The federal cabinet recently signed off on the proposal, which the military has been pushing for, calling it a uniquely time-sensitive opportunity because Boeing aircraft, the U.S. manufacturer, has closed the assembly line.
Nicholson made the announcement Friday at Canadian Forces Base Trenton, Ont., the home of the current C-17 fleet, and said that the mammoth jets have given the Canadian military a lot of flexibility to be able to move a huge amount of cargo for both itself and allies.
He underscored their use in humanitarian operations, as well as support to French troops fighting in the west African country of Mali in 2013.
"It's no exaggeration to say that the C-17 fleet has revolutionized the way the Canadian Forces operate," he said. "Without these aircraft we would be forced to contract air services, or hitch rides with our allies."
The big jets are currently being used to ferry supplies to not only the country's CF-18 air task force, operating out of Kuwait, but they're also carrying weapons from allies to Kurdish fighters in northern Iraq.
Nicholson says the addition of the fifth aircraft eases the burden on the other four and actually gives them an extra seven and a half years more of operational life.
Earlier this week, The Canadian Press reported that National Defence believed it could afford the estimated US $169-million price tag because it had not spent all of the funds made available for the initial purchase of four C-17s.
That figure is just the cost of the plane without any spares, training, maintenance — or loading equipment. When the first C-17s were purchased special loaders were required along with infrastructure improvements at Trenton, the country's largest military air base.
A defence department backgrounder, released Friday, said the overall project cost, will be $415 million when all the necessary costs are factored in. There will also be $30 million spent on long-term maintenance.
As the briefings pointed out, the cost is already found within the budget of the existing program. Defence officials under-spent the initial C-17 purchase by over $400 million.
The C-17 is costly to operate, according to U.S. Air Force comptroller. Estimates produced by the Pentagon show the cost per flying hour is US $23,279.
Since closing its production line last summer, Boeing was left with 10 unsold Globemasters, some of which were recently spoken for by Australia.
The purchase of another C-17 was not listed in the government's defence acquisition guide, released last June. But it initially was championed by former chief of defence staff, retired general Walt Natynczyk, according to briefing documents obtained by The Canadian Press.