The Ploughshares Monitor December 1999 Volume 20 Issue 4
General Motors of Canada was the largest Canadian arms manufacturer again in 1998, the second successive year the company ranked first in Project Ploughshares’ annual listing of top military contractors. With estimated 1998 military sales of $366 million, GM Canada achieved top spot by supplying light armoured vehicles (LAVs) – built at its Diesel Division in London – to the Canadian Army and the Saudi Arabian National Guard. Domestic and export sales of LAVs have maintained GM Canada as a consistent member of Canada’s top arms suppliers for two decades.
The remainder of the country’s top arms contractors also appeared on last year’s top ten list, although the relative positions of most have changed. The continuity of the largest companies reflects a remarkable stability in Canadian military production and sales in the face of major upheaval in the industries of other arms supplier nations. Whereas major arms manufacturers in the United States and Europe are merging, consolidating, buying and selling subsidiaries – in essence jockeying to maintain a share of a declining world arms market – Canadian companies, with some exceptions,1 appear to be staying a well-traveled course. Most of the largest 1998 Canadian suppliers have been so ranked since Project Ploughshares’ first listing for the early 1980s.
Like the Canadian industry overall, the largest Canadian military contractors of 1998 shipped complete weapon systems, subsystems, and components, and provided military services for the domestic and export markets. In addition to LAVs from GM Canada, Bombardier Inc, based in Montreal, supplied amphibious aircraft to the Greek forces and Challenger multi-mission aircraft to Denmark. Mirabel’s Bell Helicopter Textron Canada built special mission and anti-submarine helicopters for Ecuador, air force training helicopters for Croatia, and Griffon utility helicopters for the Canadian Army. SNC-Lavalin’s subsidiary, Fenco MacLaren, was responsible for delivery of the final four maritime coastal defence vessels to the Canadian Navy (although most of the corporation’s 1998 military sales arose from munitions supplied to the Canadian Forces by SNC Industrial Technologies). CAE Electronics in Montreal exported flight simulators for a range of military aircraft, such as two PC-7 flight trainers sold to the United Arab Emirates.
During 1998 Pratt & Whitney Canada, also in Montreal and a subsidiary of US-based United Technologies, supplied turbo engines as major subsystems for military aircraft, including for the Joint Primary Aircraft Training System (JPATS) aircraft of the US Air Force and Navy. Ottawa-area Computing Devices Canada, purchased by General Dynamics in late 1997, built sonars for Swedish navy corvettes among a host of weapon subsystem contracts. The company also made further deliveries of the Tactical Command Control and Communications System to the Canadian armed forces. Canadian Marconi of Montreal, an enduring supplier of electronic and avionics components, delivered parts for US F-15, F-16 and F-18 fighter aircraft, South African Rooivalk helicopters, and Eurocopter Tiger helicopters. It also sold tactical radios to the US Navy and others.
Bombardier was the largest military service provider during 1998. Beyond maintenance support for Canada’s CF-18 fighter aircraft, the company’s Bombardier Services division was responsible for primary flying training for the Canadian Forces and some pilots from other nations. In partnership with the Canadian government, it also offered the NATO Flying Training in Canada program, to which Denmark became the first NATO subscriber in 1998. Magellan Aerospace, through its Bristol Aerospace and Orenda Aerospace subsidiaries, and Spar Aerospace also provided repair and overhaul services to aircraft of Canadian and foreign air forces. As defence departments around the world seek to cut costs by contracting out equipment servicing, repair, and maintenance, and even aspects of military training, Canadian military service companies will be looking to expand revenues in these areas.
The 1998 ranking of top Canadian military suppliers is drawn from contract information supplied by the Canadian government and Canadian Commercial Corporation,2 and from data (including subcontract information) in company publications and press reports, all of which is compiled in Project Ploughshares’ Canadian Military Industry Database and accompanying files. Because neither the government, the companies, nor the press reports the full extent of corporate dependency on military production, the rankings are based on best estimates which in some cases are likely to be conservative.3 In two cases, Magellan Aerospace and Canadian Marconi, the company provides a figure for 1998 military sales. Although these figures could not be independently verified, they were used in the ranking as reported.
1 Magellan Aerospace, based in Mississauga, is a conglomerate that includes Bristol Aerospace, Orenda Aerospace (formerly part of Hawker Siddeley Canada), and Fleet Industries, all of which appeared regularly in earlier rankings of Canada’s largest arms suppliers. Also, CAE Inc sold its CAE Aviation subsidiary to Spar Aerospace in late1997.
2 The Canadian Commercial Corporation (CCC) is an Ottawa-based crown corporation which assists Canadian companies with export sales to foreign governments and international organizations. Typically, over 60 per cent of CCC-brokered sales are purchased by military agencies.
3 In the case of Bombardier for example, the figure is derived from a company estimate of three per cent. The value of military service contracts, missile sales by the Northern Ireland subsidiary, Short Brothers, and especially Bombardier’s sales of commercial aircraft to military users, suggest that this figure may be understated. In other cases, a company may be omitted from the largest supplier list due to insufficient data. As an example, IMP Group of Halifax was the third biggest contractor with the Canadian Department of National Defence during 1998. However, because the privately-owned company reports little sales information, it is impossible to estimate either the value of DND military contracts included in 1998 company sales or the value of military sales from other sources.
Table 1: Top 10 Canadian Military Contractors 1998
|Company head office/main plant||A||B||C||D||E||F||G||H|
|1||General Motors of Canada Ltd, Diesel Division, London||1||8||X||X||X||4||366|
|2||CAE Inc, Montreal||X||X||X||2||364|
|3||Computing Devices Canada Ltd, Nepean||10||X||X||2||350|
|4||Bombardier Inc, Montreal||X||X||1||345|
|5||SNC-Lavalin Group, Montreal||2||X||5||226|
|6||Magellan Aerospace Corp, Mississauga||1||X||X||X||1||155*|
|7||Canadian Marconi Company, Montreal||2||X||X||X||X||2||124*|
|8||Bell Helicopter Textron Canada Ltd, Mirabel||X||X||X||1||80|
|9||Spar Aerospace Ltd, Mississauga||5||11||X||X||1||80|
|10||Pratt & Whitney Canada Inc, Montreal||13||13||X||X||X||1||>60|
A Ranking within largest recipients of Canadian Department of National Defence contracts for the calendar year 1998.
B Ranking within largest recipients of military export contracts for fiscal year 1998-99 as brokered by the Canadian Commercial Corporation (CCC). (See endnote on the CCC.)
C Estimated or reported military sales greater than 20 per cent of total company sales.
D Estimated or reported export sales greater than 50 per cent of total company sales.
E Reported military sales or deliveries from Canada to one or more Third World countries during 1998.
F Foreign-owned or controlled.
G Commodity-classification of major military products (1-Aerospace; 2-Electronics; 3-Marine; 4-Transportation; 5-Armaments).
H Estimated total value of military sales in millions of Canadian dollars for 1998 or closest fiscal year, compiled from Canadian Military Industry Database data and files. For Canadian-owned companies this includes military sales of foreign subsidiaries.
(* indicates the company reported a value for its military sales.)