[news] Canada the Global Arms Dealer

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Meet Canada The Global Arms Dealer

by Stephen James-Kerr; May 25, 2003

"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

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 US 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 US peace activists were praising Canada's 'bold stance' ten
Canadian soldiers were manning AWACS radar aircraft, directing those
missiles to their targets. No reports of any terrorists killed in Iraq.

While 6457 Iraqi civilians had been killed as of May 23rd according to
www.iraqbodycount.net 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, US 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 US Air Force at Gander airport.
US 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 US Marines left their posts in Afghanistan for the Iraqi front, 1000
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 US imperialism in small towns like Cobourg Ontario and
Moosejaw Saskatchewan, 30 odd Canadian soldiers were quietly serving 'on
exchange' with US 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 I 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 US 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% between
1998 and 2000, far outpacing growth of the rest of the economy, which grew
at approximately 3%. Canada's 'defence' market grew from $3.7 billion in
1998 to $4.08 billion in 2000, up 22.6%. Exports to the USA grew by 17% from
just under a billion to $1.25 billion. And our arms exports to the rest of
the world grew a staggering 75% 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
(www.ccc.ca) 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% 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 1% 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
US 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 US 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 US 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
US 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 US 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 dollars, 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% more goods
and services than Canada in 2002. The USA is the world's largest single
exporter, but exports account for only 11% of the US economy. Canadians
export more per capita than any other nation on earth, yet this wealth is
concentrated in only a few hands.

Only 5 firms account for 20% of total exports, and 100 firms account for
more than 50%, with US trade accounting for 85%, 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 1990's, the
Federal Liberal government tightened up restrictions on Unemployment
Insurance. In 1989, 53% of unemployed Ontarians received UI benefits. By
1997, only 25% of the unemployed were eligible according to the Ontario
Federation of Labour. The Liberal government cut more than $ 45 billion
dollars 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 1990's 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. (http://www.cancrc.org/)
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 US Army TACOM
to build transportable bridges, for the next time the US 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 US 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 US 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 dollars of business per year, and 98% 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 US 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 US 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 dollar Joint Strike Fighter programme, 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 ten 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 (DFAIT) at 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 DFAIT's website and see for yourself,
then go 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 (http://www.edc.ca/) 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 ( http://www.ic.gc.ca/ ) 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
http://www.ic.gc.ca/cmb/welcomeic.nsf/icPages/Programs#IC 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 bringing 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 US project to provide a missile shield from behind which
the USA could launch a nuclear strike. Cabinet Ministers like Herb Dahliwal
(Dhaliwal.H at parl.gc.ca ), and MPs like John Godfrey, (Godfrey.J at parl.gc.ca )
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.



--------------------------------------------------------------------------------


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

The author, Stephen James Kerr stephen.kerr at sympatico.ca  is an
investigative journalist in Toronto, and the co-host of Newspeak on CIUT
89.5 FM www.ciut.fm .


What you can do:

Write to Canada's Minster of Foreign Affairs Bill Graham at
Graham.B at parl.gc.ca and Canada's 'Defence' Minister, John McCallum at
McCallum.J at parl.gc.ca and tell them you want Canada to stay out of Star
Wars. Please send a copy of your letter to the Canadian Peace Alliance at
cpa at web.ca .


For more information see:

Ploughshares Canada at www.ploughshares.ca for weapons sales to USA.

Amnesty International criticizes Canada for weapons sales to repressive
governments

Canadian small arms may have killed protestors in Papua New Guinea

Canadian weapons exports to Saudi Arabia

Export of Military Goods from Canada 2001 (not including USA)

Canada exports $26 million in weapons to Indonesia

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