Future of the Canadian Defense Industry - Market Attractiveness, Competitive Landscape and Forecasts to 2023

Table of Contents

1. Introduction 9

• 1.1. What is this Report About? 9
• 1.2. Definitions 9
• 1.3. Summary Methodology 11
• 1.4. About GlobalData 12

2. Executive Summary 13

3. Market Attractiveness and Emerging Opportunities 15

• 3.1. Current Market Scenario 16
  • 3.1.1. Primary Threat Perception 16
  • 3.1.2. Military Doctrine and Strategy 17
  • 3.1.3. Military Fleet Size 18
  • 3.1.4. Procurement Programs 23
  • 3.1.5. Top Procurement Programs by Value (US$ Million) 2018-2023 26
  • 3.1.6. Social, Political and Economic Environment and Support for Defense Projects 27
  • 3.1.7. Political and Strategic Alliances 28
• 3.2. Defense Market Size Historical and Forecast 29
  • 3.2.1. Canadian defense budget is expected to record a CAGR of 4.72% over the forecast period 29
  • 3.2.2. Military modernization and the fight for sovereignty over the arctic region to form base of defense expenditure 31
  • 3.2.3. Canadian defense expenditure as a percentage of GDP is expected to decline over the forecast period 32
• 3.3. Analysis of Defense Budget Allocation 34
  • 3.3.1. Share of capital expenditure expected to remain relatively constant over the forecast period 34
  • 3.3.2. Capital expenditure is forecasted to record a CAGR of 3.77% over the forecast period 36
  • 3.3.3. Per capita defense expenditure is projected to increase over the forecast period 38
• 3.4. Homeland Security Market Size and Forecast 39
  • 3.4.1. Canadian homeland security budget anticipated to record a CAGR of 7.76% over the forecast period 39
  • 3.4.2. Cyber-attacks and terrorism set to drive homeland security expenditure over the forecast period 41
  • 3.4.3. Canada falls under “moderate risk” of terrorism 42
  • 3.4.4. Canada faces little threat from terrorist organizations 43
  • 3.4.5. Canada has a terrorism index score of 3.0 45
• 3.5. Benchmarking with Key Global Markets 46
  • 3.5.1. Canadian defense budget expected to remain low compared to the leading spenders 46
  • 3.5.2. The US and China dominates the global defense market 48
  • 3.5.3. Canada allocates a lower share of GDP to defense expenditure than the US 49
• 3.6. Market Opportunities: Key Trends and Growth Stimulators 50
  • 3.6.1. Top 10 Defense Market Categories by Value (US$ million) - Forecast-Period Projections 50
  • 3.6.2. Corvettes 51
  • 3.6.3. Airborne C4ISR 52
  • 3.6.4. Multi-mission and Maritime Helicopter 53

4. Defense Procurement Market Dynamics 54

• 4.1. Import Market Dynamics 56
  • 4.1.1. Defense imports are expected to increase over 2019-2023 56
  • 4.1.2. The US emerged as the top arms exporter to Canada 57
  • 4.1.3. Aircraft accounted for the majority of military imports 58
• 4.2. Export Market Dynamics 59
  • 4.2.1. Defense exports expected to rise over the forecast period 59
  • 4.2.2. Saudi Arabia accounted for the majority of Canadian defense exports 60
  • 4.2.3. Engines are the main exported defense products 61

5. Industry Dynamics 62

• 5.1. Five Forces Analysis 62
  • 5.1.1. Bargaining Power of Supplier: Medium 64
  • 5.1.2. Bargaining Power of Buyer: High 64
  • 5.1.3. Barrier to Entry: Medium 64
  • 5.1.4. Intensity of Rivalry: Medium to High 64
  • 5.1.5. Threat of Substitution: Low to Medium 65

6. Market Entry Strategy 66

• 6.1. Market Regulation 66
  • 6.1.1. Offset policy aids Canada’s domestic defense industry and balances regional development 66
  • 6.1.2. FDI in the defense sector is reviewed for threats to national security and effects on the economy 67
• 6.2. Market Entry Route 68
  • 6.2.1. Budgeting Process 68
  • 6.2.2. Acquisition of domestic companies is an effective entry route for foreign defense companies 69
  • 6.2.3. Establishment of subsidiaries is an effective entry route into the Canadian defense market 69
  • 6.2.4. Market entry strategies include joint ventures and licensing agreements 70
• 6.3. Key Challenges 71
  • 6.3.1. Timeline for execution of offsets increases difficulty for foreign companies 71
  • 6.3.2. ITARs conflicting with Canadian human rights laws challenge Canadian defense companies 71

7. Competitive Landscape and Strategic Insights 72

• 7.1. Competitive Landscape Overview 72
• 7.2. Key Public-Sectors Companies 75
  • 7.2.1. CAE - Overview 75
  • 7.2.2. CAE - Major Products and Services 75
  • 7.2.3. CAE - Recent Announcements and Strategic Initiatives 76
  • 7.2.4. CAE - Alliances 77
  • 7.2.5. CAE - Recent Contract Wins 77
  • 7.2.6. CAE - Financial Analysis 81
  • 7.2.7. Pacific Safety Products Inc. - Overview 83
  • 7.2.8. Pacific Safety Products Inc. - Major Products 83
  • 7.2.9. Pacific Safety Products Inc. - Recent Announcements and Strategic Initiatives 84
  • 7.2.10. Pacific Safety Products Inc. - Alliances 85
  • 7.2.11. Pacific Safety Products Inc. - Recent Contract Wins 85
  • 7.2.12. Avcorp - Overview 87
  • 7.2.13. Avcorp - Major Products and Services 87
  • 7.2.14. Avcorp - Recent Announcements and Strategic Initiatives 87
  • 7.2.15. Avcorp - Alliances 88
  • 7.2.16. Avcorp - Recent Contract Wins 88
  • 7.2.17. Avcorp - Financial Analysis 89
  • 7.2.18. Héroux-Devtek Inc. - Overview 91
  • 7.2.19. Héroux-Devtek Inc. - Major Products and Services 91
  • 7.2.20. Héroux-Devtek Inc. - Recent Announcements and Strategic Initiatives 91
  • 7.2.21. Héroux-Devtek Inc. - Alliances 92
  • 7.2.22. Héroux-Devtek Inc. - Recent Contract Wins 92
  • 7.2.23. Magellan Aerospace Corporation - Overview 94
  • 7.2.24. Magellan Aerospace Corporation - Major Products and Services 94
  • 7.2.25. Magellan Aerospace Corporation - Recent Announcements and Strategic Initiatives 94
  • 7.2.26. Magellan Aerospace Corporation - Alliances 95
  • 7.2.27. Magellan Aerospace Corporation - Recent Contract Wins 95
  • 7.2.28. Magellan Aerospace Corporation - Financial Analysis 96
• 7.3. Key Private-Sector Companies 98
  • 7.3.1. Bell Helicopter Textron Canada Ltd - Overview 98
  • 7.3.2. Bell Helicopter Textron Canada Ltd - Major Products 98
  • 7.3.3. Bell Helicopter Textron Canada Ltd - Recent Announcements and Strategic Initiatives 98
  • 7.3.4. Bell Helicopter Textron Canada Ltd - Alliances 99
  • 7.3.5. Bell Helicopter Textron Canada Ltd - Recent Contract Wins 99
  • 7.3.6. Cascade Aerospace - Overview 100
  • 7.3.7. Cascade Aerospace - Major Products and Services 100
  • 7.3.8. Cascade Aerospace - Recent Announcements and Strategic Initiatives 100
  • 7.3.9. Cascade Aerospace - Alliances 101
  • 7.3.10. Cascade Aerospace - Recent Contract Wins 101
  • 7.3.11. General Dynamics Canada - Overview 102
  • 7.3.12. General Dynamics Canada - Major Products 102
  • 7.3.13. General Dynamics Canada - Recent Announcements and Strategic Initiatives 103
  • 7.3.14. General Dynamics Canada - Alliances 104
  • 7.3.15. General Dynamics Canada - Recent Contract Wins 105
  • 7.3.16. General Dynamics Land Systems, Canada - Overview 107
  • 7.3.17. General Dynamics Land Systems, Canada - Major Products and Services 107
  • 7.3.18. General Dynamics Land Systems, Canada - Recent Announcements and Strategic Initiatives 107
  • 7.3.19. General Dynamics Land Systems, Canada - Alliances 108
  • 7.3.20. General Dynamics Land Systems, Canada - Recent Contract Wins 108
  • 7.3.21. L-3 MAS - Overview 110
  • 7.3.22. L-3 MAS - Major Services 110
  • 7.3.23. L-3 MAS - Recent Announcements and Strategic Initiatives 110
  • 7.3.24. L-3 MAS - Alliances 111
  • 7.3.25. L-3 MAS - Recent Contract Wins 111
  • 7.3.26. Rheinmetall Canada Inc. - Overview 113
  • 7.3.27. Rheinmetall Canada Inc. - Major products 113
  • 7.3.28. Rheinmetall Canada Inc. - Recent Announcements and Strategic Initiatives 114
  • 7.3.29. Rheinmetall Canada Inc. - Alliances 114
  • 7.3.30. Rheinmetall Canada Inc. - Recent Contract Wins 115
  • 7.3.31. Raytheon Canada Ltd - Overview 116
  • 7.3.32. Raytheon Canada Ltd - Major Products and Services 116
  • 7.3.33. Raytheon Canada Ltd - Recent Announcements and Strategic Initiatives 116
  • 7.3.34. Raytheon Canada Ltd - Recent Contract Wins 117

8. Business Environment and Country Risk 118

• 8.1. Economic Performance 118
  • 8.1.1. Gross Domestic per Capita (US$) 118
  • 8.1.2. Gross Domestic Product, Current US$ Billion 119
  • 8.1.3. Exports of Goods and Services 120
  • 8.1.4. Imports of Goods and Services 121
  • 8.1.5. Gross National Disposable Income 122
  • 8.1.6. Local Currency Unit per US$ 123
  • 8.1.7. Market Capitalization of Listed Companies 124
  • 8.1.8. Market Capitalization of Listed Companies as a Percentage of GDP 125
  • 8.1.9. Government Cash Surplus/Deficit as a Percentage of GDP 126
  • 8.1.10. Goods Imports as a Percentage of GDP 127
  • 8.1.11. Goods Exports as a Percentage of GDP 128
  • 8.1.12. Services Imports as a Percentage of GDP 129
  • 8.1.13. Services Exports as a Percentage of GDP 130
  • 8.1.14. Net Foreign Direct Investment 131
  • 8.1.15. Net FDI as a Percentage of GDP 132
  • 8.1.16. Mining, Manufacturing, Utilities Output 133

9. Appendix 134

• 9.1. About GlobalData 134