The G-23 Goblin was based on the Grumman FF-1 two seat naval biplane fighter. In 1937 the Canadian Car and Foundry Company acquired a license to build the Grumman FF-1 aircraft, known as the Goblin, and subsequently manufactured 57 of these aircraft. The majority of these aircraft were exported and although the type had been offered to RCAF, it was not originally considered suitable. The aircraft had been assessed as too slow and obsolete.
The advent of war gradually changed this bleak assessment and the RCAF acquired the final batch of 15 aircraft. In December of 1940, "A" Flight of No. 118 Sqn was equipped with Goblins at Rockcliffe in Ottawa, and subsequently became No. 118 (Fighter) Sqn. Later the unit moved to Dartmouth, Nova Scotia where the Sqn's aircraft for a time constituted the sole fighter force on the east coast. Late in 1941 they were supplemented by more modern P-40 Kittyhawks but they were not completely replaced until May 1942. No. 123 (Army Co-operation) Sqn also flew five Goblins for a brief time but had disposed of them by the end of March 1942.