost in fuel and maintainance. It seems to me that splitting the two engines into separate airframes should make for higher availablitiy. Both in peace time and in a hot crisis.

      1. No, not necessarily. And the primary reason we fly thr hornet vs let’s say the F16. It’s advantageous to have a second engine incase of engine failure during flight over remote or water based regions (also a reason the us navy chose the hornet aswell). Countries have seemingly forgotten this requirement as engines have gotten better.

        1. I think the reason no one worries anymore is because the data demonstrate there’s no reason to worry. There are 270+ Gripens running, some for 30+ years. There have been zero engine failures. The GE F414 in the Gripen E Canada is considering has been in service for 20+ years. There are 1,500+ out there and they’ve accumulated four million hours of flight time. In all that time, there’s been one failure (in an Aussie Growler in ’18). That suggests a 17% chance that one engine fails over the entire 8,000-hour lifetime of all 88 potential Canadian Gripens. Furthermore, when one engine in a twin configuration fails, the cause (such as a fire, explosion, or loss of fuel pressure) often kills both engines, anyway. Having two engines actually increases risk of failure in some ways, since it doubles the chance of a chain reaction-type event.

    2. So you think that we should continue our role as the USA’s attack dogs eh? What a proud and patriotic Canadian you must be.

      The RCAF’s primary mission is not bombing the enemies of the USA but defending Canadian airspace. You don’t defend sovereign airspace with a glorified bomber. The SH was made for anti-ship and coastal assault missions, not defensive counter-air. This makes sense because there is little to no risk of a USN carrier engaging in an air battle with another carrier. There just aren’t enough non-allied carriers on the seas for that to be given serious consideration. However, Sweden is only one Finland away from Russia and so the Gripen was designed to be primarily an air defender with strike capability if needed. It’s also an STOL with extremely low maintenance requirements. Those factors are pure gold if stationed at one of the RCAF’s forward bases up north. The Gripen-E is our best bet.

  2. Our air force in the north primarily does NORAD missions. The cheapest and most cost effective fighter for that role is the Gripen E. Out of all modern aircraft in the world, ( according to Jane’s Aerospace and Defense Consulting), the Gripen E has the lowest cost per flight hour of any modern fighter at 4,700 US Dollars. While the super hornet sits at around 18,000 US dollars. Partnering with Sweden lets us be less reliant on the American military industrial complex which is notoriously uncompetitive and will constantly jockey for more jobs in their own country. The Saab partnership lets us be more independent and focus on Canadian jobs instead of scrutiny by American lawmakers. We need to get rid of American influence over our defense procurement. Examples of their influence: (Canada-class submarine and Avro Arrow/ Bomarc missiles)

    1. 100 % agree. Saab is the way to go. Unfortunately Ottawa may not see it that way. Unless it is part of the Liberal’s election campaign to have an assembled in Canada job creation platform offer to Ontario/Quebec for the Gripen.

    2. Well said.Unfortunately history lands squarely on idiots making the wrong choice. Navy Hornet instead of Air Force version. Used submarines.
      Ice breakers that can not operate in article waters in the dead of winter.
      The list is too long to go into, but your summation is appreciated.

      1. The McDonnell-Douglas F/A-18A Hornet was chosen over the Northrop FL-18 Cobra because the FL-18 was an orphaned platform, nobody bought it. The naval version was chosen for easy access to plentiful parts, the stronger airframe and the arrestor hooks were used to make short landings at our forward air bases. I think that the government actually made the right choice with the CF-188.

  3. An American pilot commented many moons ago that he would like Canada to have the Gripen (Rafale/Typhoon when in the race). They were getting bored with the same old grey fighters touring around. It would add a little spice to their lives. I think another major consideration is pilot retention. Which I think generates the acquisition numbers as well.

    One observation I made, whether it is accurate or not, would be if we obtained the F-35, there might not be a need for 410 Squadron as they can pipeline newbies from a US squadron and simulators. The duals would disappear of course. In the end, I like all three and I am not banging the drum for one particular airframe.

  4. What ever happened to the offer to build a 6th generation Aero Interceptor their original offer was something like 3 times as many planes at just under half of the cost as it was going to be for the Raptors or whatever the original idea was.

  5. I resonate with the comments offered by Eric Martin. The Gripen E is the best option for Canada. It meets all the Five Eye requirements to support NORAD or NATO operations. It’s airframe/engine combination out performs the F35 and F18SH and it’s software is not proprietary and therefore does not require US approval for updates. Without question, it is time to break from the grasp of US control. “Faint heart does not catch fair maiden”.

  6. The problem with Boeing right now is the government resurrected an old policy known informally in the procurement circle as the “Boeing Clause” which the federal budget states “companies found to have prejudiced Canada’s economic interests through trade challenges will have points deducted from their procurement bid score at a level proportional to the severity of the economic impact, to a maximum penalty.” This happen when a bitter trade dispute between Bombardier and Boeing when they filed a trade complaint that Bombardier is causing harm to Boeing’s business because the C series are being unfairly subsidize by the Canadian government. This cause a 300% duty impose to Bombardier jets which Airbus took control of the C-series jets and also in some aspect cause the cancelled acquisition of interim Super Hornet. Some say its already happening ever since the Airbus is the only qualified supplier in replacing RCAF future tanker with its A330 Multi Role Tanker Transport compare to the KC-46 though it could be that the Boeing jet is too expensive compare to Airbus.

  7. Strategic issues are unclear or indeed avoided in this piece I understand the Americans plan to deploy some 200 F 35s in the Alaskan area; the Danes some 25 F 35s in the Greenland area. That leaves us to cover off the area in between. There is no point in either the Americans or the Danes working with a force of RCAF Generation 4 equipment as it would necessitate a dumbing down of the F 35 capability. Instead it would mean the Americans would have to operate F35s in Canadian Airspace even deploying them in our Northern Region.

    Sovereignty in our North is a major concern. In any period of international tension, pressure is going to be felt from our Northern Neighbor. We must be able to join our allies at an equal level of capability to maintain a significant counter threat. Russia is not yet there with a Fifth Generation fighter but the Sukhoi T-50 is well into the development process. When it is deployed in Russia’s North, any Fourth Generation fighter will be ineffective, perhaps not even survivable.

    Canada has the opportunity to participate in a significant jump into the Generation Five fighter world. For now, only the West has such a capability which includes stealth, combined with high maneuverability and advanced electronic/weapon systems. Embodied in the overall capability is data sharing which in itself is a significant force multiplier. INTEROPERABILITY is the name of the game. The future is Generation Five. The F 35 must receive careful consideration.

  8. With Arctic sovereignty becoming a very sensitive issue and very likely to continue that way due to melting ice and opening sea lanes, we need to be there with an aircraft compatible with what the Danes are operating out of Greenland and the USAF in Alaska. Single engine vulnerability is a non issue because jet engines today are extremely reliable and, in the unlikely event that a pilot has to abandon his aircraft in the high arctic, today’s communication technology and search and rescue capability is such that he needs only to apply his knowledge of sheltering from the wind and would be located and brought home soon after ejection. In combat, a twin engined aircraft would lose its second engine soon after the first one undergoes catastrophic self-destruction due to an enemy missile strike because there is very little strong protection between them. Boeing has not been friendly to Canada (Bombardier whine) and, as of McDonnel-Douglas, is showing leadership by accountants (the 737Max fiasco)rather than pilots and engineers and should therefore not be considered. If Saab can upgrade their aircraft to acceptable 5g, (we don’t need stealth, and in any case there is anti-stealth technology out there now) and it could be built in Canada for ourselves and others, that’s the route we should take. The amount of money we spent on the WE charity would have equipped several squadrons with the Gripen a fine looking aircraft.

  9. forget theanti-American comments. Go with Super hornet. While in RCAF the Americans were out best friends and helpers when needed. SAAB money will all go to the new Nation of Quebec. maybe build them in Alberta? replace lost oil jobs.Regards

    1. Buy the Gripen and build the Arrow!!
      Time for Canada to get back in the game.

  10. Maybe buy a small number of Both Aircraft Superhornet and Gripen E with Options for more along with the economic benefits for the winner for both and test them out and figured out which is best for Canada by good old fashion Hands On testing via ‘AETE’ (Aerospace Engineering Test Establishment)

  11. So one thing to consider for the F35 is when we go into battle we don’t want to be the country with a different Jet that requires parts with no one else is flying them we could end up sitting back while other countries fly.

  12. several points
    1) pilot retention rcaf pilots spend more time waiting for a training slot due to lack of aircraft
    2) the Grippen e 39 is a pure dogfighter with a ultra low radar signature that can walk the walk. and has a over the horizon air to air missle that the usa is envious of when in close quarters hyper agile. next any tactician knows the first the an adversary does is take out the fighter bases. with the Grippen just move the mobile fuel bowser and land and refuel and re arm in 20 min. from a 4000ft gravel runway or ice runway. low cost per hour maintenance equals more aircraft training time ,more proficient fighter pilots. I’ve heard some of our fighter guys barely getting 80 hours a year that’s not a good thing both from a morale and retention perspective
    2) No aircraft. since the dawn of powered flight over 118 years ago can do every thing . So Canada solution should be a combo of stealth and pure kick ass fighter. 88 E Grippen And 35 stealth F35. that way training and pure offense domestically fighter from the Grippen. internationally strike n cap where it’s best not to be seen over foreign soil use the the F35. also a good carrot for keeping pilots opportunity to fly a new type
    3) political cover by purchasing both a) strengthens our trade relationship with Sweden, and let’s the America admin know that canceling the keystone pipeline has a cost too, reduced volume purchase of the products they want to sell
    in closing 88 Saab Grippen 39E. backed up by 35 lockheed F35 will give the country the best combo of offense and defense both domestically and internationally. low cost high sortie rates for the Grippen lower sortie but higher cost high value strategic mission internationally the f35

  13. I agree that the only real choice for Canada is the Jas39-E. In view of the pure economics of selecting the Gripen, the Lockheed piece of junk does not even come close. What truly scares me is the American pressure tactics that would be used to “convince” the bureaucrats and no-nothing self serving politicians that their F-35 is the best choice.. Do not even get me started on that issue and others pertaining to how well our successive governments regardless if Liberal or Conservative have done absolutely nothing for our military. This has been going on for decades. I do really hope and pray that there are people in our government who know what is the best choice for Canada which is the Saab Jas39-E and F Gripen

  14. John b’s balanced suggestion is similar to my own. But first it’s important to note how what should be a rational decision is so quickly muddied by politics, economics, offsets, optics, and virtue signalling. All of these things seem to interfere with the seemingly simple task of buying a good airplane for Canada. Liberal parties are among the worst for military procurement, and Conservatives are not much better.

    I suggest a Canadian version of the US high/low mix that they use. The Gripen is an ideal front-line plane for use in northern climates, and given it’s origins it has already shown it’s abilities and affordability. This would be the low end.

    For the high end, it’s going to be either the F-35 and it’s leading edge abilities plus it’s high cost to operate and maintain, or the Super Hornet which is a more incremental upgrade from the existing CF-18s, the trade dispute with Boeing notwithstanding. If they go with the F-35, they should order it in modest numbers to keep costs down. It means Canada can interact and co-ordinate with the other allies that will get the F-35, but remain somewhat frugal. The Super Hornets are indeed a successor to the smaller CF-18, and would be operationally similar and cost much less than the F-35 to operate, and they could probably get more of them.

    Some mix like this seems to be the best way of hedging bets as well as ensuring Canadian interests in terms of military hardware.

  15. All excellent commentary.. A little late to the discussion here, but..

    I agree; we should have went mixed fleet. Gripen / F35 (65/35 mix or so.. Gripen’s up North with drones, F35 integrated throughout somehow closer in. Both platforms are not orphan class but supply chains should be firmly established.

    Some of the legacy F18 two seaters should be converted to Growlers EWO for training our new incoming flight personnel. They’re there, we own them, why not?

    Stay safe

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