Canada Prime Minister Mark Carney recently announced Canada has started negotiations with the Swedish company Saab for an aerial surveillance system. The deal also involves Canadian-made jets. At the same time, Ottawa has shut the door on the purchase of a Boeing alternative.
It’s all part of Carney’s plan to diversify, not only trade, but defense and security relationships in the wake of Canada’s frayed trade and tariff relationship with President Donald Trump’s administration in America.
Carney unveiled the new agreement with Saab at a packed defense and security conference just outside Ottawa.
"I’m pleased to announce that Canada has entered into negotiations to procure Saab’s airborne early warning and control aircraft; a key resource for Canadian armed forces to detect and deter threats across the Arctic," he said. "The GlobalEye's airborne surveillance capability can track objects and signals up to 650 kilometers away and they’ll share, in real time, that information, with the Canadian forces and our allies."
There’s another reason that makes the Saab deal even more appealing, which includes the Canadian aircraft maker Bombardier.
"At the heart of the GlobalEye’s system is the Canadian-made Bombardier 6500, an aircraft that includes 20 percent U.S. content, which gives the sense of just how integrated these defense systems are," Carney said.
The deal has the potential to create 3,000 jobs in Canada’s defense and aerospace sector. The company would build the aircraft at its plants in Toronto and Montreal, not only for the Canadian armed forces but for Canada’s allies. The Canadian purchase alone is estimated at more than $5 billion.
"What this will do is create a new layer of job opportunities in terms of the modifications of the aircraft," said Mark Masluch, a spokesman for Bombadier. "So what Bombardier is doing now is getting actively involved in the discussions to create this secondary production."
The economic spinoff benefits could also be in the tens of billions of dollars.
The deal with Saab is also significant because it is trying to sell Canada its Gripen fighter jet. Ottawa has committed to buying up to 30 F-35s from the U.S. but is reviewing the purchase of another 60, and Saab CEO Micael Johansson is anxious to show that his company is a serious contender.
"We can show now as a company and as a country how closely we want to work with Canada," he said.
Linked to Ottawa’s new defense deals and purchases is a Canadian industrial sector ready to get on board — much of it in Ontario.
"We expect the strategy to add 43,000 new jobs right here in Ontario, generate over $400 million in annual provincial tax revenues and add $6 billion to our GDP," Premier Doug Ford said when unveiling his 10-year strategy for the defense industry.
Ford said Ontario is well positioned to grow in the industrial defense area, citing a highly skilled workforce, critical minerals, a high-tech sector, nuclear technology and an existing defense sector.
Both Ford and Carney made their announcements at CANSEC, which has become the largest security and defense trade show in Canada, with 300 military equipment exhibitors and more than 100 international delegations.
