By Ken Epps

After a substantial drop from the boom years of the Reagan era, the volume of Canadian military exports has levelled off in the post-Cold War period to about $1 billion per year or somewhat more than two per cent of the global arms trade.¹ But although there has been little recent variation in total trade, the regional makeup of Canadian arms exports in the 1990s has changed substantially. As shown by Table I, sales to the US have dropped by half in the past seven years,² while sales to Europe, Asia, Africa, and the Middle East have risen, in some regions dramatically. As also shown by the table, exports to the US made up four-fifths of overall Canadian military trade at the end of the Cold War; in 1996 the US portion, estimated at $545 million, was about half. Meanwhile, the latest government report on Canada's arms sales, released in December 1997, reported 1996 non-US sales totalled $459.4 million, down slightly from the $464.5 million reported for 1995.³

* US italicized numbers are estimates.

Since 1991 the Canadian government has reported annually on Canada's military exports to all countries except the United States. Each Annual Report on the Export of Military Goods from Canada provides the value of Canada's arms transfers by country, allowing more detailed analysis of Canada's arms sales than was possible with earlier government data. Like earlier editions, the 1996 report summarizes the value of Canadian arms exports to recipients grouped into high-, middle- and low-income categories derived from statistics in the UNDP Human Development Report. According to the government report, Canada exported 85.5 per cent of its military goods to high-income countries in 1996 and only 1.7 per cent to those in the low-income group. In terms of the common distinction between industrialized and developing countries however, Canadian military exports to the nations of the developing world rose to $273.8 million in 1996, up 18 per cent from $232.5 in 1995 (in current dollars). This makes the latest Third World volume the second highest of the past decade.

Some 75 per cent of Canada's military exports to the Third World go to the Middle East, a region which according to the Congressional Research Service received almost two-thirds of all arms shipped to developing nations during the period 1993-1996. Based on the figures of the government report, Canada increased its Middle Eastern arms shipments to $199.3 million in 1996 from $173.0 million a year earlier. As shown in Figure 1, Canadian military sales to the Middle East increased dramatically in 1992 and have remained at higher levels since, largely due to the sale of light armoured vehicles by General Motors of London, Ontario to the Saudi Arabian National Guard. In the five-year period Canada shipped 1,180 LAVs worth over $1 billion to Saudi Arabia, and if the more than 1,500 vehicles originally ordered by Saudi Arabia are delivered, then Canada's Middle Eastern military exports will make up the bulk of Canadian arms sales to developing nations for at least another year.

Figure 1

Canadian military exports to Asia declined somewhat from 1995 (Figure 2), but remained above $50 million, more than double the average value of the early post-Cold War period. The higher Asian arms sales of the last three years reflect the promotional efforts of both Canadian industry and government in the other regional market viewed to be lucrative by military exporters. It is uncertain whether these levels can be maintained in future years, however. In spite of the host of Canadian military goods showcased or trialed in the region (see Ploughshares Monitor, June 1996, p. 10), recent economic troubles of Asia-Pacific nations already have produced cuts to military budgets and procurement plans.⁴

Figure 2

Figure 3 shows the marked increase in Canadian arms sales to Africa in 1996 from earlier years of the decade. The jump is due to initial shipments of the 13 CF-5 fighter/trainer aircraft sold to Botswana by the Canadian Armed Forces in early 1996. Botswana is the first country to purchase the aircraft declared surplus by the Department of National Defence in 1994 and the shipment of the remaining CF-5s will boost Canadian military exports to Africa at least through 1997.

Figure 3

Finally, 1996 arms shipments to Canada's traditional markets in Europe reached a post-Cold War high of $152.4 million (Figure 4), almost a third (33.2 per cent) of reported military sales for the year.⁵

Figure 4

Export guidelines

The Foreword to the Annual Report on military exports details current export control policy guidelines, noting that in June 1996 Foreign Affairs Minister Axworthy instructed his department to tighten guideline interpretation. Department officials were told to conduct "more rigorous analyses of security issues," taking into account a number of conditions including "internal conflicts such as civil wars." There also was to be "stricter interpretation of the human rights criteria" and "stricter controls where firearms are concerned."

The latest results suggest that tightened export control interpretations have yet to affect Canadian arms sales. As detailed in Table II, in 1996 Canada shipped military goods both to governments engaged in major human rights violations⁶ and to countries suffering from internal wars, many of which are long-standing conflicts involving thousands of civilian deaths. Canadian military goods worth $100,000 or more were supplied to eight countries at war in 1996, one less than the nine countries in conflict that received equivalent shipment volumes in 1995. Similarly, Canada sold military equipment exceeding $100,000 in value to each of 11 countries suffering from serious government-sanctioned or -perpetrated human rights violations, six of which were also at war. Several other countries plagued by human rights violations or conflict were recipients of Canadian arms worth less than $100,000.

1. Country suffering from one or more internal armed conflicts in 1996 as documented in the Armed Conflicts Report 1997, Project Ploughshares.
2. Major human rights violations by the government in 1996 as reported in the Human Rights Watch World Report 1997.
3. A non-democratic country in 1996 as defined in Dictators or Democracies? 1997, an annual report published by Demilitarization for Democracy, Washington. A democracy is defined in the report as "a country meeting the standards for 'promotes democracy' in the Code of Conduct on Arms Tranfers legislation sponsored by Reps. McKinney and Rohrabacher and Sen. Kerry."
4. Country had not reported to the UN Register of Conventional Arms for 1996 activity by October 17, 1997.

For some time non-governmental organizations (NGOs), including Project Ploughshares, have advocated stronger, standardized controls on the international arms trade. Led by Dr. Oscar Arias, former president of Costa Rica, several Nobel Peace Laureates launched the text of the International Code of Conduct on Arms Transfers in May 1997, calling on arms suppliers to ensure that arms recipients met a number of democratic and human rights standards. Table II also identifies all the larger recipients of Canadian arms in 1996 that fail to meet the most basic democratic standards of the International Code. "Non-democratic" countries are so named either because they have not conducted open, meaningful election campaigns and voting free of intimidation and violence, or because their armed forces are not subject to civilian control. Based on this definition, Canada shipped military goods worth $100,000 or more to 16 non-democratic governments in 1996, six of which were also at war or involved in major human rights violations.

The table additionally lists nations that did not report their major weapons exports and imports of 1996 to the UN Register of Conventional Arms. Along with requirements related to human rights and democracy, the Nobel laureates' International Code of Conduct would require full participation in the UN Register before a country could receive arms transfers. In the Annual Report the Canadian government reiterates its support for the UN Register, noting that the Register is an important step towards regional confidence-building and restraint in arms spending. In its 1995 foreign policy statement, the government stated that it attaches "great importance to the UN Conventional Arms Registry, and [it] will press other UN member states to make use of it."⁷ Yet, in 1996 Canada shipped military goods worth more than $100,000 to each of 11 countries that did not participate in the 1996 UN Register.

Transparency improvements

In a press release issued with the 1996 Annual Report, the Department of Foreign Affairs drew attention to the first-time addition of "descriptions of the actual goods included in the categories reported," noting that transfers were now classified into three categories: weapons, support systems or parts. The new descriptions were in response to "requests from industry, non-governmental organizations and international security experts." These included recommendations for increased arms export transparency that emerged from an industry-NGO consultation on arms export policy co-sponsored by Project Ploughshares in January 1997.

The new categories and goods descriptions are a welcome improvement over earlier reports and there is no doubt their addition advances Canadian arms trade transparency. The separation of weapons systems from support systems, for example, provides new insight into the nature of Canadian military trade, including the volume differences between what may be considered "offensive" and "non-offensive" equipment. However, while the product descriptions are an advance on the categorizations of earlier reports, many remain general terms that preclude analysis of the likely end use of the exported equipment. Without further detail a public assessment of the risk of use of the equipment in human rights violations, for example, remains impossible.

As with earlier editions, the 1996 report contains no data on Canadian military exports to the United States, estimated by the report itself to be at least equal to the arms sales to all other countries combined. Neither does it contain data on export permits issued during 1996. Export permits are a measure of intent to export arms as well as of the government's endorsement of military exports, even if their value generally far exceeds that of final shipments. Export permit data is reported by other governments, notably in the Swedish government's annual report on arms exports.⁸

1 In its latest report, the US Arms Control and Disarmament Agency World Military Expenditures and Arms Tranfers 1996 gives a 1995 global trade figure of $US 32 billion, or about $44 billion Canadian.

2 The Canadian government has not reported the annual volume of Canadian military sales to the US since 1991. The US figures of the table for 1992 through 1996 are estimates, based on partial figures available from the Canadian Commercial Corporation and projections from earlier years.

3 At $464.5 million the 1995 figure of the 1996 annual report is four per cent higher than the $447.3 million reported for 1995 in last year's report. The $17.3 million difference represents shipments that were reported too late to be tallied. These include sales to 11 countries that were not listed in the 1995 report, notably $4,280,000 in shipments to Botswana likely related to the transfer of surplus CF-5 fighter aircraft from the government's own Department of National Defence.

4 See "Disarmament: Cash Crisis Threatens SE-Asian Arms Market" by Thalif Deen, InterPress Service, January 8, 1998.

5 Although military sales to Europe for 1996 were significantly above the 1993 low of $86.5 million, they still are barely a third of the $446.3 million Cold War peak of 1987 (figures adjusted for inflation). Traditionally the largest and most important market for Canadian military goods after the United States, Europe now presents a highly competitive challenge for Canadian military manufacturers.

6 Major human rights violations include extrajudicial killings, disappearances, summary executions, political violence, and routine torture.

7 Canada in the World: Government Statement, Ottawa, 1995, p. 33