ABSTRACT
Canada’s defence industrial base is a government-supported industry dominated by a handful of foreign subsidiaries. The few Canadian giants in the defence industry such as CAE and Bombardier generally provide inputs into finished systems or support services; shipbuilders such as Irving and Seaspan focus primarily on assembly rather than the manufacture of the high technology components of naval platforms. The Canadian government has historically favoured the use of the defence industry as a means to distribute wealth and economic activity but at the expense of cost and efficiency. Despite these drawbacks, the Canadian Kmost defence sectors being destined for exports to foreign trading partners. We expect the Canadian government will continue to support its domestic industry as it ensures its policy goals of economic benefits, regional specialization and technological spillovers are met. The Canadian Defence Industrial Base remains competitive in intermediate inputs into high-end defence platforms – electronics, software and other support systems. Whether these advantages are artificial and dependent on Canadian subsidies and protectionism is an ongoing question.
