F-35 Cancellation: Economic Risks & the Gripen Alternative for Canada

What canceling the F-35 could cost Canadian industry — and why the Gripen alternative may deliver more jobs, control, and long-term value.

Sylvain Faust
Originally completed March 14, 2025

F-35 Cancellation in Canada: Gripen vs Economic Fallout – Evaluation of the impact of canceling Canada’s F-35 contract on Canadian suppliers, analyzing financial and economic consequences, including job losses, supply chain disruptions, and lost revenue. Additionally, compare the SAAB Gripen offer, assessing its cost-effectiveness, technological benefits, and economic impact of domestic production in Canada.

TL;DR (Too Long; Didn’t Read)

Canada F-35 cancellation would result in significant economic losses for Canadian aerospace suppliers, including USD$10.6 billion in potential future contracts, 3,300 annual jobs, and long-term participation in a high-tech global supply chain. Major Canadian firms like Magellan Aerospace, Avcorp, and Héroux-Devtek could lose key contracts, leading to job losses and revenue declines.

However, Saab’s Gripen E alternative presents a viable economic option, with full domestic assembly in Canada, a 100% industrial offset (up to CAD$19B reinvested in Canada), and complete technology transfer, ensuring greater sovereignty and control over the fighter fleet. While the F-35 offers global supply chain participation, the Gripen would create more immediate Canadian jobs and lower long-term operational costs (~USD$8K vs. USD$33K per flight hour).

The decision is a trade-off:

• F-35 → International industrial integration & interoperability (but high costs, reliance on U.S. tech).
• Gripen → Maximum domestic job creation & economic reinvestment (but smaller user base, initial production ramp-up challenges).

Both options have strengths; choosing Gripen could mitigate the F-35 cancellation fallout while potentially benefiting Canadian industry even more in the long term—but only if structured with firm contractual guarantees for jobs, production, and technology transfer.

Introduction

Canada’s planned acquisition of the F-35 fighter jet has significant industrial benefits for Canadian aerospace suppliers. Canceling the F-35 contract at this stage would have far-reaching economic impacts – from lost revenue and jobs to disruptions in a supply chain that many Canadian firms have integrated into over the past decade. The economic implications of a Canada F-35 cancellation are widespread, impacting multiple Canadian aerospace firms. This report evaluates those impacts and examines the alternative proposal from Sweden’s Saab for its Gripen fighter. A cost-benefit analysis focuses on domestic production, job creation, technology transfer, and a comparison of long-term economic outcomes between the F-35 program and a potential Gripen acquisition. For clarity, key financial comparisons, employment effects, and broader economic implications are summarized in tables.

Also read: Boeing F-47 — America’s Sixth-Generation Fighter Explained

Canadian Suppliers in the F-35 Program

Canada has been an industrial partner in the Joint Strike Fighter (F-35) program since 1997, which allowed Canadian companies to compete for and win subcontract work on the F-35’s development and production (Lockheed Martin F-35 Lightning II Canadian procurement – Wikipedia) (Lockheed Martin F-35 Lightning II Canadian procurement – Wikipedia). As a result, over 110 Canadian firms have participated in the F-35 supply chain, delivering high-tech components and services. Canadian industry has secured about USD$2.8 billion in F-35-related contracts to date (Canada finalizes agreement to purchase new fighter jets for Royal Canadian Air Force – Canada.ca). These contracts span aerospace manufacturing, electronics, software, and tooling, engaging suppliers across multiple provinces. Some key examples include:

• Magellan Aerospace (Winnipeg, MB & Toronto, ON) – Builds major structural components such as the F-35A’s horizontal tail assemblies (contract valued around $1.5 billion) (Winnipeg plant one of largest F-35 parts producers in Canada – Canadian Dimension), and produces engine and lift system parts for the F-35B variant (Canadian Industry Takes Off With F-35 Lightning II). Magellan has been involved since the program’s early days and delivers about half of all F-35A tail assemblies (Winnipeg plant one of Canada’s largest F-35 parts producers – Canadian Dimension).
• Avcorp Industries (Delta, BC) – Sole-source supplier of the outboard wing assembly for the F-35C (carrier variant) under subcontract to BAE Systems (Canadian Industry Takes Off With F-35 Lightning II). This provides a long-term workshare building specialized wing structures unique to the carrier model.
• Héroux-Devtek (Montreal, QC & Kitchener, ON) – Produces landing gear uplock assemblies for all variants of the F-35 and assembles components for the jet’s Power Thermal Management System (cooling system), in partnership with Honeywell (Canadian Industry Takes Off With F-35 Lightning II). These parts are installed on every F-35 airframe.
• CMC Electronics (Montreal, QC) – Supplies advanced avionics components, such as optical transceivers used in the F-35’s communication and targeting systems (Canadian Industry Takes Off With F-35 Lightning II).
• Celestica (Toronto, ON) – Manufactures printed circuit boards for the F-35’s power and thermal management controllers (supplied via Honeywell’s Canadian division) (Canadian Industry Takes Off With F-35 Lightning II).
• Composites Atlantic (Lunenburg, NS) – Fabricates composite fuselage skins and weapons bay inserts for the F-35, under subcontracts to Northrop Grumman (Canadian Industry Takes Off With F-35 Lightning II).
• GasTOPS (Ottawa, ON) – Designs specialized sensors for the F-35’s Pratt & Whitney F135 engine to monitor engine health, as well as similar sensors for the vertical lift fan system on the F-35B (Canadian Industry Takes Off With F-35 Lightning II).
• Software & Tooling Firms – e.g. NGRAIN (Vancouver, BC) developed software for the F-35’s low-observable maintenance system (Canadian Industry Takes Off With F-35 Lightning II), and Handling Specialties (Burlington, ON) produced custom assembly tooling for F-35 wing and final assembly lines (Canadian Industry Takes Off With F-35 Lightning II).

This widespread involvement means the F-35 program touches many regions of Canada. It has been credited with creating hundreds of high-skilled jobs well before Canada even ordered any jets (Canadian Industry Takes Off With F-35 Lightning II) (Canadian Industry Takes Off With F-35 Lightning II). By 2013, there were already 70+ Canadian companies with F-35 contracts totaling $450 million, and a pipeline of about $10 billion in potential opportunities over the program’s life (Canadian Industry Takes Off With F-35 Lightning II). Today, the government estimates that acquiring and sustaining the F-35 will contribute about $425 million CAD to GDP annually and roughly 3,300 jobs per year (direct and indirect) over a 25-year period (Canada finalizes agreement to purchase new fighter jets for Royal Canadian Air Force – Canada.ca). These jobs include manufacturing roles, engineering and R&D positions, and long-term maintenance and support work for the fleet.

Table 1 – Selected Canadian F-35 Supplier Involvement and Dependence

Sources: F-35 Joint Strike Fighter industrial participation data (Canadian Industry Takes Off With F-35 Lightning II) (Canadian Industry Takes Off With F-35 Lightning II), company disclosures, and media reports.

As Table 1 suggests, certain Canadian suppliers – notably Magellan and Avcorp – are highly invested in the F-35. For Magellan, F-35 work represents a quarter of one plant’s jobs and a substantial portion of revenue (Winnipeg plant one of the largest F-35 parts producers in Canada – Canadian Dimension). These firms, and many smaller ones, have built up specialized capabilities and infrastructure to meet F-35 requirements. This creates dependence on the program’s continuation. The cancellation of Canada’s F-35 purchase would therefore directly affect dozens of companies and by extension the livelihoods of thousands of Canadian workers employed in the F-35 supply chain.

Impacts of Canada F-35 Cancellation

A Canada F-35 cancellation (and presumably withdrawing from the JSF partnership) would result in immediate and long-term economic repercussions for Canada’s aerospace sector:

• Lost Revenue and Future Contracts: Canadian industry would forego a massive pipeline of future F-35 work. It is estimated that Canadian companies could win up to USD$10.6 billion in additional contracts over the next 25–40 years if Canada goes through with buying the jets (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca). Exiting the program would cut off access to these opportunities. While firms would get to finish any current orders in hand (existing contracts worth ~$2.8 B have been signed to date) (Canada finalizes agreement to purchase new fighter jets for Royal Canadian Air Force – Canada.ca), they would no longer be eligible for new F-35 production or sustainment contracts (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca). In short, a revenue stream anticipated to grow over decades would dry up. The Aerospace Industries Association of Canada warned as far back as 2010 that cancellation would leave Canada “on the sidelines” of producing 3,000–5,000 aircraft, squandering a “unique opportunity” for industry growth (Cancelation of F-35 purchase threatens Canadian jobs) (Cancelation of F-35 purchase threatens Canadian jobs).
• Job Losses: The F-35 program has been supporting high-skilled jobs across Canada, and these would be at risk if the contract is canceled. The federal government projects roughly 3,300 direct and indirect jobs annually would flow from the F-35 acquisition and sustainment over 25 years (Canada finalizes agreement to purchase new fighter jets for Royal Canadian Air Force – Canada.ca). Losing the F-35 means losing those future jobs. In the near term, hundreds of existing jobs linked to F-35 part production could be lost as current orders wind down without replacement. For example, Magellan’s Winnipeg facility employs 150 workers on F-35 parts (Winnipeg plant one of the largest F-35 parts producers in Canada – Canadian Dimension); the company had previously cautioned that those jobs would be in jeopardy if Canada did not buy the F-35. (Notably, a U.S. Pentagon official in 2016 suggested Magellan’s F-35 contracts would likely continue in the short term even if Canada pulled out, given existing obligations (Winnipeg plant one of largest F-35 parts producers in Canada – Canadian Dimension). However, beyond current orders, no new work would come, leading to eventual layoffs through attrition or plant downsizing.) The AIAC bluntly stated that the cancellation of the F-35 purchase “will consequently put thousands of Canadian aerospace jobs at risk.” (Cancelation of F-35 purchase threatens Canadian jobs) (Cancelation of F-35 purchase threatens Canadian jobs) This impact would be felt in communities like Winnipeg, Montreal, Toronto, and Halifax where aerospace clusters house these supplier firms. In Montreal, for instance – a city with multiple F-35 suppliers – the loss of the program was expected to hit especially hard in manufacturing jobs and business growth (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca).
• Supply Chain Disruptions and Technological Setbacks: Canadian suppliers have inserted themselves into a complex global supply chain for a fifth-generation fighter – a niche that is not easily replicated. Canceling the F-35 purchase would disrupt production plans at Canadian plants, potentially leaving expensive advanced manufacturing equipment underutilized. Companies like Avcorp and Composites Atlantic would need to scramble to find alternative programs to fill capacity as F-35 orders cease. Smaller subcontractors might see their business “crater” if they cannot replace the highly specialized F-35 work (Reality Check: Can Canada pass on the F-35s with no impact?) (Cancellation of F-35 purchase threatens Canadian jobs). In addition, Canada would miss out on the ongoing transfer of advanced manufacturing know-how that comes with building F-35 parts. The JSF program introduced Canadian firms to cutting-edge processes in composites, titanium machining, low-observable materials, etc., which can spill over to other sectors. With withdrawal, that continuous learning and innovation pipeline could slow. There is also a strategic cost: Canada has invested hundreds of millions into the F-35 development since the late 1990s to secure a seat at the table (Lockheed Martin F-35 Lightning II Canadian procurement – Wikipedia) (Lockheed Martin F-35 Lightning II Canadian procurement – Wikipedia). A pull-out means sunk R&D investments yield less long-term benefit, and Canada might have less influence or insight into F-35 developments that allies (like the U.S. and NATO partners) are pursuing.

Despite these drawbacks, some analysts note that the blow could be softened if Canada chooses an alternative fighter that comes with a robust industrial benefits package. Under Canada’s defense procurement policies, any foreign supplier (outside the F-35 partnership) is typically required to invest an equivalent amount of the contract value back into Canadian industry (100% offsets) (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca). This means that if the F-35 were canceled and another jet selected, the government could negotiate industrial offsets to compensate Canadian firms with other work. In other words, the dollar value of industrial benefits could be made comparable, whether Canada buys the F-35 or a different aircraft (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca). However, the nature and timing of those benefits would differ. The F-35 offers globally competed supply chain work that integrates Canadian firms into export markets, whereas an alternative might offer more traditional contracted work and local assembly tied only to Canada’s own fleet.

Table 2 summarizes the anticipated losses to Canadian industry from a cancellation of the F-35, contrasted with the status quo of proceeding with the F-35 program:

Table 2 – Implications of Cancelling Canada’s F-35 Procurement

Note: Even if the F-35 is canceled, Canada’s aerospace sector could still pursue work on other aircraft or civilian projects. However, the scale and high-tech nature of the F-35 opportunities (Table 2, right column) would be hard to match in the near term without a comparable replacement program. The following section examines Saab’s Gripen offer as that potential replacement, focusing on whether it could deliver equivalent or more significant economic benefits domestically.

Saab Gripen: An Economic Alternative to Canada F-35 Cancellation

Sweden’s Saab AB, with its Gripen E fighter, was one of the bidders in Canada’s Future Fighter competition. Saab’s proposal emphasized maximum economic benefits to Canada as a core selling point. In the event of an F-35 cancellation, a switch to the Gripen is frequently discussed. Here we assess the viability of Saab’s offer, especially in economic terms:

• Domestic Production Commitments: Saab has explicitly offered to build the Gripen E in Canada if selected. This would entail establishing a complete or partial assembly line in Canada, leveraging Canadian aerospace firms for major subassemblies. Saab’s pitch mirrored the model used in Brazil’s recent Gripen program: initial jets built in Sweden with technology transfer, and the majority assembled locally by Brazilian industry (In pursuit of $19B contract, Sweden’s Saab offers to build fleet of fighter jets in Canada) (In pursuit of $19B contract, Sweden’s Saab offers to build fleet of fighter jets in Canada). For Canada, Saab stated it could “easily” accommodate an in-country production line if that is a priority (In pursuit of $19B contract, Sweden’s Saab offers to build fleet of fighter jets in Canada). In fact, Saab’s formal response to Canada’s RFP in 2020 included **88 Gripen E aircraft with a comprehensive support package and an “industrial and technological benefits” (ITB) program guaranteeing work in Canada (Saab offers Gripen to Canada) (Saab offers Gripen to Canada). The Gripen would not simply be sold to Canada – it would effectively be built in Canada. This promises an immediate influx of advanced manufacturing activity on Canadian soil, as opposed to the F-35 which would be built entirely in the U.S. (with only components coming from Canada).
• Job Creation and Regional Impact: A domestically built Gripen fleet could create a surge of employment in Canada’s aerospace sector. The final assembly of fighters is labor-intensive and would require a large workforce of technicians, engineers, and support staff. Additionally, a host of Canadian suppliers would contribute parts and systems, under Saab’s industrial plan. Saab pledged to generate “long-lasting, high-tech employment opportunities, and business opportunities across all regions of Canada” through its Gripen industrial program (Saab offers Gripen to Canada) (Saab offers Gripen to Canada). The company formed a “Gripen for Canada Team” of Canadian defense contractors – including IMP Aerospace (Nova Scotia), CAE (Quebec), Peraton Canada, and GE Aviation (Canada) – to anchor the in-country production and support ecosystem (Saab offers Gripen to Canada). This suggests that the final assembly could occur at an IMP facility in Canada, with simulators and training systems by CAE, avionics and mission systems supported by Peraton, and engines (GE F414) supported by GE Canada. Such collaboration could create thousands of jobs. For perspective, Brazil’s program to build 36 Gripen E/F jets (which is roughly half the size of Canada’s requirement) is expected to generate approximately 14,000 direct and indirect jobs in Brazil (Sweden’s Saab Launches Gripen Fighter Jet Component Production In Brazil). Canada’s buy of 88 aircraft is larger; even accounting for efficiencies, the domestic production of Gripen in Canada could plausibly create on the order of several thousand jobs during the acquisition phase, potentially well above the 3,300/year associated with the F-35 program. Moreover, these jobs would be spread across the country – for example, aerospace manufacturing in Halifax and Montreal (IMP and CAE’s bases), systems integration in Ottawa/Toronto (Peraton, etc.), engine work in Winnipeg or Vancouver (GE), and so on – aligning with Saab’s promise of pan-Canadian industry involvement (Saab offers Gripen to Canada).
• Industrial and Technological Benefits (ITB): Unlike the F-35, which as a partnership program could not offer guaranteed offsets, the Gripen acquisition would fall under Canada’s traditional ITB policy. Saab’s offer comes with a 100% value offset commitment – meaning it would invest back into Canada an amount equal to the contract value. At an estimated project cost of roughly CAD $19 billion (similar to the F-35 budget) (Canada finalizes agreement to purchase new fighter jets for Royal Canadian Air Force – Canada.ca), this implies about $19B of industrial activity in Canada. Saab affirmed it is “committed to deliver an industrial programme” to fulfill these obligations (Saab offers Gripen to Canada). In practice, this would include establishing production facilities, subcontracting to Canadian firms for components, and possibly investing in R&D or other high-tech projects domestically to meet the required dollar value. The technology transfer element is also key: Saab and the Swedish government indicated a willingness to share advanced fighter technology so that Canada can independently maintain and upgrade its Gripens (Saab offers Gripen to Canada). This could involve transferring know-how in aircraft design, software source codes, systems integration, and manufacturing processes. Such intellectual property transfer would enhance Canada’s aerospace capabilities in the long term, enabling Canadian engineers to participate in future upgrades or even contribute to the development of new indigenous technologies. By contrast, the F-35 program offers little in the way of IP transfer or local proprietary development – it is a closed system controlled by the U.S. (Canadian firms produce parts but do not get the F-35’s underlying design authority or sensitive tech). With Gripen, Canada’s sovereignty in operating the fighter would be greater: “the Royal Canadian Air Force will have full control of its fighter system”, Saab pledged, including the ability to do in-country support and through-life enhancements (Saab offers Gripen to Canada). This is an economic benefit insofar as it seeds domestic innovation (Canadian companies can develop modifications or new systems for the jets) and keeps high-value sustainment work in Canada.
• Cost Considerations: Purely in terms of purchase price, Saab’s Gripen is in the same class as the F-35A. The unit cost for a Gripen E is roughly $85 million USD per aircraft, comparable to the latest F-35A prices in the low-$80 millions (F-35 cheaper than the Gripen? – Aviacionline) (F-35 cheaper than the Gripen? – Aviacionline). For 88 aircraft, either choice is a multibillion-dollar investment (Table 3 compares costs). However, the long-term operating costs of the Gripen are expected to be significantly lower. The Gripen was designed for ease of maintenance and has a smaller logistical footprint. Estimated cost per flight hour for Gripen E is around $8,000 USD, whereas the F-35A is around $33,000 USD per flight hour according to U.S. Air Force data (F-35 cheaper than the Gripen? – Aviacionline). This indicates Gripen could be roughly 4 times cheaper to fly and maintain per hour than the F-35 (F-35 cheaper than the Gripen? – Aviacionline). Over a 30+ year service life with thousands of flight hours per jet, this adds up to substantial savings in operations and sustainment spending. Those savings could be redirected to other defense priorities or to additional domestic investments (or simply reduce the burden on taxpayers). Additionally, a portion of the Gripen’s maintenance would be done in Canada (since the fleet would be domestically supported), keeping those maintenance dollars onshore, whereas F-35 maintenance relies on a global supply network largely managed by Lockheed Martin. On the flip side, some economies of scale favor the F-35: it will be operated by many allied nations, potentially driving down some costs (e.g. bulk spare parts) and offering interoperability benefits that are hard to quantify in dollars. Canada would be joining a smaller user group if it chose Gripen (Sweden, Brazil, and a few others), meaning some niche upgrades or capabilities might need more Canadian investment. The Finnish defense ministry, when evaluating fighters, noted that no competitor (Gripen included) was dramatically cheaper in full lifecycle cost once all factors were considered, and ultimately Finland chose F-35 for capability reasons (F-35 cheaper than the Gripen? – Aviacionline) (F-35 cheaper than the Gripen? – Aviacionline). That said, from a strictly Canadian economic perspective, the Gripen keeps more of the money at home: both the acquisition and much of the sustainment would flow through Canadian industry, whereas the F-35 entails sending a large sum abroad to purchase the jets and later to buy parts/licenses for upkeep (albeit with some offsets coming back via subcontracting).
• Potential Challenges: Viability is not solely economic. There are schedule and technical risks in standing up a new production line for a modern fighter in Canada. It would require time to ramp up and train a workforce – Brazil’s experience shows it can be done, but not overnight (their tech transfer program for Gripen is a 10-year endeavor) (Technology Transfer | Gripen for Brazil – Saab). If Canada needed jets urgently, relying on local production could be slower initially. Also, while Saab’s offer is firm on paper, it presumes government-to-government support (the Swedish government was backing Saab’s proposal with a complete technology transfer allowance (Saab offers Gripen to Canada)). Any political or diplomatic changes could influence how much tech is ultimately shared. Nonetheless, Sweden has a track record of successful fighter tech transfer deals (as seen with Brazil). Another consideration is that the F-35’s sheer prevalence among allies offers intangible strategic and economic benefits – like being part of a large sustainment enterprise – which the Gripen, with fewer users, cannot match. Canadian companies on the F-35 program gain exposure to the U.S. defense market and could spin off into other programs; the Gripen program would be a more self-contained Canadian-focused economic benefit.

In summary, Saab’s Gripen offer is economically compelling in terms of domestic industry development. It would likely match or even exceed the F-35 in Canadian job creation during the acquisition phase, and it provides advantages in local control and potentially lower long-term costs. The following section directly compares the F-35 and Gripen options across key financial and economic metrics to illustrate these trade-offs.

Canada F-35 Cancellation Comparison: Gripen vs. F-35 Economic Impact

The following table (Table 3) highlights key differences and similarities between continuing with the F-35 purchase and switching to Saab’s Gripen E, from an economic and industrial standpoint:

Table 3 – Economic and Industrial Comparison: Lockheed Martin F-35 vs. Saab Gripen E

Sources: Government of Canada procurement documentation (Canada finalizes agreement to purchase new fighter jets for Royal Canadian Air Force – Canada.ca) (Canada finalizes agreement to purchase new fighter jets for Royal Canadian Air Force – Canada.ca); Global News/industry reports (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca) (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca); Saab proposal statements (Saab offers Gripen to Canada) (Saab offers Gripen to Canada); Brazil Gripen program data (Sweden’s Saab Launches Gripen Fighter Jet Component Production In Brazil); and operating cost estimates from service data (F-35 cheaper than the Gripen? – Aviacionline).

As shown in Table 3, the Gripen option offers greater immediate economic benefits to Canada’s domestic industry (through guaranteed local production, full-value offsets, and tech transfer), whereas the F-35 option ties Canadian industry into a global production line with potentially significant – but not guaranteed – long-term contracts. The F-35’s benefits are more indirect, hinging on Canadian companies remaining competitive suppliers in the worldwide F-35 program. In contrast, the Gripen’s benefits are more direct, flowing from contractual obligations to build and invest in Canada.

From a cost-benefit perspective: If purely evaluating economic impact on Canada, the Gripen path would likely create more Canadian jobs and domestic business volume in the short-to-medium term, since nearly every dollar spent on the jets would return to Canadian firms in some form. Over the long term, operating cost savings with the Gripen could also ease pressure on Canada’s defense budget. The F-35 path, while yielding slightly fewer local jobs, integrates Canada with the defense-industrial base of its allies and could position Canadian firms on a broader stage (the F-35 supply chain for hundreds of jets worldwide). There is a trade-off between immediate domestic economic stimulation (Gripen) and participation in a global program with export-oriented benefits (F-35).

See also: Canada’s Gold Reserves — A Strategic Overview

Conclusion

Ultimately, a Canada F-35 cancellation would unquestionably have negative short-term economic consequences for Canadian aerospace suppliers – including lost revenue, layoffs in high-tech manufacturing jobs, and a step back from the advanced F-35 supply chain that Canada helped build. However, an alternative like Saab’s Gripen E, backed by strong industrial guarantees, could offset many of those losses and even provide new opportunities. Saab’s proposal to produce the Gripen in Canada with full technology transfer promises a level of domestic industrial activity and sovereignty that the F-35 program does not offer. It would likely create a surge of jobs and embed new capabilities in Canada’s defense sector (at the cost of forgoing the F-35’s interoperability and its existing global supply network).

In weighing the options, Canada faces a classic cost-benefit equation:

• Stay with the F-35 and continue benefiting from an established but more internationally diffused economic program, or
• Pivot to the Gripen and invest in a domestically driven production effort with potentially greater local economic payoff and control, but more initial uncertainty.

The tables above illustrate that, purely on economic grounds, the Gripen alternative is viable in that it can deliver comparable, if not greater, benefits in jobs and local industry development. The long-term costs of ownership also favor the Gripen on paper. On the other hand, canceling the F-35 means Canada’s firms lose out on their piece of a massive global program – a loss not easily quantified in dollars alone, as it also means stepping back from a marquee project in aerospace.

See also: U.S. Foreign Policy Reset – Strategic Infrastructure & Influence, a companion piece exploring how the U.S. is shifting strategy in a multipolar world through development diplomacy, infrastructure, and global partnerships.

Ultimately, the decision involves balancing economic impacts with military and strategic considerations. From an economic perspective, what’s clear is that there is “no free lunch” – pulling out of the F-35 will have consequences, but a well-structured replacement program (like Saab’s offer) could redirect and even boost the Canadian defense industry in a different way. Policymakers would need to ensure that any such switch includes ironclad commitments to Canadian jobs and technology, to truly realize the kind of benefits outlined in this analysis. The data suggests that with those commitments in place, Canada could mitigate the industrial fallout of an F-35 cancellation and perhaps achieve a net positive outcome for the domestic economy over the long run. (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca) (Reality Check: Can Canada pass on the F-35s with no impact? – National | Globalnews.ca)

Canada’s long-term approach to economic strategy and asset liquidation is further explored in this article on Canada’s gold reserves, which documents the country’s complete exit from gold holdings.

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