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===New Fighter Aircraft program===
{{main|New Fighter Aircraft program}}
In 1977, the Canadian government identified the need to replace the NATO-assigned [[Canadair CF-104 Starfighter|CF-104 Starfighter]], the NORAD-assigned [[McDonnell CF-101 Voodoo|CF-101 Voodoo]] and the [[Canadair CF-5|CF-116 Freedom Fighter]] (although the decision was later made to keep the CF-116). Subsequently, the government proceeded with the [[New Fighter Aircraft Project|New Fighter Aircraft]] (NFA) competition, with a purchase budget of around {{nowrap|[[Canadian dollar|C$]]2.4 billion}} to purchase 130–150 of the winner of the competition. Candidates included the [[Grumman F-14 Tomcat]], [[McDonnell Douglas F-15 Eagle]], [[Panavia Tornado]], [[Dassault Mirage F1]] (later replaced by the [[Mirage 2000]]), plus the products of the American [[Lightweight Fighter]] (LWF) competition, the [[General Dynamics F-16 Fighting Falcon]], the F/A-18 Hornet, and a de-navalized version of the Hornet, the F-18L.{{#tag:ref|The F-18L, like the entire F-18 series, was derived from the [[Northrop YF-17 Cobra]], the Hornet's predecessor.|group=N}} The government stressed that the winner of the competition be a proven off-the-shelf design and provide substantial industrial benefits as part of the order.
By 1978, the New Fighter Aircraft competitors were short-listed to just three aircraft types: the F-16 and the two F-18 offerings. The F-14, F-15, and the Tornado were rejected due to their high purchase price, while Dassault dropped out of the competition. The F-18L combined the systems and twin-engine layout of the F-18 that Air Command favored with a lighter land-based equipment setup that significantly improved performance. Northrop, the primary contractor for the F-18L version, had not built the aircraft by the time of the NFA program, waiting on successful contracts before doing so. While Northrop offered the best industrial offset package, it would only "pay off" if other F-18L orders were forthcoming, something the [[Department of National Defence (Canada)|Department of National Defence]] (DND) was not willing to bet on.<ref>[http://www.disam.dsca.mil/pubs/Vol%2013_1/OMB.pdf "F/A-18 Aircraft Sales to Canada, Australia, and Spain: A Case Study of Offsets."] {{Webarchive|url=https://web.archive.org/web/20110722185901/http://www.disam.dsca.mil/pubs/Vol%2013_1/OMB.pdf |date=22 July 2011 }} ''The Office of Management and Budget'' via ''disam.dsca.mil'', 16 April 1990. Retrieved: 8 June 2010.</ref>
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