The Canadian Government is reportedly planning to cancel a $55m contract with Thales Canada to deliver new radar units in order to support its CF-18 fighter jet squadrons in Cold Lake, Alberta and Bagotville, Quebec.

Under the deal, which was signed in November 2010, Thales Canada was set to deliver two 400 air-defence tactical-control radar systems, CBC News reported.

Delivery of the equipments was scheduled to begin in 2013.

Defence Department documents revealed that the costs had increased to more than $78m by 2013 and the Public Works Department was in negotiations with Thales to resolve the issue by November last year.

"Delivery of the equipments was scheduled to begin in 2013."

Public Works spokeswoman Annie Trepanier was quoted by CBC News as saying: "In February 2015, Canada and Thales reached agreement in principle to terminate this contract by mutual consent.

"Public Works is working with Department of National Defence (DND) to identify an appropriate path forward to meet their long-term capability needs on this project."

However, negotiations for a final termination agreement are still underway, the news report said.

The GM 400 offers detection from very high to very low altitudes, and tracks a wide range of targets, from highly manoeuvrable tactical aircraft flying at very low altitudes to the unconventional small radar cross-section devices, such as unmanned aerial vehicles or cruise missiles.

According to Defence documents, the military had already spent at least $6.5m on the project by 2013.

Meanwhile, National Defence spokesman Major James Simiana said the existing systems ‘are operational and they are still capable of supporting both Bagotville and Cold Lake.’