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Canada Defence and Security Report 2017

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Canada is trying to simultaneously upgrade its aging defence capabilities and to maintain anactive role in NATO and in UN peacekeeping operations. This dilemma has led the government to focus oncontracts to prolong the operational life of military hardware, instead of purchasing expensive newequipment. Although Canada has agreed in principle to begin replacing aging ships, aircraft and militaryequipment with new modern replacements, in practice there are budgetary constraints that make itattractive for the government to seek temporary bridging solutions instead. The new US administration ispressuring NATO countries to begin spending 2.0% of GDP on defence, and Canada has one of the lowestlevels - forecasted at 1.2% in 2017 - in NATO. In these circumstances, Canada is likely to commit stronglyto its overseas deployments rather than increase the defence budget to 2.0%, as this is a cheaper way ofshowing a commitment to NATO than by almost doubling defence expenditure. This means thatoverwhelmingly, the budget will be used to cover operational expenses and recurrent costs, as Canadianforces deploy in the Baltic States and Ukraine, and that new procurements are increasingly being deferred.

Latest Updates

The March 2017 budget CAD8.5bn would be deferred from the 2015/16 spending cycle back to 2035-6which would otherwise be allocated to procuring brand new equipment. The budget also stated a newplan to buy second hand 18 F-18 Superhornets to prolong the lifetime service of the CF-18 jet fleet whichis aging. This also likely signals that Canada will try to cancel its order of the Lockheed Martin F-35 jetas the Liberal Prime Minister promised before his election in 2015.These developments suggest that fewnew defence projects beyond those already committed to, will be undertaken.


BMI Industry View
Canada BMI View
Table: Defence Expenditure Canada 2015-2020
SWOT analysis
Canada Defence & Security SWOT
Industry Forecast
Defence Expenditure
Table: Defence Expenditure (Canada 2014-2021)
Table: Defence Expenditure Canada (2020- 2025)
Defence Trade
Industry Risk Reward Index
Canada Security Risk Index
Table: Developed States Defence Risk Reward Index
Rewards
Risks
Market Overview
Canada Market Overview
Domestic Defence Sector
Defence Market
Armed Forces Overview
Armed Forces
Table: Armed Forces Personnel Canada 2008- 2016
Table: Canadian Armed Forces Overseas Deployments
Security Overview
Domestic Threats
Regional Threats
International Threats
Company Profile
CAE
Lockheed Martin
L3 Communications
Raytheon Canada
GDLS Canada
Methodology
Industry Forecast Methodology
Risk/Reward Index Methodology
Sector-Specific Methodology
Table: Defence Risk/Reward Index Indicators
Weighting
Table: Weighting of Defence Risk Reward Index

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