During the Second World War, Victory Aircraft in Malton, Ontario was Canada's largest aircraft manufacturer. Prior to 1939, as a part of National Steel Car Ltd. of Hamilton, the concern had been one of a number of "shadow factories" set up in Canada to produce British aircraft designs in safety. National Steel Car had turned out Avro Anson trainers, Handley Page Hampden bombers, Hawker Hurricane fighters and Westland Lysander army cooperation aircraft. National Steel Car Corporation of Malton, Ontario was formed in 1938 and renamed Victory Aircraft Limited in 1942 when the Canadian government took over ownership and management of main plant. During the Second World War, Victory Aircraft built Avro (UK) aircraft: 3,197 Anson trainers, 430 Lancaster bombers, six Lancastrian, one Lincoln bomber and one York transport.
In 1944, an Advisory Committee on Aircraft Manufacture was established by the Canadian government, the Canadian Director of Aircraft Production wrote to Minister of Munitions and Supply C.D. Howe in 1944 to express the "utmost importance to Canada" of the establishment of a Canadian aircraft industry, and UK-based Avro also established in 1944 a company searching for post-war opportunities. Bob Leckie of the RCAF was a strong advocate for years for an industry to design and build aircraft in Canada yet the Department of National Defense, according to Avro's Roy Dobson, gave "a cold reception" to doing more than building under licence. Howe, as Minister of Reconstruction and Minister of Munitions and Supply (later Reconstruction and Supply), brokered the deal with the Hawker Siddeley Group to take over the Victory Aircraft plant in 1945 with Frederick T. Smye hired by HSG's Roy Dobson as its first employee.
In 1945, the UK-based Hawker Siddeley Group purchased Victory Aircraft from the Canadian government, creating A.V. Roe Canada Ltd. as the wholly owned Canadian branch of its aircraft manufacturing subsidiary, UK-based A.V. Roe and Company. Avro Canada began operations in the former Victory plant. Avro Aircraft (Canada), their first (and, at the time, only) division, turned to the repair and servicing of a number of Second World War-era aircraft, including Hawker Sea Fury fighters, North American B-25 Mitchell and Avro Lancaster bombers. From the outset, the company invested in research and development and embarked on an ambitious design program with a jet engine and a jet-powered fighter and airliner on the drawing boards.
The new company produced the first Canadian-designed jet fighter, the twin-engined CF-100. Prototype flew in 1950; 639 were built for the RCAF and 53 for the Belgian Air Force. Flew prototype C-102 Jetliner in 1949, but no production order was received. Avro Canada became a member of the Hawker Siddeley Group in 1955, and in 1962 became Hawker Siddeley Canada Ltd. CF-105 Arrow delta twin-jet all-weather fighter prototype flew in 1958. Only five CF-105s were built before the project was cancelled in favour of Bomarc surface-to-air missiles. The Avrocar VTOL aircraft developed under a U.S. Department of Defense contract and flown in 1959 in California. In its prototype form it was a circular flying saucer.
A.V. Roe Canada Ltd. was restructured in 1954 as a holding company with two aviation subsidiaries: Avro Aircraft Ltd. and Orenda Engines Ltd., which began operating under these names on 1 January 1955. Each companies' facilities were each were located across from each other in a complex at the perimeter of Malton Airport. The total labour force of both aviation companies reached 15,000 in 1958.
In 1956, 500,000 shares were issued to the public at a total value of $8 million. By 1958, 48% of the shares of A.V. Roe Canada were publicly traded on the stock exchange. Although controlled and largely owned by UK-based Hawker Siddeley Group, all profits from A.V. Roe Canada Ltd. were retained within the company to fund development and growth. Management of the Canadian companies remained in Canadian hands.
In 1962, the Hawker Siddeley Group formally dissolved A.V. Roe Canada and transferred all A.V. Roe Canada assets to its newly-formed subsidiary Hawker Siddeley Canada. Avro Aircraft was closed.