The Canadian Airforce had purchased 6 CH46 helicopters for air rescue and a further 12 for medium transport. The rescue version was named Labrador and the transport Voyageur. The rescue helicopters were busy and useful. The canadian government decided that with the arrival of the Chinook helicopter that the Voyageaur's would be converted into an additional 9 labradors. Beoing Canada to posession of the airframes to refurbish and convert.
The Aircraft were lodged in a hanger waiting the work. On the night of 3rd of March 1975 a fire broke out in the hanger complex (arson by a disgruntled contract cleaner). The ensuing fire destroyed all 9 aircraft. This was bad enough the Canadians now had 6 labrador aircraft in the course of the rest of that month 2 were to be lost to mechanical failure and 1 to an electrical fire. Crisis had hit the Canadian airforce.
They quickly diverted Sea King aircraft to the rescue task. The USCG, USAF and Air National Guard provided coverage. With the Sea Knight out of production various options were looked at. Including buying second hand aircraft from the Americans, New aircraft from America, UK,Italy & France were all examined as options. including various Sea King's, Super Frelon's even the HH53 Sea Stallion. The Chinook had been ruled out as impractical.
Experience with the USCG HH-3 and US ANG HH-3's influenced the decision. The HH-3 was out of production in the US so Agusta in Italy were awarded the contract to produce the CH-125 helicopter. The First delivered in late 1976 and the first squadron 103 was operational and was reviewed by the Queen in her Jubliee review of the RCAF.