Canada to restart fighter search, could buy F-35: source

By David Ljunggren

OTTAWA (Reuters) - Canada is restarting its search for new fighter jets but could still choose Lockheed Martin Corp's F-35, which Ottawa had initially said it would buy before losing enthusiasm as cost estimates soared, a government source told Reuters on Friday.

An independent four-person panel will study the F-35, Boeing Co's F-18 Super Hornet and the EADS Eurofighter and report back to Ottawa by early 2013, the source said. The panel, which could also look at other fighters, will not make a recommendation on which jet to buy.

The decision marks a determined effort by the Conservative government to end a series of embarrassments after announcing in July 2010 it intended to buy 65 of the Joint Strike Fighters for C$9 billion. The planes were supposed to replace Canada's veteran CF-18s, which will be retired in 2020.

Canada is one of eight international partners helping to fund development of the new radar-evading warplane, but it has not signed a formal contract to buy the planes from Lockheed Martin. Ottawa had decided to proceed with the purchase without holding an open competition after military officials said the F-35 was the only plane to meet all their needs.

The Pentagon's F-35 office declined to comment, saying it is a Canadian issue.

U.S. officials said Canada remained part of the international group that is funding development of the F-35 and that status remained unchanged. Canada agreed in February 2002 to contribute $150 million to the F-35 development program.

Critics have long complained that the C$9 billion purchase figure was unrealistically low and said the military had opted for the F-35 without looking closely enough at alternatives.

"People said the process was unclear and they don't know how we got to the decision (to buy the F-35s). This time everything will be out in the open. The process will be clear," the government source told Reuters.