Canada’s defence industry increasingly selling abroad: report

LAV III armoured vehicles on display at the CANSEC defence industry trade show in Ottawa, May 25, 2016. Leslie Young / Global News

Canada’s defence industry is increasingly selling its wares abroad, according to a new joint report from the economic development ministry and a defence industry association.

The “State of Canada’s Defence Industry 2014” report found that Canada’s defence industry sold about $5.95 billion of weapons, equipment and services outside of Canada – representing about 60 per cent of industry sales. That amount grew by 20 per cent since 2011.

Here are some more things to note about Canada’s defence industry.

1. They mostly sell to NATO or NATO-affiliated countries.

According to Philippe Richer from Innovation, Science and Economic Development Canada, approximately 70 per cent of Canadian defence exports went to the US in 2014. Another 20 to 25 per cent went to Europe.

But, it’s hard to check these figures: country-based statistics weren’t part of this report because many companies didn’t fill out that part of the survey. Because the data was so full of holes, said Richer, they couldn’t release it.

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2. But not always – Saudi Arabia was the top customer in 2013.

Luckily, there is a different, if less complete survey to look at for clues.

Once you take the U.S. out of the equation, Saudi Arabia was Canada’s top customer in 2013, according to data from Global Affairs Canada. U.S. figures are not generally reported by the department because the statistics are based on permits, and many permits aren’t required for U.S. exports. So, we don’t know how much was exported to the U.S.


(NOTE ON GRAPHIC: Does not include exports to the U.S., which were likely substantial.)

Obviously, the countries Canada sells to can change year by year, depending on what contracts get signed and delivered.

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Again, not counting the U.S., the top countries that Canada exported to in 2013 were:

  1. Saudi Arabia – $153 million
  2. United Kingdom – $106 million
  3. Austria – $85 million
  4. Italy – $50 million
  5. Germany – $47 million

3. The industry contributed about $6.7 billion to GDP in 2014.

That’s about the same as the beverage and tobacco manufacturing industry and the postal and courier industry. The report also estimates that the industry employs about 63,000 people across Canada. They’re generally higher-wage jobs than the average manufacturing job too, according to the report.

4. Different provinces produce different things

Ontario and Quebec specialize in combat vehicles, Atlantic Canada focuses on military aircraft and ship maintenance, and Western and Northern Canada focus on aircraft maintenance and repair and shipbuilding.

5. Canada mostly makes and repairs aircraft and vehicles.

Overall, Canada’s top-selling defence industry activity is combat vehicle construction, repair and “other defence” representing about $2.8 billion. Yes, this is one large, strange category.

Aircraft maintenance and repair accounted for about $2 billion, and aircraft fabrication and components were worth $1 billion.

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