Yes, the CF18s need to be replaced (contingent on maintenance of the existing organisation of our armed forces). The oldest in the fleet are approaching 30 years and will near 40 by the the time they use up their latest life-extension. The physics of airframe fatigue and the like demand they stop flying at some point, regardless of any defence white paper. It's better when we voluntarily retire them, versus having them retire themselves by falling from the sky.
But do we need to replace them with F35s? Well...thats' partly a boffin argument that would have to weigh features of the F35 against its competitors. The F35 is single engine, which is thought to be a safety negative for a country like Canada with vast stretches of relatively uninhabited territory. An engine failure in a single engine aircraft over the far North means an ejection, loss of the aircraft, and subsequent wilderness survival problem for the unfortunate pilot. Two engines theoretically means controlled flight.
The F35 is also a brand new unfathomably complex machine. It's almost a given that there will be bugs to work out. There already have been major weight/performance issues with the prototypes that come from trying to make the F35 do everything you can make an airplane do (like vertical landing, carrier compatible, stealth, supersonic cruising...) and still meet basic range and payload demands. Are we about to find our fleet grounded because after X number of hours we discover some critical mechanical or structural flaw? Is it better to go with a currently in-service and therefore less experimental airframe such as the Dassault Rafale, Eurofighter Typhoon, or F18E/F series Superhornet? These are the sorts of things a competitive tender would sort out. But this is the new Canada with its ahistorical postmodern government. Considered decision making is not what we do. Anyone suggesting otherwise is a military-hatin' Liberal Commie traitor, even if they're retired Naval-astronauts.
The other issues I have with the F35 purchase are strategic, and relate to increasingly uncertain social, political, and environmental contexts. We've grown accustomed to stable high-performance economies that allow us to technologically innovate phenomenal things like F35s, and buy them on credit. We in the developed West suffer the assumption that this status quo will hold.
The F35 has a long tail of support needs. That much flying wizardry requires a huge private sector commitment - the flaw in the military-industrial complex is that the military requires a viable industrial sector... In an era of economic uncertainty (Paul Krugman thinks we're walking into a depression), no firm (or state for that matter) is safe from failing and that may have implications for supporting key aircraft systems and structures over time. The US is a declining superpower, and has major money problems. In a few years it may not have the economy that allows it to produce or support something like the F35. If it can't support its fleet, we can't support ours.
Oil. If you subscribe the theory of Peak Oil, then petroleum availability and therefore affordable energy prices, and therefore social and economic stability are in trouble. Add climate change to the latter, things are just compounded. Aircraft and armed forces in general are high consumers of all sorts of fuels, and 3-digit oil prices exponentially increase their running costs. The martial winners (and possibly the social and political winner) in that game are the countries that can keep their armed forces functional (which I think might have to in some ways borrow more from the Pashtun ORBAT than NATO).
But despite growing evidence to the contrary, we're a bit addled with our postivism about the future. Sure we can acknowledge some realities but there's this implicit and explicit assumption that we might maintain the status quo. Yes, at the political level, we might say oil decline and climate change are real and fear their implications. However, our policy responses often either ignore them or assume that existing social and economic stability will hold [so] then we [can] go buy things like F35s on the assumption we'll still by flying them by 2040.