For Canadian aerospace to remain a global leader, an industrial strategy is required

If you fail to plan, you plan to fail. The global challenges and technological opportunities of the coming decades demand the very best of Canadian aerospace innovation. Facing the climate crisis, meeting net-zero goals, reimagining air and space mobility and safeguarding Canada’s national interests are serious issues that require serious, focused planning. Canada faces a growing array of ambitious, proactive and well-funded competitor countries all vying to be aerospace leaders in the global arena. This was made very clear throughout the comprehensive industry consultations that Aerospace Industries Association of Canada completed over the past six months; consultations to determine what is required to best position Canadian industry for the next 20 to 30 years from both an innovation and environmental sustainability perspective. Canada’s international competitors have gone all-in and we need to do the same. Aerospace is on other countries’ strategic agendas in a big way. The United Kingdom, Germany, the Netherlands, Luxembourg, Ireland, and Australia are already pursuing defined, coordinated industrial strategies for aerospace, defence and space. The United States routinely uses defence procurement to stimulate innovation. If Canada is to compete on this level, strategic action through a sector-specific national Canadian aerospace strategy is needed. A renewed partnership with government through a full scale, cross-departmental aerospace strategy spanning civil aviation, defence and space is an urgent requirement. As an export-intensive industry, aerospace has been hard hit by global events. In 2021, aerospace contributed $24.4-billion to Canada’s GDP, including $12-billion in direct impacts from manufacturing and maintenance, repair and overhaul. That was down 38 per cent from a direct impact of $16.6-billion in 2019, with COVID-19 responsible for much—but not all—of that drop. Overall, the industry lost 35,000 well-paid, highly-skilled jobs during the pandemic. Skilled labour was already in short supply before the pandemic. Getting talent back and fostering new talent is a substantial challenge. The good news is that this industry continues to lead all other manufacturing industries is R&D. There are tremendous opportunities should Canada leverage our strengths and focus efforts through an organized, coordinated approach ensuring alignment across the country when it comes to innovation. The growing importance of continental defence could allow for novel use of strategic defence procurement and collaborative innovation to drive domestic aerospace R&D and exports. Our industry has called upon Canada’s government to increase its defence budget to meet its NATO commitment, go forward with NORAD modernization in coordination with the industry, and expedite procurement initiatives. On green technology and sustainability, there is a global revolution underway with breakthroughs in areas such as sustainable fuels, new propulsion technologies, advanced materials, decarbonization solutions, autonomous vehicles and more. This innovation will drive progress toward achieving net-zero goals while also creating high-quality jobs and strengthening the national economy. As well, space technology, and the global space economy, is growing at an unprecedented rate. Canada must be positioned for the unbelievable opportunities ahead in the trillion-dollar marketplace that is being projected, building on our longstanding history of developing space technologies to secure Canada’s place in the new space era. Capitalizing on these opportunities requires a concerted partnership with government through a road map that ensures industry and government are working in concert to achieve our collective goals. Canadian policies should not do more harm than good. Case in point, the federal imposition of a tax on the manufacture of business aircraft that is having a dramatic, negative impact on Canadian manufacturing and discouraging companies from buying Canadian made products. No other jurisdiction imposes such a tax penalizing their own domestic aerospace industry and our losses will be a gain to our competitor nations. This tax should be repealed. Without focused co-ordination, Canada is at real risk of losing ground that will not be easy to regain, especially given how our country has slipped already. To compete effectively against other aerospace nations, Canada needs focused coordination that capitalizes on our collective strengths and builds up the aerospace innovation ecosystem for the future. The next 30 years will bring more radical and rapid change than current generations have seen in their lifetimes. We must ensure we seize the full potential of what’s to come with a sector specific national aerospace strategy guiding the way—thereby ensuring continued Canadian pride and economic prosperity though our nation’s significant aerospace achievements. Mike Mueller is the president and CEO of Aerospace Industries Association of Canada.

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For Canadian aerospace to remain a global leader, an industrial strategy is required

Canada faces a growing array of ambitious andwell-funded competitor countries all vying to be aerospace leaders in the global arena.

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