Avro Canada arose from the ashes of Victory Aircraft, which had built 736 Avro Ansons and 430 Avro Lancasters during the Second World War. Sir Roy Dobson, the Managing Director at Avro, was concerned about the imminent closure of Victory Aircraft and the unemployment it would cause. An agreement was soon reached and Victory Aircraft became part of the Hawker Siddeley Group on 1st December 1945 under the Avro Canada banner.

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The Company was based at Malton and, with the exception of Roy Dobson, it was run entirely by Canadians, with financial backing provided by Hawker Siddeley. Avro Canada designed and built the CF-100 jet fighter, which was used in large numbers by the Royal Canadian Airforce and exported to Belgium. It also produced the C-102 jetliner but the Company didn't receive any orders for the aircraft and only one prototype was built.

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Avro Canada designed and built the Avro Model 1 Avrocar, a strange disc-shaped vehicle used for testing the suitability of a ‘saucer’ type aircraft. It was powered by three small turbojets which drove a central fan to create an air cushion. The Project Office at Avro Chadderton assisted in the design under the code-name Project Y. It was predicted that the vehicle would have a maximum range and speed of 1,000 miles and 300 mph respectively. The programme was taken over and financed by the United States Army of Defence in 1955 but the trials were a complete failure and the project was cancelled in 1961.

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The Company also owned a Gas Turbine Division which later became Orenda Engines. It was responsible for the first jet engine to be designed and built in Canada, which first ran on 17th March 1948.

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Avro Canada is perhaps most famously known for the futuristic CF-105 Avro Arrow turbojet fighter. Powered by two Avro Orenda Iroquois engines, the Arrow made its maiden flight on 25th March 1958 and later exceeded 1,000 mph in level flight. Trials were going extremely well and the RCAF placed an order for 35 aircraft in June 1958. Despite the promise shown, the Canadian government cancelled the project in February 1959 after just five aircraft had been completed.

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The Hawker Siddeley Group had invested much into the Canadian heavy industry and the cancellation of the Arrow had grave consequences  for the Group. The Company was forced to lay off its workforce and Avro Canada was formally dissolved in 1962.