Canada scraps plan to buy Boeing fighters amid trade dispute: sources

The Boeing Company logo is projected on a wall at the "What's Next?" conference in Chicago, Illinois, U.S., October 4, 2016. REUTERS/Jim Young

Canada is scrapping a plan to buy 18 Boeing Co (BA.N) Super Hornet fighter jets amid a deepening dispute with the U.S. aerospace company, three sources familiar with the matter said on Tuesday.

Instead, the Liberal government will announce next week it intends to acquire a used fleet of older Australia F-18 jets, the same kind of plane Canada currently operates, said the sources, who asked not to be identified because of the sensitivity of the situation.

The move underlines Ottawa’s anger at a decision by Boeing to launch a trade challenge against Canadian planemaker Bombardier Inc (BBDb.TO), which the U.S. giant accuses of dumping airliners on the American market.

The Liberal Party of Prime Minister Justin Trudeau initially said in late 2016 it wanted the Boeing jets as a stopgap measure until it could launch a competition for a permanent fleet to replace Canada’s ageing CF-18 jets.

But as relations with Boeing deteriorated, Ottawa slammed the firm for not acting as a trusted partner and began looking at the Australian jets.

Australia’s Defence Department said Canada lodged a formal expression of interest for “a number” of Australia’s F/A-18 Classic Hornets on Sept. 29, in a statement emailed to Reuters.

“Defence is continuing to assist Canada in regards to their EOI,” the statement added, without disclosing a price or any other details.

Two sources also said Australian military officials had been in Ottawa late last month for talks.