Canada to consider buying other combat aircraft than American-made F-35 fighter

TORONTO Canada is considering buying fighter jets other than U.S.-made F-35's because of escalating costs associated with Lockheed Martin's (LMT) troubled Joint Strike Fighter program, the country's defense minister said Wednesday.

Defense Minister Peter MacKay said the government needs to ensure a balance between military and taxpayer interests.

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MacKay said Canada needs to have all viable options on the table to replace the current fleet of 1980s-vintage CF-18s, which the government says will reach the end of their projected service life around 2020.

He reiterated that Canada wants to buy 65 jets for about $9 billion. But escalating costs and delays have dogged the F-35, which is now the most expensive U.S. Department of Defense procurement program ever.

A KPMG report says the lifetime cost of Canada owning 65 F-35's is estimated at $45.8 billion over 42 years.

MacKay had previously said it would buy the F-35, but the government never signed a binding contract. The government has since come under pressure because of ballooning costs and because other bids were not considered. An independent panel will consider a new range of options.

The government acknowledged Wednesday it could still buy the F-35. Other planes that could be considered include Boeing's (BA) Super Hornet or the European consortium made Eurofighter Typhoon jet.

Japan has said it may cancel its plans to buy dozens of the F-35s and Australia has said that to cut costs it is pushing back delivery of most of the F-35 Joint Strike Fighters. The Netherlands has also said it will trim its order.

The next-generation fighter is set to become the centerpiece of U.S. and allied air forces. Canada is a funding partner in developing the Joint Strike Fighter. Most of the funding comes from the United States, while Australia, Turkey, Britain, Italy, Norway, Denmark and the Netherlands are also funding partners.