Ottawa was planning to buy 18 F/A-18 Super Hornet fighter jets but has elected instead to buy used F-18s from the Australian government, some of which will be cannibalized for spare parts for the Canadian military's existing stock, Reuters said.
National Defence had already planned to spend up to $500 million to keep its 76 CF-18s flying to 2025, but previous estimates have said extending past that date would be very expensive.
The government's decision to buy Australian fighter jets stands to increase tensions with Boeing, which has repeatedly warned that billions of dollars in business activity in Canada are at stake in the ongoing dispute.
Retired military officers and defence experts alike say a competition, which latest estimates say would be worth up to $19 billion, could be launched right away, and urged the Liberals to take that step, rather than waiting several more years.
"Even today, it could be started".
Defence Minister Harjit Sajjan has said Canada can not meet all of its obligations to the North American Aerospace Defence Command (NORAD) and the North Atlantic Treaty Organization (NATO) with its current fleet of CF-18s, arguing new fighter jets are needed before the entire fleet is replaced in the next decade.
In the meantime, government and industry sources say the Liberals have settled on buying Australia's used jets from Australia.
The decision comes after the U.S. Commerce Department levied a 300 percent tariff on each Bombardier C Series jet delivered to the U.S., following accusations from Boeing that the Canadian industrial giant was receiving unfair government subsidies.
The Australian plan does have its advantages.
Instead, the Liberal government will announce next week it intends to buy a used fleet of older Australia F-18 jets, the same kind of plane Canada now operates, said the sources, who asked not to be identified because of the sensitivity of the situation.
Speaking to The Globe and Mail in September, Boeing International president Marc Allen said the federal government should not forget that Boeing does $4-billion a year of business in Canada, with 560 suppliers and an overall impact of 17,000 jobs. "Canada hadn't operated them", Perry said.
But the used jets are 30 years old - the same vintage as the CF-18s - and will need significant upgrades to continue flying into the next decade.