Canada is reassessing its $27.7 billion agreement to buy 88 F-35A fighter jets from Lockheed Martin, weighing whether to reduce the order and add Saab’s JAS 39 Gripen E/F as an alternative or complementary aircraft.

Prime Minister Mark Carney’s government has confirmed that a minimum of 16 F-35s will be purchased, while the remainder of the 72-aircraft order remains under evaluation.

Officials familiar with the discussions say the review, initiated in March 2025, aims to ensure better value for taxpayers amid a 45% surge in program costs.

Industry Minister Mélanie Joly has taken a prominent role in the talks, signaling that Canada could adopt a mixed fleet if Lockheed Martin fails to provide more favorable economic terms.

“Saab’s proposal includes assembling Gripens in Canada,” Joly said in an interview, calling the plan “a path to strengthen our airpower, build alliances, and create Canadian jobs.”

Saab’s Counteroffer and Operational Debate

Saab has actively promoted the Gripen E’s adaptability and affordability, arguing it offers cutting-edge capabilities without the cost burden of the F-35.

Company spokesperson Sierra Fullerton emphasized the Gripen’s “continuous daily software upgrades” and said its operating costs are “about one-sixth those of the F-35.”

Joly downplayed concerns about maintaining two aircraft types, noting that “all G7 countries operate mixed fleets.”

She also underscored the need for fiscal responsibility given strained U.S.–Canada relations and shifting trade policies under President Donald Trump.

Former Defense Minister Bill Blair, who initiated the review process earlier this year, said Ottawa “must explore alternatives” amid commercial and political pressures.

Military and Expert Perspectives

Senior military officials, including Deputy Defense Minister Stefanie Beck and Royal Canadian Air Force Commander Lt.-Gen. Jamie Speiser-Blanchet, continue to advocate for fifth-generation aircraft such as the F-35, citing the need to counter evolving threats from China and Russia.

However, they acknowledge that “preparations are ongoing” pending final decisions from the Prime Minister’s Office.

Defense analysts remain divided.

Philippe Lagassé of Carleton University warned that “Canada has limited leverage to renegotiate a signed contract,” while researcher David Perry suggested Lockheed Martin “could easily find alternative buyers” if Ottawa scales back its commitment.