Boeing may bid to supply Canadian fighter jets despite trade row

OTTAWA (Reuters) - Boeing Co may take part in a race to supply Canada with 88 new fighter jets and stands an equal chance with other bidders even though it is locked in a trade dispute with Ottawa, a senior Canadian official said on Thursday.

FILE PHOTO: Boeing's logo is seen during the Japan Aerospace 2016 air show in Tokyo, Japan, October 12, 2016. REUTERS/Kim Kyung-Hoon/File Photo

Procurement Minister Carla Qualtrough made her comments shortly after the Liberal government released a list of five companies that would be allowed to compete. Boeing, along with U.S. rival Lockheed Martin Corp, is on the list of approved suppliers.

Canada is due to release the exact specifications for the jets next year. Officials say the deal is worth between C$15 billion ($11.80 billion) and C$19 billion.

Although Boeing angered Canada last year by launching a trade challenge against planemaker Bombardier Inc, Qualtrough said the dispute would not necessarily harm Boeing if it chose to enter its F-18 Super Hornet.

“All the five teams on the supplier list have an equal chance,” she said in a phone interview when asked about Boeing’s prospects given the Bombardier row. None of the contenders are obliged to take part.

Boeing spokesman Scott Day said the aerospace giant would continue to evaluate its participation in the competition.

A U.S. trade commission last month dismissed Boeing’s complaint that Bombardier was dumping planes on the American market at “absurdly low” prices. Canadian officials have privately made it clear that Boeing needs to drop the matter to stand a better chance of winning the fighter jet contract, say well-placed sources.

Ottawa has made clear that bids will be evaluated in part by whether firms have caused any past economic damage to Canada - a clear reference to Boeing.

But on Thursday Qualtrough said: “We haven’t decided how far back into the past companies’ (actions) will be analyzed.”

Canada is remaining in the nine-nation consortium that helped fund development of the F-35, which has prompted some defense analysts to suggest the jet has an advantage going into the competition.

“We’re aware of that perception and we are working very hard to make sure that the process is fair and transparent,” said Qualtrough. Prime Minister Justin Trudeau initially opposed the F-35 on the grounds that it was too costly, but Ottawa has since softened its line.

The government said the other companies eligible to take part are: Airbus, which makes the Eurofighter; Saab AB, which makes the Gripen; and Dassault Aviation, which makes the Rafale.

($1 = 1.2709 Canadian dollars)

Additional reporting by Leah Schnurr in Ottawa; Editing by Bernadette Baum and Leslie Adler