Bombardier Inc. is cautioning the Canadian government that its decision to review the F-35 fighter jet contract with Lockheed Martin Corp. could have unintended consequences, particularly for Canada’s defense industry and its own U.S. contracts.
Speaking to a business audience in Montreal, Bombardier CEO Eric Martel acknowledged the reasoning behind reconsidering the $19 billion (US$13.3 billion) deal for 88 F-35 jets, but urged caution. “Cancelling the F-35s might be a good idea, but we need to think about it,” Martel said. “We have contracts with the Pentagon. Will there be reciprocity there?”
F-35 Review Tied to U.S. Tariff War
Newly elected Prime Minister Mark Carney initiated the review as part of Canada’s broader response to U.S. President Donald Trump’s trade war, which saw new 25% tariffs on Canadian goods, aluminum, and steel. While the F-35 deal remains intact for now, Canada’s defense ministry stated the review aims to ensure the agreement is in the best interests of Canadians and the Canadian Armed Forces.
Bombardier’s U.S. Ties Could Face Retaliation
Bombardier, which has significantly expanded its defense sector, currently holds two major contracts with the U.S. military—one for communications aircraft and another for surveillance planes. With about 60% of its revenue coming from the U.S., the company is deeply tied to American supply chains, relying on 2,800 U.S.-based suppliers across 47 states.
The Global 7500, Bombardier’s flagship jet, illustrates this dependency:
✅ Wings – Manufactured in Texas
✅ Avionics – Produced in Iowa
✅ Engines – Built in Indiana
Although these components originate in the U.S., the jets are assembled and finished in Canada, making them subject to tariffs under Trump’s latest trade measures.
Trump’s Pressure on Canada’s Military Spending
Trump’s administration has repeatedly criticized Canada for underfunding its military, with the U.S. President even suggesting Canada should be America’s 51st state—a claim that 90% of Canadians reject, according to recent polls.
Martel acknowledged that Trump’s criticisms aren’t entirely unfounded, stating, “We’ve been hiding behind our big brother for a while, and we’re completely dependent on him militarily.”
Bombardier Faces Market Uncertainty
The F-35 review isn’t the first setback for Bombardier in Canadian defense contracts. In 2023, the federal government opted to purchase 16 military surveillance aircraft from Boeing in a US$7 billion deal, rejecting Bombardier’s competing bid.
Since Trump’s re-election in November 2024, Bombardier’s stock has dropped 18%, though it remains up 50% over the past year. The company has also suspended its financial outlook for 2025 due to market volatility, particularly uncertainty around U.S. tariffs.
With Canada reconsidering a major defense contract and Bombardier’s reliance on U.S. trade policies, the company warns that economic retaliation from Washington could further disrupt Canadian aerospace and defense industries.
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