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: 2021-08-20


The global pandemic has and continues to significantly impact Canada’s aerospace market. The sector declined in value from US$24 billion in 2019 to US$14.2 billion in 2020. 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.

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 exports more than half of its aerospace exports are to the United States.

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. In 2018, the sector spent approximately US$1billion in R&D; the aerospace sector is five times more R&D intensive than the average for Canadian manufacturing industries. 

Several U.S.-Canada agreements make it easier for U.S. aerospace companies to do business in Canada as compared to other foreign markets 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. 

Table: Canada Aerospace Production Data Market (US$ Millions) – HS88 Aircrafts and Spacecrafts (including parts and flight and combat simulators)





2021 (Estimate)

Total Local Production





Total Exports





Total Imports





Imports from the US





Total Market Size





Exchange Rate





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

Units: $ millions

Source: Statistics Canada reports in US$ 

COVID-19 Impacts on Commercial Aviation

COVID-19 has had a detrimental effect on the Canadian commercial aviation sector, much like the rest of the world. Commercial airlines grounded most of their planes due to travel restrictions and lacking passenger demand. Passenger volumes in Canada dropped 95% in 2020 and remained at 12% of 2019 levels in early 2021. Canadian airlines including Air Canada and WestJet cut dozens of routes and suffered billions of dollars in losses. These challenges had a cascading effect on the maintenance, repair and overhaul industry and the need for suppliers, many of which are small and medium-sized companies. Furthermore, airlines have had to cancel or delay their orders and delay delivery of new aircraft. Other difficulties faced in the sector include those noted by the Canadian Aerospace Union:

· Reduced production forecasts by about 50% for Airbus and Boeing.

· Aircraft deliveries in 2020 totaled 723 aircraft, a 42% decrease from 2019 and 55.3% from 2018.

· Aircraft orders down 59% from 2019. Of the 567 new orders in 2020, 52% were completed in January 2020, before the pandemic struck.

· Minimal maintenance and repair activities (MRO) outside of regular activities.

· Suppliers in precarious financial situations are running out of funds and are losing valuable resources.

· Of the 27,500 aircraft in service at the beginning of 2020, fewer than 7,500 are still flying.

Leading Sub-Sectors

· Aircraft Parts, Systems and Sub-Systems

· Aircraft Engine Parts and Components

· Aircraft Maintenance, Repair and Overhaul Parts, Components and Services

· Space Commerce


We continue to look for opportunities for U.S. exporters in Canada’s aerospace market. The Canadian aviation sector is highly integrated with that of the United States and Europe. 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.

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) – The government of Canada plans to procure 88 advanced fighter jets, along with associated equipment, weapons and sustainment via the Future Fighter Capability Project. The program cost is estimated between US$11 – $14.3 billion. At the time of writing this report, Public Services and Procurement is currently evaluating bid responses from three down-selected competitors.

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. Request for proposal expected in 2021, and contract award expected on 2022-23.

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. Industry engagement taking place in 2021.

U.S. companies are eligible to bid on Canadian federal government tenders for both commercial and military aviation. For more information on these opportunities, visit Canada’s Public Works and Government Services Canada website.


Major Events and Trade Shows in Canada

· Global Supply Chain Summit 2021 Aerospace (virtual), October 26, 2021

· Aeromart Montreal, Montreal, Québec, October 26-28, 2021

· Unmanned Canada, Calgary, Alberta and virtual Conference and Trade Show, November 2-4, 2021

· Canadian Aerospace Summit, Ottawa, Ontario, November 8-10, 2021

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 Officer Cathy Feig at or by phone at (514) 908-3661. 

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