Canada - Country Commercial Guide
Aerospace and Defense
Last published date:

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.

Canada is working to combat the detrimental effects of the COVID-19 pandemic by providing government support to the aerospace sector in 2022-2023, including:

  • 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 (until March 31, 2024) – Regional Recovery Initiative
  • C$1 billion (approximately US$780 million) – Tomorrow’s sustainable aerospace technologies (Bell Helicopter Textron Canada Limited, CAE, Pratt & Whitney Canada)
  • C$334 million (approximately US$259.42 million). For self-funded measures and additional contributions to support investments estimated at C$2.8 billion (approximately US$2.17 billion)– For the Québec Aerospace Strategy 2016-2026
  • C$10 million (approximately US$7.7 million) Aerospace Regional Recovery Initiative (ARRI) delivered by Canada’s Regional Development Agencies (RDAs) (H55)
  • C$32 million (approximately US$24.6 million) – Aerospace Regional Recovery Initiative (ARRI) delivered by Canada’s Regional Development Agencies (RDAs) with a national budget of $250 million over three years (Meloche Group, Laflamme Aero, Balko Technologies, Calogy Solutions, Sonaca Montréal, WatchOut Corp., Abipa Canada, Optima Aero, M1 Composites Technology, Tecnickrome Aéronautique, the DCM Group, Alphacasting, Dynatherm Instrumentation and Montréal International)


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. Canada is the only country that ranked in the top five across civil flight simulator, engine, and aircraft sub-segments in 2022. Canada’s aerospace industry contributed over C$27 billion (approximately US$20.8 billion) in GDP and close to 212,000 jobs to the Canadian economy, an increase of 14,400 jobs from the previous year. Approximately 88% of Canada’s aerospace sector is civil oriented, and 12% is defense oriented. Montréal is the world’s third largest aerospace hub after Seattle, Washington, and Toulouse, France, and contributes to over 75% of Canadian aerospace research and development (R&D). Canada has 5% of worldwide sales in aerospace. The industry is recovering from COVID-related disruption, with 2022 data indicating the first post-pandemic increases in revenue, jobs, and GDP.  The Canadian aerospace manufacturing industry exported close to C$18.7 billion (approximately US$14.4 billion) and actively participated in global supply chains in 2022; more than 80% of aerospace manufacturing revenues were export-oriented, of which over 60% were supply chain related.

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

  1. Aircraft manufacturing (civil, defense, and space) (65%)
  2. Aircraft maintenance, repair, and overhaul (MRO) (35%)

U.S. and Canadian aerospace supply chains are highly integrated. Canada ranked second (after France) among the top U.S. Civil Aircraft, Engines, and Parts Export destinations and received US$8.99 billion worth of exports between May 2022 and April 2023. Canada exported an estimated 57.38% of goods from the Aircraft, Engine, and Parts Manufacturing industry to the United States in 2022.

It is noteworthy that the MRO subsector has grown by 26% over the last decade, and that over 25% of Canada’s MRO activities are in the defense sector. Between 2021 and 2022, all regions maintained their relative employment share across the aerospace manufacturing and MRO services sectors. In terms of geography, over 61% of Canada’s aerospace manufacturing employment occurs in Québec and 24% in Ontario; 12% in Western Canada and 3% in Atlantic Canada. Thirty-eight percent of all MRO employment occurs in Western Canada, 35% in Ontario, 22% in Québec, and 5% in Atlantic Canada. In 2022, the aerospace industry invested over C$680 million (approximately US$523 million) in R&D, resulting in a R&D intensity over 2.3 times higher than the manufacturing average. 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 level playing field between U.S. and Canadian aerospace companies. Additionally, the United States-Mexico-Canada Agreement (USMCA) 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); years 2020-2023 est.





2023 (Estimate)

Aerospace manufacturing and MRO contribution to GDP





Total Exports (aerospace product and parts manufacturing)





Total Imports (aerospace product and parts manufacturing)





Imports from the US (aerospace product and parts manufacturing)





Revenues (aerospace manufacturing and MRO)





C$:US$ Exchange Rate





Source: Canada Trade Data reports in US$

Leading Sub-Sectors

  • Aircraft Parts, Systems and Sub-Systems
  • Aircraft Engine Parts and Components
  • Aircraft fuselage, wing, tail, and similar assemblies
  • Tail and wing assemblies and parts
  • Aircraft Maintenance, Repair and Overhaul Parts, Components and Services
  • Simulation and Training Equipment
  • Avionics
  • Helicopters, propellers, and parts
  • Drones
  • Advanced Air Mobility
  • Aerospace product prototypes


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 Airbus Canada, Avcorp Industries, Bell Helicopter Textron Canada Limited, Boeing, Bombardier, CAE, CMC Electronics, De Havilland Canada, GE Aerospace, Goodrich, Héroux-Devtek, L-3 Harris, Safran, Lockheed Martin, Magellan Aerospace Corporation, Pratt & Whitney Canada, Raytheon, Rolls Royce, StandardAero, and Thales.

Canada’s most significant aircraft manufacturing platforms include Airbus A220, Mitsubishi CRJ, Bombardier Global Express and Challenger Business Jets, Bombardier Learjet, and Bell Textron’s 407, 412, 429, 555 rotorcraft. Significant engine manufacturing is done by Pratt & Whitney Canada (P&WC); all UTC engines with less than 11,000 pounds of thrust are made in Canada.

Opportunities for 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.


Major Events and Trade Shows in Canada:

  • ICAO Security Week 2023: AVSEC & CYBERSEC, Montréal, Québec, October 23–27, 2023
  • Careers in Aviation Expo 2023, Calgary, Alberta, October 24, 2023
  • Canadian Aerospace Summit, Ottawa, Ontario, November 7–8, 2023
  • 2023 Aerial Evolution Association of Canada Conference & Exhibition, Ottawa, Ontario, November 7–10, 2023
  • Canadian Aviation Conference & Tradeshow (Air Transport Association of Canada (ATAC) 89th Aviation Conference and Tradeshow), Montréal, Québec, November 14–16, 2023
  • ICAO’s DRONE ENABLE 2023, Montréal, Canada, December 5–7, 2023
  • International Aerospace Innovation Forum, Montréal, Québec, May 21–23, 2024
  • ICAO’s FIRST ADVANCED AIR MOBILITY SYMPOSIUM (AAM 2024), Montréal, Québec, September 9–12, 2024
  • Aeromart Montréal, Montréal, March 25-27, 2025
  • Defense Security & Aerospace Exhibition (DEFSEC) Atlantic 2023, Halifax, Nova Scotia, October 1–3, 2024

Industry Associations

  • Aerospace Industries Association of Canada
  • Aéro Montréal
  • 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 Mehdi Azeriah at, or by phone at (613) 688-5176.