UPDATE 1-Canada opposition assails F-35 fighter jet contract

Thu Jul 15, 2010 2:33pm EDT

Related Topics

* Opposition vows to put deal on hold if it wins power

* Government to announce big fighter contract on Friday (Adds comments from government paras 8-10)

By David Ljunggren

OTTAWA, July 15 (Reuters) - Canada's main opposition Liberal Party condemned on Thursday a multibillion-dollar government plan to buy a fleet of new fighter jets from Lockheed Martin Corp (LMT.N).

The Conservative government said in May 2008 that it planned to buy 65 of Lockheed's F-35 Joint Strike Fighters. Media reports say Ottawa will announce a C$16 billion ($15.4 billion) 20-year deal on Friday for the acquisition and maintenance of the jets.

The F-35s would replace Canada's aging CF-18s, which are scheduled to reach the end of their working lives in 2017-20. Canada bought 138 CF-18s in the 1980s and has refurbished 80 of them.

Liberal industry spokesman Marc Garneau said there was no need to make an announcement now and questioned why the government would offer a sole-source contract.

"A future Liberal government will put on hold this ... contract," he told a news conference. "Competition guarantees the best value for Canadians."

Polls show the Liberals trail the Conservatives in popular support and would have little chance of winning an election now.

The Joint Strike Fighter program is being funded by the United States, Canada, Turkey, Britain, Italy, Norway, Denmark, Australia and the Netherlands.

"Contrary to Liberal myths, this was a competitive process. Canada participated in an extensive and rigorous competitive process where two bidders developed and competed prototype aircraft," said a spokesman for Defence Minister Peter MacKay.

"Participation in the JSF program has allowed the Department of National Defence and Canadian industry to be part of a cutting-edge international military program."

Ottawa will make "a major defense procurement announcement" at 11 a.m. (1500 GMT) on Friday, the spokesman added.

The JSF is set to be the world's costliest arms acquisition program, priced at more than $300 billion for the United States alone. The United States is scheduled to buy more than 2,400 of the planes.

One rival aircraft is the Eurofighter, made by a consortium comprising Britain's BAE Systems (BAES.L), Italy's Finmeccanica (SIFI.MI) and EADS EAD.PA, representing Germany and Spain.

($1=$1.04 Canadian) (Reporting by David Ljunggren; editing by Peter Galloway)

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