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Bombardier to Grow Defence Business

Bombardier announced plans to increase their presence in the defence market at AéroMontréal’s International Aerospace Innovation Forum. This announcement is in response to rising global tensions including Russia’s invasion of Ukraine and China’s claim over Taiwan.

“We’re going to be growing our defence business significantly,” said Bombardier Chief Executive, Éric Martel. “There is a lot of interest right now in our products.”

Canada’s defence budget has received a significant boost with increasing geopolitical uncertainty. For instance, Minister of Defence, Anita Anand, announced in June Canada’s plan to modernize Canada’s continental defence capabilities and protect Canadians from new and emerging threats. Supported by an investment of $3 billion over six years from existing Budget 2022 allocations, starting in 2022-23, with $1.9 billion in remaining amortization (or $4.9 billion on a cash basis), the plan includes a series of new and enhanced capabilities to ensure our Canadian Armed Forces (CAF) and NORAD can detect, deter and defend Canadians against threats well into the future.

Mr. Martel also stated that defence could become a US$1-billion business for the company, representing 10% or more of its overall revenue. Unfortunately, Éric Martel didn’t provide a timeframe for meeting that target.

According to Martel, Bombardier-built planes are used in a variety of military missions worldwide, including two modified Challenger 600s – currently being flown by the U.S. Air Force on the border of Russia and Ukraine. The company signed a deal last year with the U.S. Air Force to supply as many as six Global 6000 planes for the military branch’s Battlefield Airborne Communications Node (BACN) program.

The Canadian government has faced pressure from allies to increase its military spending, particularly after Russia’s invasion of Ukraine. This year, Canada’s military spending of $36.3-billion amounts to 1.33 per cent of the country’s GDP. The federal government has made budget commitments to spend $51-billion, or 1.59 per cent of GDP, in 2026-27.

Unfortunately, that number falls short of Canada’s NATO commitments, which requires Canada to invest 2% of annual economic output to defence spending.

Earlier this year, Bombardier renamed its specialized aircraft division, now known as Bombardier Defense, to reflect its focus on the defence industry. This Division of Bombardier is based in Wichita, Kansas.

Look for a detailed report on the conference presented by AéroMontréal in the next issue of CDR.

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