The Defense Market of Canada

A Hot Tip about Administration, Defense and Security in Canada

Posted on: 21 Dec 2009


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 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. Canada's spending is so substantial that it outspends the lowest 12 NATO members combined. This year, Canadian defense spending has reached the highest level since World War II with a defense budget of slightly more than US$18 billion per year. Canada's Afghanistan mission equipment and services requirements are driving demand for a wide range of products and technologies.


Market Demand

The "Canada First" Defence Plan was announced in December 2005 as part of the Conservative Government's election campaign. It is designed to strengthen Canada’s national sovereignty by providing more funding in the areas of defense, security and international assistance.


Canadian Budgets

Canada Budget 2005 provided nearly $10.4 billion in new defense funding over a period of 5 years. This funding delivers on the commitment to expand the Canadian Forces (new troops and reserves) and the operational sustainability, as well as to acquire new equipment and material. This budget provided an additional US$1 billion to the previous US$6.4 billion invested over the previous three years to enhance the safety and security of Canadians by reinforcing air and marine security, border issues, policing, emergency preparedness and response capabilities. This substantial increase in funding delivered on the Government’s commitments to meet its upcoming projects, namely:


- US$2.4 billion to expand the Canadian forces by 5,000 troops and the reserves by 3,000

- US$2.6 billion to strengthen military operations in order to improve training and operational readiness and to enhance military medical care;

- US$2.2 billion to acquire and operate new medium capacity helicopters, logistics trucks, utility aircraft and specialized facilities for JTF2.


In Budget 2006, Canada’s New Conservative Government committed to invest an additional $5.3 billion over five years in the Canadian Forces to implement the Canada First Defence Plan. Under this plan, the Government will continue to support the development of Canada’s multi-role, combat-capable defense force. The procurement of major equipment has progressed with the approval and announcement of the acquisition of joint support ships, a medium-sized logistics truck fleet, medium- to heavy-lift helicopters, as well as enhanced strategic and tactical airlift capability. The following are some of the highlights:


- $3.1 billion to the Canadian Forces over the next three years to accelerate the implementation of the Canada First defence plan.

- $80 million over two years to the Canadian Security Intelligence Service to protect Canada's national security.

- $60 million/year to ensure the environmental allowances (location/danger pay) paid to soldiers serving in Army field units are in line with those paid to Navy and Air Force personnel.

- Appoint a Veterans’ Ombudsman to ensure better services for veterans.

- Provide $19 million in 2007–08 and $20 million per year thereafter to help the Department of Veterans Affairs improve services to veterans.

- Invest $10million a year to establish five new Operational Stress Injury Clinics across Canada to help military personnel and their families deal with stress injuries.


Budget 2007 committed to making Canadian communities safer and more secure, supporting the men and women of the armed forces, including the veterans, and bringing new hope to people beyond Canadian borders through more effective international aid. The following are some of the highlights:


- $715 million to the Canadian Forces in 2007-08 to accelerate the implementation of the Canada First defence plan.

- $200 million in additional support for reconstruction and development in Afghanistan.

- $10 million per year to establish five new Operational Stress Injury Clinics to assist Canadian Forces members and veterans dealing with stress injuries related to their military service and provide improved support for their families.

- $19 million in 2007–08 and $20 million thereafter to establish a Veterans’ Ombudsman and ensure that veteran's services meet the standards set out in a new Veterans’ Bill of Rights.

- $11 million over the next two years to enhance the critical infrastructure of Canadian embassies and consulates.



By Lucy Latka

Read the full market research report

Posted: 21 December 2009

See more from Administration, Defense and Security in Canada