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The business of war: Canada has a sizeable arms industry that is joined at the hip to the huge military production system in the United States.

Article Excerpt
The Avro Arrow (pictured below) was a marvel of Canadian engineering. The military interceptor aircraft first flew in 1958. Faster and more advanced than any warplane flying or under design at the time, the Avro Arrow was years ahead of its time.

Slightly less than one year after its first test flight the Avro Arrow program was cancelled. The Progressive Conservative government of Prime Minister John Diefenbaker decided that Canada could not afford to build such sophisticated weapons from scratch. In future, Canada's arms makers would function as suppliers of parts to the huge American manufacturers to the south.

In 1963, the Defence Development Sharing Arrangement was signed with the United States. This agreement has promoted joint funding of research and development projects involving Canadian companies in the initial stages of weapon development.

An earlier accord that is still in effect is the Defence Production Sharing Arrangement, which was signed in 1956. This has allowed Canadian firms to compete on a more equal footing with their American counterparts in the U.S. market. Also, it has led to greater standardization in the design and production of military equipment.

These arrangements have helped Canada become a significant force in the defence industry. Canada only has one company (Canadian Aviation Electronics Ltd.) among the world's 100 biggest arms manufacturers. However, our largest trading partner, the United States, has 53 corporations on that list. Some of those U.S. companies--Raytheon, General Motors Defence, Bell Helicopter Textron--have Canadian operations.

Cross-border trade in weapons and weapons technology makes Canada the world's 13th largest arms manufacturing country. What all this adds up to is that the Canadian arms industry is closely tied to the American arms industry.

The Ottawa region is the hub of Canada's military-industrial complex. The obvious reason for that is that's where the big cheques get signed. The region is also home to hundreds of thriving high-tech, military industries. (According to Project Ploughshares' Canadian Military Industry Data Base, there are 1,000 companies in the Ottawa region that are known to have received military contracts.) There are two universities where sophisticated weapons research can be carried out. Attracted to the centre of activity are private consultants and military industry associations that...