I think you're misunderstanding what thegazelle is saying, in the post you quote he says that he thinks $1200 would be a reasonable price, which I would have a hard time disagreeing with looking at the other offerings here. He's not complaining about the price but simply stating that in the case of most products it is often cheaper to buy domestically compared to an import from another 1st world country. For reference in the US market, a 16" FX-9 rifle is $799 USD (MSRP, likely sells for less at USA dealers) which converts to just over $1000 CAD at current rates. However the 18.6" non-restricted variant we have in Canada is significantly more due to the arbitrary nature of our firearms regulations regarding barrel length and classification status. While I am not involved in the manufacturing industry I am aware of the rising costs across the entire supply chain having a significant effect on costs, however I find it hard to attribute the costs we pay for domestic firearms here entirely to material and labor costs as those are not unique to Canada but rather any 1st world country offering a fair wage to workers.
Rather I believe that our small market leads to a lack of competition and prevents the utilization of the "economies of scale" principle. While I'm sure our domestic manufacturers are trying to bring a quality product to us they don't have a lot of domestic competition, meaning there is not much incentive to vastly improve existing products or offer a lower price. Instead of having to directly compete with other Canadian manufacturers they simply have to compete with the imported firearms distributed by companies such as North Sylvia, Korth Group, MD Charlton etc. who often have exclusive rights to a particular manufacturer's products. This is the situation in many countries without strong domestic firearms manufacturing. I believe that if we had a more firearm-friendly attitude similar to the USA the costs of all domestic firearms would be significantly lower, as the competition would be much fiercer for market share. You can see an example of this in the US market with the AR-15 and budget hunting rifles, manufacturers are constantly trying to offer the best value proposition in a certain budget range, without this competition prices would likely remain higher.
So while intuition would dictate we should get a slashed price for domestically produced guns we don't because they only need to position themselves relative to the imported competition, such as the FX-9, Ruger PC Carbine and JR Carbine.
TLDR; I don't think material costs are really that great of a factor in the prices we see here, rather there is a much smaller market that has has very little competition between domestic manufacturers. The only example I can say off the top of my head is the WS-MCR and WK-180c and in that case the costs of both has increased over time due to market demand being so strong since the OIC.
