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The first Cyclone helicopter is supposed to be delivered to the Canadian military in January 2009. ((Canadian Press))

Defence Minister Peter MacKay was tight-lipped Wednesday about a report that the federal government might cancel its $5 billion contract to replace Canada's aging fleet of Sea King helicopters.

"We're in some very important negotiations with [helicopter-maker] Sikorsky to find out exactly where we are in terms of what we contracted," he told reporters in Ottawa.

"Obviously it's a key priority for our government to have our maritime helicopters replaced. We've been committed to that since the early 1990s and beyond."

MacKay was reacting to a Globe and Mail report that suggested Sikorsky, a U.S. company, is now asking for an extra $250 million to $500 million to provide the Canadian military with 28 high-tech Cyclone helicopters.

The Globe, citing unnamed senior government officials, said Sikorsky was upping its price because the Cyclones need a more powerful engine to meet Canada's requirements.

The report also suggested the Cyclones might be delivered nearly two years late, even if the additional money is provided. The first Cyclones were supposed to be delivered in January 2009.

MacKay on Wednesday was quick to blame the Liberals for leaving Canada in desperate need of new helicopters in the first place.

In 1992, the Conservative government under Brian Mulroney signed a contract worth $4.8 billion to buy 50 EH-101 helicopters from the Anglo-Italian consortium European Helicopter Industries Ltd.

But when the Liberals took power a year later, they axed the deal, which cost $500 million in cancellation fees.

It was more than a decade later, in 2004, that the Liberals announced they had struck the new deal with Sikorsky, which then-defence minister Bill Graham said would give the Canadian military "the right helicopter" at "the best price."

But many in the military said they would have preferred to have the EH-101 helicopters to replace the Sea Kings.

The Sea Kings were supposed to have been retired by 2000, but the air force prolonged their life by spending $80 million to keep them flying. The Sea Kings require 30 hours of maintenance for every hour of flight, and they are unavailable for operations 40 per cent of the time.