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\u201cCancelling the F-35s might be a good idea, but we need to think about it,\u201d Bombardier chief executive Eric Martel told a business audience in Montreal. \u201cWe have contracts with the Pentagon. Will there be reciprocity there?\u201d<\/p>\n<\/div>\n
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Bombardier has invested in recent years in its defence unit, which converts jets into military aircraft. It has two contracts with the U.S. government, one for communication aircraft and another for surveillance planes.<\/p>\n
New Canadian Prime Minister Mark Carney ordered a review of the F-35 purchase agreement, a $19 billion deal for 88 jets that was finalized in 2023. The deal hasn\u2019t been scrapped, but the government needs to \u201cmake sure that the contract in its current form is in the best interests of Canadians and the Canadian Armed Forces,\u201d a defence ministry spokesperson said.<\/p>\n
Earlier this month, President Donald Trump put 25 per cent tariffs on imports on Canadian goods that don\u2019t fall under the Canada-U.S.-Mexico Agreement (CUSMA), and added 25 per cent import taxes to aluminum and steel products. He has repeatedly said he believes Canada should be the 51st U.S. state \u2014 a recent poll showed that 90 per cent of Canadians disagree \u2014 and members of his administration have taken the Canadian government to task for its low level of military spending.<\/p>\n
\u201cTrump isn\u2019t wrong on everything,\u201d Martel said. \u201cWe\u2019ve been hiding behind our big brother for a while, and we\u2019re completely dependent on him militarily.\u201d<\/p>\n<\/div>\n
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In 2023, Canada finalized a deal to order as many as 16 military surveillance aircraft from Boeing Co. as part of an investment worth more than US$7 billion, rejecting a competing Bombardier proposal.<\/p>\n
The jet maker\u2019s shares have dropped 18 per cent since Trump was elected on Nov. 5, but are still up about 50 per cent over the past year.<\/p>\n
In February, Bombardier set aside its financial outlook for the year because of risk and uncertainty about tariffs. \u201cNot providing guidance is the most responsible thing for us to do,\u201d Martel said at the time. About 60 per cent of Bombardier\u2019s business comes from the U.S., and its planes are currently built and shipped under the rules of the CUSMA.<\/p>\n
Bombardier has a complicated supply chain that includes manufacturing in U.S. and Mexico with more than 2,800 US-based suppliers across 47 states. U.S.-made parts and systems make up a significant proportion of the cost of its aircraft.<\/p>\n Recommended from Editorial<\/p>\n