A conference held in Ottawa last week may give a boost to Israeli exports of arms and military technologies to Canada.

 
Representatives of Israeli defense industries met Canadian Army and defense officials, as well as representatives of scores of Canadian companies.

In contrast to the US, one of the largest customers for Israeli defense industries, Israel's presence in the Canadian defense market is negligible. An increase in Israeli defense exports to Canada would mean the opening of a new market for Israeli military products in North America. Sources said doubts have risen lately about future Israeli arms sales to Turkey and India, due to political differences with the former and the change in government in the latter. Consequently, it is important to find new markets, especially in friendly countries, such as Canada.

The shocks in New Delhi and the difficulties in Ankara are driving Israeli defense companies to review their strategic deployments and to try to focus on markets previously considered secondary. The Ottawa conference was therefore an important milestone in the effort by Israeli defense companies to deepen their penetration of the Canadian military market.

Israel Aircraft Industries, Israel Military Industries, Rafael (Israel Armament Development Company), Elbit Systems (Nasdaq: ESLT; TASE:ESLT) and Elisra Electronic Systems were among the companies at the conference. Canadian participation exceeded expectations. 110 people from 60 companies and the Canadian government, security forces, and military registered. The Israeli companies made presentations and held meetings to study joint business ventures. Embassy of Israel in Washington minister counselor Dr. Joseph Draznin, one of the conference's organizers, told "Globes" that some Israeli companies, including Elbit Systems and Elisra, were active in Canada, and participated in tenders there. He said the conference had prepared the ground for more companies, which previously did not know how work with the Canadian defense establishment, to do business in Canada.

"The Canadian defense market is a different order of magnitude compared with the US, which Israeli companies know much better," Draznin said. The Canadian Army is about to launch a $5 billion procurement program, and Canada's defense establishment is very interested in technology. In addition, Canada recently established a Department of Homeland Security, which will focus on security along Canada's long border with the US.

Embassy of Israel in Ottawa deputy head of mission Ronen Gil-Or said Israeli defense companies did not know the Canadian system well. Israelis were surprised that Canada, whose foreign policy stresses peacekeeping, would demonstrate enthusiasm for commercial relations with Israel's defense industry. Former Prime Minister Jean Chrétien froze procurements by the Canadian Army.

However, a bilateral confidentiality agreement from 2001 that provided a secure framework for national defense discussions and military procurements, changed matters. Canada's new Prime Minister, Paul Martin, overturned his predecessor's defense policy, releasing budgets for military procurements. At the conference, Canadian Assistant Deputy Minister of National Defence (Materiel) Alan Williams said it was his job to ensure that Canadian soldiers had the best possible equipment, and he called on Israeli companies to participate in Canadian government arms procurement tenders.

Published by Globes [online] on May 20, 2004