The changing scope of Canadian arms exports

Canadian companies are selling military components, software and technology at a rate that surpasses that of more traditional military exports such as tanks armoured personnel carriers and other military armed vehicles, according to a CBC News analysis of data from the department of Foreign Affairs and International Development.

The sale of component parts for building planes, for instance, increased slightly more than 19 times from $3,386,965 in 2003 to $65,460,636 in 2009.

Companies producing software, such as guidance systems for bombs and planes, also saw a rise in sales of their goods, experiencing a 12-fold increase from $2,437,417 in 2003 to $30,884,279 in 2009.

"I am surprised by that incredible rate," said Richard Saunders, coordinator for the Coalition to Oppose the Arms Trade in an interview with CBC News. "Is it just because we're specializing in certain areas and certain companies have been getting some really huge contracts?"

Neil Desai, director of programs and communications at the Munk School of Global Affairs, was also surprised by the numbers. Although he characterizes the overall trade figures for component parts, software and technology as a "drop in the bucket" compared to sales figures from countries such as the United States, the former adviser in the Prime Minister's Office says these are significant growth areas that have potential.

"We have to be cognizant that there is a military purpose here, but there will also be a large opportunity for our economy going forward."

At about 40 per cent of the total of the sale of military goods from 2003 to 2009, ground vehicles (like tanks armoured personnel carriers) and aircraft still dominate. But they are performing well behind the sales of component parts and software. As a matter of fact, Canadian companies are selling fewer ground vehicles than they did back in 2009.

These trends come from the publications entitled Reports on Exports of Military Goods from Canada:

• 2007-09
• 2006
• 2003-05

The department of Foreign Affairs an International Trade produces the reports every year and is supposed to table them in Parliament. But this has occurred infrequently.

It was only last Friday that the foreign affairs minister Lawrence Cannon released the latest report from 2007 to 2009.

After an initial story about the report, CBC News conducted analysis of the numbers of the reports from 2003 to 2009 to get an idea of some of the trends at play over a longer time period.

This table tells you what was sold, to whom, and for how much. Of interest in this table are some of the sales to countries such as Libya, a country that has been slapped with an arms embargo.

In 2009, companies sold about $86,000 worth of goods to that country. Though the amount is small compared to countries such as Saudi Arabia, the sales are still noteworthy and represent one of the reasons why activists and some opposition MPs such as NDP foreign affairs critic Paul Dewar have been calling on the Foreign Affairs department to release these reports on the export of military goods more frequently.

In an email response Friday about past sales to Libya a Foreign Affairs spokesperson wrote:

"Canadian exports of military equipment to Libya have historically been very small, or non-existent in almost all of the past 20 years."

Critics also have other issues with the reports, which track permits Foreign Affairs grants to companies that want to sell military goods and services. From 2003 to 2009, Canada sold about $4.7 billion worth of arms covering 22 categories. But that number does not include the United States.

Richard Saunders of the Coalition to Oppose the Arms Trade says the absence of U.S. data means that Canadians are getting an incomplete picture.

"They should at least tell us what they're selling to the United States so that we can raise it as an issue so that people can find out. If people don't even know what's being sold, then how can you make it an issue? I've been doing this for decades, and most Canadians have no idea that Canada is a player in the military exports industry."

In its latest report, the Department of Foreign Affairs explains that it doesn't track U.S. sales because of our "long-standing military cooperation" with that country. "Exports of military goods and technology to the Unites States are therefore not reported here."

However, "certain statistics on Canadian exports to U.S. military users may be available from other sources such as Statistics Canada or the Canadian Commercial Corporation."

CBC News has already reported that StatsCan creates tables that track actual sales to countries, including the United States.

However, these numbers fail to tell the full story, in large part because they also include the sale of non-military goods that cross the border.

The Canadian Commercial Corporation (CCC), a Crown corporation that acts as "Canada's international contracting and procurement agency," is a more reliable source.

While the corporation was able to produce sales figures from the fiscal years of 2002-03 to 2005-06, it was unwilling to provide more recent data. In an emailed response, a spokesperson wrote, "CCC switched to a different reporting scheme... As such, an Access to Information request would need to be made for CCC to produce those figures."

Still, the publicly available figures the corporation did provide prove that the U.S. is, by far, the largest customer for arms exports.

From 2002-03 to 2005-06, Canadian companies sold $2.85 billion worth of goods, more than triple the amount of products sold to countries such as Saudi Arabia and the United Kingdom during a longer time period contained in the Department of Foreign Affairs reports.

David McKie can be reached at david_mckie@cbc.ca