Canada - Country Commercial Guide
Aerospace and Defense

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-08-03


Canada remains one of the world’s largest aerospace markets and ranks first for civil flight simulator production, third in civil engine production, and fourth in civil aircraft production. Approximately 80% of Canada’s aerospace sector is civil oriented, and 20% is military oriented. Montréal is the world’s third largest aerospace hub after Seattle, Washington and Toulouse, France and contributes to over 70% of Canadian aerospace research and development (R&D). Canada has 5% of the worldwide sales in aerospace, while the province of Quebec alone has a 3% share, which qualifies it as the sixth in worldwide sales. Volatile economic conditions brought on by the COVID-19 pandemic have and are projected to continue to disrupt Canada’s aerospace market.

Canada’s aerospace sector activities are divided into two main subsectors:

  1. Aircraft manufacturing (civil, defense and space) (69%)
  2. Aircraft maintenance, repair, and overhaul (MRO) (31%)

U.S. and Canadian aerospace supply chains are highly integrated. Canada consistently ranks among the top five export markets for U.S. aerospace goods and received US$9.1 billion worth of exports in 2019 (approximately 60% of total sector exports to Canada). Canada exported an estimated 56.6% of goods from the Aircraft, Engine, and Parts Manufacturing industry to the U.S. in 2021.

It is noteworthy that the MRO subsector has grown by 26% over the last decade, and over 25% of Canada’s MRO activities are in the defense sector. In terms of geography, over 50% of Canada’s aircraft manufacturing occurs in Québec and 30% in Ontario; 41% of all MRO occurs in Western Canada. The aerospace sector is five times more R&D intensive than the average for Canadian manufacturing industries. The Canadian government provides full write-offs of R&D capital and equipment for the first C$2 million (approximately US$1.55 million) of qualifying R&D expenditures. This incentivizes companies in the Canadian industry to stay ahead of international competition.

Several U.S.-Canada agreements make it easier for U.S. aerospace companies to do business in Canada, such as the U.S.-Canada Bilateral Aviation Safety Agreement (BASA), which facilitates airworthiness approval by Transport Canada of FAA-approved aerospace products. Multilaterally, Canada is a signatory to the WTO’s Trade in Civil Aircraft Agreement, thereby ensuring a same-level playing field between U.S. and Canadian aerospace companies. Additionally, the USMCA Agreement offers direct access to the US$432 billion North American market that represents 59% of the global market, creating optimal conditions for cooperation between the Canadian and the U.S. aerospace companies.

Table: Canada Aerospace Market (US$ Millions)





2022 (Estimate)

Total Local Production

24, 819


15, 621

21, 913

Total Exports

16, 502

13, 205

13, 214

16, 341

Total Imports

19, 863

13, 970

12, 485

16, 100

Imports from the US

13, 759

9, 898


11, 270

Total Market Size

28, 180

19, 789

14, 892

21, 672

Exchange Rate





(total market size = (total local production + imports) - exports)

Units: $ millions

Source: Statistics Canada reports in US$ and IBIS World Market Research Reports

Demand Determinants

The Aerospace Manufacturing industry in Canada largely produces parts for commercial use. Therefore, demand is contingent on demand from enterprises such as airlines, MRO, and commercial enterprises. These markets are exposed to overall economic conditions and adjust their demand for aircraft and related parts according to the health of the economy.

Since 2020, the COVID-19 pandemic has become a new demand determinant. Commercial airlines grounded most of their planes due to travel restrictions and low passenger demand. These challenges negatively affected the MRO industry and the need for suppliers of commercial aviation. The low revenues garnered during pandemic years forced airlines to cancel or delay aircraft orders. Moreover, there was minimal maintenance and repair opportunities outside of regular activities.

Canada is working to combat these detrimental effects by implementing the Canada Aerospace Regional Recovery Initiative. This national program will provide C$250 million (approximately US$194.21 million) over three years to help the Canadian aerospace sector emerge from the pandemic and continue to compete on the global stage.

Other Canadian government support to the aerospace sector in 2021-2022 includes:

  • April 2021
  • C$200 million (approximately US$155 million) – Tech demo on the development of a greener aircraft
  • C$1.75 billion (approximately US$1.36 billion) over 7 years – Federal Strategic Innovation Fund
  • C$250 million (approximately US$194.21 million) over 3 years – Regional Development Agencies
  • July 2021
  • C$1 billion (approximately US$780 million) – Tomorrow’s sustainable aerospace technologies (Bell, CAE, Pratt and Whitney)
  • February 2022
  • C$334 million (approximately US$259.42 million). This framework includes both self-funded measures and additional contributions to support investments estimated at C$2.8 billion (approximately US$2.17 billion)– Quebec Aerospace Strategy 2016-2026

Leading Sub-Sectors

  • Aircraft Parts, Systems and Sub-Systems
  • Aircraft Engine Parts and Components
  • Aircraft Maintenance, Repair and Overhaul Parts, Components and Services
  • Simulation and Training Equipment
  • Drones
  • Advanced Air Mobility
  • Space Commerce


The Canadian aviation sector is highly integrated with that of the United States and Europe. Growing relationships and continued collaboration with the United States includes the Council of the Great Lakes Region (Indiana, Michigan, Ohio, Wisconsin, NY, Pennsylvania, Minnesota, Québec, Ontario); the Kentucky Aerospace Industry Consortium; the New Hampshire Aerospace & Defense Export Consortium; the New York North Country Chamber of Commerce; Ohio Aerospace Institute; the Vermont Chamber of Commerce; the Pacific Northwest Aerospace Association; among others.

Large aerospace companies in Canada include Bombardier, Bell Textron, Pratt & Whitney Canada, L-3 Harris, Safran, Goodrich, Boeing, GE, Rolls Royce and Lockheed Martin.

Canada’s most significant aircraft manufacturing platforms include Airbus A220 (former Bombardier CSeries), Mitsubishi CRJ (legacy Bombardier program), Bombardier Global Express and Challenger Business Jets, and Bell Textron’s 407, 412, 429, 555 rotorcraft. Significant engine manufacturing is done by Pratt & Whitney Canada (PWC); all UTC engines with less than 11,000 pounds of thrust are made in Canada. Bombardier finalized the sale of its train business to French company Alstom in January 2021, which completed its transformation into a solely business jet manufacturing company. As a result, Bombardier harvested C$6.1 billion (approximately US$4.74 billion) in revenue in 2021 supporting a fleet of almost 5,000 business jets in service worldwide.

Opportunities for the U.S. – Canada collaboration:

  1. Growth: Emerging markets with strong growth potential: MRO, Space, Drones, Advanced Air Mobility (eVTOL)
  2. Sustainable Aviation: sustainable aviation fuels (SAF), electric, hydrogen / hybrid engines, environmental jets
  3. Materials: Sustainable raw material (carbon free aluminum and eco-friendly materials) & energy (hydroelectricity)
  4. Talent: Exploring opportunities and sharing of best practices in labor upskilling, recruitment, academia & research, and development exchanges
  5. Innovation: up to 70% of R&D projects can be financed in Québec/Canada and innovation partnerships are a good entry point for joint efforts
  6. Partnerships: Supply chain capabilities, joint ventures, M&A, agreements, or acquisitions – opening common markets in a reciprocal way and promoting “Best cost country status”
  7. Security: Enhancing the perception of Canada as an ally in supporting US defense capabilities and procurement requirements

U.S. companies can best capture business opportunities in Canada by participating in local trade shows and industry events. Canadian representatives prefer to do business with companies with whom they can build a long-term relationship. In addition to selling directly to clients, U.S. companies should consider establishing distributorships or hiring local sales representatives as Canada has a large landmass and having local representation will facilitate greater access.

Defense related aerospace opportunities include:

Future Fighter Capability Project (FFCP) – On March 28, 2022, Canada announced the selection of Lockheed Martin’s F-35 for the “finalization phase” of Canada’s Future Fighter Competition Project, setting the stage for Canada to purchase 88 of Lockheed’s F-35 fighter jets pending agreement on a final contract, estimated at US$15.2 billion.  During negotiations, Lockheed Martin must demonstrate that a resulting contract would meet all of Canada’s legal requirements and outcomes for its fighter procurement.  Key criteria include value for money, flexibility, protection against risks, performance and delivery assurances, and high-value economic benefits for Canada’s aerospace and defense industry.  If the parties fail to reach agreement, Canada will shift contract negotiations to second-ranked bidder Saab for the Swedish manufacturer’s Gripen fighter.  The “finalization phase” of the procurement process will be labor-intensive and take at least seven months, however Canada aims to complete a contract with Lockheed by the end of 2022 and begin F-35 deliveries in 2025.

Future Fighter Lead-in Training – A requirement by the Royal Canadian Air Force (RCAF) to secure a continuous and long-term training ecosystem for fighter jet pilots for use on current and new jet fighter capabilities and in ground-based training system. Canada has currently closed its request for information and is conducting industry feedback in 2022.  The outcome of this procurement is linked to successful contract award under the Future Fighter Capability Project (FFCP.)

Remotely Piloted Aircraft System (RPAS) - The government of Canada plans to procure a medium altitude Remotely Piloted Aircraft System along with associated equipment, weapons, infrastructure, and in-service sustainment capability that will support up to three concurrent lines of operation, domestic or international via the RPAS Program. The procurement budget is between US$753 million and US$3.76 billion, and it includes project management costs, infrastructure, and contingency.  On May 20, 2022, down selected bidder L3 Technologies MAS Inc. withdrew from the procurement process, leaving The United States Government and General Atomics Aeronautical Systems, Inc. as the only remaining Qualified supplier. A contract award is expected on Q3 2023.  


Major Events and Trade Shows in Canada

  • The Aerospace, Defense & Security Expo (ADSE), Vancouver and Abbotsford, British Columbia, August 3-5, 2022
  • International Aerospace Innovation Forum, Montreal, Quebec, September 6-7, 2022
  • Defense & Security / Space Day, Montréal, Quebec, September 8, 2022
  •  Aerial Firefighting Conference 2022, Kelowna, British Columbia, September 20, 2022
  • 41st International Civil Aviation Organization (ICAO) Triennial Assembly, Montréal, Quebec, September 27- October 7, 2022
  •  Defense Security & Aerospace Exhibition (DEFSEC) Atlantic 2022, Halifax, Nova Scotia, October 4-6, 2022
  •  Careers in Aviation Expo 2022, Southport, Manitoba, October 15, 2022
  •  Manitoba Aerospace: Aerospace Manufacturing and Maintenance, Repair and Overhaul (MRO) Conference, Winnipeg, Manitoba, October 18-19, 2022
  •  Aerial Evolution Association of Canada 2022 Conference & Exhibition, Calgary, Alberta, November 1-3, 2022
  •  Aeromart Montreal, Montreal, Québec, November 2, 2022
  • Canadian Aerospace Summit, Ottawa, Ontario, November 7-9, 2022
  • Air Transport Association of Canada (ATAC) 88th Aviation Conference and Tradeshow, Vancouver, British Columbia, November 15-17, 2022

Industry Associations

  • Aerospace Industries Association of Canada
  • Aero Montreal
  • Alberta Aviation Council
  • Atlantic Canada Aerospace and Defense Association (ACADA)
  • Canadian Business Aviation Association
  • Canadian Association of Defense and Security Industries (CADSI)
  • Canadian Council for Aviation and Aerospace (CCAA)
  • Consortium for Aerospace Research and Innovation in Canada (CARIC)
  • Consortium for Research and Innovation in Aerospace in Québec (CRIAQ)
  • Green Aviation Research and Development Network (GARDN)
  • Ontario Aerospace Council
  • Pacific Northwest Aerospace Alliance (PNAA)
  • Unmanned Systems Canada

Canadian Government

  • Transport Canada
  • Public Services and Procurement Canada
  • Innovation, Science and Economic Development Canada

Commercial Service Contacts

For additional information on civil/dual-use aerospace, please contact Commercial Specialist Pavel Sevastian at or by phone at (514) 908-3673.

For additional information on military aerospace, please contact Commercial Specialist Luz Betancur at or by phone at (613) 688-5411.