Canadian Small Arms Production and Export: Spotlight on Canadian Military Exports

Tasneem Jamal

Kenneth Epps

The Ploughshares Monitor September 1999 Volume 20 Issue 3

The value of Canadian exports of small arms1 and small arms accessories and components to non-US2 customers totalled $23 million in 1997, the last year for which figures are available. Most exports, $22 million (or 96%) went to NATO countries, with remaining sales divided between other industrial countries ($446,000) and countries in the Third World ($672,000). Individual state recipients, totalling 37 in 1997, are identified in Table 1. The 1997 sales, reported in the Federal Government’s annual report on Export of Military Goods from Canada, are down from 1995 and 1996 when the total non-US sales were $31 million and $29 million respectively, with most of the declines owing to reduced sales to NATO customers (see Figure 1).

Most Canadian small arms exports are variations of the US M-16 automatic rifle, built under licence by Diemaco of Kitchener as the C7 combat rifle, the C7A optically-sighted version of the C7, and the C8 carbine. In 1984 Diemaco received a contract to build the C7 for the Canadian armed forces, and at the time the company was prevented from exporting by provisions of the Criminal Code of Canada. The company lobbied for a change in legislation, arguing that it could not in the long run remain economically viable if it had access only to the Canadian defence market. In 1991 the necessary changes were made, despite opposition, and three years later the company received a major contract from the Netherlands. (Figure 1 shows sharp increases in small arms exports in 1994, when sales began.) Diemaco has since supplied the Dutch Army with more than 50,000 automatic rifles worth almost $60 million and has exported rifles to Belgium and Denmark.

Canada has at least three other small arms manufacturers. Para-Ordnance in the Toronto area builds handguns for military, police, and civilian markets. Sporting rifles, primarily for the US market, are built by Savage Arms of Lakefield, Ontario and Armament Technology assembles 7.62 mm tactical and sniper rifles in Halifax. Elcan Optical Technologies in Midland, Ontario specializes in military small arms components and accessories, and another three companies manufacture munitions (see Table 2 for more details).3

Export regulations

Small arms exports are controlled through the Export and Import Permits Act (EIPA) administered by Canada’s Department of Foreign Affairs. Along with other military goods, small arms appear on the Export Control List and require export permits before shipment from Canada to any non-US destination. (US shipments are exempt from the export permit process under US-Canada Defence Production Sharing Arrangements.) The 1991 legislation permitting exports of automatic rifles restricts exports to countries on the Automatic Firearms Country Control List (AFCCL). To be eligible for the AFCCL, a country must have a defence development relationship with Canada, although it appears that such a relationship is readily established if a sale is imminent or threatened. (When GM Canada sold light armoured vehicles equipped with US-made machine guns to Saudia Arabia, the defence relationship was arranged and Saudi Arabia was added to the AFCCL to allow the sale to go through.)

In 1996, following an internal departmental review, Foreign Minister Lloyd Axworthy announced an intention to tighten export controls. His instructions to department officials included exercising “the strictest controls over the export of firearms and other potentially lethal equipment to satisfy me that gun control laws and practices in recipient countries are adequate to ensure that Canadian firearms do not find their way into the illicit arms trade nor fuel local violence” (DFAIT 1996).

When the domestic gun control regulations of the 1995 Firearms Act come into full effect, all firearms exports will require both export permits and authorization by provincial firearms officers or the RCMP registrar. Reinforced by obligations under the 1997 Organization of American States (OAS) convention on illicit firearms trafficking, expected to be in place in Canada by early 2000, the export requirements will extend to US shipments. As of Canadian ratification of the OAS Convention, export permits will be required for firearms sales to the US.

1 While varying definitions of small arms are used, Canadian export figures used here are based on Item 2001 of Canada’s Export Control List consisting of “small arms and automatic weapons such as pistols, revolvers and rifles, including certain firearms for sporting and competition purposes and accessories” (DFAIT 1998, p. 31). Currently, most reported export sales are for military use, but police weapons and sporting guns are also included in the government statistics.

2 Because military exports to the US do not require export permits, statistics for US sales are not maintained.

3 The current international focus on efforts to control “small arms and light weapons” uses a broader definition than the small arms defined by Canada’s Item 2001 of the Export Control List (ECL). For example, the definition of the 1997 report of the UN Governmental Experts on Small Arms includes pistols, rifles, light and heavy machine guns, and portable grenade launchers, anti-aircraft guns, anti-tank guns and mortars. Canadian exports of items considered to be “light weapons” are accounted for in ECL categories beyond Item 2001 (e.g., Item 2004 includes bombs, rockets and missiles and related equipment). These light weapons are not the subject of this report. Also, ammunition exports for Item 2001 small arms are reported in Item 2003 of the ECL. Because Item 2003 statistics do not distinguish small calibre ammunition exports from shipments of larger calibre munitions, it is not possible to include ammunition in the value of Canadian small arms exports.


DFAIT (Department of Foreign Affairs and International Trade) 1996, “Notes for an address by the Minister,” June 18.

DFAIT 1998, Export of Military Goods from Canada: Annual Report 1997.



Table 1

1997 recipients of Canadian small arms exports*

Country                  Value                           Country                  Value 

Andorra                   $7,492                          Luxembourg            $13,015
Argentina                 $54,966                        Netherlands             $20,238,216
Australia                  $155,959                      New Zealand           $15,167
Austria                     $9,843                          Norway                   $95,202
Belgium                    $170,030                      Philippines               $183,284
Chile                        $31,317                         Poland                    $990
Czech Republic        $19,825                         Romania                  $884
Denmark                  $283,893                       Slovakia                  $3,098
Egypt                       $61                                Slovenia                   $6,245
Finland                     $10,642                         South Africa             $15,595
France                     $188,371                       Spain                        $92,617
Germany                  $597,495                       Sweden                    $1,986
Greece                     $10,516                         Switzerland              $220,111
Greenland                 $13,126                        Tanzania                   $5,532
Guyana                     $250                             Thailand                   $362,506
Hong Kong               $6,225                          Turkey                     $1,679
Hungary                    $1,249                           United Kingdom      $53,868
Italy                          $224,905                       Zambia                    $930
Jordan                       $3,856                          Total                      $23,100,946

*Small arms contained in Export Control List Item 2001 only.


Table 2

Canadian small arms manufacturers

The following table was compiled by Project Ploughshares from open sources.


1. Diemaco Inc., Kitchener, Ontario

Designated the Small Arms “Centre of Excellence” by the Canadian Department of National Defence, Diemaco was proclaimed to be “the firearms-production capital of Canada” when it received a $107 million DND contract to supply automatic rifles and carbines in 1984. In 1994 the company landed a $50 million contract with the Netherlands military to supply C7 rifles, followed in 1995 and 1996 by Danish orders worth $13 million. Diemaco also has exported automatic weapons and components to Belgium, New Zealand, and the US, according to company and media reports, and has had additional “export experience” in Australia, Papua New Guinea, Saudi Arabia, and the UK, according to Industry Canada (Industry Canada “Canadian Company Capabilities” at website

Diemaco produces the C7 Combat Rifle (a version of the US Colt M-16), the C7A1 Combat Rifle (an optically-sighted version of the C7), the C8 Carbine (a C-7 with a telescoping stock and a shorter barrel), and the C10 training rifle. The company is a division of Devtek Corporation, based in Markham, Ontario.

From 1981 Diemaco lobbied the government to change the Criminal Code so that it could export automatic rifles, contributing to 1991 legislative changes creating an Automatic Firearms Country Control List of prescribed countries eligible to order automatic weapons from Canada.

2. Para-Ordnance Manufacturing Inc., Scarborough, Ontario

Para-Ordnance manufactures and sells handguns – a range of 9mm, .40- and .45-calibre pistols. According to company material, Para-Ordnance is the originator of the “high magazine capacity” .45-calibre pistol, and “offers a wide range of quality engineered products for the law enforcement, military, and civilian markets” (“About Us” from the company website, Para-Ordnance supplies domestic customers, including Canadian police forces, private sports shooters and hunters, and ships handguns out of the country, reporting export sales exceeding $500,000 in a company report to Industry Canada in 1998. In 1996, Para-Ordnance received an export permit to sell about 200 handguns worth just over $100,000 to police in Thailand, according to media reports. The company also claims “export experience” in over 20 countries, including South Africa, Philippines, Argentina, Chile, Venezuela, and all states in the United States.


3. Savage Arms (Canada) Inc., Lakefield, Ontario

Savage Arms (Canada) produces .22-calibre long rifles and sporting fire rifles, including those used for target shooting and biathlon events. Formerly the Canadian-owned Lakefield Arms, the company is now a subsidiary of the Massachusetts-based Savage Sports Corporation. According to company officials, Savage Arms exports 97 per cent of its rifles, mostly to the US (Testimony of Mr. Barrie King, Vice-President and General Manager, to the House of Commons Standing Committee on Justice and Legal Affairs, November 24, 1997).

4. Armament Technology, Halifax, Nova Scotia

Armament Technology sells Canadian-assembled 7.62 mm tactical and sniper rifles to military, police and civilian customers. The Canadian-owned company also distributes associated firearms equipment such as optical sights and rifle stocks and provides refits, including rebarreling, of police and military sniper rifles. Armament Technology has reported sales to Canadian and US police forces as well as exports to Australia.


1. SNC Industrial Technologies Inc, Le Gardeur, Quebec

A division of the SNC-Lavalin Group of Montreal, SNC Industrial Technologies produces a range of small arms ammunition, including 5.56 mm, 7.62 mm, 9 mm, .50- and .303-calibre rounds as well as small arms training ammunition for military, special forces, and police in Canada and abroad. The Canadian Department of National Defence is the company’s largest customer by far, awarding regular multi-million dollar orders for small arms ammunition. (In 1996, for example, DND placed a $180 million order for “ammunition through 30 mm” with the company.) SNC has also exported training ammunition to the US Navy and Army, the US Federal Bureau of Investigation, and the French Ministry of Defence. In reports to Industry Canada, the company cites “export experience” with over 30 other countries, including Albania, Armenia, Azerbaijan, Ecuador, Oman, Russia, Thailand and the former Yugoslavia. SNC Industrial Technologies also has supplied 81 mm mortar cartridges and, before 1992, “Elsie” anti-personnel landmines to the Canadian Army.

2. Royal Canadian Cartridge and Munitions Corp., North Vancounver, British Columbia

Royal Canadian Cartridge and Munitions produces shotshells, .22-calibre rimfire rounds, and other small arms ammunition. It is a Canadian-owned company.

3. Challenger Ammunition, Sainte-Justine-de-Newton, Quebec

Challenger Ammunition produces shotshells, and firearms ammunition, including bullets, and centrefire and rimfire rounds. According to Industry Canada, the company reported no export sales, although it is “actively pursuing” many foreign markets.


1. ELCAN Optical Technologies, Midland, Ontario

ELCAN produces optical sights for military small arms use, including sights with night vision capability. The company, now a division of the US-based Raytheon Systems Company, also produces optical systems for mortars and the Eryx anti-tank weapon. ELCAN has sold thousands of sights to the Canadian military – in 1992 DND ordered 6,750 optical sights worth $5 million for C9 light machine guns and 55,000 sights worth $20 million for C7 combat rifles. Additional military customers include Australia and the UK. In 1998 the US Army ordered ELCAN telescopic sights for 5.56 mm and 7.62 mm machine guns in an initial $200,000 order that could lead to sales totalling $6 million.

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