A Canadian-made Swedish fighter jet may kick-start a domestic defence aerospace industry. But at what cost?

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John Diefenbaker’s scrapping of the Avro Arrow interceptor jet in 1959 is often, and rightfully, condemned as the greatest act of industrial sabotage in Canadian history. The supersonic, delta-winged angel of death was considered a decade ahead of its time. Five were built before the then-prime minister deemed the defence project too expensive and determined that foreign allies were unlikely to buy the machine.

The planes were demolished. Avro Canada – which had 50,000 employees in the late 1950s, making it one of the world’s top aerospace companies – went out of business. National pride took a hit and Canada suffered a massive brain drain as the top Arrow engineers found work in the U.S. aerospace industry.

Canada has not produced a homegrown fighter since.

Today, federal cabinet ministers dream of recreating the Arrow project – not a new version of the plane itself but a pioneering aerospace industry that could produce sophisticated flying weapons and thousands of manufacturing and research jobs. It’s an ambitious goal that has taken on new urgency as U.S. President Donald Trump’s tariffs bash Canada’s auto, steel and aluminum industries. Canada needs an industrial win and aerospace, evidently, is it.

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The question is whether the desperation to become a weapons player, with the goodies spread across the country, not just in the tech heartland of Ontario and Quebec, will turn into a boondoggle. The risk is that it will cost taxpayers a fortune as the feds and the provinces inevitably play the corporate welfare game to attract aerospace jobs.

Sweden and Ukraine, of all countries, may soon help Canada fulfill its national ambition. Last week, The Globe reported that Bombardier and Saab, the Swedish aerospace company that makes the Gripen, are in talks to form a joint venture to produce the fighter in Canada. There are two possible clients: the Royal Canadian Air Force and Ukraine, whose President, Volodymyr Zelensky, last month signed a letter of intent with Swedish Prime Minister Ulf Kristersson to buy 100 to 150 of the aircraft. Saab in Sweden simply does not have the capacity to build so many jets.

Enter Canada. Within moments of becoming Prime Minister in March, Mark Carney, under tariff assault from Mr. Trump, ordered a review of the contract to buy 88 F-35 stealth fighters from Lockheed Martin in the United States. (Canada has paid for only 16 of them.) The review has not been released but, already, there is the rough outline of a new plan.

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It would see Bombardier, currently a maker of only business jets after discarding passenger planes and trains, manufacture the Gripen in Canada, no doubt somewhere in Ontario or Quebec, for the RCAF or Ukraine or both. What seems certain is that Canada would order the Gripen only if the aircraft were made here, as Saab offered to do in 2022 when it and the F-35 made the short list to rebuild the air force.

The word in Ottawa is that Canada would still take delivery of the 16 F-35s and perhaps double the order in an attempt to prevent Mr. Trump from embarking on another tariff rampage. About 60 to 70 of the non-stealth, though far less expensive, Gripens would be added to the fighter fleet.

Ukraine, of course, would like its Gripens built on home soil. But the risks are high, given that a factory would become a prime target for Russian missiles.

In August, Industry Minister Mélanie Joly visited Saab’s facilities in Sweden. More recently, so did Ontario Economic Development Minister Vic Fedeli. In an interview this week, he told The Globe that “if incentives are required, we could consider them,” referring to potential sweeteners to persuade Bombardier and Saab to assemble the planes in Ontario.

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It’s always cheaper to purchase airplanes off the shelf from the country that invented and makes them. But the purpose of buying the Gripen is not just defence; it’s job creation. The effort would be costly. A factory, maybe even a runway, would have to be built, along with supply chains formed, workers hired and trained, engineers recruited.

Remember, Bombardier is a civil aviation company; there is no guarantee that it can transition virtually overnight to the weapons business easily or cheaply. And it has a history of epic cost overruns and delivery delays. The C Series regional jet, now the Airbus A220, went US$2-billion over budget and almost sank the company. The Learjet 85 was another costly failure.

Over the decades, Bombardier has soaked up billions in federal and provincial grants, loans and loan guarantees. Ontario has a dubious corporate freebie record, too, having handed electric-vehicle and battery makers vast fortunes in incentives just as that industry began grinding into reverse.

If Bombardier wins the contract for the Gripen’s final assembly, Ottawa would be wary of dressing up the project as a Quebec, or Quebec and Ontario, endeavour. It would want to make sure other aviation companies, including Calgary’s De Havilland, get a piece of the action. Trying to make the aircraft a truly national project will raise costs as well as political tensions as various provinces demand Gripen-related jobs.

Using the Gripen to kick-start a defence aviation industry is a majestic idea, but its implementation could be long, costly and politically fraught.