With an Airbus-led consortium and France's Dassault Aviation having already withdrawn their Typhoon and Rafale fighters, respectively, from the procurement process, that leaves only Lockheed Martin's F-35 and Saab's Gripen in the running.

A decision is expected next year, with the first of 88 fighters to be delivered as early as 2025, Public Services and Procurement Canada said in a statement.

Boeing and its F-18 Super Hornet were not mentioned by name. Rather the government ministry simply released an updated shortlist of bidders who've met the air force's requirements.

"Proposals were rigorously assessed on elements of capability, cost and economic benefits. The evaluation also included an assessment of economic impact," it said.

The next step could involve final negotiations with the top-ranked bidder, or giving both Lockheed Martin and Saab an opportunity to improve their proposals.

The contract is valued at more than Can$15 billion (US$11.7 billion).

The new aircraft's central role will be to patrol North American air space with the US Air Force under NORAD.

Airbus said when it withdrew from the competition in 2019 that NORAD security requirements were too expensive, while sources told AFP that Dassault Aviation was unable to meet technical requirements tied to Canada's membership in the "Five Eyes" intelligence sharing group of nations.

The Five Eyes group is comprised of Canada, the United States, Britain, Australia and New Zealand.