Under an 11-year contract, worth C$200m ($152.7m), the company will provide a C295W aircrew and maintenance training solution.
The contract comes with the option to extend for an additional 15, increasing its value to more than C$300m ($229m).
As part of the FWSAR programme, the RCAF will receive 16 C295W aircraft specifically modified for search and rescue.
CAE Canada vice-president and general manager Joe Armstrong said: "We are honoured to serve as the training systems integrator to lead the overall design and development of a comprehensive C295W training solution for aircrews and maintainers.
"The search-and-rescue mission in Canada is both critical and challenging, and we are proud that we will play a role in helping train and prepare the RCAF for this mission."
Work under the contract will be performed in three phases and is expected to create close to 300 jobs in Canada.
Phase I of the contract involves construction of a new training centre facility at 19 Wing in Comox, British Columbia.
The proposed facility will be equipped with a C295W full-flight simulator (FFS), cockpit procedures trainer (CPT), sensor station simulator used for rear-crew training, operational mission simulator to support networking of the sensor station simulator with FFS or CPT to provide full-crew mission training, eight mission procedures trainers, an aircraft maintenance trainer and cockpit systems part-task trainer.
Additionally, ten classrooms in the centre will feature CAE Simfinity C295W virtual maintenance trainer (VMT) stations.
Delivery of the training centre facility and C295W training suite will be completed in late 2019.
As part of the Phase II of the contract, CAE will conduct a three-year in-service support (ISS) transition period for the C295W aircrew and maintenance training programme.
Following the transition period, Phase III with the 20-year in-service support phase will begin.
During the in-service support phases, CAE will provide a range of training services, including training device upgrades and maintenance, hardware and software engineering, courseware updates, technology insertion and obsolescence management, and other in-service support services.
The company will also provide academic and simulator instructors for aircrew and maintenance training.
Image: An artist rendering of the new C295W training facility. Photo: courtesy of CAE.