The Swedish aerospace company, Saab AB, has delivered new proposals to the Canadian government, suggesting that the construction of its two primary military aircraft, the Gripen fighter jet and the GlobalEye surveillance plane, in Canada could potentially create 12,600 jobs. The proposal includes the production of Gripens for Ukraine, who has expressed interest in purchasing the planes, and potentially other export markets.
Saab’s Attractive Proposal
According to the Industry Minister Mélanie Joly, Saab has proposed the production of between 150 to 200 aircraft in Canada. Joly considered the proposal highly attractive, citing its strong industrial development and job-creation aspects. The proposition from Saab states that the production of the Gripen E model, the most recent version of the single-engine jet equipped with advanced electronic-warfare systems, could generate 10,000 direct and indirect jobs.
Job Creation Breakdown
However, the latest proposal suggests a slightly lower number of jobs, with the Gripen’s production accounting for 9,000 jobs, and the GlobalEye’s production, which is based on the Bombardier 6500-series business jet, generating 3,600 jobs. This proposal comes as part of the government’s efforts to offset job losses in the tariff-impacted auto, steel, aluminum, and lumber industries, by exploring opportunities in the defense and pharmaceuticals industries.
Decision Pending
There is currently no indication of when Prime Minister Mark Carney will approve or reject the Saab proposal to construct one or both of the aircraft in Canada. So far, Canada has ordered 88 F-35 stealth fighter jets from Lockheed Martin, with a commitment to buy only 16. The review of the F-35 purchase is ongoing, and it’s release date is yet unknown. Joly stated that the Saab proposal is being taken very seriously as a means of achieving greater defense autonomy from the U.S.
Former Military Officials Weigh In
A number of former Canadian military officials, including Tom Lawson, former chief of defense staff, have privately urged Carney to proceed with the full F-35 order. Their argument lies in the complexity and expense of running two types of aircraft, as well as their belief in the F-35’s superior capabilities.
Ontario’s Economic Development
Vic Fedeli, Ontario’s minister of economic development, has met with Saab executives in Sweden to discuss the possibility of building the Gripen in Ontario. This comes as part of the government’s efforts to preserve manufacturing jobs in the face of tariffs imposed by the U.S. Incentives such as low-interest loans, job-training packages, and freight price reductions are being offered to manufacturers in an effort to preserve jobs and boost domestic sales.
Legal Action Against Stellantis
Joly revealed that the government is preparing to launch a lawsuit against Stellantis for breach of a taxpayer-funded contract reached in 2022. The agreement involved a $529-million allocation for work on the Jeep Compass factory in Brampton and a research site in Windsor, Ontario. The government is now going after the funds, having sent Stellantis a notice of default related to the jobs and funding agreement.
Future Implications
If Stellantis fails to present a credible plan for the factory, the government is prepared to hold them accountable. Joly emphasized the message this sends to all companies that decide to leave the country after receiving generous subsidies.
