Here is CDR’s annual report on Ontario’s aerospace and defence industry. Ontario is home to some of the most influential companies operating within Canada’s defence and aerospace industry, including armoured vehicle manufacturers, shipbuilders, producers of ammunition, pilot training service providers and even suppliers of over-the-horizon radars for continental defence.

BY PETER DIEKMEYER

Minister of National Defence, Bill Blair, visited Inuvik in late August to highlight the Arctic focus of Canada’s defence policy. His agenda focused on the community’s role as a transportation hub, nearby NORAD training exercises and threats to the country’s increasingly important Northern regions.

Burlington Ontario did not figure prominently in the Minister’s discussions. However, Sherry Colville, Senior Vice President Operations at Duke, was paying close attention. “The recently announced Icebreaker Collaboration Agreement between Finland, the U.S. and Canada emphasized Arctic security,” she told CDR. “It also created demand for the workers who will be needed to build, maintain and operate the ships planned in Canada’s Shipbuilding Strategy. That’s where we can help.”

Editor’s note: On July 11^th, 2024, Canada, the U.S. and Finland released a joint statement announcing an enhanced trilateral partnership called the Icebreaker Collaboration Effort, or ‘ICE Pact’ for short.

Almost all Canadian defence stories tie into Ontario in one way or another. Heather Pilot, President of Pilot Hill, which organizes the Best Defence Conference, promotes the London Ontario event as an excellent entry point for international companies to the entire Canadian defence and security marketplace. The province accounts for a substantial share of Canada’s economic output and basing infrastructure. Ottawa, the nation’s capital, where all major procurement decisions are made is home to the Canadian Association of Defence and Securities Industries (CADSI), and the offices of most of the country’s largest contractors. Toronto is the country’s most populous city and its financial capital.

Armoured vehicle manufacturing is a perfect example of Ontario’s superiority when it comes to defence-related production. Companies such as Roshel, which is located in a newly renovated 140,000 square-foot facility in Brampton, and London-based General Dynamics Land Systems-Canada (GDLS-C), are two of the largest manufacturers in the country. GDLS-C, which employs 1,800 highly skilled designers, assemblers and maintainers, got a big boost earlier this Spring when the company was awarded a contract for the Logistics Vehicle Modernization (LVM) project. Two contracts were awarded to GDLS-C and Marshall Aerospace Canada, in a joint venture known as The Power Team.

READ: COVER STORY – ROSHEL Smart Armored Vehicles

An acquisition contract valued at $1.5 billion (including taxes) was awarded for the purchase of the vehicles and related equipment. A second contract with a potential total value of $1.08 billion (including taxes) was awarded for in-service support of the vehicles for up to 25 years, if all option periods are exercised.

RAMPING-UP AMMUNITION PRODUCTION

Ontario’s defence sector could prove to be particularly important amidst Canada’s current sluggish economy. Slowdowns tend to hit cyclical businesses far harder than government contractors such as IMT Precision, which plays a key stabilization role during economic slowdowns.

In March 2024, Minister of National Defence, Bill Blair, asked weapons manufacturers to come up with a plan to boost production of 155mm ammunition as the war in Ukraine continues. Blair stated that $4.4M will go to IMT Precision (formerly IMT Defence) and General Dynamics Ordnance and Tactical Systems-Canada, to develop detailed proposals to increase production.

This is particularly timely as Canada’s employment rate (which hit 6.6% in August) continues to rise. “Good jobs are being created at the right time for the right reasons,” said Remo Assini, President of IMT Precision. “Ukraine is using a lot of artillery. Canada and the U.S. have been forwarding as much of their existing stockpiles as possible. But those inventories are low and will need to be rebuilt.”

On October 2nd, IMT Precision held a ribbon-cutting ceremony to celebrate a 90,000 square foot expansion to its Ingersoll facility which will allow the company to expand its 155mm production line. IMT Precision expects to create between 250 and 300 new positions to supply recent surges in demand. Those totals are even more impressive when the substantial spinoffs generated by sub-contractors and other supply chain players are included.

Recent contracts that IMT Defence landed with the U.S. government enabled the company to finance the expansion of its Ingersol facility. The importance of IMT Precision’s Ingersoll facility could increase even further in coming years. “Militaries talk a lot about precision weapons,” said Assini. “However, the high percentage of deaths attributed to artillery in the Ukrainian war has highlighted its continuing importance in attrition combat.”

ALLEN-VANGUARD TARGETS CFLEWM

Allen-Vanguard, a provider of Electronic Warfare technology, is another Ontario company that should see surging demand during the coming years. Israel’s recent invasions of Gaza and Lebanon and Russia’s inability to defend itself against NATO supplied munitions and targeting information used in Ukrainian drone attacks, have highlighted the growing importance of Counter-Improvised Explosive Devices (C-IED) and Counter-Uncrewed Air Vehicle (C-UAV) measures.

“We are very busy,” says Steve Drover, the company’s Director of Business Development Canada. “Our key focus is on broadening our C-IED capabilities, to include C-UAV and Electronic Warfare tools. The goal is to produce a system that can sense signals of interest and jam them or report that information back to a command post where further decisions can be made.”

Allen-Vanguard employs about 60 highly trained professionals and supports a surrounding ecosystem of subtrades. A key priority has been on preparing to bid on the $700M Canadian Forces Land Electronic Warfare Modernization (CFLEWM) project which is moving into project definition phase. But keeping up to date isn’t easy.

Editor’s note: The CFLEWM project will improve the CAF’s ability to monitor, manage and deliberately deny the use of the electromagnetic spectrum.

Disabling the electronics on a roadside bomb and a drone are similar tasks on paper. However, there is a big difference between jamming a garage door opener used by a militant to try to set off an IED and disabling a modern drone guided by communications that conduct split second frequency shifts.

Like many small and medium sized Canadian businesses, Allen-Vanguard must constantly self-fund a range of research and development investments to remain on the cutting edge. But Drover is not fazed in the least. “The changing nature of warfare requires nimble actors,” says the defence industry veteran. “We need those capabilities here in Canada and we are ready to provide them.”

MARITIME SENSORS

Eric Meger, CEO of Maerospace, was also closely watching Minister Blair’s trip to Inuvik. Meger was particularly intrigued by Blair’s commitments to allocating $1.4B over 20 years to acquire specialized maritime sensors. That’s because Maerospace markets High Frequency Surface Wave Radar (HFSWR) over the horizon technology.

Maerospace’s PASE solution facilitates continuous monitoring of vessel-based activities across exclusive economic zones up to 200 nautical miles from shore and could be used to monitor approaches to Canada’s Northwest passages. Meger argues that the fourth generation PASE deployment at Cape Race, Newfoundland, which began live operations late last year, prototypes a capability that could be installed at major Arctic choke points.

“Canadians are becoming increasingly adamant about asserting our sovereignty in Arctic waters,” says Meger. “Without monitoring you don’t have defence and security. Our technology enables that.” Meger also has been marketing the PASE system, which comes in an integrated radar equipment shelter with built in satellite communications capabilities and back-up power, to international clients. Interest has been particularly strong in east Asia following a recent naval incident in the South China Sea involving China and the Philippines.

However, it hasn’t always been easy. Getting credit guarantees has been a challenge due to complex rules governing financial institutions that want to do business in dual use and military markets. The shear manpower cost of bidding on federal government contracts can be particularly onerous to small and medium sized businesses if projects are cancelled or delayed. “Canada and Maerospace have invested in this technology for decades,” says Meger. “We need to find creative ways to leverage its international potential.”

DEFENCE PROCUREMENT

Darcy Byrtus, Director of Government and Industry relations at BMT Canada, says that many defence sector procurement challenges relate to chronic understaffing. Byrtus should know. BMT Canada has seen steady growth in recent years providing what he describes as “balanced, impartial, and objective expert advice” to officials involved in large Royal Canadian Navy and Canadian Coast Guard procurement projects. 

“Defence procurement personnel are some of the country’s most skilled public officials,” says Byrtus. “It takes years to train that kind of talent. The federal government is thus consistently hampered by chronic shortages of human resources when it plans, executes and transitions into service, new generational projects.”

BMT Canada’s key mandates include providing support for Babcock and Seaspan in the sustainment of Canada’s four Victoria-class submarines through the Victoria Class In-Service Support Contract (VCISS), work with Naval Force Development on the Canadian Patrol Submarine Project (CPSP) and assistance to the federal government on a range of special projects.

“We have become adept at finding and onboarding skilled ex-defence sector personnel,” says Byrtus. “Many of our top people are retired naval or government employees who did almost identical tasks in the past, but who wanted to continue to contribute.” Byrtus cites the large number of ageing infrastructure projects and platforms in both the surface and submarine fleets as key drivers of increased work in the company’s Ottawa, Halifax and Victoria offices.  

Despite the cynicism that tends to pervade pre-election periods Byrtus takes federal spending promises seriously. “The government has ambitious objectives, but it will need to be flexible,” he notes, citing his experience working on Canada’s Halifax Class Frigate procurement program in the 1980s as an example. “I had 250 people in the project. If I had a question, there’d be an expert in my office within minutes. Federal officials today don’t have nearly that kind of backup.”

SHIPBUILDING IN ONTARIO

Ted Kirkpatrick, Director of Business Development and Government Relations at Ontario Shipyards, was also closely watching Defence Minister Blair’s recent trip to Canada’s North. Workers at the company’s Port Weller drydocks are in the midst major life extension work on the CCGS Terry Fox, a large icebreaker which is key to demonstrating Canada’s Arctic presence. Kirkpatrick thinks that the massive $130M assignment could be just the start.

“Ontario was once the epicenter of Canadian shipbuilding and our facilities played a major role,” says Kirkpatrick who has been working hard to rebuild that tradition. “Ontario facilities were not allocated prime contractor roles on the major vessels in Canada’s National Shipbuilding Strategy. However more than 50 NSS small and medium vessels that fall under Pillar 2 (under 1000 tons light ship displacement) are slated to be built. We’d like to pitch in.”

Ontario Shipyards isn’t alone. Kirkpatrick’ cites Ontario’s Maritime Transportation Strategy, a 10-year vision for building a world-class marine transportation network, as a signal of the Ontario government’s commitment to the province’s naval construction capabilities which double as a key Canadian national defence asset. Last month the province announced that it was allocating $10M from its Skills Development Fund (SDF) Training Stream to help Ontario Shipyards to train shipbuilding and repair sector workers.

Ontario Shipyards is also readying for potential work as part of Team Vigilance. The RCN’s fleet of 12 Kingston-class Maritime Coastal Defence Vessels (MCDVs) are due for replacement under pillar two of the NSS. “We need to bring shipbuilding back to Ontario in a big way,” Kirpatrick told CDR. “This would be a great place to start.”

DEW: INCREASINGLY ‘VIGILANT’

Another Ontario-based company that could benefit from the Kingston-class replacement initiative is DEW Engineering & Development. The company recently inked an agreement to license SH Defence’s Cube multi-mission module system for use on Team Vigilance’s proposed Kingston-class replacement – which is known as the ‘Vigilance’. The highly flexible components, which enable rapid mission assignment and interchangeability between platforms, would be built in Ottawa. In-service support work would also be done in the province.

“This would be very much an Ontario focused initiative,” says Ian Marsh, the company’s President. “We also have major facilities in New Brunswick. But we see ourselves as part of Canada’s broader defence sector, and like many Ontario businesses, our focus is national in scope.”

Marsh, a major activist in the fight to home-shore Canada’s defence industrial base in a tense global environment, maintains a cautiously optimistic demeanor. “Shipbuilding is a highly politically sensitive issue,” says the defence sector veteran who has more than three decades of service under his belt at DEW Engineering & Development. “If Canada meets its commitment to spend 2% of its gross domestic product on defence, it would provide significant benefits to the industry. But that is a big if.”

READ: PILOT TRAINING – ITPS Canada

PILOT TRAINING

Canada’s increasing focus on defence has also been great for ITPS Canada which runs an international fight test training school and tactical training center in Ontario. According to David Lohse, the company’s Vice President – Flight Test, ITPS was recently awarded a three-year extension to a key contract with the RCAF.

“Training is done in teams of two including one pilot and one flight test engineer,” says Lohse who credits the company’s use of government-to-government agreements negotiated through Canadian Commercial Corporation to boost international sales. “We train students from FVEY and other friendly nations, as well as from private companies such as Leonardo and Airbus.”

The fact ITPS competes on a small North American field with only four comparable organizations, highlights Ontario’s growing leadership role in the aerospace sector. However, ITPS Canada’s capabilities, centered around the province’s London International Airport, doubles as a key national defence asset. The recent appointment of Brendan Pierce, the company’s Vice President – Tactical Training, to a NATO Industrial Advisory Group gives the facility a seat at the table to address the fighter pilot training shortfall and is expected to provide additional international visibility during coming years.

That doesn’t mean ITPS Canada is resting on its laurels. The company is constantly adding to and improving its flight test and tactical training fleets. These efforts include recent upgrades to its L39 aircraft to encompass Fly-By-Wire Advanced Controls Evaluator (ACE) capabilities, and the incorporation of AI and Machine Learning into its Advanced Aircraft Simulation Centre (AASC).

Lohse acknowledges the fact that test pilot training is a maturing market and expects faster future growth to come from its tactical arm. The federal government’s announcement that it will invest $60M for pilot training could help that process.

CONTINENTAL DEFENCE & NORAD MODERNIZATION

Ontario’s central role in Canada’s defence industry was highlighted in August when the U.S. Defence Security Cooperation Agency approved the sale of $264M worth of RTX Sidewinder missiles and associated support capabilities to the Canadian government. Decisions regarding the equivalent value worth of offset work that needs to be done in Canada related to such purchases are generally made in Ottawa.

The potential dollar amounts are huge. RTX bills itself as the world’s largest aerospace and defence company. Its Canadian arm employs nearly 8,500 at a variety of subsidiaries any one of which could be the beneficiaries of offset contracts stemming from the Sidewinder sale and a similar deal announced early last year related to its NASAM missiles. 

“RTX continues to expand its partnerships with the Canadian government and customers,” says Garry Venman, CEO at Raytheon Canada, pointing to its substantial Ontario footprint which includes Collins locations in Ottawa, Toronto and Waterloo; Pratt and Whitney Canada in Mississauga; and Raytheon Canada locations in Midland (ELCAN), Ottawa and Petawawa/Renfrew. These in turn all give work to a range of small and medium business. Collins Aerospace produces Wideband High Frequency (HF) systems at a facility in Ottawa where Raytheon Canada has concentrated the business in a Centre of Excellence.

Raytheon Canada officials, who are pursuing multiple defence opportunities related to continental defence, cyber security and NORAD modernization, were thus also closely monitoring Minister Blair’s recent trip to Canada’s North. According to Venman Raytheon Canada has made significant investments in developing Canadian Arctic defence related capabilities. These include ongoing research and development of Over-The-Horizon Radar – a joint effort between Raytheon Canada and Defence Research and Development Canada. Raytheon Canada’s Waterloo facility, which specializes in primary surveillance radars and High Arctic Data Communication Systems is also an important player in Northern defence.

STAFFING SOLUTIONS FOR SHIPBUILDING & BEYOND

According to Sherry Colville, Senior Vice President of Operations at Duke Smart Staffing Solutions, Canada’s increased spending to meet NATO obligations is driving demand for defence, aerospace, shipbuilding, and cybersecurity personnel. “Recruiting agencies like Duke will play a crucial role in sourcing talent,” says Colville. “We are developing specialized strategies to attract professionals to meet the needs of defence contractors.”

Colville has also been a big backer of Ontario’s efforts to rebuild its shipping industry after Duke became a preferred supplier to the Team Vigilance bid on the upcoming Kingston-class replacement program. “Both the Ontario and Canadian governments have introduced policies and funding to support defence sector growth,” Colville told CDR. “These include workforce development, innovation, and R&D initiatives, and infrastructure improvements designed to boost competitiveness and attract further investment. The future looks bright.”

Peter Diekmeyer is CDR’s Quebec Bureau Chief