Why wasn't Avro Arrow program revived ever?
Since I'm not and was never a member of the Canadian Parliament or Canadian military top brass, this is pure speculation as you are likely to get from practically anyone else on this site with the possible exception of Rhino Driver (who is AFAICT a serving U.S. naval aviator).
My guess is that the Canadians looked to their south, saw one of their nation's staunchest allies who also happened to be one of the two remaining superpowers after World War II, and concluded that they couldn't afford to compete in the Cold War arms race but could definitely afford to profit from our R&amp;D. Canada and the U.S. formed NORAD in 1958 as a joint venture to defend North American airspace, so Canada knew the U.S. had its back. Canada, for its part, spent its defense dollars outfitting defensive SAM and ICBM-intercept fortifications along probable Soviet nuclear bomber routes, effectively forming the northern part of the North American nuclear shield.
As far as not reviving Avro Canada now, the biggest answer is that Canada is so far behind the major powers in domestic aerospace technology that it would essentially have to recruit in the U.S. military-industrial complex anyway. In addition, compared to the USAF, the RCAF is tiny, composed mainly of transports to move the Army around, with just 70-odd CF-18 fighters making up the total fixed-wing combat complement, and a handful of ASW helicopters seeing service at naval stations and on the Canadian Navy's dozen Halifax-class frigates. In short, Canada has no real need for a domestic military aerospace program, as demand is very low and it can get all it wants from its southern neighbor at preferential prices. They're in line, IIRC, for a shipment of F-35s once Lockheed gets the bugs worked out.
EDIT FROM COMMENT: The comment says that Canada could build planes primarily for export. Such an effort would be doomed to fail for three reasons:

The RCAF itself, given its small size and its outstanding relations with the U.S., would be unlikely to buy the planes. When looking for export buyers, your best marketing is the success of your design in your home country's military, so not having your military use the design at all is a big black mark (the F-5 is the only fighter I can think of that managed decent export success despite the U.S. never widely adopting it; even then, the USAF did have some test deployments of F-5 squadrons in Vietnam for the primary purpose of giving Northrop their backing to market the plane for export).
This presents a Catch-22 for financing and R&amp;D efforts; you're unlikely to get the funds to start working on a plane without any acknowledged demand for it, and with the Canadian aerospace industry being dormant for over almost 60 years, you're unlikely to generate demand for an as-yet nonexistent fighter from an unproven design team. So you have to get the money to build the fighter, and you have to build the fighter to get the money.

Again, the Canadian aerospace industry is dormant, and therefore way behind the times. A joint venture with U.S. or European firms to provide a knowledge transfer to home-grown aerospace engineers seems like the only option to develop something new, when those same firms would then have to openly compete with the resulting firm and its designs. A new Canadian aerospace company would be reduced, as I said, to sniping U.S. talent to jump-start design work.

Some countries that formerly imported jets are starting to look toward domestic production, making a primary export strategy that much more unappealing. Pakistan is the foremost example; their political relationship with practically all the major exporting countries is pretty shaky, and designs still in production for export are getting really expensive, so they're designing the J-17 jointly with China to have an inexpensive, capable fighter they can build in-house without relying long-term on imports. The resulting fighter (an interesting combination of design features from the F-16, F-18, and European designs like the Gripen and Rafale), on paper, is about 40 years behind the times, comparable to Gen-4 and 4.5 fighters like the F-15, F-16, MiG-29, Su-27, Typhoon and Rafale. But, the J-17 is projected to have a flyaway cost of only about \$15 milion a plane, which is a bargain compared to the aforementioned export choices, which start at about \$40 mil per plane and go up to \$110 mil.