Canada

Canada’s aerospace and defence industry has a long history of innovation and success. Canada is a global market leader among other items as far as producing regional aircraft, avionics, business jets, commercial helicopters, aircraft engines, flight simulators, landing gear systems, space systems and in terms of providing Maintenance, Repair and Overhaul (MRO) services. Additionally, it is worth noting that leading aerospace companies from around the world, choose to perform several of their manufacturing, as well as Research and Development (R&D) activities, in Canada. Regarding the defence sector, Canada provides products and services which among others include: military aircraft and naval ship MRO services, development and manufacturing of combat vehicles, airborne sensors, fire control, warning & countermeasures systems, firearms, ammunition, missiles, rockets, and other munitions & weapons, as well C4ISR, avionics and simulation systems.

Canada’s defence industry comprises of approximately 640 companies that sold almost 10 billion Canadian Dollars (CAD) in defence goods and services, in 2014. For the same year, the local defence industry, directly and indirectly contributed about 6.7 billion CAD to the country’s Gross Domestic Product (GDP) and close to 63,000 full-time jobs in terms of employment. The Canadian defence industry is export intensive, as almost 60% of its total production was exported in 2014. Local production capabilities cover a broad range of products and services. In 2014, the “Aerospace” sector accounted for 47% of the total sales and 48% of the total exports of the Canadian defence industry. The Aerospace sector was followed by the “Land and Cross-domain” sector which accounted for 40% and 42% of total sales and total exports respectively, while the “Naval” sector accounted for 13% of total sales and 10% of total exports, respectively.

Product and service wise, the aircraft fabrication, structures, components and military aircraft MRO categories combined, accounted for the biggest percentage (some 30.4%) of Canadian defence sales in 2014, followed by combat vehicles and related MRO services (28.4%), C4ISR, Product and service wise, the aircraft fabrication, structures, components and military aircraft MRO categories combined, accounted for the biggest percentage (some 30.4%) of Canadian defence sales in 2014, followed by combat vehicles and related MRO services (28.4%), C4ISR, avionics, simulation systems and other electronics (25.1%), naval ship fabrication, structures, components and related MRO services (8.6%), firearms, ammunition, missiles, rockets and other munitions and weapons products (3.7%), troop support services (2.3%) and live personnel and combat training services (1.1%). Region wise, the Canadian defence industry is mainly concentrated in the Ontario region, which accounts for 44% of total defence employment, followed by Quebec (24% of total defence employment), Atlantic Canada (17%) and Western and Northern Canada (15%).    

On the other hand, the local aerospace industry generated 29.8 billion CAD in revenues, 89,000 in direct employment positions and some 13.3 billion CAD in direct GDP contributions, in 2015. Aerospace manufacturing created revenues which amounted to 22.179 Billion CAD, while Aerospace MRO’s revenues amounted to 7.659 Billion CAD, significantly increased (by some 258 million CAD) when compared to 2014. Central Canada accounts for the majority of the aerospace manufacturing activity, while Western and Atlantic Canada captures close to 60% of the national Aerospace MRO activity. It is indicative that the Quebec region accounts for 55% of the people employed in the aerospace manufacturing sector, while Western Canada accounts for 44% of the people employed in the Aerospace MRO sector. The majority of aerospace sales were related to the civil/commercial aerospace sector (80%).

In 2015, the vast majority of the aerospace manufacturing production (80%) was exported, while it should be noted that 55% of the sectors’ exports were supply chain related. The United States is the predominant aerospace export market for Canada, while exports to the Asia Pacific region grew dramatically (up by 105%) over the period 2010-2015 and account for close to 12% of the overall export volumes of Canada in the aerospace sector. Additionally, the “Airplanes & Rotorcraft” category is the biggest contributor (43%) to the aerospace exports of the country, followed by “Engines” (27%), “Other Parts” (11%), “Avionics” (9%), “Landing Gear” (7%) and “Simulators” (3%).

With more than 28,500 employees and a leadership position in global markets, Bombardier Aerospace is the leading aerospace company in Canada. Bombardier, designs and manufactures aviation products for the business, commercial, specialized and amphibious aircraft markets. Among others, Bombardier provides the following products and services: business aircraft (Learjet, Challenger and Global aircraft families), commercial aircraft (C Series, CRJ Series and Q Series aircraft families), aerostructures & engineering services (aircraft structures, component repair and other services), specialized aircraft solutions (aircraft modified for special missions) and finally aircraft services and training (aircraft parts, maintenance, comprehensive training, technical support and publications, and online services).

Further, the Canadian A&D sector is heavily involved in the F-35 fighter aircraft program, as the North America country is a key contributor to the development, production, and sustainment of the aircraft. Currently, there are more than 110 companies that have been awarded related contracts, valued at some 750 million dollars, while it is expected that the Canadian industry will be exposed to approximately 11 billion dollars in business opportunities overall in relation to the F-35 aircraft.

Under this context, in May 2016, Avcorp Industries Inc, was awarded a contract extension with Lockheed Martin. This follow-on contract complements Avcorp’s assembly of the F-35 Carrier Variant (“CV”) Outboard Wing (“OBW”) structure. Additionally, the Canadian company NGRAIN has developed critical software for the Low Observable Health Assessment System (LOHAS), which helps maintain the F-35 outer skin during operations. Moreover, Magellan Aerospace, a Canadian company that has been part of the F-35 program, since the concept demonstration phase in 1998, has been awarded a contract in October 2016, to produce F-35 Lightning II horizontal tail components.

While the continued success of the Canadian aerospace and defence industry cannot be assumed, the strong base upon which it is built and the aid provided by the Canadian authorities will definitely foster its future development. The country’s authorities assist the sector’s companies through the employment of attractive investment fundamentals, leading-edge knowledge infrastructure, risk-sharing investments in technology development, commitment to investing in skills and research, and new business opportunities.