On 4 October 1957, the first Arrow finally rolled off the production line. That same day the Soviet Union unveiled Sputnik1, the first satellite to enter earth’s orbit. Sputnik’s launch marked the beginning of the “Space race” and it challenged conventional thinking about what forms of military defenses were effective in the Cold War. The world was suddenly faced with space and missile technology that seemed to make the distance separating continents and countries irrelevant. In this climate, purchasing the Bomarc missile seemed wiser than developing costly fighter jets.
On 20 February 1959, the Diefenbaker government cancelled the Arrow program. A total of $470 million had been spent on planes that never flew and 14, 528 Avro employees lost their jobs.
“We did not cancel the [Arrow] CF-105 because there was no bomber threat, but because there was a lesser threat and we got the Bomarc in lieu of more airplanes….”