The Trudeau government has missed the deadline for a multimillion-dollar payment that keeps Canada in the club of nations involved in the F-35 stealth fighter program, CBC News has learned.
The $32-million membership fee was due on May 31, but a spokeswoman for Defence Minister Harjit Sajjan confirmed late Monday that the U.S. project office overseeing development of the highly complex jet has not received the instalment.
But Jordan Owens cautioned not to read too much into the oversight and that Canada is still on the hook for the cash.
Defence Minister Harjit Sajjan speaks at a press conference at National Defence Headquaters in Ottawa on Wednesday, April 6, 2016. (Photo: Sean Kilpatrick/CP)
"We will honour our financial commitments," she said, responding for the minister who was in transit from a defence conference in Singapore.
It's unclear when the instalment will be made and whether there are any penalties associated with a late payment.
The policy issue is an uncomfortable conversation for the Liberals.
Earlier this year, the fact that Canada was still paying to be part of the F-35 buyers' club raised questions about their campaign pledge to purchase something else other than the stealth fighter. Prime Minister Justin Trudeau said it "no longer makes sense" to buy the Lockheed Martin fighter because Canada would not participate in any first strike missions.
The annual payment also gives the federal government the right to buy F-35s at a discount price and gives Canadian companies access to supply contracts for the construction and maintenance of the high-tech jet.
The missed payment does not signal Canada's withdrawal from the agreement, Owens said.
Sole-sourcing a new jet
But it does shine a further spotlight on the contradictions in the Liberal policy and comes one day after published reports stated that cabinet was mulling over the sole-source purchase of an unknown number of Super Hornets, the Boeing-built rival to the F-35.
"I was shocked," said Alan Williams, a former procurement manager at the Department of National Defence, and one of the most strident critics of the Harper government's plan to acquire the F-35 without a competition. "I don't think anyone would have expected that kind of behaviour."
Williams was one of the defence insiders most impressed with the Liberal promise of open competition and transparency in last fall's election.
He said that if the government does a sole-source deal with Boeing, it makes the Liberals no better than the government they replaced.
"There is no legal justification to sole-source this," said Williams, who noted that the use of the national security criteria would not apply.
The move would possibly open the door to a legal — or even trade — challenge by competitors, he said.
"I'm not sure companies want to take the government to court on this kind of thing, but, you know, there is no legal justification for doing this," he said.
Owens denied cabinet has discussed a sole-source deal.
Capability gap or no capability gap?
But it was less than clear where the government was headed Monday when John McKay, the parliamentary secretary for defence, said the Liberals must do something about CF-18s that are getting old and need to be retired.
"There is a developing capability gap that needs to be managed," he said. "We have obligations to NATO. We have obligations to Norad."
Up until the last couple of weeks, the line from both the Liberals and their Conservative predecessors was that the 1980s vintage CF-18s, which have been upgraded, are still good to keep flying into the 2020s.
Indeed, a year before being defeated, the Harper government ordered a further life-extension to the fighters — worth hundreds of millions of dollars — so they could stay airborne until 2025.
In light of that, Conservative defence critic James Bezan said the so-called capability gap is fiction.
"I think it's imaginary on their part and they're trying to use that as the narrative," he said. "There isn't this need to actually go out there and select immediately."