Report on exports of military goods from Canada - 2012-2013

Table of Contents

• Export Controls
• International Cooperation on Military Trade
• Military Export Statistics
  • Data Interpretation Notes
  • Table 1 - Summary Statistics
  • Chart 1 - Exports to destinations categorized by Human Development Index (HDI level)
  • Chart 2 - Exports to destinations categorized by Defence Relationship
  • Table 2 - Exports of Military Goods and Technology by Destination
  • Table 3 - Group 2 of Canada’s Export Control List
  • Table 4 - Exports of Military Goods and Technology by Export Control List Item
  • Table 5 - Exports of Military Goods and Technology by Destination and Export Control List Item
  • Table 6 - Country Lists

Export Controls

Canada has some of the strongest export controls in the world. A key priority of Canada’s foreign policy is the maintenance of peace and security. To this end, the Government of Canada strives to ensure that Canadian military exports are not prejudicial to peace, security or stability in any region of the world or within any country.

This policy is implemented primarily through Canada’s system of export controls, as authorized by the Export and Import Permits Act (enacted in 1947). This law requires those who wish to export from Canada any article included in the Export Control List (ECL) to obtain, prior to shipment, an export permit issued by Foreign Affairs, Trade and Development Canada (DFATD)^{Footnote 1}. The Export Control List includes military, dual-use, and strategic goods and technology, all U.S.-origin goods and technology, and a limited number of items that are controlled for economic reasons.

The military goods and technology described in this report are included in Group 2 (“Munitions List”) of the Export Control List. Items listed in Group 2 are “specially designed or modified for military use.” Civilian goods and technology that are not covered by any group in the Export Control List are not normally subject to export controls (such as fuel and food), even if they are intended for sale to a military end-user.

Canada prohibits the export of military goods and technology to a number of countries under the authority of the Export and Import Permits Act, the United Nations Act, and the Special Economic Measures Act^{Footnote 2}. As well, Canada maintains an Area Control List, which currently includes two countries: Belarus and North Korea^{Footnote 3}. All goods and technology destined to these countries are subject to export controls, with normally only those goods and technology that respond to humanitarian needs receiving an export permit.

Under current export control policy guidelines mandated by Cabinet, Canada closely controls the export of military goods and technology to countries:

• that pose a threat to Canada and its allies;
• that are involved in or under imminent threat of hostilities;
• that are under United Nations Security Council sanctions; or
• whose governments have a persistent record of serious violations of the human rights of their citizens, unless it can be demonstrated that there is no reasonable risk that the goods might be used against the civilian population.

Additional goals of Canada’s export controls regime include:

• ensuring that exports do not contribute to the development of nuclear, biological or chemical weapons of mass destruction, or of their delivery systems; and
• that exports are consistent with existing economic sanctions' provisions.

Once an application to export goods or technology has been received, wide-ranging consultations are held among human rights, international security and defence-industry experts at DFATD (including those residents at Canada’s overseas diplomatic missions), the Department of National Defence and, as necessary, other government departments and agencies. Through such consultations, each export permit application is assessed for its consistency with Canada’s foreign and defence policies. Regional peace and stability, including civil conflict and human rights, are actively considered.

A key consideration in the review of each application is the end-use of the export.  Careful attention is paid to mandatory end-use documentation in an effort to ensure that the export is intended for a legitimate end-user and will not be diverted to ends that could threaten the security of Canada, its allies, or other countries or people.  Military goods and technology are generally exported for one of the following purposes:

• sales to military and, in some cases, police forces or other government agencies;
• sales of parts and components for the production of new goods;
• repairs of military equipment in Canada for foreign customers, and shipments of spare parts;
• sales to private individuals (especially sales of firearms).

Canada’s defence industry makes a valuable contribution to the nation’s prosperity and employs tens of thousands of Canadians. It develops high-technology products and is closely integrated with counterparts in allied countries. Export controls are not meant to hinder international trade unnecessarily but to regulate and impose certain restrictions on exports in response to clear policy objectives, described above. Canada’s defence industry provides the Canadian Forces, as well as the armed forces of our allies, with the equipment, munitions and spare parts necessary to meet operational needs, including requirements for combat and peacekeeping missions. As stated in the United Nations Charter, all states share a right to legitimate self-defence.

Exports of Firearms

Most firearms exports from Canada are intended for sporting or other recreational use and not for military use. Since a large volume of Canadian firearms exports go to private end-users, steps are taken to ensure items are not diverted into the illegal arms trade or used to fuel local violence. As part of this process, the bona fides of the end-users are thoroughly investigated. Canadian diplomatic missions and other sources may also provide information about destination countries’ firearms control laws, procedures and enforcement practices. If concerns remain about the end-user, the export permit will not be issued.

Certain prohibited firearms, weapons, devices, or components thereof that are included on the Export Control List may be exported following the issuance of an export permit only to destinations on the Automatic Firearms Country Control List and only to consignees that are government or authorized by government^{Footnote 4}. Canada has inter-governmental defence, research, development, and production arrangements with countries on the Automatic Firearms Country Control List (these countries are listed in Table 6).

International Cooperation on Military Trade

Multilateral action is an important means of promoting international peace and security. Canada supports and participates in a range of arms control and non-proliferation activities, working closely with like-minded countries^{Footnote 5}.

Wassenaar Arrangement

Most items have been included on the Export Control List because of Canada’s commitments to like-minded countries that participate in multilateral export-control regimes or because of Canada’s obligations as a signatory to international agreements that seek to control and monitor the movement of sensitive goods and technology.

The control regime that deals with the military goods and technology covered in Group 2 of the Export Control List is the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies^{Footnote 6}. Founded in 1996, the Initial Elements define the objectives of the Arrangement as, inter alia:

"to contribute to regional and international security and stability, by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies, thus preventing destabilising accumulations"

Through national policies, the 41 Participating States seek to ensure that transfers of items covered by the common export control lists created in meetings of the Wassenaar Arrangement do not contribute to the development or enhancement of military capabilities that have the potential to undermine regional and global security and stability. Participating States also take every precaution to ensure that such goods and technologies are not diverted to illegitimate end-uses.

United Nations Register of Conventional Arms

Canada continues to actively promote greater transparency in the trade of conventional weapons. In 1991, Canada was a founding contributor to the United Nations Register of Conventional Arms, to which governments voluntarily supply data on their imports and exports of seven major categories of conventional weapons systems^{Footnote 7}. The annually updated Register makes a significant contribution to transparency, confidence-building and enhanced global security. Each year since the inception of the Register, more than 90 governments on average have made submissions to it; of these, about 70 have done so consistently, including Canada. Currently, there is reasonable representation from most geographic regions, capturing over 95 percent of the international trade in major conventional weapons. As a result, the Register has become an important and authoritative source of information

Canada is also one of a growing number of countries that voluntarily submit data to the Register on military holdings and on procurement through national production. This information goes beyond the minimum currently required by the United Nations and makes an important contribution to global transparency on military capabilities.

Trade in Small Arms and Light Weapons

Canada, in cooperation with like-minded partners, is looking at ways to address the problem of illicit small-arms proliferation, which can undermine security and development efforts and contribute to human suffering. Canada has adopted an integrated approach, addressing the arms-control, crime-prevention and peace-building dimensions of the issue at all levels. Such an approach targets supply-side and transit issues, and seeks to cope with post-conflict surplus stocks and reduce the demand for weapons.

Canada promotes measures designed to achieve transparency in legal transfers of small arms and light weapons. Aspects under review include codes of conduct and transparency initiatives. Canada’s own procedures are strict and seek to ensure a high level of control over exports of small arms.

Military Export Statistics

As part of Canada’s effort to encourage greater transparency on military exports, DFATD has published periodic reports on annual exports of military goods and technology since 1990.

Statistics are obtained from utilization reports which must be provided to DFATD as a condition of using export permits for military goods and technology.  These reports include the country of destination, a description of the goods exported, their quantity and their value in Canadian dollars. Details of export transactions are protected due to the commercially confidential nature of such information and restrictions under the Privacy Act.

Export controls apply to all foreign destinations. However, due to close and long-standing military cooperation with the United States, including the integrated nature of North America’s defence industry, permit exceptions apply to most Group 2 exports destined for final use in that country. Exports of military goods and technology to the United States are therefore not reported here.

Certain statistics on Canadian exports may be available from other sources such as Statistics Canada or the Canadian Commercial Corporation. It should be noted that these figures may include non-military goods such as commercial computers, civil-certified aircraft, guns and ammunition designed exclusively for industrial uses, such as the lighting of gas flares at oil wells, or other civilian equipment. Since there is no direct correlation between the commodity codes used by Statistics Canada and the Export Control List numbers, and because each source uses different methods of data collection, a meaningful comparison of the information from these three sources is extremely difficult.

The internationally accepted standard for statistics on worldwide military trade is the previously mentioned United Nations Register of Conventional Arms. However, the Register limits itself to precise categories of weapons systems and does not include parts, components or the wide assortment of non-lethal support systems (such as radar equipment, simulators and software designed for military use) that make up the majority of Canada’s military exports.

For the 2012 and 2013 calendar years, Canada’s total exports of military goods and technology amounted to approximately $1.72 billion. The major share ($1.15 billion or 67%) went to member countries of the North Atlantic Treaty Organization (NATO) or non-NATO AFCCL destinations.  Saudi Arabia, a non-NATO AFCCL destination was the largest single destination of Canadian military exports each year, received $575.1 million in military exports, accounting for 33% of all Canadian military exports.  Five NATO countries were also in the top ten destinations for the same period: the United Kingdom, Germany, Italy, France and Belgium.  One other of the top ten destinations was non-NATO AFCCL destination; Australia, which received a combined $46.9 million in military exports.  The United Arab Emirates, Austria and Singapore, the second, fourth and ninth-largest destinations for military exports respectively, were the only non-NATO and non-AFCCL countries in the top ten. Military exports to Participating States of the Wassenaar Arrangement accounted for $741.7 million, or 43% of the total military exports.

Chart 1: Exports to destinations by Human Development Index (HDI) level

2012

2013

Chart 2: Exports to destinations by defence relationship

2012

2013

Table 6: Country Lists