Calgary ammo manufacturer sees opportunity in NATO defence spending pledge

Calgary-based commercial pistol and rifle ammunition manufacturer FH Munition Inc. wants Ottawa to know it's ready to do business.

With Prime Minister Mark Carney committing to increase defence spending, the company's vice president of business development, Taran Grey, said it's an opportunity to scale up and sell its ammunition to the government.

"Having a 'made in Canada' solution that actually [meets] the priority of Canadian customers is extremely important," he said.

Wednesday, Canada and other NATO leaders signed on to increase defence spending across the alliance to five per cent (up from two per cent) of gross domestic product over the next decade.

Earlier in the week, Prime Minister Mark Carney had said that the five per cent benchmark would cost the federal treasury up to $150 billion per year. 

With 3.5 per cent of GDP going toward direct military spending, the Liberal government would be looking to spend an additional $45 billion to $50 billion on defence.

The company said it has room to increase its capacity by 800 per cent, adding four more production lines to the existing two —one for pistols and the other for rifles.

"It would be fairly effortless to do so because a lot of our processes are automated," said Grey.

He said FH Munitions Inc. would bring on about a dozen more employees to meet the increased demand if they were to successfully land a government contract.

"We're currently underutilized in terms of capacity. We could be producing a lot more," he said. "The sky is the limit." 

A 'made in Canada' solution

FH Munitions Inc. was founded in 2019. Since then, the company's grown, now making millions of rounds for sport shooters and law enforcement agencies across the country. 

Grey said the company hopes to fill orders for the Canadian military but so far hasn't been able to make headwinds, even approaching Canada's current ammunition provider, General Dynamics Ordnance and Tactical Systems – Canada based in Quebec, to no avail.

Canada's own stockpile of military ammunition has been depleted through weapons donations to Ukraine since 2022. Last spring, Ottawa pledged $9.5 billion over 20 years to accelerate ammunition production in the country.

Carney asked if new defence spending will lead to higher taxes or service cuts

2 days ago

Duration 0:44

Announcing their billions of dollars in cumulative commitments following the NATO summit, Prime Minister Mark Carney was asked Wednesday if this would mean a tax hike for Canadians. Carney responded that these spending targets would ‘grow this economy’ while adhering to their commitment to balance the budget within three years.

Eyeing a potential opportunity to capitalize on Canada's new increased spending, the company reached out to their local Member of Parliament for help.

On a tour of the facility, Tomasz Kmiec, the Conservative MP for Calgary Shepard, said he was "wowed" by FH Munition's capacity to expand.

Though he's a member of the Opposition, Kmiec said he'll do what he can to help the Calgary firm become an ammunition supplier for Canada.

"When it comes to 'made in Canada' solutions for armed forces or for law enforcement, there's only one team and it's Team Canada," Kmiec said.

"If we're looking for solutions, Alberta and Calgary is the place to be."

"It would be an increase in employment for one thing, and also establish our centre of excellence here as a base for an anchor company of sorts to actually increase the overall capacity for defence in the region," Grey said.

"We're here and we're open for business."

It's too early to assume a commitment to higher defence spending will trickle down to local manufacturers, or that Canada will actually meet the target, according to Rob Huebert, director for the Centre for Military Security and Strategic Studies at the University of Calgary.

Huebert pointed out that previous federal governments got "nowhere near" defence spending commitments. 

Under former prime minister Justin Trudeau, Canada faced regular criticism from allies for not meeting NATO's target of two per cent of GDP. 

"Given the increasingly dangerous geopolitical environment that we are in … I think that there's an increased urgency, but that doesn't necessarily mean that this government will be different from everybody that went before them."

One factor working in the favour of FH Munitions Inc., according to Huebert, is a prevailing sensitivity toward being over reliant on the U.S. for defence manufacturing.

"If you can in fact do it at home, that is the route to go. That is a rational and logical response to what we see with the American directions that they have taken," he said. 

"One hopes that local manufacturers will in fact be given … a greater piece of the pie, but the record is not entirely encouraging."

Carney has said the move to five per cent of GDP — 3.5 per cent for core military spending and 1.5 per cent for defence-related infrastructure — will take place over the next 10 years.