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Canada's arms exports in 2002 By Ken Epps According to the most recent government report released in November, during 2002 Canada exported $678.3-million in military goods to 68 countries. The majority of the weapons shipments went to like-minded governments, but transfers also were made to countries at war and to countries whose governments were involved in human rights violations against domestic populations. Because the report again omitted weapons sales to the US and sales of some Canadian equipment shipped for military end-use, the reported total value of all military exports for 2002 was less than one-third the value estimated by Project Ploughshares. In 2002, for the fifth consecutive year, the value of Canadian military exports reported by the government increased, to a total of $678.3-million, nearly 15 per cent more than the $592-million reported for 2001. The 2002 value also was the largest in the post-Cold War era (adjusted for inflation) and the second largest total for reported Canadian arms exports in the quarter-century since 1978. The latest figures on Canadian military exports are documented in the Export of Military Goods from Canada : Annual Report 2002 released in November 2004, almost a year after the December 2003 date of publication. The government report details the overseas shipment during 2002 of goods making up Group 2 of the Export Control List, that is, goods that are “specially designed or modified for military use.” Table 1 identifies the largest recipients of military goods reported for 2002. Table 1: Largest reported recipients of Canadian military goods in 2002 Recipient Military goods Total value United Kingdom Parts for aircraft, helicopters, simulators, radios & others $168.0 million Australia Light armoured vehicles & components & others $111.0 million Germany Simulators & parts, electronics & others $93.4 million South Korea Patrol aircraft, radios, electronic components & others $77.0 million Saudi Arabia Helicopters, light armoured vehicles & parts & others $49.8 million Netherlands Radar & parts, fire control system spares & others $25.5 million Sweden Sonar, aircraft, radio & radar parts & others $15.7 million Norway Thermal imagers, sonobuoys, small arms parts & others $15.6 million France Sonobuoys, rockets, optics & parts & others $14.1 million Denmark Military firearms & parts & others $14.0 million Chile Warship components & others $12.2 million Italy Radio, aircraft, helicopter & vehicle parts & others $11.0 million Belgium Scubas, turrets & parts, surveillance pods & others $10.5 million Singapore Armoured personnel carrier parts & others $9.8 million Japan Computer, aircraft & helicopter parts & others $5.6 million Source: Export of Military Goods from Canada : Annual Report 2002 (International Trade Canada ). As in 2001, more than half the value (56.2 per cent) of reported arms exports were shipped to Europe in 2002 although after adjustment for inflation this was only marginally higher than the value reported for 2001 (see Table 2). Oceania (essentially Australia and New Zealand ) was the next largest regional recipient of Canadian military goods in 2002, importing about one-sixth (16.6 per cent) of all overseas shipments. Shipments to this region also demonstrated the most dramatic change from the previous year, a jump from $45.3-million to $112.3-million (in 2002 constant dollars), an increase of 148 per cent. (The increase was largely due to initial deliveries of light armoured vehicles and parts worth almost $70-million to Australia .) Most of the remaining reported shipments – $184.5-million or 27.2 per cent – went to nations in the four regions of Latin America, Middle East, Asia, and Africa . Of these, the Middle East region demonstrated the largest increase in shipments over 2001 (from $41.2- to $58-million or 41 per cent) and Latin America the largest decline (from $25.4- to $16.2-million or 36 per cent). As Table 2 illustrates (in columns four and six), the regional distribution of 2002 arms exports differs significantly from the distribution as averaged over the 13-year post-Cold War period, 1990-2002. In fact, a multi-year distribution offers a more accurate assessment of the dependency of Canadian military exports on geographical regions. The final column of the table shows that Europe has been the largest regional market since the end of the Cold War (45.7 per cent), followed by the Middle East (27.5 per cent) and Asia (13.1 per cent). Latin America and Africa are relatively minor markets at 1.8 per cent and 2.3 per cent respectively. It is worth noting that during the post-Cold War period, the developing world – with 43.7 per cent of reported sales – has collectively represented a market to rival Europe in importance to Canadian arms exporters. Table 2: Regional distribution of reported Canadian arms exports (Values in millions of constant 2002 dollars) Region 2001 value 2002 value 2002 % of total 1990-2002 total value 1990 -2002 % of total Latin America 25.9 16.6 2.4 102.8 1.8 Europe 377.5 381.1 56.2 2652.1 45.7 Middle East 41.2 58 8.6 1592.7 27.5 Asia 101.5 106.5 15.7 758.5 13.1 Oceania 45.3 112.3 16.6 557.3 9.6 Africa 6.9 3.8 0.5 136 2.3 Total 598.3 678.3 100 5799.4 100 Sources: DFAIT and International Trade Canada, Statistics Canada (for inflation adjustment figures). The 2002 report identifies four export control policy guidelines that governed the shipment of military goods detailed in the report. The first guideline calls for the close control of exports to countries “that pose a threat to Canada and its allies,” although it is not apparent from the report how or if the guideline influences arms export regulation. Adherence to the third guideline, related to countries under UN Security Council sanctions, may be determined more readily by noting that during 2002 no country subject to a UN arms embargo was the recipient of Canadian military goods. With respect to the remaining two guidelines, however, the 2002 report data provided plentiful evidence that the Canadian government overrides its own export control guidelines to approve some shipments of military goods. Canada ’s second export control guideline calls for the close control of arms exports to countries involved in or under imminent threat of hostilities. Despite the guideline, Canada exported military goods valued at $100,000 or more to seven countries hosting armed conflicts in 2002: Algeria , Colombia , India , Israel , Nigeria , the Philippines , and Sri Lanka (see Table 3). The value of arms exports to these countries totaled $8-million. The shipments included electronic countermeasures equipment to Algeria and Israel , a surveillance camera system to Colombia , ammunition containers to the Philippines , and radio spares to Sri Lanka . The final guideline applies to countries whose governments have a persistent record of serious human rights violations unless “there is no reasonable risk that the goods might be used against the civilian population.” As shown in Table 3, Canada exported military goods valued at more than $100,000 to each of 12 countries where, in its 2003 Annual Report, Amnesty International (AI) reported serious and systematic human violations by government security personnel during 2002. These included the seven recipient countries affected by armed conflicts as well as Brazil , Jamaica , Mexico , Saudi Arabia , and Turkey . The total value of Canadian arms shipments to the 12 countries exceeded $60-million. AI-documented human rights violations involved torture, disappearances, extra-judicial executions, and other killings. In Brazil , for example, to which Canada shipped ammunition components and containers, AI reported that in 2002 “thousands of people were killed in confrontations with the police.” Similarly, Canada exported armoured vans to Jamaica , where “at least 133 people were killed by the police, many in disputed circumstances suggesting extrajudicial executions” (AI 2003). Table 3: Canadian arms deliveries worth $100,000 or more to selected nations in 2002 Country Armed Conflict 2002 Serious humans rights violations 2002 Value of Canadian arms shipments Algeria Yes Yes $122,400 Brazil Yes $217,305 Colombia Yes Yes $680,500 India Yes Yes $2,700,000 Israel Yes Yes $3,512,845 Jamaica Yes $746,477 Mexico Yes $430,000 Nigeria Yes Yes $460,275 Philippines Yes Yes $344,121 Saudi Arabia Yes $49,795,495 Sri Lanka Yes Yes $172,112 Turkey Yes $1,113,561 Sources: Export of Military Goods from Canada : Annual Report 2002 (International Trade Canada ), Armed Conflicts Report 2003 (Project Ploughshares), Annual Report 2003 (Amnesty International). During 2002 Canada also shipped light armoured vehicles (LAVs) and parts worth almost $20-million to Saudi Arabia . These were the latest LAV shipments to the Saudi Arabian National Guard that since 1992 have totaled 1,254 vehicles (as reported to the UN Register of Conventional Arms), valued at $1.2-billion. In 2002 in Saudi Arabia , according to AI, “gross human rights violations continued” and “torture and ill-treatment remained rife.” The National Guard is responsible for the protection of the royal family that controls the government. There remains a very reasonable risk that Canadian-built LAVs will be used against Saudi citizens in any popular uprising against the autocratic government. Unreported exports The total value of reported Canadian arms exports, equivalent to $432-million in 2002 US dollars, would place Canada among the largest 10 global arms suppliers for 2002. The value of Canadian arms exports approximates those reported for Italy, which was ranked as the seventh largest arms supplier in 2002 by the US Congressional Research Service ( CRS ) (Grimmett 2003, p. CRS -33).1 Canada’s ranking among the largest international arms suppliers would climb even higher if the value of unreported arms exports were added to reported sales. A full accounting of 2002 Canadian arms exports would place Canada as the fifth largest global arms supplier in the CRS ranking, immediately following the top tier suppliers: the United States , Russia , France , and the United Kingdom . The substantial volume of Canadian military goods exports to the US is by far the largest omission from the annual government report. US figures are not included because they cannot be derived from the process used to compile arms shipment values. The report figures are obtained from values for goods shipments filed by exporters against the export permits approved by the government. Export permits are central to the export data acquisition. However, under the terms of Defence Production Sharing Arrangements between Canada and the US , cross-border trade in military goods does not require export permits. As noted in the annual report, “statistics on military exports to the United States are therefore not readily available.” Project Ploughshares estimates the value of Canadian arms exports to the US from prime contract data supplied under the Access to Information Act by the Canadian Commercial Corporation ( CCC ). (The CCC is a crown corporation that brokers contracts between Canadian companies and foreign governments. Approximately 60 per cent of the annual brokered sales are due to military contracts, mostly with the Pentagon.) Assuming an approximately even split in Canadian arms exports to the US between prime contracts brokered by the CCC and sub-contracts arranged between Canadian companies and US defence corporations, it is possible to estimate total 2002 Canadian military exports to the US as $1,312.7-million or almost twice the reported total for shipments to all other nations combined. It is worth noting that in addition to creating an enormous hole in the annual report, the government’s inability to accurately monitor cross-border military trade has meant that Canada has not fulfilled international transparency obligations related to the arms trade, including reports to the voluntary UN Register of Conventional Arms and the more recent, and legally binding, Inter-American Convention on Transparency in Conventional Weapons Acquisitions that requires the same weapons transfer data. In its report on 2002 transfers to the UN Register, for example, Canada omitted exports to the US of an estimated 150 “Stryker” armoured vehicles built by General Dynamics Land Systems Canada. The annual report also omits exports of “dual-use” goods included in the Export Controls List ( ECL ). The equipment “specially designed for military use” making up Group 2 of the ECL is the sole group of exported goods reported in the Annual Report. However, in addition to military goods, Canada also requires export approval for the transfer of certain commercial equipment considered “dual-use.” This equipment may be used for either civilian or military purposes, but the “ordinary use” is viewed to be commercial or civilian. Dual-use equipment as currently defined is primarily advanced technology items such as special metal alloys, high-speed computers or remote-sensing equipment – goods that require export permits because of their possible strategic value. Although dual-use transfers require export permits they are not reported and the group of dual-use transfers for military end-use in particular is a significant omission from the annual report. The third category of military exports omitted from the annual report arises from a loophole in Canadian export controls. The existing system of regulation of dual-use goods fails to control frequent cases of Canadian equipment categorized as “civilian” that is shipped without export regulation for military end-use. Because the shipments do not require export permits they are omitted from the annual report, despite their military destination. An example that received some media attention involved Bell 212 helicopters. Between 1994 and 1996 the Canadian company Bell Helicopter Textron Canada shipped 12 helicopters to the Colombian military and police, with the assistance of the Canadian Commercial Corporation and without needing to apply for export permits. The shipments occurred in spite of concerns of human rights organizations that the helicopters would be used in human rights violations. The practice of supplying sophisticated civilian equipment to military forces is becoming more commonplace. With a history of supplying both civilian and military markets, many Canadian companies now advertise “commercial-off-the-shelf (COTS)” goods, especially in areas of advanced technology such as aerospace and data processing, as readily adapted to military use. When these offers are combined with financial pressures on the military budgets of prospective buyers, there is growing incentive for those responsible for military equipment purchases to explore sources outside military-defined channels. Table 4 identifies selected transfers during 2002 of Canadian “civilian” equipment to foreign military end-users. The table is compiled from transfers reported by the Stockholm International Peace Research Institute and other sources, which include “civilian” aircraft in their documentation of military sales. The table is incomplete because many transfers of civilian equipment to foreign military customers are not reported. Nevertheless, the table demonstrates that, at a minimum, the estimated value of unreported exports of civilian equipment for military end-use during 2002 was $125-million, or almost one-fifth of reported sales. When this figure is added to estimated US sales, and to a minimal assigned value for dual-use goods shipped to the military, the military exports not reported in the 2002 annual report total an estimated $1.5-billion. The estimated value of all Canadian military exports in 2002 was thus more than three times the government’s reported figure. Table 4: Selected Canadian equipment for military end-use omitted from 2002 Annual Report Recipient Equipment Estimated value of 2002 shipments Manufacturer Algeria PT6A turboprop engines for Beech-1900D airborne ground surveillance aircraft $6 million Pratt & Whitney Canada Brazil PT6A turboprop engines for ALX light attack aircraft N/A Malaysia C-130 Hercules transport aircraft upgrades $15 million Spar Aerospace Mexico Q200 Dash 8 multimission aircraft $27 million Bombardier Inc PW206 turboshaft engines for MD Combat Explorer helicopters $6 million Pratt & Whitney Canada Nepal PT6A turboprop engines for M-28 Skytruck transport aircraft $2 million Spain PW127G turboprop engines for C-295 transport aircraft $6 million Thailand Bell 412EP helicopters $40 million Bell Helicopter Textron Canada U.K. $16 million Venezuela AS-61D helicopter overhaul $7.5 million Aero Aerospace Estimated Total Value >$125 million Sources: SIPRI Yearbook 2003 (Stockholm International Peace Research Institute); Canadian Military Industry Database (Project Ploughshares). The 2002 edition of Canada ’s annual report on the export of military goods again reveals major problems with Canadian export control application and reporting standards. The documented shipment of weapons to countries hosting armed conflict and to countries whose governments are accused of serious human rights violations underlines the need for the Canadian government to adhere more strictly to its existing export control guidelines. The limited transparency of Canadian arms sales arises from the glaring omission of more than two-thirds of these sales – mostly due to the exclusion of US exports. The current reporting opacity suggests that Canada must take concerted steps to bring its arms transfer reporting up to the transparency standards it advocates for international instruments like the UN Register. In sum, Canadian export control policies and procedures are in need of an overhaul and the government’s promised foreign policy review may be just the occasion. 1 It is not clear why the annual CRS report (among others) consistently omits Canada from the largest arms suppliers in spite of the value of Canadian official figures. It may be related to the delay in the Canadian annual report. For example, the CRS report on 2002 arms transfers appeared more than a year before the Canadian report for the same year. References Amnesty International 2003, Amnesty International Report 2003. [Online]. Available from: www.web.amnesty.org/report2003/index-eng. Grimmett, RF 2003, Conventional Arms Transfers to Developing Nations, 1995-2002, CRS Report for Congress, September 22. [Online]. Available from: http://www.fas.org/man/crs. International Trade Canada 2003, Export of Military Goods from Canada: Annual Report 2002. [Online]. Available from: http://www.dfait-maeci.gc.ca/trade/eicb/military/miliexport02-en.asp. Project Ploughshares 57 Erb Street West Waterloo, Ontario, Canada N2L 6C2 tel (519) 888-6541 fax (519) 888-0018 Email: plough@ploughshares.ca