The business of war: Canada has a sizeable arms industry that is joined at the hip to the huge military production system in the United States.

The Avro Arrow (pictured below) was a marvel of Canadian engineering. The military interceptor aircraft first flew in 1958. Faster and more advanced than any warplane flying or under design at the time, the Avro Arrow was years ahead of its time.

Slightly less than one year after its first test flight the Avro Arrow program was cancelled. The Progressive Conservative government of Prime Minister John Diefenbaker decided that Canada could not afford to build such sophisticated weapons from scratch. In future, Canada's arms makers would function as suppliers of parts to the huge American manufacturers to the south.

In 1963, the Defence Development Sharing Arrangement was signed with the United States. This agreement has promoted joint funding of research and development projects involving Canadian companies in the initial stages of weapon development.

An earlier accord that is still in effect is the Defence Production Sharing Arrangement, which was signed in 1956. This has allowed Canadian firms to compete on a more equal footing with their American counterparts in the U.S. market. Also, it has led to greater standardization in the design and production of military equipment.

These arrangements have helped Canada become a significant force in the defence industry. Canada only has one company (Canadian Aviation Electronics Ltd.) among the world's 100 biggest arms manufacturers. However, our largest trading partner, the United States, has 53 corporations on that list. Some of those U.S. companies--Raytheon, General Motors Defence, Bell Helicopter Textron--have Canadian operations.

Cross-border trade in weapons and weapons technology makes Canada the world's 13th largest arms manufacturing country. What all this adds up to is that the Canadian arms industry is closely tied to the American arms industry.

The Ottawa region is the hub of Canada's military-industrial complex. The obvious reason for that is that's where the big cheques get signed. The region is also home to hundreds of thriving high-tech, military industries. (According to Project Ploughshares' Canadian Military Industry Data Base, there are 1,000 companies in the Ottawa region that are known to have received military contracts.) There are two universities where sophisticated weapons research can be carried out. Attracted to the centre of activity are private consultants and military industry associations that support and promote the interests of this sector.

Some military companies with factories elsewhere in Canada have set up offices in Ottawa. That's so they can be close to the politicians and bureaucracy who make decisions about military research and development, production, and export.

The National Research Council (NRC) does military research on contract. The history of Canadian defence research can be traced back to World War I. During that conflict, Canadian scientists helped reduce the danger from submarines and sea-mines in the Atlantic Ocean. Twenty years later, during World War II, Canada's effort was more substantial, with the National Research Council and Canadian universities turning over large parts of their research effort to defence problems. By the end of the war, Canada had a high level of skill in defence research and development.

The Defence Research Board was set up in 1947 to keep the defence research ball rolling. The board, which has undergone a few name changes, has pretty much managed defence research since then through the NRC and through Canadian universities. Today, it's called Defence R&D Canada and it has 1,500 employees and an annual budget of $300 million.

After a few years of so-so sales, business has picked up for arms makers. The "War on Terrorism" has pushed the production lines in armaments factories into high gear.

The Stockholm International Peace Research Institute in Sweden keeps track of the numbers. In its most recent annual report (2005) the institute says: "The combined arms sales of the top 100 companies in 2003 were $236 billion [U.S.]. The top five companies accounted for 44 percent of this total. The top 100 companies increased their combined arms sales in 2003 by 25 percent."

As well as enjoying booming sales, arms manufacturers get a great deal of help from their governments. The World Trade Organization (WTO) sets the rules for international trade and can force countries to change laws that it determines block the open exchange of goods. The WTO has struck down the laws of countries aimed at protecting the environment, setting health standards, and financially supporting the arts where it decides such laws interfere with free trade. However, it has a hands-off policy to challenges on activities designated by states as essential for national security. Through this loophole the WTO allows government subsidies for military research and arms exports. This has helped wealthy countries use military spending to subsidize corporations.

Here's how it worked in the case of Bombardier Aerospace of Montreal. In 1999, a WTO dispute panel Med against Canada and its Technology Partnerships Canada program. This was a scheme that gave subsidies to defence and aerospace companies. Bombardier used the program to help build and export passenger aircraft. The WTO said you can't do that and struck the subsidy down.

So, Canada tweaked the program and placed it under the control of the Department of National Defence. It became a $30 million annual subsidy program for the development of new weapons. This new program can't be challenged at the WTO because it falls within the national security exception. So, it can be used to fund Bombardier's military production.

One problem with this is that it can lead to a militarization of the economy. Instead of focussing on passenger jet development, Bombardier might be tempted to turn to military production so it can scoop up some big government grants.

SUGGESTED ACTIVITIES:

1. Suggest reasons why defence industries receive so much favourable attention from governments.

2. Screen the movie Why We Fight as a prelude to a discussion about the pros and cons of military research and spending.

Websites

Canadian Association of Defence and Security Industries--htrp://www.cdia.ca/public/ index.asp

Project Ploughshares--http://www.ploughshares.ca/

Stockholm International Peace Research Institute--http://www.sipri.org/

FACT FILE

According to Science for Peace, "There are now 27,000 nuclear weapons in the world, of which 4,400 are capable of being used in under 30 minutes."

FACT FILE

Currently, the holder of the highest value defence contract in Canada is Kelowna Flightcraft Limited which is signed up to provide pilot training at Southport near Portage la Prairie, Manitoba, for $80 million a year until 2027 for a total value of $1.8 billion.

FACT FILE

According to the federal government, Canadian defence suppliers employ over 20,000 people and produce about $6 billion dollars of advanced products and services for domestic and more than 60 international customers."

RELATED ARTICLE: The iron triangle.

Dwight D. Eisenhower gave the American people a warning in 1961. In his farewell speech after eight years as the country's president, Mr. Eisenhower spoke about what he called the "military-industrial complex." He feared the growth of the combined power of an "immense military establishment and a large arms industry ...

"The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes."

In an early draft of his speech he referred to the "military-industrial-congressional complex," He removed the reference to elected politicians because, it is said, he didn't want to offend them during a ceremonial event.

The close ties among defence contractors (industry), the Pentagon (military), and the United States Congress (government) is sometimes referred to as the iron triangle. The people who hold the purse strings (the elected officials in Congress) find it tough to resist the sales pitches from the arms manufacturers. Their political donations help fund election campaigns. In addition, a company can easily move weapons production out of a congressman's district if it doesn't like the way he or she votes on defence contracts.

If he was still alive, President Eisenhower would probably ask: "Why didn't they listen to me?" The World Policy Institute did. Just before the U.S. invasion of Iraq in March 2003, the institute published an article in its Multinational Monitor magazine outlining the current state of the "military-industrial complex."

It pointed out that the aggressive foreign policy and defence agendas of U.S. President George W. Bush had been written before he came to power. Most of the plans came out of conservative think tanks that were funded by large corporations. It cited the Center for Security Policy, the National Institute for Public Policy, and the Project for a New American Century.

"(People) formerly affiliated with these think tanks, along with the 32 major administration appointees who are former executives with, consultants for, or significant shareholders of top defence contractors, are driving U.S. foreign and military policy.

"The arms lobby is exerting more influence over policymaking than at any time since President Dwight D. Eisenhower first warned of the dangers of the military-industrial complex over 40 years ago."

According to the World Policy Institute, the goal of these high-level government people has been to increase defence spending to benefit the companies they used to work for, It seems they have been spectacularly successful.

When George W. Bush came into office, U.S. defence spending stood at $329 billion. President Bush has requested funding for 2007 of $463 billion.

The 2005 documentary Why We Fight examines the issue of the growth of the military-industrial complex. In the movie, U.S. Senator John McCain says that President Eisenhower's "words have unfortunately come true. He was worried that priorities are set by what benefits corporations as opposed to what benefits the country."

RELATED ARTICLE: Hauling sailboat fuel.

According to the Knight-Ridder newspaper chain, truckers have been driving around Iraq in empty vehicles to run up mileage to be charged to the U.S. Defence Department. The truck drivers call this activity hauling sailboat fuel, or fence-post holes. The story involves trucks owned by the Halliburton Corporation, one of the biggest private contractors involved in the reconstruction of Iraq. The company was paid $3.9 billion by the U.S.-armed forces in 2003, an increase of 680 percent over 2002. Before he became Vice President of the United States, Dick Cheney was Chief Executive Officer of Halliburton. The company has been accused of overcharging for fuel and meals, supplying tainted water to soldiers, and a host of other shenanigans.

There's nothing new about war profiteering boondoggles. Where there's war, there are war profiteers. We can go back to World War I (1914-18) to find some Canadian examples. A lot of people close to Colonel Sam Hughes became rich quite quickly in the early stages of that conflict. Col. Hughes was the Minister of the Militia for Canada between 1914 and 1916. He was also head of the Imperial Munitions Board of Canada, created to coordinate purchasing contracts for war goods and services. The Colonel decided that the first Canadian troops to arrive in Europe would be totally equipped by Canada. They were to be a kind of trade show for Canada's war industries. Unfortunately, the soldiers' Canadian boots rotted in the mud of the trenches, their Canadian uniforms fell apart at the seams, and their Canadian rifles jammed under battle conditions.

Nobody knows how many young Canadian men died frantically trying to un-jam their useless Ross Rifles in the face of an enemy attack. Canon Frederick Scott was a Canadian army military chaplain in the war. He wrote that "The Ross Rifle is the greatest crime ever perpetrated against the soldier boys and their loved ones. The blood of Canadians wasn't worth the filthy gold that somebody made out of it."

RELATED ARTICLE: Cutting edge.

Time was when a soldier going to war headed down to the village blacksmith to have a sharper edge put on his axe. With that done he was ready for battle. Things have become a little more sophisticated--and expensive.

Here are a few of the technologies arms manufacturers are working on today:

Acoustic bullets. High-power, very low-frequency waves emitted from a large antenna dish cause everything from discomfort to blunt-object trauma and death.

Brain-machine interface. Duke University scientists have developed a system that allows a monkey to move a robotic arm 1,000 kilometres distant just by thinking about it. The plan is to use implants in human brains that will allow people to control unmanned gunships or robotic tanks on battlefields on the other side of the world.

Holograms. The images of massed soldiers could be projected to convince an enemy he's up against much larger forces or that there are soldiers where there are none.

Tungsten bolts. Carried into space in unmanned craft, these metal projectiles could be dropped on small targets anywhere with devastating impact.

Robotic soldiers. The U.S. army demonstrated these in 2005. They run on tank-style tracks, have night-vision capability, and can fire up to 300 rounds of ammunition in a single burst. The first dozen are about to be deployed in Iraq.

Visual stealth. The British Defence Ministry has revealed details of a program it calls Chameleon aimed at making aircraft invisible to the human eye. By using bright panels of light, the aircraft virtually disappears against a blue sky.

Infrasound. Long wave-length sound beamed at an enemy causes vomiting, loss of bowel control, disorientation, and internal-organ damage.

Micro-fusion. The U.S. is trying to develop miniature nuclear warheads using nanotechnology.

Metal storm. A new technology has produced a gun with no moving parts that uses an electrical impulse firing system to deliver 1.6 million rounds a minute.

Turtle troops. A Russian scientist claims to have created a technology that allows turtles to be directed by remote control. Alexei Burikov at Rostov-on-Don University says that small vibrators fitted to a turtle's shell can be activated to direct the animal to a target to place a bomb or plant a listening device.

Biodegrading microbes. Tiny organisms are being developed that can, for example, turn tanks of stored aviation fuel into useless jelly, or dissolve materials such as concrete bunkers.

Virtual reality. Hollywood movie makers are being enlisted to create digitally faked video clips. A virtual national leader might appear on television screens and call on soldiers to lay down their arms and surrender.

Antimatter. Every type of subatomic particle has its antimatter counterpart. But, when matter and antimatter collide, they destroy each other in an immense burst of energy. The U.S. Air Force is funding research to find military applications for this action.