Canada Sweden defence pact reshapes fighter jet competition

Canada and Sweden have signed a new strategic partnership that places defence, security, and industrial cooperation at the centre of their relationship, reshaping the environment around Canada’s future fighter jet plans.

The pact was announced on Tuesday during the Ottawa visit of Sweden’s King Carl XVI Gustaf and Queen Silvia.

It focuses on five areas that include economic development, security, the Arctic, science and technology, and the environment.

The timing is notable as Canada is under pressure to strengthen domestic manufacturing and reduce its dependence on the US for both military supplies and export markets.

Industrial talks

The partnership arrives as Swedish firm Saab continues talks with Quebec-based Bombardier about producing Gripen fighter jets in Canada.

The companies already collaborate on the GlobalEye early warning aircraft, which is assembled in Canada before being sent to Sweden for radar and sensor integration.

The Globe and Mail reported that Saab is offering to build the entire GlobalEye aircraft in Canada.

This expansion would deepen their long-standing industrial ties and support Canada’s ambition to broaden its aerospace sector.

Contract uncertainty

The renewed cooperation unfolds against the backdrop of Canada’s stalled F-35 programme.

Several years ago, Saab’s bid for a major fighter jet contract was rejected in favour of Lockheed Martin’s F-35.

The decision has since come under scrutiny after US President Donald Trump imposed tariffs on Canada and repeatedly made comments calling for Canada to become the 51st state.

In response, Prime Minister Mark Carney launched a formal review of the F-35 contract earlier this year.

Canada has so far committed to buying only 16 F-35s, despite an original plan to acquire 88 jets.

The government had indicated a decision on the review would come before the end of the summer, but no update has been released.

The main factor in the delay appears to be whether Lockheed Martin can provide stronger industrial benefits to Canada, which has long pushed for greater domestic participation in large defence projects.

Gripen prospects

Saab has sought to position the Gripen as a solution that delivers both capability and economic impact.

The company has said that full assembly of the Gripen in Canada would create 10,000 jobs.

It has also been suggested that a domestic manufacturing line could be used to produce jets for Ukraine.

These proposals form part of a wider conversation about Canada’s need to secure more value from major defence contracts and support long-term industrial growth.

A key factor in the debate is the difference between the aircraft.

The Gripen falls into the fourth or 4.5 generation category, while the F-35 is a fifth-generation fighter with advanced stealth, stronger network systems, and higher combat effectiveness.

These distinctions continue to shape political and military discussions, even as industrial capacity becomes a central issue.

The Swedish royal visit includes senior government officials and business leaders, adding further attention to both the partnership and the defence competition surrounding Canada’s future fleet.

The delegation will continue its tour with a stop in Montreal on Thursday.

Their presence highlights Sweden’s interest in deeper collaboration across the Arctic and the North Atlantic, areas where both countries share strategic concerns.

The defence pact now sits alongside negotiations involving Saab, Bombardier, and the Canadian government, creating a new framework that could influence the direction of the fighter jet programme.

With Canada balancing domestic jobs, technological needs, and geopolitical pressures, the partnership adds fresh momentum to the ongoing competition between the Gripen and the F-35.