Leaving aside the Arrow specifically[1] basically the question is how long can Canada keep up, such that this work provides the sorts of benefits that you are expecting?
Every generation of combat aircraft ends up roughly an order of magnitude more expensive than the one before (Augustine's Law: https://en.wikipedia.org/wiki/Augustine%27s_laws#/media/File...). So, let's say that Canada decides it could afford the Arrow, could it afford a domestic 3rd Generation Fighter (something like the F-4)? Could it afford a domestic Fourth Generation Fighter (F-15/F-16)? Could it afford a domestic Fifth Generation Fighter (F-22/F-35)? Since the cancellation of the Arrow, the UK has not made a single purely domestic air superiority fighter, everything has been transnational. They found affording a domestic 3rd Generation fighters too difficult, so would Canada have been able to do better? Maybe Canada could have gotten some benefit from spin-off technologies, briefly, in the 1950's and into the 1960's, but would it be sustaining if the larger and richer UK couldn't afford it? (Or, as someone else put it to me once, if you want spin off technologies, why not fund those directly, rather than laundering them through mass produced weapons systems?)
[1]: Most 1950's fighters that underperformed were because of the engine troubles, and the Iroquois engine never actually flew outside of a few hours on the tail of a B-47, so it's not guaranteed that it would have worked out in practice. The fighters that didn't underperform due to engine troubles did so because of fire control systems, and after the deserved cancellation of the Astra/Sparrow II program the Arrow was supposed to carry the AIM-4 Falcon missile, which we have ample evidence was very very bad. So as a weapon system, I've only limited confidence that the Arrow would have lived up to its hype.