The Canadian government is reportedly planning to cancel a $2bn programme to purchase new armoured vehicles for the army.
The Canadian Department of National Defence's (DND) combat vehicle (CCV) programme covers a total of 108 vehicles.
The CCV programme aims to develop and supply high survival medium-weight vehicles to help the Canadian Army bridge the gap between the light-armoured vehicles III (LAV III) and the Leopard 2 main battle tanks.
The bid also includes an option for the acquisition of an additional 30 vehicles, majority of which were scheduled to be manufactured in Canada through the government's industrial regional benefits programme, which seeks business activity in the Canadian economy equal to 100% of the contract value.
Three defence contractors, Nexter, BAE Systems and General Dynamics Land Systems have submitted their bids for the programme. The three bidding companies spent tens of millions of dollars to compete in the CCV programme. However, their bids will expire on 23 December 2013 and the military has decided not to select a winner.
The army's readiness budget was cut by 10% year over year from about $3.7 billion to about $3.3 billion. Sources told CBC News that the army was recently asked to re-evaluate its need for the vehicles.
The news agency reported that the process allegedly led the army to restate its desire to buy the heavier fighting vehicles.