Aerospace and Defense in Canada

A Hot Tip about Administration, Defense and Security in Canada

Posted on: 8 Jan 2010

Overview

Canada offers the most open, accessible and transparent public sector market for U.S. goods and services outside of the United States. As the sixth highest military spending economy in NATO, the Government of Canada (GOC) is a significant purchaser of aerospace, defense, and security products. U.S. organizations account for the largest share of military contract awards by the GOC. In fact, Canada trades US$3.5 billion of defense and security products and technologies with the U.S. annually. This year, Canadian defense spending has reached the highest level since World War II with an estimated defense budget of US$18.8 billion per year. Canada's Afghanistan mission equipment and services requirements are driving demand for a wide range of products and technologies.

 

The market demand for defense products is continuing to grow with the "Canada First" Defence Strategy. Announced in December 2005, the "Canada First" Defence Strategy is designed to strengthen Canada's national sovereignty by providing more funding in the areas of defense, security and international assistance. As a result, the GOC announced various upcoming procurement projects.

 

Canadian budgets are committed to making Canadian and international communities safer. Budget 2009 has awarded an automatic annual increase of 2 percent, commencing in 2011, to defense spending which will assist in the successful implementation of the "Canada First" Defence Strategy. This increase from the previous 1.5 per cent will provide the Canadian forces an additional CDN$12 billion. Budget 2009 has also allocated an additional CDN$100 million for the reconstruction and development in Afghanistan, and CDN$89 million over the next two years to adding new embassies and missions overseas.

 

Aerospace

In 2007, the Canadian market demand for aircraft and aircraft parts market was valued at $15.4 billion, a 25 percent increase over the previous year. About 400 aerospace companies employ 82,000 workers. The Canadian aerospace industry is unique because approximately 80 percent of its domestic production is exported. Several Canadian aerospace companies are world leaders and have captured as much as 80 percent of the world market share in their product categories.

 

Canada is the world's fifth largest importer of aircraft and aircraft parts. Industry estimates Canadian demand for aircraft and aircraft parts to grow modestly in the next year. During the three first quarters of 2008, Canadian aerospace companies received record breaking orders, which will fuel production until at least early 2010 and, to a great extent, shelter the industry from the global economic slowdown.

 

The United States is the largest exporter of aircraft and aircraft parts to Canada. In 2007, more than half of all aircraft and aircraft parts imports were from the United States (58.2 percent). The United States’ share of imports rose over the last few years, and more importantly, Canada's imports from the United States are rising faster than Canada's total worldwide imports. It is estimated that the U.S. share will grow to 61.4 percent in 2009.

 

Opportunities

U.S. defense and aerospace companies wanting to develop new sales in Canada benefit from a privileged access to numerous business facilitation programs offered by the U.S. Commercial Service year round.

 

Read the full market research report


Posted: 08 January 2010

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