Meet Canada the Global Arms Dealer


"Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children." -- Dwight D. Eisenhower

TORONTO (25 May 2003) -- When Americans think of Canadians these days, it's usually as the laid back folks who sat out the war on Iraq. Our national myth is "Canada the peacekeeper," but it's a myth, not a fact.

The facts are hard to mythologize.

The Canadian government was the fourth-largest contributor to the attack on Iraq after Australia, ahead of most members of Bush's "coalition of the willing," who offered only moral support. Canada topped Colin Powell's list of countries who didn't want their names mentioned while they helped Uncle Sam take over Iraq.

While many Americans were cursing Canadian "non-participation" three Canadian warships equipped with surface to air missiles and anti-submarine capability were escorting the U.S. fleet that fired Tomahawk missiles at innocent Iraqis. Our government calls this mission Operation Apollo, insisting that these ships are deployed in the "war on terrorism." Not a shot has been fired at a Canadian ship.

While some U.S. peace activists were praising Canada's "bold stance" 10 Canadian soldiers were manning AWACS radar aircraft, directing those missiles to their targets. No reports of any terrorists killed in Iraq.

While 6,457 Iraqi civilians had been killed as of May 23, according to, Canadian officers continued to sit in the air-conditioned offices of CENTCOM in Doha, Qatar, deep in the logistical details of escorting American ships, and planning for war.

While Canadians slept, U.S. troop transport planes carried the invading army silently over our heads thanks to the Canadian government's offer of over-flight privileges and refueling to the U.S. Air Force at Gander airport. U.S. military doctrine describes refueling as the "key" to US global airpower. This reporter's request for a full accounting of these over-flights was refused by the Canadian Department of National Defence.

When U.S. Marines left their posts in Afghanistan for the Iraqi front, 1,000 Canadian soldiers spelled them off, taking up the "war on terror" in military engagements which are kept secret from the Canadian public. Next year Canada will take over command of the Afghan occupation.

While Canadians, who supported their government's decision to "sit out the war" protested U.S. imperialism in small towns like Cobourg, Ontario and Moosejaw, Saskatchewan, 30 odd Canadian soldiers were quietly serving "on exchange" with U.S. and UK invasion forces in Iraq. One young Canadian soldier died.

The Canadian government has tried desperately to paint the blood-red reality of Canadian imperialism in teal blue.

In response to Bush's 48-hour deadline for Saddam Hussein and his sons to leave Baghdad or die, Canada's Foreign Minister, Bill Graham declared that "Clearly a very much welcomed his (Bush's) reference to the United Nations, and clearly the President has demonstrated a willingness to work within the international system to date." This is how Graham described Bush's threat to invade a UN member state based on forged documents, for the profit of the oil and construction companies that put Bush in office.

Graham was only dipping from the Prime Ministerial whitewash bucket.

"Mr. Speaker, We have always made clear that Canada will require the approval of the Security Council if we were to participate in (a) military campaign. Over the last few weeks the Security Council has been unable to agree on a new resolution authorizing military action. Canada worked very hard to find a compromise to bridge the gap in the Security Council. Unfortunately (emphasis mine) we were not successful. If military action proceeds without a new resolution of the Security Council, Canada will not participate." Such were the assurances of Graham's boss, Prime Minister Jean Chrétien to the House of Commons, on March 17.

Graham reinforced the message with the press the next day. "We require a clear United Nations mandate if the use of force is to be used to resolve potential conflicts between states," said Graham with his trademark poker face.

That "requirement" is becoming harder to justify to Canada's growing arms industry, and to the politicians like Graham who are now openly beholden to it. Thus the desperate and contradictory Iraq policy of the Federal Liberal government, caught between the Canadian public, which overwhelmingly opposed the attack on Iraq, and the Canadian military industrial complex which profited from it.

Canadian foreign policy publicly postures for peace while pimping for private profit.

In its self-contradictory editorial of May 7, the Toronto Star, which opposed the attack on Iraq, rationalized the recently revealed Liberal government support for U.S. National Missile Defence (NMD) because it "relies on conventional, non-nuclear rockets based on the ground to shoot down enemy missiles." The Star, itself an unofficial organ of the governing federal Liberal Party, had to acknowledge that "Canada has no credible enemy, and no immediate need for missile defence," but still urged participation, "in Canada's interest."

What the Star left out was the exact nature of that interest, the great taboo of Canadian journalism.

According to the Canadian Defence Industries Association (CDIA), "Under the existing conditions, Canada can expect, at a minimum, about $270 million in NMD-related exports over the next 15 years. With appropriate levels of Government and industry action, (emphasis mine) there is a potential for that to increase to more than $1 billion in exports."

CDIA figures show that Canadian "defence" industry revenues grew 35 per cent between 1998 and 2000, far outpacing growth of the rest of the economy, which grew at approximately three per cent. Canada's "defence" market grew from $3.7 billion in 1998 to $4.08 billion in 2000, up 22.6 per cent. Exports to the USA grew by 17 per cent from just under a billion to $1.25 billion. And our arms exports to the rest of the world grew a staggering 75 per cent in the same period from $798 million to $1.5 billion.

Meet the Canada you never knew, the global arms dealer with a heart of gold.

Most Canadians don't know that much of the Canadian arms trade is guaranteed by the Canadian government through the Canadian Commercial Corporation ( and other government agencies. Our ignorance is the result of a total failure by the media to report basic facts about the Canadian arms economy.

The CCC -- "Canada's export contracting agency" -- does more than $1.2 billion in business annually, approximately 70 per cent of it weapons, weapons components and services to the Pentagon and NASA, just in case "force must be used to resolve conflicts between states." Making weapons is big business in this country. Canada's defence industry accounts for 650 firms, and 57,000 direct jobs, says the CCC, while the Canadian Defence Industries Association puts the figure at 1,559 firms. CDIA employment numbers roughly match those of the CCC. The Canadian defence industry sells about $5 billion dollars of goods and services per year, half of which are exported. Though weapons account for just over one per cent of economic output, it is one of the most heavily subsidized and protected sectors of the Canadian economy. This reflects the political importance of arms, and their role as a bargaining chip in Canada-U.S. relations for the Canadian elite. It is also a reflection of the connection between militarism, imperialism and Canada's need to force weaker states to accept heavily-subsidized Canadian exports.

Canada's hospitals are collapsing, public schools are being closed, and the ranks of our homeless increase, but weapons exporters take shelter from the economic storm under the Canadian flag.

"For Canadian Exporters, CCC wraps the Canadian flag around their proposal, providing a government-backed guarantee of contract performance," says the CCC. We go all the way for the USA.

The U.S. Department of Defence takes care of friends like Canada, who treat their flag with such reverence. "All purchases from Canada over U.S. $100,000 must be contracted through the Canadian Commercial Corporation," according to the Defence Production and Sharing Agreement, in effect since 1956.

Dealing through the CCC means that Canadian companies get treated not just like American firms, but one better. They are exempted from U.S. Federal cost accounting standards and from import taxation, as well as parts of the Buy American Act.

Canadian taxpayers pick up the tab.

The CCC is a Crown Corporation, wholly owned by the Canadian people, managed by our government. Thus when Canada "becomes the prime contractor," for the U.S. Department of Defence, as it is whenever a Canadian firm makes a sale greater than $100,000 Cad to the Pentagon, Canadian citizens are underwriting the American Empire.

But it's a well-kept secret. When the Canadian government reports its arms exports each year, sales to the U.S. military are not included. (see below)

The Canadian economy is uniquely dependent on exports. In 1993 total Canadian exports were valued at approximately $176 billion a but by 2000 exports increased to approximately $400 billion according to Statistics Canada, or nearly half of the output of the entire economy. In comparison, China, with 37 times the Canadian population, exported only 20 per cent more goods and services than Canada in 2002. The USA is the world's largest single exporter, but exports account for only 11 per cent of the U.S. economy. Canadians export more per capita than any other nation on earth, yet this wealth is concentrated in only a few hands.

Only five firms account for 20 per cent of total exports, and 100 firms account for more than 50 per cent, with U.S. trade accounting for 85 per cent, according to the Canadian government. Thus it should come as no surprise that catering to big businesses that export to the USA is what the Canadian government is politically committed to. Compare how the CCC helps Canadian weapons exporters with how the Canadian government treats people.

If you own a small electronics firm that has never sold a circuit to the Pentagon before, have no fear of economic hard times. The CCC will assist your sale to a foreign government at every step of the way, from contract negotiation, to providing a letter of introduction and support which "carries the weight of the Government of Canada."

Got cash-flow problems? Over one million Canadian children live in low income households according to the Canadian government's own records, but poor kids don't export missile components. For weapons exporters the CCC has a Progress Payment Plan which provides a line of credit up to two million Canadian dollars to companies with insufficient working capital to fulfill an export contract. Canadian exporters sold $69 million dollars worth of goods using this subsidy in 2001.

All the major Canadian banks provide lines of credit for the CCC. The Canadian people sign the contracts, and we write the cheques, for buyers and sellers alike.

But if you are an unemployed Canadian in need of financial assistance, the Canadian government's attitude is "Get a job." During the 1990s, the federal Liberal government tightened up restrictions on Unemployment Insurance. In 1989, 53 per cent of unemployed Ontarians received UI benefits. By 1997, only 25 per cent of the unemployed were eligible according to the Ontario Federation of Labour. The Liberal government cut more than $45 billion from the employment fund between 1993 and 2001. In a typical year, the Feds take in $5 billion more in unemployment premiums than they pay out. They've been sitting on the surplus, but the Liberals won't raise benefit rates, or let more unemployed workers into the system. The Canadian Labour Congress has documented that one million Canadian workers have paid UI premiums from their paycheques, but are unable to collect UI when they are out of a job. "It's a scam," says the CLC.

It's not the only one.

If you own a small business that does not sell weapons or export to foreign governments, you are on a tight budget. Throughout the 1990s Canada's chartered banks tightened up credit availability to small business and individuals. The Canadian Community Reinvestment Coalition, a broad grouping including the Canadian Labour Congress and Canada's largest NGO the Council of Canadians with over 100,000 members, have criticized the banks for attempting to hide their lending statistics. ( Whereas in the USA, banks are obliged to track how many loans are granted or rejected by gender, race income level and other stats, Canadian banks keep this data under wraps.

If you are a Canadian university student, you already know the banks, because they keep calling you for money. In 1998 the Liberal government took away the rights of students to declare bankruptcy if they default on student loans. Nearly half of students who apply for financial assistance in Canada are disqualified, according to the Canadian Federation of Students, Canada's national student union which has been calling for a tuition freeze for years. From 1990 to 2000, the average undergraduate tuition fee rose from $1,500 to $3,500.

While Canadians got cut off, Canadian weapons makers cut deals. Here are a fraction of the weapons systems Canada sold with the help of the CCC and a small army of bureaucrats:

* Bombardier, a corporation whose board is peppered with powerful Liberals including the Prime Minister's son-in-law, got the deal with U.S. Army TACOM to build transportable bridges, for the next time the U.S. Army needs to cross the Rubicon.

A bridge without a Light Armoured Vehicle to drive across it would be like a Canadian Cabinet Minister without a needy relative.

* LAVs driven by U.S. Marines across the long Iraqi supply lines were largely made in Canada, by GM Defence in London, Ontario. "With CCC's export sales and contract management assistance, GM has accumulated worldwide LAV sales of more than $2.5 billion. About two-thirds of the company's production is exported," says the CCC. Saudi Arabia is also a good customer for Canadian LAVs.

* Pivotal Power in Nova Scotia makes uninterruptible power systems, batteries and other gear, some of which can be found aboard the U.S. Navy's DDG-51 Burke-class destroyers. This is the platform from which the Mk 41 Tomahawk missile was fired at Iraqis.

* CPI Canada has been dealing with the Canadian Commercial Corporation for 45 years. CPI is "the world's leading design, development and manufacturing specialist of microwave and millimeter wave tubes and complex electronic equipment for communications and medical applications," according to the CCC. CPI does $35 million of business per year, and 98 per cent of that is exported. Today, when the U.S. Army's Communications and Electronics Command (CECOM) is in need of a good Klystron, they come to CPI.

* Winnipeg-based Bristol Aerospace is busy making everything from missiles, to the M1 Abrams Tank engine housing, and the targeting systems for the Patriot missile.

* CAE Systems manufactures flight simulators used to train U.S. Air Force Apache helicopter pilots. When the missiles hit their targets, it's thanks in part to Canadian ingenuity.

For Canadian capitalists at least, the weapons business is not a waste of time, resources and human labour. In 1998, Canada, thanks to the CCC was the 66th biggest defence contractor to the U.S. Department of Defence, ahead of big American firms Mitretek and Honeywell. The results are profitable for Canadian weapons system makers. "CCC flies the Canadian flag and we benefit from standing under it," says one happy corporate Vice President.

Once the profits start flowing, it's impossible for Canadian capitalists to 'just say no' to war. They're hooked and looking for a fix.

The Canadian Commercial Corporation is encouraging Canadian companies to participate in the $200 billion Joint Strike Fighter program, and has set up an entire team of government bureaucrats to make sure Canadian firms get in on the lucrative global arms race. They are drawn from a tangled web of state agencies, all dedicated to corporate welfare.

Team Canada Inc. ( is the high level government lobbying agency led by the Prime Minister, and his "team" of 10 provincial Premiers. Jean Chrétien loads up on frequent flier miles while on business junkets to China, Africa and other locations to have his picture taken while Canadian CEOs sign multi-million dollar contracts.

The Department of Foreign Affairs and International Trade ( used to be two separate ministries. The Liberal Party brought them together immediately after coming to power in 1993, and DFAIT has led the drive to put Canadian corporate profit at the heart of our foreign policy ever since. DFAIT's mission is "advancing Canada's interests abroad." These interests are indistinguishable from the corporate interest.

"It is in Canada's interest to pursue deeper integration with American defence industry while looking for niches in the emerging transatlantic defence market," according to DFAIT. Amnesty has condemned Canada for exporting arms to repressive governments which abuse human rights, including Israel, the Philippines, Saudi Arabia and Indonesia. When DFAIT promotes arms deals, how credible is "Canada the peacemaker"? Check out and see for yourself, then go to to check out how the DFAIT helps Canadian companies cash in on the lucrative business of Iraqi reconstruction. DFAIT and the Minister of Foreign Affairs Bill Graham is the bland public face of Canadian imperialism.

Export Development Canada ( has been criticized by Probe International for its tendency to award export development grants and loans to benefit Canadian companies owned by paid up Liberal party donors. EDC is also pushing weapons. "EDC helps absorb risk on behalf of exporters, beyond what is possible by other financial intermediaries," according to its sister corporation, the CCC. Probe International isn't impressed. "As a result EDC makes otherwise uneconomic investments proceed. It has become clear that a number of the larger EDC-supported projects are socially and environmentally destructive." The EDC uses "vendor financing" -- loaning Canadian taxpayer dollars to foreign customers in order to purchase Canadian subsidized weapons and nuclear technology that nobody really needs. Four billion dollars of EDC financing has allowed China, India, Pakistan and South Korea to purchase CANDU nuclear reactors. Normally if your customer can't afford to buy your product you go out of business, but Ottawa is busy promoting failure, while distributing nuclear technology to belligerent governments.

"Industry Canada ( works with Canadians throughout the economy to improve conditions for investment, improve Canada's innovation performance, increase Canada's share of global trade and build a fair, efficient and competitive marketplace," according to Industry Canada. Given the record of the EDC, this self-description seems barely credible. Industry Canada works with corporations to deregulate and privatize the economy using over 150 programs, many of them pure corporate welfare. See for details.

There is no end to the largely invisible bureaucracy that supports business in Canada where the social welfare system has been mythologized in order to cover up its near destruction by the growing corporate welfare system.

Because Canada is a regional nation, with disparate populations concentrated in a few isolated capital cities, Provincial governments, alone or in blocks also have their overlapping trade promoting bureaucracies. Ontario Exports Inc, the Alberta Economic Development, the Atlantic Opportunity Fund are only three.

Throw in the Canadian Defence Industries Association, the Aerospace Industries Association of Canada, Canadian Manufacturers and Exporters, Nav Canada which runs Canadian Air Navigation Services and the Canadian chartered banks, and you have a family portrait of the Canadian military industrial complex, minus the more than one thousand children produced by this orgy of state subsidy -- the Canadian companies that make the weapons and reap the profits, but who choose to remain anonymous from the public which finances their otherwise uneconomic and socially destructive operations.

But the real nature of the family business is getting harder to hide from the kids.

At the beginning of May, a split opened up in the Liberal government over the next big foray into the arms business, Canadian government support for the Star Wars system, a U.S. project to provide a missile shield from behind which the USA could launch a nuclear strike. Cabinet Ministers like Herb Dhaliwal ( ), and MPs like John Godfrey, ( a and others on the left wing of the Liberal backbench spoke out against their own government's stated intentions. The caucus was also split along similar lines over Canadian participation in the war. Fearing his caucus more than American wrath, the Prime Minister put the missile defence decision on hold, then switched gears to promote the decriminalization of marijuana possession.

Somebody forgot to tell Chrétien the Sixties ended a long time ago. Today's peace movement is addicted to political protest, not pot.

With an unprecedented number of Canadians mobilized against the war on Iraq, there is a growing movement to expose Canadian arms makers and the effects of the weapons they produce. At the forefront of this activity are a number of groups, including the Canadian Peace Alliance, the New Democratic Party, Science for Peace, and Toronto Homes not Bombs.

Sid Lacombe is with the Canadian Peace Alliance. ( The CPA has launched a national campaign to keep Canada out of National Missile Defence. "Star Wars represents a new arms race," says Lacombe. "It's another escalation of military spending. This is money that should be going into healthcare, education and housing."

Lacombe's schedule is busy. "The next step is to educate the Canadian public and step up our activity. We have hundreds of petitions filled out, and we are distributing them across the country." The Liberal purple haze may blow over quickly. Lacombe says "It's very urgent. They are beginning discussions with the Americans this week. Bill Graham says that missile defence is Canada's 'insurance policy.'"

Having paid the premiums for years, Canadians are now starting to read the fine print, and they do not like what they see. Groups across Canada are planning actions in the coming weeks and months that target corporate war profiteers. In Montreal one group is offering a bus tour of local weapons makers. Direct actions are being planned in Toronto. The "insurance policy" might protect Canadian corporate profits in the short term, but the increasing dependence of Canadian industry on arms exports exposes the Canadian business elite to increasing risks from an angry public armed with the ugly truth about Canada the global weapons dealer.

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* Stephen James Kerr is an investigative journalist in Toronto, and the co-host of "Newspeak" on CIUT 89.5 FM


* All figures are in Canadian dollars unless otherwise stated. At the time of this writing, the Canadian dollar was rapidly rising against the U.S. dollar, at .7430 U.S. cents to the Canadian dollar.

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