The big issue would be what could Canada do with civilian orders, because in a military the size of Canada's its just not gonna work to base an industry entirely on military aircraft. Even with the Commonwealth (and assuming the giant screwups that the British defense industry was chocked full of in the 1950s, 60s and 70s) its a massive stretch, and you'll always have the Americans as stiff competition in both the military and civilian fields.
Best bet? Get the long-range airliner going early as the first real business jet, and develop the De Havilland Canada airliners as OTL, as well as the flying boats and the Dash-7 / Dash-8 series. Having created the business jet market Canadair pushes hard on it, while Avro Canada, having built the Arrow, looks at other projects. Canada never buys the Starfighter, and the Canuck is eventually modified for ground-attack and other duties as the Arrows take over their supersonic jobs. The RAF quickly realizes what a load of crap the White Paper is, but not before the EE Lightning bites it as a result, resulting in a fat RAF order for the Arrow. This makes Avro Canada a pile and results in a merger between Avro Canada and Canadair in the mid-1960s. A strong aerospace industry results in political demands for better armed forces developments, and the Canadian armed forces get better gear across the board as a result, with most of it made in Canada.
The big move is the Vickers VC10. Air Canada and Canadian Pacific Air Line, along with Canadair and Orenda engines, get in on its development and as a result the VC10 doesn't come with older RR Conways but rather the newest turbofan from Orenda, the Orenda Haida, which proves to be a substantial fuel efficiency improvement on the RR Conway or anything offered on the Boeing 707, giving the VC-10 a sizable number of orders from Commonwealth countries and all VC-10s made for the North American markets are assembled by Canadair, as well as military patrol plane versions which begin development in the late 1960s. The VC10 proves an excellent plane for Canadian environments and improvements happen through the 1960s as a result of the demands to top the 707 and DC-8.
The big breaks comes in the late 1960s. Canadair and McDonnell Douglas do a deal to pass off construction of the RAF's ordered fleet of Phantoms to Canadair, relieving tension on the company's assembly lines (taxed by the need for USAF, USN and USMC Phantoms during the Vietnam War) and with the hope of the F-4 being bought by Canada. This effort is successful, and all RAF and RCAF Phantoms are built in whole or in part by Canadair, which buys a chunk of McDonnell Douglas as a result, a result helped by the development of the CL-84 Dynavert for the Canadian Army - the Dynavert was soon also bought by several other armed forces due to its capabilities. The second big break comes in 1969, when Orenda bets huge on its future and buys a massive stake in Rolls-Royce, saving it from bankruptcy. The resulting Rolls-Royce Orenda company also pushes for Canadair involvement in the Lockheed L-1011, that also proving vital to Lockheed's survival. Rolls-Royce Orenda proves to be a huge player in the world of aircraft engines thanks to the RB211 series, and Canadian L-1011s are soon also being made by Lockheed, a situation as before followed by orders from British Airways and Qantas, both of whom take delivery of long-ranged L-1011s in the 1970s. The Arrows proves to be tough and reliable and the RCAF's fleet, which by the late 1960s is almost entirely Canadian-made, is a major source of pride to the nation's armed forces, so as a result when the time comes to begin the NFA programs in the late 1970s, Canadian involvement was highly sought after, both for the expertise and investment.
The result is the by-then obsolete Arrow is replaced beginning in 1981 by the F-15 Eagle, a decision heavily influenced by Canadair's investment in McDonnell Douglas. Canuck F-15s are not only made in Canada, they also include a sizable number of avionics improvements (including the ability to carry air-to-ground ordinance) and some aerodynamic improvements, as well as Rolls-Royce Orenda PST.18 Blackfoot turbofan engines, which prove to be an improvement in power on the American Pratt and Whitney F100s though at a small cost in fuel efficiency. The development of the CF-15D in Canadian service as a two-seat strike fighter foresaw the American F-15E Strike Eagle. The Canadian F-4s would be ultimately complemented by the Panavia Tornado, which were license-built by De Havilland Canada and entered CF service in 1985, at first supplementing and then eventually replacing the F-4 in Canadian service, which was retired in 1994. The Arrow's fighter variants were retired in 1986, but recon versions lasted until 1998 in RCAF service. The Tornado proved a great airplane for Canada but was always seen as somewhat underpowered, until RR Orenda got on that job with its improvement of the Turbo-Union engines, upgrades that eventually were also sold to Britain, the Netherlands and Saudi Arabia.
The stress of RCAF orders in the 1980s forced Canadair out of the airliner business, leaving that to De Havilland Canada. The company's problems with development costs however became a non-issue when the company merged with Bombardier Transportation in 1986, and Bombardier absorbed the Dutch Fokker company in the late 1980s and into the 1990s. That move resulted in Bombardier using the Fokker 100 as a base to develop its own short-range 737 competitor, and to nobody's surprise Air Canada, Canadian Airlines and Air Transat were all buyers of the new aircraft, named the Bombardier B Series, which entered service in 2001, while the following C Series would be an all-new aircraft, that aircraft entering service in 2012. Both would also prove highly successful with Western European and Latin American operators.
By 2015, the Canadian airliner business is focused on Canadair, which is a company focused on helicopters, business jets, smaller propeller-driven aircraft, specialized aircraft (water bombers and the like) and military projects, while Bombardier is the world's third largest (behind Boeing and Airbus) maker of airliners, making their aircraft in Canada, the Netherlands and Northern Ireland. Canadair's involvement with the making of the L-1011 lasted to the end its production life in 1985, and their involvement with McDonnell Douglas resulted in them being an owner of a chunk of Boeing after their merger in 1996, as well as Canadair being the second-largest supplier of components to Boeing (after Kawasaki Heavy Industries) and with Canadair providing components to the 777, 747-400/747-8 and 787 Dreamliner projects. The aerospace industry in Canada almost always buys its components and materials from Canadian manufacturers, and its one of Canada's several massive value-added manufacturing sectors - along with automobiles and auto parts, railroad vehicles, consumer electronics, shipbuilding, metals finishing and recycling and petrochemical refining - that provide an estimated 1.2 million direct jobs and as much as 21% of Canada's GDP.
OOC: Perhaps a little optimistic, but not insane.
