State of Canada’s Defence

Industry Report

Spring 2024

State of Canada’s Defence Industry Report – Spring 2024 1

TABLE OF CONTENTS
The Report Objective ................................................................................................................................ 3
Report Development Process ................................................................................................................... 4
Key Industrial Indicators, % Change, 2020–2022 ..................................................................................... 5
Economic Impact ...................................................................................................................................... 6
Key Industrial Indicators by Firm Size ....................................................................................................... 7
Key Industrial Indicators by Domain ......................................................................................................... 8
Regional Breakdown................................................................................................................................. 9
Gender Breakdown by Occupation ......................................................................................................... 10
Skills & STEM ......................................................................................................................................... 11
Innovation ............................................................................................................................................... 12
Global Supply Chains ............................................................................................................................. 13
Exports ................................................................................................................................................... 14
Key Findings ........................................................................................................................................... 15
Annexes .................................................................................................................................................. 16
Annex 1 – Economic Impact Methodology Principles ........................................................................ 16
Annex 2 – Canadian Defence Industry Key Industrial Indicators (2014 vs. 2022) ............................. 17
Annex 3 – Canadian Defence Industry Economic Impact (2020 vs. 2022) ........................................ 17
Annex 4 – Revenues of Defence Goods and Services Categories by Domain (2020 vs. 2022) ....... 18
Annex 5 – Top 10 Regional Defence Activities, Ranked by Employment (2022) .............................. 20
Annex 6 – R&D to Revenues Ratios of Defence Goods and Services Categories (2022) ................ 22
Annex 7 – Canadian Defence Industry Exports by Destination (2020 vs. 2022) ............................... 23
Annex 8 – Exports' Share of Revenues, Defence Goods and Services Categories Ranked by Export
Intensity (2022).................................................................................................................................. 24
Annex 9 – Official Definitions of Defence Goods and Services Categories by Domain ..................... 25
Data Sources .......................................................................................................................................... 34

2
THE REPORT OBJECTIVE

Objective: Develop relevant, quality, and timely strategic information on Canadian production of defence goods and services to brief
policy and industry decision makers

• Canada is the first country from the Organisation for Economic Co-operation and Development (OECD) and North Atlantic Treaty
Organization (NATO) to conduct an in-depth Government statistical agency survey on defence industry capabilities.

• This report is supported by a multi-year collaborative analytics agreement between Innovation, Science and Economic
Development Canada (ISED) and the Canadian Association of Defence and Security Industries (CADSI).

• This report presents a statistical overview of Canadian defence industry activities in 2022, based on the most recent data
available.

➢ It also provides a comparative analysis into the state of the Canadian defence industry between 2020 and 2022.

• The next iteration of the biennial survey will measure 2024 industrial activities.

➢ Statistics Canada’s publication of 2024 data is scheduled for 2026.

State of Canada’s Defence Industry Report – Spring 2024 3

REPORT DEVELOPMENT PROCESS

1. Stakeholder Engagement (May 2022 – December 2022)

• Consultation with industry and government stakeholders and policy decision-makers on their priority data requirements
• Development, field testing, and refinement of new survey questions
• Verification of priority firms and key contact information with industry association partners

2. Data Development (January 2023 – January 2024)

• Administration of ISED-sponsored Statistics Canada biennial survey
➢ Distribution of survey questionnaire by Statistics Canada
➢ Completion of the survey is a legal requirement under the Statistics Act
• Outreach to membership by industry association partners to encourage firms’ participation
• Validation of data quality and imputation of firm-level data based on Government of Canada administrative data and
independent subject matter expert data sources

3. Research & Analysis (February 2024 – June 2024)

• Modelling of total economic impact (i.e., GDP1 and jobs contributions)
➢ Methodology principles informed by experts at the OECD and Statistics Canada2
• Preparation of customized tabulations data tables by Statistics Canada
• Review of results with CADSI’s Industry Advisory Committee
• Joint release of the report by ISED and CADSI

1 Gross Domestic Product (GDP) is the total unduplicated value of the goods and services produced in the economic territory of a country or region during a given
period.
2 See Annex 1 for detailed methodology principles.

State of Canada’s Defence Industry Report – Spring 2024 4

KEY INDUSTRIAL INDICATORS, % CHANGE, 2020–2022

Between 2020 and 2022, the Canadian defence industry’s revenues, employment, R&D3 and exports grew

Canadian Defence Industry Key Industrial Indicators4, % Change, 2020–2022

3 Research & Development (R&D) expenditures relate to businesses’ in-house R&D.

4 Financial values are in nominal/current terms and are not adjusted for inflation. See Annex 2 for a comparative analysis of Canadian defence industry key
industrial indicators between 2014 and 2022.

State of Canada’s Defence Industry Report – Spring 2024 5

ECONOMIC IMPACT

In 2022, the Canadian defence industry contributed over $9.6B in GDP and 81,200 jobs to the Canadian economy 5

GDP Economic Impact Jobs Economic Impact

• Between 2020 and 2022, the Canadian defence industry’s contribution to the Canadian economy increased by close to $450
million in GDP and 3,600 jobs

5 Excludes the economic impact of business activities undertaken through the Industrial and Technological Benefits (ITB) Policy that were not involved in Canadian
defence industry production. See Annex 1 for detailed methodology principles and Annex 3 for a comparative analysis of Canadian defence industry economic
impacts between 2020 and 2022.

State of Canada’s Defence Industry Report – Spring 2024 6

KEY INDUSTRIAL INDICATORS BY FIRM SIZE

In 2022, firms with fewer than 250 employees represented over 85% of firms in the Canadian defence industry

Key Industrial Indicators by Firm Size6

• Firms with 500 or more employees accounted for over 60% of the Canadian defence industry’s revenues, employment, R&D and
exports

• Firms with 250–499 employees represented less than 15% of revenues, employment, R&D, and exports

6 See note 3.

State of Canada’s Defence Industry Report – Spring 2024 7

KEY INDUSTRIAL INDICATORS BY DOMAIN

In 2022, the Canadian defence industry generated over $14.3B in revenues from its more than 585 firms across all three domains 7

Key Industrial Indicators by Domain8

7 The grouping of defence goods and services categories by ‘domain’ is determined here by the platform type to which they relate. See Annex 9 for the full official
titles and definitions of the survey’s defence goods and services categories by domain, Annex 2 for a comparative analysis of Canadian defence industry key
industrial indicators between 2014 and 2022, and Annex 4 for a comparative analysis of category-level defence goods and services revenues by domain between
2020 and 2022.
8 See note 3. The survey’s measurement of ‘Space Systems’ is narrower in scope than the broader concept of the ‘Space Sector’ as measured by the Canadian

Space Agency (CSA).

State of Canada’s Defence Industry Report – Spring 2024 8

REGIONAL BREAKDOWN

Each region had specific areas of strength in 2022

Share of Canadian Defence Industry Employment9 and List of Top Defence Activities by Region, 202210

9 Shares of employment by region are based on businesses that specified their regional employment breakdown and reflect the 36,000 direct employees in the
Canadian defence industry. See Annex 5 for the Top 10 regional defence activities, ranked by employment, and Annex 9 for the full official titles and definitions of
the survey’s defence goods and services categories by domain.
10 Maintenance, Repair and Overhaul (MRO)

State of Canada’s Defence Industry Report – Spring 2024 9

GENDER BREAKDOWN BY OCCUPATION

In 2022, the share of female employees in the Canadian defence industry was comparable to the broader manufacturing sector

Canadian Defence Industry Gender Breakdown11 by Occupation, 2022

Share of Female Employees by Occupation

Canadian Broader
Occupation Defence Manufacturing
Industry Sector
STEM12
17% 21%
Employees
Production
26% 23%
Workers
Corporate
38% 53%
Functions13

Total 27% 29%

11 Gender breakdown reflects the 36,000 direct employees in the Canadian defence industry.
12 Science, Technology, Engineering, and Mathematics (STEM) occupations include survey categories on engineers, scientists and/or researchers, and
technicians and technologists.
13 Corporate functions include occupations in management, administration, marketing, and all other employees.

State of Canada’s Defence Industry Report – Spring 2024 10

SKILLS & STEM

In 2022, the Canadian defence industry’s share of employment in STEM14 occupations was over 2.5X greater than the broader
manufacturing sector

Share of Employees in STEM Occupations, 2022

14 See note 12.

State of Canada’s Defence Industry Report – Spring 2024 11

INNOVATION

In 2022, the Canadian defence industry was over 3X more R&D-intensive15 than the broader manufacturing sector

R&D Intensity, 2022 Share of Canadian Defence Industry R&D Expenditures by

Source of Funds, 202216

• In 2022, the Canadian defence industry performed over $440M of R&D

➢ 77% funded by industry and 14% by Canadian government sources

15 See note 3. Industry-level R&D intensity is measured as the ratio of R&D performed by a given industry or sector relative to its own GDP. At the level of
individual defence goods and services categories, R&D to GDP ratios are not available. Instead, see Annex 6 for category-level defence goods and services R&D
to revenues ratios, and see Annex 1 for detailed methodology principles.
16 Other sources may include universities, foreign governments, individuals, etc.

State of Canada’s Defence Industry Report – Spring 2024 12

GLOBAL SUPPLY CHAINS

In 2022, close to 55% of Canadian defence industry supply chain expenditures17 were with Canadian-based suppliers

Share of Canadian Defence Industry Supply Chain Expenditures by Supplier Location, 2022

• Canadian-owned firms used domestic suppliers more than foreign-owned firms

17
This reflects the subset of operating expenditures related to the purchase of mainly raw materials and components that are more directly used for/in
manufacturing processes.

State of Canada’s Defence Industry Report – Spring 2024 13

EXPORTS

In 2022, the Canadian defence industry exported18 over $7.0B in goods and services, of which close to 70% was to Canada’s Five Eyes
partners

Share of Canadian Defence Industry Revenues and Share of Canadian Defence Industry Exports by Destination, 2022

18See Annex 7 for a comparative analysis of Canadian defence industry exports by destination between 2020 and 2022 and Annex 8 for category-level defence
goods and services exports to revenues ratios, ranked by export intensity.

State of Canada’s Defence Industry Report – Spring 2024 14

KEY FINDINGS

In 2022, the Canadian defence industry:

• Grew across all key industrial indicators between 2020 and 2022

• Generated over $14.3B in revenues from its more than 585 firms across all three domains

• Contributed over 81,200 jobs to the Canadian economy

➢ An increase of close to 3,600 jobs between 2020 and 2022

• Was national in scope, with regional specializations

• Was over 2.5X more STEM-intensive and over 3X more R&D-intensive than the broader manufacturing sector

• Had close to 55% of its supply chain expenditures with Canadian-based suppliers

• Exported over $7.0B in goods and services, of which close to 70% was to Canada’s Five Eyes partners

State of Canada’s Defence Industry Report – Spring 2024 15

ANNEXES

Annex 1 – Economic Impact Methodology Principles

• ISED’s approach is informed by experts from the Organisation for Economic Co-operation and Development (OECD) and Statistics Canada.

• Foundation data from Statistics Canada’s latest (2022) Canadian Defence, Aerospace, Marine, and Cybersecurity Industries Survey,
released in 2024.

• ISED’s model reflects the economic structure of Canada through Statistics Canada’s 2019 Input-Output (I/O) economic impact multipliers.

➢ NOTE: While ISED normally uses the most current multipliers, the latest (2020) multipliers were not used due to Statistics Canada
guidance which indicates that:

▪ Due to the COVID-19 pandemic in 2020, the structure of the economy was significantly altered. The 2020 I/O multipliers
and I/O models should be used for analysis of economic impacts that occurred in 2020. For economic impact analysis for
more current periods, the 2019 I/O multipliers and models may be considered as more reflective of current economic
structures.

➢ Defence activities (i.e., each defence industry goods and services category) have been linked to the closest related and most
relevant specific economic impact multiplier(s).

• Total economic impact includes activities that occur within the Canadian defence industry (direct economic impact from survey participants),
its Canadian suppliers (indirect economic activity from the Canadian defence industry’s value chain partners), and consumer spending by
associated employees (induced economic activity) across the Canadian economy.

➢ GDP impact is reported on an annual average basis.

➢ Jobs impact is reported on an annual average basis and measured in terms of full-time equivalent (FTE) employment.

➢ Economic impact estimates are reported at the national level and cannot be broken down at the regional level.

• All values are in Canadian nominal/current dollars.

State of Canada’s Defence Industry Report – Spring 2024 16

Annex 2 – Canadian Defence Industry Key Industrial Indicators19 (2014 vs. 2022)

Key Industrial Indicator 2014 2022 % Change, 2014–2022

Revenues $9,231,524,542 $14,310,628,198 55%
Employment (Number of Jobs) 26,857 36,016 34%
R&D20 (2016 vs. 2022) $398,848,412 $443,592,739 11%
Exports $5,509,665,830 $7,039,146,000 28%

Annex 3 – Canadian Defence Industry Economic Impact21 (2020 vs. 2022)

GDP Economic Impact (Millions of Dollars) 2020 2022

Defence Industry $4,420 $4,657
Canadian Suppliers to the Defence Industry $2,567 $2,744
Defence Industry and Value Chain $6,987 $7,401
Consumer Spending by Associated Employees $2,199 $2,234
Total GDP Economic Impact $9,186 $9,635
Jobs Economic Impact (Number of Employees) 2020 2022
Defence Industry 34,500 36,000
Canadian Suppliers to the Defence Industry 23,500 25,200
Defence Industry and Value Chain 58,000 61,200
Consumer Spending by Associated Employees 19,600 20,000
Total Jobs Economic Impact 77,600 81,200

19 See note 4. Estimates related to 2014 defence industry activities are based on updated 2014 data, which reflect the necessary revisions that occurred after
Statistics Canada’s original data release and ISED-CADSI’s 2016 publication of the State of Canada’s Defence Industry, 2014 report.
20 See note 3. Defence industry R&D expenditures from 2014 could not be used for comparisons over time, with the 2016 value used instead. Among firms

accounting for 50.1% of 2014 defence industry revenues, it could not be determined if they performed in-house R&D and/or the value of such spending. The 2014
R&D value is more likely to notably understate actual R&D in that year and cannot be regarded as statistically representative of the overall defence industry with
sufficient confidence.
21 See note 5.

State of Canada’s Defence Industry Report – Spring 2024 17

Annex 4 – Revenues22 of Defence Goods and Services Categories by Domain23 (2020 vs. 2022)

$ Value Change % Change

Air & Space Systems24 Defence Goods and Services Categories 2020 Revenues 2022 Revenues
2020–2022 2020–2022
Military Aircraft Maintenance, Repair, Overhaul, Modernization or Upgrade
$1,339,505,777 $2,079,143,232 $739,637,455 55.2%
Services
Aircraft Fabrication, Structures and Components $1,416,086,478 $1,445,924,277 $29,837,799 2.1%
Primarily Airborne Electro-Optical, Radar, Sonar and Other
Sensor/Information Collection Systems; Fire Control, Warning and $994,181,470 $1,071,151,042 $76,969,572 7.7%
Countermeasures Systems, and Related Components
Primarily Airborne Communications and Navigation Systems; and Other
Information Systems (Including Processing and Dissemination), Software, $377,610,671 $375,868,525 -$1,742,146 -0.5%
Electronics and Components
Simulation Systems for Aircraft $235,430,669 $238,783,900 $3,353,231 1.4%
Unmanned Aerial Systems and Vehicles (UAS/V) and Components $63,556,985 $168,930,867 $105,373,882 165.8%
Military Systems Deployed in Space, Space Launch Vehicles, Land-based
Systems for the Operation, Command and Control of Space Launch Vehicles $70,704,636 $73,943,779 $3,239,143 4.6%
or Systems Deployed in Space, and Related Components
Total Air & Space Systems Revenues $4,497,076,686 $5,453,745,622 $956,668,936 21.3%
Total Defence Revenues $12,612,286,611 $14,310,628,198 $1,698,341,587 13.5%

$ Value Change % Change

Land & Other Defence Goods and Services Categories 2020 Revenues 2022 Revenues
2020–2022 2020–2022
Combat and Other Military Ground Vehicles and Components $2,131,512,853 $1,975,060,892 -$156,451,961 -7.3%
Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform
Specific Communications and Navigation Systems; and Other Information
$507,845,649 $621,696,087 $113,850,438 22.4%
Systems (Including Processing and Dissemination), Software, Electronics
and Components

22 See note 4.
23 See note 7.
24 See note 8.

State of Canada’s Defence Industry Report – Spring 2024 18

 $ Value Change % Change
Land & Other Defence Goods and Services Categories 2020 Revenues 2022 Revenues
2020–2022 2020–2022
Ammunition and Other Munitions $408,365,530 $528,584,986 $120,219,456 29.4%
Other Defence $636,232,827 $528,186,410 -$108,046,417 -17.0%
Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform
Specific Electro-Optical, Radar, Sonar and Other Sensor/Information
$332,564,053 $406,993,358 $74,429,305 22.4%
Collection Systems; Fire Control, Warning and Countermeasures Systems,
and Related Components
Military Training Services $355,998,765 $365,918,369 $9,919,604 2.8%
Military Personal Protective Equipment, Load Carriage Systems and
$166,503,552 $198,234,077 $31,730,525 19.1%
Operational Clothing
Combat and Other Military Ground Vehicles Maintenance, Repair, Overhaul,
$303,021,503 $181,838,574 -$121,182,929 -40.0%
Modernization and Upgrade Services
Missiles and Rockets $126,891,803 $104,774,592 -$22,117,211 -17.4%
Firearms and Other Weapons $106,350,078 $88,640,495 -$17,709,583 -16.7%
Simulation Systems for Land Vehicles or Other Applications $27,861,283 $16,228,525 -$11,632,758 -41.8%
Total Land & Other Revenues $5,103,147,896 $5,016,156,365 -$86,991,531 -1.7%
Total Defence Revenues $12,612,286,611 $14,310,628,198 $1,698,341,587 13.5%

$ Value Change % Change

Marine Defence Goods and Services Categories 2020 Revenues 2022 Revenues
2020–2022 2020–2022
Naval Vessel Construction, Conversions, Architecture, Engineering and
$1,331,866,629 $1,776,979,321 $445,112,692 33.4%
Related Services25
Naval Ship Maintenance, Repair, Overhaul, Modernization or Upgrade
$775,234,432 $1,070,632,031 $295,397,599 38.1%
Services
Naval Shipborne Mission Systems and Components $480,265,905 $643,438,602 $163,172,697 34.0%
Naval Ships' Structural Elements, Platform Systems, Parts & Components
$415,459,845 $332,715,246 -$82,744,599 -19.9%
(Excluding Shipborne Naval Mission Systems)

25The survey’s “New Naval Vessels Constructed by Shipyards, and Naval Conversions” and “Naval Vessel Architecture, Engineering, Certification and Related
Professional Services” categories' data was merged by Statistics Canada to meet the confidentiality requirements of the Statistics Act.

State of Canada’s Defence Industry Report – Spring 2024 19

 $ Value Change % Change
Marine Defence Goods and Services Categories 2020 Revenues 2022 Revenues
2020–2022 2020–2022
Simulation Systems for Naval Vessels $9,235,218 $16,961,011 $7,725,793 83.7%
Total Marine Revenues $3,012,062,029 $3,840,726,211 $828,664,182 27.5%
Total Defence Revenues $12,612,286,611 $14,310,628,198 $1,698,341,587 13.5%

Annex 5 – Top 10 Regional Defence Activities, Ranked by Employment26 (2022)

Western and Northern Canada
1. Military Aircraft Maintenance, Repair, Overhaul, Modernization or Upgrade Services
2. Naval Vessel Construction, Conversions, Architecture, Engineering and Related Services
3. Naval Ship Maintenance, Repair, Overhaul, Modernization or Upgrade Services
4. Aircraft Fabrication, Structures and Components
5. Other Defence
6. Naval Shipborne Mission Systems and Components
7. Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other
Information Systems (Including Processing and Dissemination), Software, Electronics and Components
8. Military Training Services
9. Combat and Other Military Ground Vehicles and Components
10. Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific Electro-Optical, Radar, Sonar and Other
Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems, and Related Components

Ontario
1. Combat and Other Military Ground Vehicles and Components
2. Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and
Countermeasures Systems, and Related Components
3. Aircraft Fabrication, Structures and Components
4. Other Defence
5. Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other
Information Systems (Including Processing and Dissemination), Software, Electronics and Components
6. Military Aircraft Maintenance, Repair, Overhaul, Modernization or Upgrade Services
7. Naval Shipborne Mission Systems and Components
8. Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific Electro-Optical, Radar, Sonar and Other
Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems, and Related Components

26 See note 9.

State of Canada’s Defence Industry Report – Spring 2024 20

 9. Primarily Airborne Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination),
Software, Electronics and Components
10. Naval Ship Maintenance, Repair, Overhaul, Modernization or Upgrade Services

Quebec
1. Ammunition and Other Munitions
2. Military Aircraft Maintenance, Repair, Overhaul, Modernization or Upgrade Services
3. Aircraft Fabrication, Structures and Components
4. Simulation Systems for Aircraft
5. Military Training Services
6. Naval Ship Maintenance, Repair, Overhaul, Modernization or Upgrade Services
7. Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other
Information Systems (Including Processing and Dissemination), Software, Electronics and Components
8. Primarily Airborne Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination),
Software, Electronics and Components
9. Military Personal Protective Equipment, Load Carriage Systems and Operational Clothing
10. Naval Shipborne Mission Systems and Components

Atlantic Canada
1. Naval Vessel Construction, Conversions, Architecture, Engineering and Related Services27
2. Military Aircraft Maintenance, Repair, Overhaul, Modernization or Upgrade Services
3. Naval Shipborne Mission Systems and Components
4. Naval Ship Maintenance, Repair, Overhaul, Modernization or Upgrade Services
5. Other Defence
6. Aircraft Fabrication, Structures and Components
7. Military Training Services
8. Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and
Countermeasures Systems, and Related Components
9. Naval Ships' Structural Elements, Platform Systems, Parts & Components (Excluding Shipborne Naval Mission Systems)
10. Combat and Other Military Ground Vehicles and Components

27 See note 25.

State of Canada’s Defence Industry Report – Spring 2024 21

Annex 6 – R&D28 to Revenues Ratios of Defence Goods and Services Categories (2022)

R&D to Revenues
Defence Goods and Services Categories 2022 Revenues Rank
Ratio
Simulation Systems for Aircraft $238,783,900 15% < X ≤ 18% 1
Unmanned Aerial Systems and Vehicles (UAS/V) and Components $168,930,867 12% < X ≤ 15% 2
Simulation Systems for Land Vehicles or Other Applications $16,228,525 6% < X ≤ 9% 3
Simulation Systems for Naval Vessels $16,961,011 6% < X ≤ 9% 4
Military Training Services $365,918,369 6% < X ≤ 9% 5
Military Systems Deployed in Space, Space Launch Vehicles, Land-based Systems for the
Operation, Command and Control of Space Launch Vehicles or Systems Deployed in Space, $73,943,779 6% < X ≤ 9% 6
and Related Components
Primarily Airborne Communications and Navigation Systems; and Other Information Systems
$375,868,525 6% < X ≤ 9% 7
(Including Processing and Dissemination), Software, Electronics and Components
Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific Electro-
Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning $406,993,358 3% < X ≤ 6% 8
and Countermeasures Systems, and Related Components
Combat and Other Military Ground Vehicles Maintenance, Repair, Overhaul, Modernization and
$181,838,574 3% < X ≤ 6% 9
Upgrade Services29
Ammunition and Other Munitions $528,584,986 3% < X ≤ 6% 10
Combat and Other Military Ground Vehicles and Components $1,975,060,892 3% < X ≤ 6% 11
Other Defence $528,186,410 3% < X ≤ 6% 12
Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection
$1,071,151,042 3% < X ≤ 6% 13
Systems; Fire Control, Warning and Countermeasures Systems, and Related Components
Aircraft Fabrication, Structures and Components $1,445,924,277 3% < X ≤ 6% 14
Naval Shipborne Mission Systems and Components $643,438,602 3% < X ≤ 6% 15

28 See note 15.

29 In the case of the two combat vehicles-related categories, there is relatively greater certainty regarding their combined R&D to revenue ratio. Merged, the R&D
to revenue ratio is also within 3% < X ≤ 6%, and such a merged grouping would rank at about 10th position out of 22 categories (22 would be left after such a
merger).

State of Canada’s Defence Industry Report – Spring 2024 22

 R&D to Revenues
Defence Goods and Services Categories 2022 Revenues Rank
Ratio
Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific
Communications and Navigation Systems; and Other Information Systems (Including $621,696,087 0% ≤ X ≤ 3% 16
Processing and Dissemination), Software, Electronics and Components
Missiles and Rockets $104,774,592 0% ≤ X ≤ 3% 17
Naval Ships' Structural Elements, Platform Systems, Parts & Components (Excluding
$332,715,246 0% ≤ X ≤ 3% 18
Shipborne Naval Mission Systems)
Firearms and Other Weapons $88,640,495 0% ≤ X ≤ 3% 19
Military Aircraft Maintenance, Repair, Overhaul, Modernization or Upgrade Services $2,079,143,232 0% ≤ X ≤ 3% 20
Military Personal Protective Equipment, Load Carriage Systems and Operational Clothing $198,234,077 0% ≤ X ≤ 3% 21
Naval Ship Maintenance, Repair, Overhaul, Modernization or Upgrade Services $1,070,632,031 0% ≤ X ≤ 3% 22
Naval Vessel Construction, Conversions, Architecture, Engineering and Related Services30 $1,776,979,321 0% ≤ X ≤ 3% 23

Annex 7 – Canadian Defence Industry Exports31 by Destination (2020 vs. 2022)

$ Value Change % Change

Destination 2020 Exports 2022 Exports
2020–2022 2020–2022
United States $3,204,296,920 $4,431,692,402 $1,227,395,482 38.3%
Middle East32 and Africa $1,729,372,701 $864,553,528 -$864,819,173 -50.0%
Europe (excludes UK) $672,894,201 $750,267,518 $77,373,317 11.5%
Asia and Oceania33 (excludes AU & NZ) $454,006,753 $436,801,294 -$17,205,459 -3.8%
United Kingdom (UK) $216,011,845 $341,528,766 $125,516,921 58.1%
Central America, the Caribbean, Mexico, and South America $184,818,726 $163,095,058 -$21,723,668 -11.8%

30 See note 25.

31 See note 4.
32 The Middle East is comprised of Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates and

Yemen.
33 Oceania is comprised of Australia, Fiji, New Zealand, and Papua New Guinea.

State of Canada’s Defence Industry Report – Spring 2024 23

Australia (AU) $68,312,835 $48,812,468 -$19,500,367 -28.5%
New Zealand (NZ) $2,965,172 $2,394,966 -$570,206 -19.2%
Total Exports $6,532,679,153 $7,039,146,000 $506,466,847 7.8%

Annex 8 – Exports' Share of Revenues, Defence Goods and Services Categories Ranked by Export Intensity
(2022)

Exports’ Share of
Defence Goods and Services Categories 2022 Revenues Rank
Revenues
Unmanned Aerial Systems and Vehicles (UAS/V) and Components $168,930,867 80% < X ≤ 100% 1
Aircraft Fabrication, Structures and Components $1,445,924,277 60% < X ≤ 80% 2
Military Systems Deployed in Space, Space Launch Vehicles, Land-based Systems for the
Operation, Command and Control of Space Launch Vehicles or Systems Deployed in Space, $73,943,779 60% < X ≤ 80% 3
and Related Components
Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection
$1,071,151,042 60% < X ≤ 80% 4
Systems; Fire Control, Warning and Countermeasures Systems, and Related Components
Combat Vehicles and Components & Combat Vehicles Maintenance, Repair and Overhaul34 $2,156,899,466 60% < X ≤ 80% 5
Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific Electro-
Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning $406,993,358 60% < X ≤ 80% 6
and Countermeasures Systems, and Related Components
Primarily Airborne Communications and Navigation Systems; and Other Information Systems
$375,868,525 60% < X ≤ 80% 7
(Including Processing and Dissemination), Software, Electronics and Components
Simulation Systems for Aircraft $238,783,900 40% < X ≤ 60% 8
Naval Ships' Structural Elements, Platform Systems, Parts & Components (Excluding
$332,715,246 40% < X ≤ 60% 9
Shipborne Naval Mission Systems)

34 The survey’s “Combat and Other Military Ground Vehicles and Components” and “Combat and Other Military Ground Vehicles Maintenance, Repair, Overhaul,
Modernization and Upgrade Services” categories were merged here by Statistics Canada to provide an export intensity estimate more certain to be representative
of the combined set of associated activities than individual estimates, where the combat vehicles MRO estimate would have been of more uncertain reliability. See
Annex 9 for the full official titles and definitions of the survey’s defence goods and services categories by domain.

State of Canada’s Defence Industry Report – Spring 2024 24

 Exports’ Share of
Defence Goods and Services Categories 2022 Revenues Rank
Revenues
Ammunition and Other Munitions $528,584,986 40% < X ≤ 60% 10
Missiles and Rockets $104,774,592 40% < X ≤ 60% 11
Primarily Land-Based, Ground Vehicle-Borne, Man-Portable or Non-Platform Specific
Communications and Navigation Systems; and Other Information Systems (Including $621,696,087 40% < X ≤ 60% 12
Processing and Dissemination), Software, Electronics and Components
Naval Shipborne Mission Systems and Components $643,438,602 40% < X ≤ 60% 13
Military Aircraft Maintenance, Repair, Overhaul, Modernization or Upgrade Services $2,079,143,232 40% < X ≤ 60% 14
Firearms and Other Weapons $88,640,495 20% < X ≤ 40% 15
Other Defence $528,186,410 20% < X ≤ 40% 16
Simulation Systems for Naval Vessels $16,961,011 20% < X ≤ 40% 17
Military Training Services $365,918,369 20% < X ≤ 40% 18
Military Personal Protective Equipment, Load Carriage Systems and Operational Clothing $198,234,077 20% < X ≤ 40% 19
Naval Ship Maintenance, Repair, Overhaul, Modernization or Upgrade Services $1,070,632,031 0% ≤ X ≤ 20% 20
Naval Vessel Construction, Conversions, Architecture, Engineering and Related Services35 $1,776,979,321 0% ≤ X ≤ 20% 21
Simulation Systems for Land Vehicles or Other Applications $16,228,525 0% ≤ X ≤ 20% 22

Annex 9 – Official Definitions of Defence Goods and Services Categories by Domain

Air & Space Systems36
Aircraft fabrication, structures, and components
This category includes sales related to production as well as research, development, design, engineering, testing, and evaluation services relating to: Military
aircraft, and military aircraft structural elements, control surfaces, systems, sub-systems, parts and components of manned military aerial platforms, and complete
manned military aerial platforms, intended for use in combat and military transport. This includes things like landing gear (e.g., wheels, shock absorbers and
related parts for the retraction and extension of aircraft landing gear, helicopter pontoons); flight control actuators; and propulsion and power systems for military
aircraft (e.g., aircraft gas turbine engines, compressors, fuel systems).

35 See note 25.

36 See note 8.

State of Canada’s Defence Industry Report – Spring 2024 25

Excluded from this category are sales related to military aircraft maintenance, repair and overhaul (MRO) services; aircraft communication systems; navigation
systems; avionics; air-borne sensors; missiles, rockets and projectiles made to be fired from aerial platforms; display units; and other electronics for manned
military aerial platforms—these are to be reported under separate defence product and service categories as appropriate.

Military aircraft maintenance, repair, overhaul, modernization, or upgrade services

This category includes sales of
• maintenance, repair, and overhaul (MRO) services carried out under contract for military aircraft (including the MRO of their systems and subsystems like
engines, avionics, etc.), as well as for related MRO training; examples of related activities include sales under contracts for
o military aircraft repair, maintenance, rebuilding or overhauling on a factory basis (i.e., restoring aircraft to original design specifications)
o basic servicing, repairing and maintenance of military aircraft
o MRO-related military aircraft inspection and testing services
o associated engineering support and material management
• contracts for military aircraft modernization, upgrade, conversion, or modification services (including systems and subsystems like avionics, engines,
associated software, etc.).

EXCLUDED from this category are:

• sales from the provision of systems like avionics (e.g., flight control systems, radar, electro-optical, communications, navigation, countermeasures
systems), engines or other platform systems and parts
o to be integrated into military aircraft undergoing MRO, modernization, upgrades, conversion, or modifications
o to be integrated into new military aircraft.
• Sales of such goods and services should instead be reported as most appropriate under the alternative defence goods and services categories for
“Primarily airborne electro-optical, radar, sonar and other sensor and information collection systems; fire control, warning and countermeasures systems,
and related components,” “Primarily airborne communications and navigation systems, and other information systems (including processing and
dissemination), software, electronics and components” and “Aircraft fabrication, structures and components.”
• sales from the provision of aircraft (re)fuelling services, aircraft cleaning and fumigation services at airports; such sales should not be reported under any
of the defence goods and services categories.

Military systems deployed in space, space launch vehicles, land-based systems for the operation, command and control of space launch vehicles or
systems deployed in space, and related components
This category includes sales related to production as well as research, development, design, engineering, testing and evaluation services:
• Relating to primarily military systems deployed in space (e.g., satellites, spacecraft, and space robotic systems) and their sub-systems and components;
as well as space launch vehicles.
• Related design, engineering and production of earth-based systems used for the operation, Command & Control of military systems deployed in space and
space launch vehicles (e.g., ground stations, satellite tracking systems, and launch facilities).

Primarily airborne communications and navigation systems; and other information systems (including processing and dissemination), software,
electronics and components
This category includes sales related to production as well as research, development, design, engineering, testing, and evaluation services relating to primarily
airborne:
• military communications systems, secure cyber/information systems, and other military Information Technologies (including software);
• navigation and guidance systems (e.g., Global Positioning System [GPS] based systems, gyroscopes, accelerometers) and other geomatics related
systems and services (e.g., geographic information system (GIS) products and services for military applications, remote sensing services for military
applications);

State of Canada’s Defence Industry Report – Spring 2024 26

 • other technologies for the receipt, exchange/disseminating, processing, synthesizing, analysis, and integration of multiple types of data;
• display technologies, digital control systems and other avionics; Other mission system avionics, computers and electronics;
• other aircraft avionics for military aircraft not elsewhere specified.

Note: sales relating to similar systems, but which are integrated into naval vessels should be reported under the category for “Naval Ship-Borne Mission Systems
and Components.”

Primarily airborne electro-optical, radar, sonar, and other sensor / information collection systems; fire control, warning and countermeasures systems,
and related components
This category includes sales related to production as well as research, development, design, engineering, testing, and evaluation services relating to primarily
airborne:
• electro-optical systems (e.g., image intensification night-vision systems, thermal imaging systems, lasers), radars, dipping sonar, other sensors, and fire-
control systems used to aid weapons in target acquisition, tracking and engagement;
• warning systems (e.g., technologies that detect enemy radars, enemy laser targeting systems, and approaching threats such as missiles);
• countermeasures (e.g., electronic jamming equipment, smoke screens, flares to counter heat-seeking missiles);
• other related aircraft avionics systems.

Note: sales relating to similar systems, parts, and components but which are integrated into naval vessels should be reported under the category for “Naval Ship-
Borne Mission Systems and Components.”

Simulation systems for aircraft

This category includes sales related to production as well as research, development, design, engineering, testing and evaluation services for the hardware and
software technologies used by military and security forces to develop, experiment and test operational doctrines and to train personnel using situational scenarios
(e.g., intelligent software, visual systems, network simulations, real-time simulators) as primarily related to aircraft and operations in the air-domain.

Unmanned aerial systems and vehicles and components

This category includes sales related to production, research, development, design, engineering, testing, and evaluation services relating to: Military unmanned
aerial vehicles/systems and drones, and related sub-systems, parts, components, and accessories (including related ground control systems and launchers).

Excluded are sales relating to missiles; or to weapon systems (e.g., guns, missile launchers) and ammunition, munitions, and missiles carried on/delivered by
unmanned aerial systems or vehicles. Such sales should be reported under either the category for “Firearms and other weapons” or under the category for
“Missiles & rockets.”

Land and Other Defence

Ammunition and other munitions
This category includes sales related to production as well as research, development, design, engineering, testing and evaluation services, and disposal activities
such as relating to:
• conventional ammunition in small/medium/large calibers, artillery and mortar rounds, bombs, grenades, torpedoes, mines, other munitions, and related
precision manufacturing;
• related propellants and explosives like explosive plastics, gels, liquids, and powders; and,
• nuclear, biological, and chemical warheads.

Excluded are sales of missiles, rockets and other related parts and components which should be reported under the category for “Missiles and Rockets.”

State of Canada’s Defence Industry Report – Spring 2024 27

Combat and other military ground vehicles and components
This category includes sales related to production as well as research, development, design, engineering, testing and evaluation services relating to: Land-based
vehicles specifically designed for military use in combat and to transport and protect soldiers and materials, and the basic platform systems, sub-systems and
components of such vehicles (e.g., vehicle structures, electrical systems, armour, engines, transmission systems, heating/cooling systems, engineering).

Excluded are sales such as of:

• Combat vehicle-based weapons systems like guns and missile launchers as such sales should be reported under the “Firearms and other weapons”
category.
• Sales relating to associated projectiles like tank gun rounds or missiles should be reported separately under the “Ammunition and other munitions” or
“Missiles and rockets” categories as appropriate.
• Combat vehicle communication systems, electronics, sensors, fire-control and navigation systems sales should instead be reported under either the
appropriate categories for: “[Primarily land-based, ground vehicle-borne, man-portable or non-platform specific] electro-optical, radar, sonar and other
sensor/information collection systems; fire control, warning and countermeasures systems; and related components” and “[Primarily land-based, ground
vehicle-borne, man-portable or non-platform specific] communications and navigation systems; and other information systems (including processing and
dissemination), software, electronics, and components”.
• Relating to maintenance, Repair, overhaul (MRO) and/or training services relating to combat vehicles should also be reported separately in the category
for: “Combat and other military ground vehicles maintenance, repair, overhaul, modernization and upgrade services.”

EXCLUDED ENTIRELY from the survey are any sales relating to consumer, commercial or industrial vehicles sold to militaries.

Combat and other military ground vehicles maintenance, repair, overhaul, modernization, and upgrade services
This category includes sales of
• maintenance, repair, and overhaul (MRO) services carried out under contract for combat and other military ground vehicles, as well as for MRO-related
training; examples of related activities include sales under contracts for
o military vehicle repair, maintenance, or overhaul to original design specifications
o basic servicing, repairing and maintenance of military vehicles
o MRO-related military vehicle inspection and testing services
o associated engineering support, material management
• contracts for vehicle modernization, upgrade, conversion, or modification services.

EXCLUDED from this category are sales relating to

• associated projectiles like tank gun rounds or missiles, sales of which should be reported separately under the “Ammunition and other munitions” or
“Missiles and rockets” categories as most appropriate;
• the sale of items such as vehicle-mounted guns or missile launchers, which should be reported separately under the “Firearms and other weapons” goods
and services sales category;
• vehicle-based mission systems like communication systems, sensors, fire-control and navigation systems, countermeasures, and other electronics and
software, which should be reported under the appropriate categories for the following “[Primarily land-based, ground vehicle-borne, man-portable or non-
platform specific] electro-optical, radar, sonar and other sensor and information collection systems; fire control, warning and countermeasures systems;
and related components” and “[Primarily land-based, ground vehicle-borne, man-portable or non-platform specific] communications and navigation
systems; and other information systems (including processing and dissemination), software, electronics and components.”

EXCLUDE ENTIRELY from the survey any sales relating to consumer, commercial or industrial vehicles that happen to be sold to militaries.

State of Canada’s Defence Industry Report – Spring 2024 28

Firearms and other weapons
This category includes military sales related to production as well as research, development, design, engineering, testing, and evaluation services relating to
technologies aggressively used to gain or defend a tactical advantage over an adversary; to attack, defend and protect assets and personnel. This includes lethal
and non-lethal kinetic and non-kinetic weapon systems like:
• light/medium/heavy firearms;
• vehicle-based or mobile weapons like tank guns, howitzers, mortars, and missile launchers;
• acoustic, laser, and other electromagnetic based weapon systems.

Military personal protective equipment, load carriage systems and operational clothing
This category includes sales related to production, research, development, design, engineering, testing and evaluation services; as well as to the maintenance and
repair of soldiers’ personal protective equipment (PPE) including:
• ballistic/blast protection and related military body armor, helmets, eyewear, and related accessories; as well as soldier flame/thermal protection;
• chemical, biological, radiological & nuclear (CBRN) military protective suits, as well as military respirators and associated;
• soldier load carriage systems (includes exoskeletons and other personal equipment designed specifically to help soldiers carry their respective fighting,
battle, and sustainment loads);
• other personal military items designed for use by individual soldiers to aid in their concealment from enemy detection;
• other operational military clothing and footwear.

Excluded from this category are sales relating to:

• Ceremonial uniforms, as well as commercial/civil market items purchased for soldiers. Nor are these to be reported as defence goods and services sales
under any of the other defence sales categories.
• Sensors/electronics designed for military use in the detection and identification of CBRN and explosives related threats. Sales of goods and services
relating to such sensors/electronics should instead be reported under the most appropriate category relating to: “Electro-optical, radar, sonar and other
sensor / information collection systems; fire control, warning and countermeasures systems, and related components.”

Military training services

This category includes sales related to the provision and development (by operations in Canada) of:
• Live military training services to military personnel such as in relation to combat training exercises, including military airborne training services and any
similar land or maritime training services; military marksmen and sniper training, etc.
• Relevant activities are those that occur in real/natural physical environments mirroring expected operational environments/ conditions to the extent
possible, using actual platforms and/or other systems and equipment.
• Training services involving individuals/trainees operating simulated platforms and/or other warfighting systems/equipment in simulated/synthetic
environments mirroring expected operational environments/scenarios.
• Such activities may relate to training of specific military personnel in isolation, or to training of multiple individuals. For example, multiple individuals
simultaneously operating separate but networked military aircraft simulators.
• Training and simulation-based services involving simulated actors/ forces operating simulated systems/equipment in simulated/ synthetic environments
and scenarios, based at least in part on inputs entered into simulations prior to the running of simulations (e.g., war-gaming models).

Excluded are sales:

• Of actual simulation system hardware and associated software—which should instead be reported under the three categories relating to “Simulation
Systems” as appropriate.

State of Canada’s Defence Industry Report – Spring 2024 29

 • For training services related to the maintenance, repair, and overhaul (MRO) of military platforms and systems—as these should be reported under
appropriate MRO categories under the survey.

Missiles and Rockets

This category includes sales related to production as well as research, development, design, engineering, testing, and evaluation services relating to military
missiles and rockets, including advanced missiles used by anti-ballistic missile (ABM) systems.

Excluded here are sales relating to:

• space launch vehicles;
• munitions/sub-munitions and other types of warheads carried on or delivered by missiles and rockets.
Those are to be reported under either the categories for “Ammunition and Other Munitions” or for military space systems as appropriate.

Primarily land-based, ground vehicle-borne, man-portable, or non-platform specific communications and navigation systems; and other Information
systems (including processing and dissemination), software, electronics and components
This category includes sales related to production as well as research, development, design, engineering, testing, and evaluation services relating to land-based,
ground vehicle-borne, man-portable, or non-platform specific:
• military communications systems, secure cyber/information systems, and other military Information Technologies (including software);
• navigation and guidance systems (e.g., Global Positioning System [GPS] based systems, gyroscopes, accelerometers) and other geomatics related
systems and services (e.g., geographic information system (GIS) products and services for military applications, remote sensing services for military
applications);
• other technologies for the receipt, exchange/disseminating, processing, synthesizing, analysis, and integration of multiple types of data;
• display technologies and digital control systems;
• other defence computer and electronics related products not elsewhere specified.

Note: sales relating to similar systems, but which are integrated into naval vessels should be reported under the category for “Naval Ship-Borne Mission Systems
and Components.”

Primarily land-based ground vehicle borne, man-portable or non-platform specific electro-optical, radar, sonar, and other sensor/information collection
systems; fire control, warning, and countermeasures systems, and related components
This category includes sales related to production as well as research, development, design, engineering, testing, and evaluation services relating to primarily
land-based, ground vehicle-borne, man-portable, or non-platform specific:
• electro-optical systems (e.g., image intensification night-vision systems, thermal imaging systems, lasers), radars, sonar, other sensors, and fire-control
systems used to aid weapons in target acquisition, tracking and engagement;
• warning systems (e.g., technologies that detect enemy radars, enemy laser targeting systems, and approaching threats such as missiles), and
countermeasures (e.g., electronic jamming equipment, smoke screens, flares to counter heat-seeking missiles).

Note: sales relating to similar systems, parts, and components but which are integrated into naval vessels should be reported under the category for “Naval Ship-
Borne Mission Systems and Components.”

Simulation systems for land vehicles or other applications

This category includes sales related to production as well as research, development, design, engineering, testing and evaluation services for the hardware and
software technologies used by military and security forces to develop, experiment and test operational doctrines and to train personnel using situational scenarios
(e.g., intelligent software, visual systems, network simulations, real-time simulators) as primarily related to naval vessels and operations in the maritime-domain.

State of Canada’s Defence Industry Report – Spring 2024 30

All other defence (specify)
This category includes sales that could not otherwise be captured under other specified defence goods and services categories, and which are earned from
designing, engineering, testing, evaluating, producing, providing, maintaining, upgrading, modernizing or performing research and development for systems and
services specifically designed or adapted for (and generally restricted to) use by militaries to conduct operations, and that perform military functions or missions;
and related subsystems, components or parts limited in use or specific to such military systems or services and the performance of military specific functions. To
be in-scope, the industrial activities of businesses must also involve actual production and provision of such goods and services by their employees located in
Canada.

EXCLUDED are sales of:

• goods and services that were produced, rendered, or provided by facilities and employees located outside of Canada, and then just delivered or sold “as-
is” by a business located in Canada;
• goods sold by wholesaler, distributor, or retailer operations located in Canada that were not actually produced by those businesses in Canada (but that
were produced by other businesses located in Canada or abroad);
• cleaning services provided to military facilities, construction and maintenance services for basic housing and infrastructure (e.g., roads, sewers) at military
bases, human resources staffing services, basic commercial transportation services to military clients (e.g., commercial trucking firms transporting goods
to a base) and raw materials (e.g., chemical feedstocks, metals).

Marine
Naval ship maintenance, repair, overhaul, modernization, or upgrade services
This category includes sales of:
• maintenance, repair, and overhaul (MRO) services carried out under contract for naval surface vessels, and subsurface vessels and submarines, as well
as for MRO-related training; examples of related activities include sales under contracts for:
o naval vessel repair, maintenance, or overhaul to original design specifications
o basic servicing, repairing and maintenance of naval vessels
o MRO-related naval vessel inspection and testing services
o associated engineering support, material management
• contracts for naval vessel modernization, upgrade, conversion, or modification services.

EXCLUDED from this category are:

• Sales of systems, like naval ship-borne mission and platform systems
o produced for integration into vessels undergoing MRO, modernization, upgrades, conversion or modification
o produced for integration into new naval vessels during their construction.
Sales of such goods and services should instead be reported as most appropriate under the goods and services categories for “Naval ship-borne mission systems
and components” and “Naval ships structural elements, platform systems, parts and components.”

Naval ship’s structural elements, platform systems, parts & components (excluding shipborne naval mission systems)
This category includes sales for production as well as research, development, design, engineering, testing and evaluation services relating to: Platform systems,
subsystems, structural parts and components intended for either existing manned naval surface ships/submarines or for use during the building of new manned
naval vessels (e.g., vessels that were specifically designed or modified for use by militaries in combat or the transportation of military goods and personnel). For
example, this would include sales of bulkheads, ship propulsion plant and electrical power systems, ship propellers and propeller shafts, steering mechanisms,
machinery control systems, ballistic protection materials, fire extinguishing systems, climate control/ventilation and water treatment systems, plumbing, deck
machinery, living spaces, and hull compartments and other hull sections, naval ships’ helicopter handling systems, etc.

State of Canada’s Defence Industry Report – Spring 2024 31

Excluded from this category are sales:
• Related to shipborne naval mission systems/naval vessels’ combat systems like command, control, and communications systems; radars, sonar, electro-
optical systems, naval countermeasures, navigation systems, displays and other sensors and electronics, naval guns, and missile launchers. Those are to
be reported under the category for “Naval ship-borne mission systems and components.”
• Related to maintenance, repair and overhaul services provided for manned naval surface ships/submarines. Those sales should instead be reported under
the separate category for: “Naval ship maintenance, repair and overhaul.”
• By shipyards relating to their design or construction/assembly and delivery of newly built naval ships (including submarines); and/or naval conversions.
These should instead be reported under the separate category for “New naval vessels constructed by shipyards, and naval conversions.”

Naval ship-borne mission systems and components

This category includes sales related to production as well as research, development, design, engineering, testing and evaluation services relating to such systems
as: Naval vessel mission/combat systems: command, control, and communications; radar, sonar, electro-optical and other sensors, navigation systems, displays,
other Information Technologies (including Software) and electronics, countermeasures; guns, and missile or torpedo launchers.

Excluded from this category are sales related to the actual missiles, torpedoes and other munitions or projectiles launched or fired from/by naval vessels’ weapon
systems, as well as associated warheads. Such sales are to be reported under either the category for “Missiles and Rockets” or the category for “Ammunition and
Other Munitions” as appropriate.

Naval vessel architecture, engineering, certification, and related professional services

This category includes sales under contracts specifically for naval architecture and engineering services relating to naval surface ships or naval submarines
operated by navies (i.e., vessels specifically designed for and restricted to use by militaries in combat, their transportation of military goods and personnel, or to
otherwise perform military and naval specific functions). Relevant services include:
• assessing design requirements and proposals, and determining basic vessel characteristics
• modelling related to hydrodynamics and vessel signature management (e.g., radar cross section; thermal, acoustic, and electromagnetic emissions)
• providing overall ship hull and superstructure design, and determining platform system requirements (e.g., requirements to be met by power and
propulsion; steering; heating, ventilation, and air conditioning systems)
• specifying the layout of the interior space of vessels, and the physical layout of platform systems and other systems and machinery within vessels
• providing associated drawings, schematics, and job specifications
• inspecting machinery and equipment, hulls, and superstructures (including damage surveys)
• developing and conducting the testing and evaluation of machinery and equipment, and of the operational performance of platforms
• ensuring compliance with marine vessel standards and regulations, and certification of systems and vessels
• deriving vessel construction cost estimates and establishing contract specifications and vessel production schedules.

Exclude from this category

• sales under contracts specifically for the actual provision or integration of businesses’ specific ship-borne mission systems, platform systems and structural
elements, as well as of simulation systems for naval vessels; such sales should instead be reported under other naval goods and services categories that
are in accordance with their respective definitions
• sales under contracts specifically for the provision and management of maintenance, repair, and overhaul services, or of the actual modernization or
upgrade of naval vessels and their systems.

New naval vessels constructed by shipyards, and naval conversions

State of Canada’s Defence Industry Report – Spring 2024 32

Only to be reported here are sales by shipyards in relation to their construction/assembly work (and/or related research, development, design, and engineering
work) conducted by their operations in Canada in relation to the:
• Assembly of new manned naval surface ships or submarines at a business’ shipyards in Canada (i.e., vessels that were specifically designed for use by
militaries in combat, the transportation of military goods and personnel, or to otherwise perform military/naval specific functions).
• Conversion of existing vessels that were originally designed and built as commercial/civil vessels into naval vessels for future use by militaries in combat,
the transportation of military goods and personnel, or to otherwise perform military/naval specific functions.

Excluded from this category are sales:

• Of goods and services related to shipborne naval mission systems such as naval radars, battle management command and control systems, mine
detection and naval countermeasures, naval guns, and missile launchers etc. Those are to be reported under a preceding category for: “Naval ship-borne
mission systems and components.”
• Related to maintenance, repair, and overhaul services (MRO) for manned naval surface ships and submarines. Those sales should instead be reported
under a separate category for: “Naval ship maintenance, repair and overhaul.”
• Of goods and services relating to structural elements, other platform systems, subsystems, parts, and components of naval vessels not elsewhere
reported. Such sales should instead be reported under the separate preceding category for: “Naval ships’ structural elements, platform systems, parts, &
components (excludes shipborne naval mission systems).”

Further exclusions or guidance: if the business is not a shipyard in Canada but was nonetheless responsible for, (and paid by a government/military for progress
on) the eventual delivery of naval vessels being assembled by a shipyard in Canada that is not its subsidiary, or otherwise owned by the business or by a common
parent company—then, such a business should not report sales figures which include the amount of associated sales made by the shipyard(s). For such
businesses, they should only report any relevant sales relating to work done by their respective operations’ employees in Canada, which exclude the sales value of
work the businesses contracted/subcontracted or passed through to shipyards in Canada. This is necessary to prevent potential large scale double counting of the
actual value of naval vessels being delivered by shipyards in Canada, and hence overestimation of the actual volume of associated industrial activity at shipyards
in Canada.

Simulation systems for naval vessels

This category includes sales related to production as well as research, development, design, engineering, testing and evaluation services for the hardware and
software technologies used by military and security forces to develop, experiment and test operational doctrines and to train personnel using situational scenarios
(e.g., intelligent software, visual systems, network simulations, real-time simulators) as primarily related to naval vessels and operations in the maritime-domain.

State of Canada’s Defence Industry Report – Spring 2024 33

DATA SOURCES

1. Key Industrial Indicators, % Change, 2020–2022 b. See 2(a)

a. Statistics Canada’s Canadian Defence, Aerospace, c. See 3(a)
Marine and Cybersecurity Industries Survey (2020 and
2022), 2022 survey released in 2024 9. Global Supply Chains
a. See 3(a)
2. Economic Impact
a. ISED economic model estimates based on Statistics 10. Exports
Canada’s 2019 Input-Output (I/O) multipliers, 2024 a. See 3(a)
b. See 1(a)
11. Annex 2
3. Key Industrial Indicators by Firm Size a. Statistics Canada’s Canadian Defence, Aerospace,
a. Statistics Canada’s Canadian Defence, Aerospace, Marine and Cybersecurity Industries Survey (2014, 2016
Marine and Cybersecurity Industries Survey (2022), and 2022), 2022 survey released in 2024
released in 2024
12. Annex 3
4. Key Industrial Indicators by Domain a. See 2(a)
a. See 3(a) b. See 1(a)

5. Regional Breakdown 13. Annex 4

a. See 3(a) a. See 1(a)

6. Gender Breakdown by Occupation 14. Annex 5

a. ISED custom tabulations based on Statistics Canada's a. See 3(a)
Labour Force Survey (2022), 2024
b. See 3(a) 15. Annex 6
a. See 3(a)
7. Skills & STEM
a. See 6(a) 16. Annex 7
b. See 3(a) a. See 1(a)

8. Innovation 17. Annex 8

a. ISED custom tabulations based on Statistics Canada’s a. See 3(a)
Table 27-10-0333-01, 27-10-0344-01, 36-10-0222-01, 36-
10-0223-01, and 36-10-0402-01 (all released in 2023), 18. Annex 9
2024 a. See 3(a)

State of Canada’s Defence Industry Report – Spring 2024 34

State of Canada’s Defence Industry Report – Spring 2024 35