State of Canada's Defence Industry

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Features of Canada's Defence Industry, 2014

Summary:
Innovation, Science and Economic Development Canada (ISED) joined forces with the Canadian Association of Defence and Security Industries (CADSI) to publicly release a new report on Canada’s defence industry for decision makers. Features of the report include building analytic capacity through collaborative research, economic impact, innovation, exports, and supply chains analysis.

Building Analytic Capacity through Collaborative Research

Canadian defence industry metrics

  • Relevant, quality and timely data on Canadian defence industrial activity informs effective development and implementation of policies, programs and practices related to defence procurement, industrial economic development and innovation
  • Standard industrial classifications mix non-defence and defence activities and cannot be used to effectively identify and measure defence goods and services
  • Firms' activities vary significantly, and publicly disclosed firm-level data has been insufficient for accurate and comprehensive defence industry estimates
  • The development of statistically reliable survey-based estimates was required to establish a shared understanding of defence industrial activity by businesses' operations in Canada
  • ISED collaborated with industry and government stakeholders to refine its latest multi-sector survey done through Statistics Canada*
*Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Collaborative process to build analytic capacity

  • ISED joined forces with CADSI to publicly release a new report on Canada's defence industry for decision makers
    • Defence industry results reflect activities relating to 18 categories of defence goods and services produced in 2014 by business operations in Canada*

Figure 1: Collaborative process to build analytic capacity

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Description of Figure 1
Collaborative process to build analytic capacity
1 Policy Makers' and Industry Needs Identification
2 Research Analysis Framework - Methodology consultation with OECD, U.S. Department of Defence, & Statistics Canada
3 Data Collection - Statistics Canada “Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey”
4 Preliminary Research and Analysis Results
5 Validation Sessions with Industry Research Committee on Trends and Drivers
6 Official Launch of Final Report - Industry and policy makers
7 Continued Support to Inform Policy and Industry Decision Makers; and Pursue New Analytical Opportunities
*See Annex A for the listing of the 18 defence goods and services categories with their full official titles.

Economic Impact

The Canadian defence industry had sales of almost $10B* in goods and services, produced by close to 640 firms in 2014

  • Of 638 firms**, a third (211) were more defence-focused, with defence goods and services (G&S) accounting for 80%-100% of their own respective total sales
    • The 211 more defence-focused firms accounted for 72% of total defence sales
    • In contrast, 8% of total defence sales were by the 290 commercial/civil-focused firms for which defence accounted for less than 20% of their own sales

Figure 2: Defence Goods & Services Sales as a Share of a Business' Total SalesCar rentals

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Description of Figure 2
Defence Goods & Services Sales as a Share of a Business' Total SalesCar rentals
  Number of Enterprises
Over 0% but less than 20% 290
20% or more, but less than 50% 79
50% or more, but less than 80% 58
80% to 100% 211

* Defence goods and services sales only.

** Businesses/firms under the survey referred to in this presentation are units at the "enterprise level", not the level of individual establishments, facilities, or plants.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

More than 90% of firms had less than 250 employees—while over 80% of defence sales and 90% of exports were by firms with 250 or more employees*

Firms with less than 250 employees accounted for about 17% of defence industry sales, 24% of employment, and 10% of exports

Figure 3: Relative Importance to Defence of Different-Sized Businesses

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Description of Figure 3
Relative Importance to Defence of Different-Sized Businesses
Number of Businesses Defence Employment Defence Sales Defence Exports
Less than 100 employees 81% 13% 10% 6%
100 - 249 employees 9% 11% 7% 4%
250 - 499 employees 4% 9% 10% 9%
500 or more employees 5% 67% 74% 80%

* Businesses/firms under the survey referred to in this presentation are units at the "enterprise level", not the level of individual establishments/facilities/plants.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

The economic contribution of the defence industry is reflected by gross domestic product (GDP) estimates

GDP metrics measure Canada's domestic value-added and associated employment by excluding double counting, as well as the value of foreign content

Defence industry sales contributed to the economy through three main effects:

  1. Defence industry production of defence goods and services [direct effects]*
    Impact on jobs and GDP from defence industry firms" own direct employment needed to generate their defence goods and services (G&S), and their own value-added beyond the non-defence material inputs/purchases they sourced from other industries to make the defence G&S that they sold
  2. Non-defence suppliers production for the defence industry [indirect effects]*
    Impact on jobs and GDP due to inter-industry purchases and other firms/industries providing the defence industry with non-defence G&S (like steel, chemicals, tools, electricity, etc.) not under the survey's 18 defence G&S categories, but needed for the production of those defence G&S
  3. Consumer spending by associated employees [induced effects]*
    Economic impact resulting from consumer spending induced by labour force incomes derived from production under the above "direct" and "indirect" industrial activities*
* Note: The meanings and use of the terms "Direct", "Indirect" and "Induced" in this context are in accordance with the Canadian System of National Accounts and Input-Output related concepts, terminology and practices relating to economic impact multipliers, and economic impact estimates; they do NOT relate to the Industrial and Regional Benefits (IRB) policy, nor the Industrial and Technological Benefits (ITB) policy and their concepts of "direct" vs. "indirect" activities. See Annex B for further details.

Defence industry sales contributed about $6.7B to GDP and close to 63,000 to employment to the Canadian economy in 2014*

Total GDP impact from industrial production of defence goods and services up from $6B in 2011, to almost $6.7B in 2014

Figure 4: Total GDP and Jobs Impacts of Defence Industry Production of Defence Goods & Services

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Description of Figure 4
Total GDP and Jobs Impacts of Defence Industry Production of Defence Goods & Services
Defence Industry Production of Defence Goods & Services [Direct Effects] Non-Defence Suppliers Production for the Defence Industry [Indirect Effects] Consumer Spending by Associated Employees [Induced Effects]
Jobs, 000s 28 20 15
GDP, $B 3.1 2.0 1.6
* Based on results the Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016), Statistics Canada Input-Output multipliers and ISED modelling. Note: The meanings and use of the terms "Direct", "Indirect" and "Induced" in this context are in accordance with the Canadian System of National Accounts and Input-Output related concepts, terminology and practices relating to economic impact multipliers, and economic impact estimates; they do NOT relate to the Industrial and Regional Benefits (IRB) policy, nor the Industrial and Technological Benefits (ITB) policy and their concepts of "direct" vs. "indirect" activities.

Innovation

Innovation-relevant occupations accounted for over 30% of the defence industry's direct employment*

  • Total defence industry employees'* average annual compensation was close to 60% above the manufacturing sector average
  • The defence industry invested more than $250M in R&D in 2011, led by larger firms***

Figure 5: 2014 Defence Industry Direct Employment by Type

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Description of Figure 5
2014 Defence Industry Direct Employment by Type
Engineers, Scientists and/or Researchers 18%
Technicians & Technologists 13%
Production Workers 39%
All Other (incl. Management, Admin., Marketing etc.) 30%

* The occupation estimates relate only to the defence industry's own direct employment and do not necessarily reflect the occupational nature of "Indirect" and "Induced" jobs supported by defence industry sales.

** Estimates of the employee type breakdown of total direct defence industry employment are based on the relative breakdown indicated by the 80% of the industry's employment whose type was clearly specified for 2014.

*** A 2014 R&D estimate could not be published because several key firms chose to not provide necessary data. The 2011 R&D estimate is based on the results of Statistics Canada's "Canadian Commercial Aerospace, Defence, Commercial and Civil Marine and Industrial Security Sector Survey, 2011" (Released 2013); as with 2011 sales, larger firms (250 or more employees) accounted for 81% of 2011 defence R&D.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016); and Statistics Canada, CANSIM, 2016

Exports

The Canadian defence industry was export driven, with close to 60% of sales ($6B) attributed to export sales

  • Overall, defence sales rose from over $9.4B in 2011 to over $9.9B in 2014
  • Export intensity (% of sales that were exports) increased by close to 20% over the period
  • The defence sales export intensity was close to 20%* higher than that of the overall Canadian manufacturing average
  • Collectively, firms with 250 or more employees were more export oriented with about 65% of their defence sales being direct exports, as opposed to about 37% of the sales of firms with less than 250 employees

Figure 6: Domestic vs. Export Orientation of the Defence Industry in 2014

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Description of Figure 6
Domestic vs. Export Orientation of the Defence Industry in 2014
  $B %
Exports 5.95 60%
Domestic Sales 3.98 40%

* Total Canadian manufacturing sector export intensity estimated at 51% in 2014, vs. 60% for the defence industry.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016), "Canadian Commercial Aerospace, Defence, Commercial and Civil Marine and Industrial Security Sector Survey, 2011" (Released 2013); and Statistics Canada non-survey data.

Supply Chains

The Canadian defence industry is national

  • MRO* services are important defence activities across all regions of Canada
  • Each region has specific specializations in defence industrial activities

Figure 7: Total Defence Employment by Regions

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Description of Figure 7
Total Defence Employment by Regions
  Share of Total Defence Employment
Western & Northern Canada 15%
Ontario 44%
Quebec 24%
Atlantic Canada 17%

* MRO represents "Maintenance, Repair and Overhaul".

** Canadian defence industry total direct employment of 28,000 in 2014. Estimates of the regional breakdown of total direct Canadian defence industry employment are based on the relative regional breakdown indicated by the 86% of industry employment whose location was clearly specified for 2014.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016)

Western & Northern Canada: 15% of total employment**

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Top 5 Defence Industrial Activities in 2014*

  1. Military Aircraft Maintenance, Repair and Overhaul Services
  2. Naval Ship Fabrication, Structures & Components
  3. Aircraft Fabrication, Structures & Components
  4. Combat Vehicles & Related Maintenance, Repair and Overhaul; and "Other Defence"
  5. Naval Ship-Borne Systems (i.e., Mission Systems) and Components

* Defence goods & services category rankings within regions are based on estimates of regional distributions of associated employment.

** Canadian defence industry  total direct employment of 28,000 in 2014. Estimates of the regional breakdown of total direct Canadian defence industry employment are based on the relative regional breakdown indicated by the 86% of industry employment whose location was clearly specified for 2014.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Ontario: 44% of total employment**

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Top 5 Defence Industrial Activities in 2014*
  1. Combat Vehicles & Related Maintenance, Repair and Overhaul; and "Other Defence"
  2. Airborne Communications, Navigation, & Other Information Systems, Software, Electronics
  3. Aircraft Fabrication, Structures and Components
  4. Airborne Sensor/Information Collection; and Fire Control, Warning & Countermeasures Systems
  5. Land/Man Portable Sensor/Information Collection; and Fire Control, Warning & Countermeasures Systems

* Defence goods & services category rankings within regions are based on estimates of regional distributions of associated employment.

** Canadian defence industry  total direct employment of 28,000 in 2014. Estimates of the regional breakdown of total direct Canadian defence industry employment are based on the relative regional breakdown indicated by the 86% of industry employment whose location was clearly specified for 2014.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Quebec: 24% of total employment**

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Top 5 Defence Industrial Activities in 2014*

  1. Combat Vehicles & Related Maintenance, Repair and Overhaul; and "Other Defence"
  2. Firearms, Ammunition, Missiles, Rockets, and Other Munitions & Weapons
  3. Military Aircraft Maintenance, Repair and Overhaul Services
  4. Airborne Communications, Navigation, & Other Information Systems, Software, Electronics
  5. Aircraft Fabrication, Structures and Components

* Defence goods & services category rankings within regions are based on estimates of regional distributions of associated employment.

** Canadian defence industry  total direct employment of 28,000 in 2014. Estimates of the regional breakdown of total direct Canadian defence industry employment are based on the relative regional breakdown indicated by the 86% of industry employment whose location was clearly specified for 2014.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Atlantic Canada: 17% of total employment**

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Top 5 Defence Industrial Activities in 2014*

  1. Military Aircraft Maintenance, Repair and Overhaul Services (MRO)
  2. Naval Ship MRO
  3. Naval Ship-Borne Systems (i.e., Mission Systems) and Components
  4. Combat Vehicles & Related Maintenance, Repair and Overhaul; and "Other Defence"
  5. Aircraft Fabrication, Structures & Components

* Defence goods & services category rankings within regions are based on estimates of regional distributions of associated employment.

** Canadian defence industry  total direct employment of 28,000 in 2014. Estimates of the regional breakdown of total direct Canadian defence industry employment are based on the relative regional breakdown indicated by the 86% of industry employment whose location was clearly specified for 2014.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Canadian capabilities crossed a broad range of defence goods and services*

Figure 12: Total Defence Sales by Broad Goods & Services Categories, 2014

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Description of Figure 12
Total Defence Sales by Broad Goods & Services Categories, 2014
Aircraft Fabrication, Structures, Components and Maintenance, Repair & Overhaul 31%
Combat Vehicles and Related Maintenance, Repair & Overhaul; and Other Defence 28%
C4ISR, Avionics, Simulation Systems and Other Electronics
(Air, Space, Land & Naval)
25%
Naval Ship Fabrication, Structures, Components and Maintenance, Repair and Overhaul 9%
Firearms, Ammunition, Missiles, Rockets, and Other Munitions & Weapons 4%
Troop Support 2%
Live Personnel & Combat Training Services 1%

* See Annexes A, D, E and F for further details on the defence goods and services categories related to Command, Control, Communications, Computers, Intelligence, Surveillance & Reconnaissance (C4ISR), Avionics and Simulation Systems; the categories under the various broad G&S categories groupings and "domains"; and for the full actual titles of the survey’s 18 published defence goods and services categories.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Canada's defence industry spanned air and space, naval, and land & cross-domain activities*

Figure 13: Total Defence Industry Sales and Exports by Associated 'Domain' (2014)

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Description of Figure 13
Total Defence Industry Sales and Exports by Associated 'Domain' (2014)
  Defence Sector Sales Defence Sector Exports
Air & Space 47% 48%
Land & Other Defence 40% 42%
Maritime 13% 10%

* Land and Cross-Domain/Other Defence also includes non-platform, non-domain specific defence goods and services; see Annexes A, E and F for further details on the defence goods and services categories under the various "domains" and "technology/functional" groupings; and for the full actual titles of the survey's 18 published categories.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Sales in the air & space domain were led by military aircraft MRO services with over 40%*

  • C4ISR, Avionics and Simulation Systems* related sales of goods and services captured 34% of overall air & space domain sales

Figure 14: title

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Description of Figure 14
Breakdown of Air & Space Domain Related Sales, $4.6B (2014)*
Military Aircraft Maintenance, Repair and Overhaul Services 43%
Aircraft Fabrication, Structures & Components 22%
Airborne Communications, Navigation, & Other Information Systems, Software, Electronics  17%
Airborne Sensor/Information Collection; and Fire Control, Warning & Countermeasures Systems 12%
Simulation Systems for Aircraft 3%
Military Space Systems 2%
Unmanned Aerial Systems/Vehicles & Components 1%

* See Annexes A, D, E and F for further details on the defence goods and services categories related to Command, Control, Communications, Computers, Intelligence, Surveillance & Reconnaissance (C4ISR), Avionics and Simulation Systems; the categories under the various broad G&S categories groupings and ‘domains’; and for the full actual titles of the survey’s 18 published defence goods and services categories.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Among land & other cross-domain activities, combat vehicle goods and services dominated sales*

Figure 15: title

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Description of Figure 15
Breakdown of Land, Cross-Domain, & Other Defence Sales, $3.9B (2014)*
Combat Vehicles and Related Maintenance, Repair & Overhaul; and Other Defence 71.3%
Firearms, Ammunition, Missiles, Rockets, and Other Munitions & Weapons 9.4%
Land/Man Portable Sensor/Information Collection; and Fire Control, Warning & Countermeasures Systems 6.1%
Troop Support 5.7%
Land/Man Portable Communications, Navigation, & Other Information Systems, Software, Electronics  4.2%
Live Personnel & Combat Training Services 2.9%
Simulation Systems for Land Vehicles or Other Applications 0.4%

*Land and Other Defence also includes non-platform, non-domain specific defence goods and services; see Annexes A, E and F for further details on the defence goods and services categories related to C4ISR, Avionics and Simulation Systems; the categories under the various "domains"; and for the full actual titles of the survey’s 18 published defence goods and services categories.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

In the naval domain, goods and services sales were led by naval MRO* with 42%, followed by ship-borne (Mission) systems at 36%

Figure 16: Breakdown of Naval Domain Related Sales, $1.3B (2014)*

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Description of Figure 16
Breakdown of Naval Domain Related Sales, $1.3B (2014)*
Naval Ship Maintenance, Repair and Overhaul 42%
Naval Ship-Borne Systems (i.e., Mission Systems) and Components 36%
Naval Ship Fabrication, Structures and Components 21%
Simulation Systems for Naval Vessels 1%

* MRO represents "Maintenance, Repair and Overhaul". See Annexes A, E and F for further details on the defence goods and services categories related to C4ISR, Avionics and Simulation Systems; the categories under the various "domains"; and for the full actual titles of the survey's 18 published defence goods and services categories.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

The majority of Canadian defence exports and sales came from Canadian operations of foreign-owned firms in 2014

  • Canadian-owned firms accounted for over 50% of the defence industry's direct employment in 2014
    • Canadian-owned firms accounted for 60% of defence industry R&D spending in 2011*

Figure 17: Shares of Key Defence Industry Variables Relating to Domestic vs. Foreign-Owned Businesses*

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Shares of Key Defence Industry Variables Relating to Domestic vs. Foreign-Owned Businesses*
Canada U.S. Other (Non-U.S.) Country
Number of Businesses 85% 8% 7%
Defence Employment 53% 32% 15%
Defence Sales 34% 46% 19%
Defence Exports 20% 57% 23%

* A 2014 estimate for R&D could not be published because several key firms chose to not provide necessary data.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014"(Released 2016).

Sourcing patterns vary according to firms' country of ownership

U.S.-owned firms in Canada sourced mainly from U.S. and other foreign suppliers

Figure 18: Sourcing Patterns of Domestic vs. Foreign-Owned Businesses*

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Sourcing Patterns of Domestic vs. Foreign-Owned Businesses*
  Parent Company in Canada Parent Company in U.S. Parent Company in Other (Non-U.S.) Country
Domestic Suppliers 55% 37% 56%
U.S. Suppliers 30% 48% 17%
Other Foreign Suppliers 15% 16% 27%
* Estimates of the breakdown of total defence industry purchases by provider are based on the relative breakdowns of the 89% of purchases whose provider/supplier was clearly specified for 2014.
Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016).

Key Findings

  • In 2014, close to 640 Canadian firms sold almost $10B in defence goods and services
  • The defence industry's sales and its linkages to other industries contributed about $6.7B to GDP and close to 63,000 to employment to the Canadian economy
  • The Canadian defence industry is national with regional specializations in specific defence industrial activities
  • MRO services are important to all regions and across air, naval and land domains
  • Canada's defence industry was export intensive, with almost 60% of sales being exports - over 20% higher than the manufacturing sector average in 2014
  • Innovation-relevant occupations accounted for over 30% of the defence industry's direct employment
  • Defence industry direct employees" average annual compensation was close to 60% above the manufacturing sector average
  • The majority of Canadian defence exports and sales came from Canadian operations of foreign-owned firms in 2014
  • Canadian-owned firms accounted for over 50 percent of direct employment and 60 percent of R&D spending
  • Sourcing patterns vary according to firms’ country of ownership; U.S.-owned firms in Canada sourced mainly from U.S. and other foreign suppliers

Annexes

Annex A: Defence Industry Sales Across 18 Defence Goods & Services Categories Published for FY2014
Total Defence Industry Sales, 2014 $9,931,524,542
Full Official Titles of the 18 Published Defence Goods & Services Categories Share of Total Defence Industry Sales (%)
Firearms, Ammunition, Missiles, Rockets, and Other Munitions and Weapons 3.7
Military Systems Deployed in Space, Space Launch Vehicles, Land-Based Systems for the Operation, Command and Control of Space Launch Vehicles or Systems Deployed in Space and Related Components 0.9
Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems and Related Components 5.8
Primarily Land-Based or Man-Portable Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems and Related Components 2.4
Primarily Airborne Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics and Components 7.7
Primarily Land-Based, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics and Components 1.7
Naval Ship-Borne Systems (i.e., Mission Systems) and Components 4.9
Naval Ship Fabrication, Structures and Components 2.9
Naval Ship Maintenance, Repair and Overhaul 5.7
Combat Vehicles and Related Maintenance, Repair & Overhaul; and Other Defence 28.4
Aircraft Fabrication, Structures and Components 10.2
Military Aircraft Maintenance, Repair and Overhaul Services 20.2
Unmanned Aerial Systems/Vehicles (UAS/V) and Components 0.4
Simulation Systems for Aircraft 1.5
Simulation Systems for Naval Vessels 0.1
Simulation Systems for Land Vehicles or Other Applications 0.1
Live Personnel and Combat Training Services 1.1
Troop Support 2.3
Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016)
Annex B: Estimated Economic Impacts of the Defence Industry*
Direct Defence Industry Impacts Indirect Impacts in the Broader Economy Induced Impacts in the Broader Economy Total Impacts Across the Economy
Jobs 27,975 19,927 14,831 62,733
GDP 3,067,184,125 2,020,969,360 1,581,087,608 6,669,241,093

Direct Effects: Impacts on employment and GDP from defence industry businesses' own direct employment required to generate their defence goods and services (G&S) sales, and their own value-added beyond the material inputs/purchases they sourced from other industries;

Indirect Effects: Impacts on jobs and GDP due to inter-industry purchases and other firms/industries providing the defence industry with non-defence G&S (like steel, chemicals, tools, electricity, etc.) not under the survey's 18 defence G&S categories, but needed for the production of those defence G&S;

Induced Effects: Economic impacts resulting from consumer spending induced by labour force incomes derived from production under the aforementioned direct and indirect industrial activity.

*Note: The meanings and use of the terms "Direct", "Indirect" and "Induced" in this context are in accordance with the Canadian System of National Accounts and Input-Output related concepts, terminology and practices relating to economic impact multipliers, and economic impact estimates; they do NOT relate to the Industrial and Regional Benefits (IRB) policy, nor the Industrial and Technological Benefits (ITB) policy and their concepts of "direct' vs."indirect' activities.

Based on results from Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016), Statistics Canada Input-Output multipliers, and ISED modelling.

Annex C: Rankings of Defence Goods and Services Activities within a Given Region
Approximate Rankings of the 18 Defence Goods and Services Categories According to Their Relative Importance Within a Given Region's Own Defence Industry—Based on Employment Metrics*
Full Official Titles of the 18 Published Defence Goods & Services Categories Atlantic Canada Quebec Ontario Western and Northern Canada
Firearms, Ammunition, Missiles, Rockets, and Other Munitions and Weapons 16 2 11 11
Military Systems Deployed in Space, Space Launch Vehicles, Land-Based Systems for the Operation, Command and Control of Space Launch Vehicles or Systems Deployed in Space and Related Components 17 17 13 13
Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems and Related Components 7 8 4 8
Primarily Land-Based or Man-Portable Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems and Related Components 10 11 5 16
Primarily Airborne Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics and Components 9 4 2 9
Primarily Land-Based, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics and Components 8 9 10 10
Naval Ship-Borne Systems (i.e., Mission Systems) and Components 3 7 7 5
Naval Ship Fabrication, Structures and Components 6 14 12 2
Naval Ship Maintenance, Repair and Overhaul 2 12 9 7
Combat Vehicles and Related Maintenance, Repair and Overhaul; and Other Defence 4 1 1 4
Aircraft Fabrication, Structures and Components 5 5 3 3
Military Aircraft Maintenance, Repair and Overhaul Services 1 3 6 1
Unmanned Aerial Systems/Vehicles (UAS/V) and Components 13 16 15 12
Simulation Systems for Aircraft 11 6 14 17
Simulation Systems for Naval Vessels 14 18 18 18
Simulation Systems for Land Vehicles or Other Applications 18 15 17 14
Live Personnel and Combat Training Services 15 13 16 15
Troop Support 12 10 8 6
*The rankings are considered approximate, as they are based on estimates of associated employment shares derived from breakdowns of sales as related to the various defence goods/services categories, and breakdowns of employment across regions. As these are simple rankings, the gap between one category and a following category could be relatively small or relatively large.
Annex D: 18 Defence G&S Categories Published Under the FY2014 Survey as they Correspond to Broad G&S Groupings
Broad Groupings of Defence Goods & Services Categories Correspondence with the 18 Detailed Defence G&S Categories for Which Results Were Published Under the Survey
Firearms & Other Weapons; and Expendables like Ammunition, Missiles, Rockets, and Other Munitions Firearms & Other Weapons; and Expendables like Ammunition, Missiles, Rockets, and Other Munitions
Command, Control, Communications, Computers, Intelligence, Surveillance & Reconnaissance (C4ISR); Avionics; Simulation Systems and Other Electronics (Air, Space, Land & Naval) Primarily Airborne Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics, and Components
Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems; and Related Components
Primarily Land-Based or Man-Portable Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems; and Related Components
Primarily Land-Based, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics, and Components
Naval Ship-Borne Systems (i.e., Mission Systems) and Components
Simulation Systems for Aircraft
Simulation Systems for Naval Vessels
Simulation Systems for Land Vehicles or Other Applications
Military Systems Deployed in Space, Space Launch Vehicles, Land-Based Systems for the Operation, Command & Control of Space Launch Vehicles or Systems Deployed in Space; and Related Components
Naval Ship Fabrication, Structures, Components and Maintenance, Repair and Overhaul Naval Ship Fabrication, Structures and Components
Naval Ship Maintenance, Repair and Overhaul
Aircraft Fabrication, Structures, Components and Maintenance, Repair & Overhaul Aircraft Fabrication, Structures and Components
Military Aircraft Maintenance, Repair and Overhaul Services
Unmanned Aerial Systems/Vehicles (UAS/V) and Components
Combat Vehicles and Related Maintenance, Repair & Overhaul; and Other Defence Combat Vehicles and Related Maintenance, Repair & Overhaul; and Other Defence
Live Personnel & Combat Training Services Live Personnel and Combat Training Services
Troop Support Troop Support
Annex E: FY2014 Defence G&S Categories Corresponding to Broad "Technology/Functional" Type Groupings
Firearms & Other Weapons; and Expendables like Ammunition, Missiles, Rockets, and Other Munitions Ammunition and Other Munitions
Firearms and Other Weapons
Missiles and Rockets
Command, Control, Communications, Computers, Intelligence, Surveillance & Reconnaissance (C4ISR); Avionics; and Other Electronics Primarily Airborne Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics, and Components
Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems; and Related Components
Primarily Land-Based or Man-Portable Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems; and Related Components
Primarily Land-Based, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics, and Components
Naval Ship-Borne Systems (i.e., Mission Systems) and Components
Military Systems Deployed in Space, Space Launch Vehicles, Land-Based Systems for the Operation, Command & Control of Space Launch Vehicles or Systems Deployed in Space; and Related Components
Platform Fabrication & MRO; and All Other Defence Aircraft Fabrication, Structures and Components
Combat Vehicles and Components
Naval Ship Fabrication, Structures and Components
Unmanned Aerial Systems/Vehicles (UAS/V) and Components
Combat Vehicles Maintenance, Repair and Overhaul
Naval Ship Maintenance, Repair and Overhaul
Military Aircraft Maintenance, Repair & Overhaul Services
Other Defence
Troop Support
Simulation Systems Simulation Systems for Aircraft
Simulation Systems for Land Vehicles or Other Applications
Simulation Systems for Naval Vessels
Live Personnel & Combat Training Services Live Personnel and Combat Training Services
Annex F: FY2014 Defence G&S Categories Corresponding to the "Type Groupings"
Air & Space Aircraft Fabrication, Structures and Components
Military Aircraft Maintenance, Repair & Overhaul Services
Military Systems Deployed in Space, Space Launch Vehicles, Land-Based Systems for the Operation, Command & Control of Space
Launch Vehicles or Systems Deployed in Space; and Related Components
Primarily Airborne Communications and Navigation Systems; and Other Information Systems (Including Processing and Dissemination), Software, Electronics, and Components
Primarily Airborne Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and
Countermeasures Systems; and Related Components
Simulation Systems for Aircraft
Unmanned Aerial Systems/Vehicles (UAS/V) and Components
Land, Cross- Domain and Other Defence Combat Vehicles and Components
Combat Vehicles Maintenance, Repair and Overhaul
Primarily Land-Based or Man-Portable Electro-Optical, Radar, Sonar and Other Sensor/Information Collection Systems; Fire Control, Warning and Countermeasures Systems; and Related Components
Primarily Land-Based, Man-Portable or Non-Platform Specific Communications and Navigation Systems; and Other Information Systems
(Including Processing and Dissemination), Software, Electronics, and Components
Simulation Systems for Land Vehicles or Other Applications
Ammunition and Other Munitions
Firearms and Other Weapons
Live Personnel and Combat Training Services
Missiles and Rockets Other Defence
Troop Support
Naval Naval Ship Fabrication, Structures and Components
Naval Ship Maintenance, Repair and Overhaul
Naval Ship-Borne Systems (i.e., Mission Systems) and Components
Simulation Systems for Naval Vessels
Annex G: Summary of Defence Industry Basic Industrial Metrics and its Impacts on the Broader Economy*
Direct Activity of the Defence Industry and its Broader Economic Impacts*
  Defence Industry Total G&S Sales ($B) Defence Industry G&S Exports ($B) Total GDP Impact in the Canadian Economy [Direct + Indirect + Induced GDP Effects] that Resulted from Defence Industry G&S Sales Defence Industry R&D ($M) Defence Industry Direct Jobs Total Jobs Impact in the Canadian Economy [Direct + Indirect + Induced Jobs] that Resulted from Defence Industry G&S Sales
2014 Estimates $9.93 $5.95 $6.67 N/A 27.98 62.73**
2011 Estimates $9.42 $4.64 $5.99 $251 26.54 63.55**

Direct Effects: Impacts on employment and GDP from defence industry businesses' own direct employment required to generate their defence goods and services (G&S) sales, and their own value-added beyond the material inputs/purchases they sourced from other industries;

Indirect Effects: Impacts on jobs and GDP due to inter-industry purchases and other firms/industries providing the defence industry with non-defence G&S (like steel, chemicals, tools, electricity, etc.) not under the survey's 18 defence G&S categories, but needed for the production of those defence G&S;

Induced Effects: Economic impacts resulting from consumer spending induced by labour force incomes derived from production under the aforementioned direct and indirect industrial activity.

*Note: The meanings and use of the terms "Direct", "Indirect" and "Induced" in this context are in accordance with the Canadian System of National Accounts and Input-Output related concepts, terminology and practices relating to economic impact multipliers, and economic impact estimates; they do NOT relate to the Industrial and Regional Benefits (IRB) policy, nor the Industrial and Technological Benefits (ITB) policy and their concepts of"direct' vs."indirect' activities.

Based on results from Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014" (Released 2016), Statistics Canada Input-Output multipliers, and ISED modelling.

**While direct defence industry employment rose somewhat since 2011, employment in other industries resulting from indirect and induced effects fell, lowering the total economy jobs impact by about 1% . This would mainly be due to changes in the relative mix of types of defence goods and services over time, and changes in Canadian Input-Output based GDP and Employment multipliers used in the modelling of broader economic impacts.

Annex H: Defence Industry's Own Direct Employment by Region
  Estimated Regional Distribution of the Defence industry's Own Direct Jobs, (2014)*
Atlantic Canada 17%
Quebec 24%
Ontario 44%
Western and Northern Canada 15%
Total 100%

* Estimates of the regional breakdown of total direct defence employment are based on the relative regional breakdown indicated by the over 86% of total defence industry employment whose location was clearly specified for 2014.

Source: Statistics Canada "Canadian Defence, Aerospace and Commercial and Civil Marine Sectors Survey, 2014"(Released 2016).

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