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  November 14, 2018 | Local, Aerospace

  Vision 2025: AIAC spearheads initiative aimed at protecting Canadian aerospace

  by Chris Thatcher Whether he looks ahead or behind, Jim Quick can see the squeeze coming. Ahead, countries with well-established aerospace industries are developing long-term strategies to strengthen their positions and capitalize on new technologies. Behind, emerging markets are aggressively pursuing entry into the sector, expanding aircraft production and staking a claim to the lucrative maintenance, repair and overhaul business. “The global aerospace industry is growing and evolving at an unprecedented rate,” said Quick, the president and chief executive officer of the Aerospace Industries Association of Canada (AIAC). “New markets are opening up everywhere. New technologies are disrupting our industry [and] shaping a global landscape.” More and more countries in Asia and Africa can see a potential future in the aerospace sector and are investing, in some cases heavily. “There are emerging economies that feel that having aerospace is a key economic driver critical to their economical and industrial success,” he observed. Canada may be ranked fifth among global aerospace markets, and a leader in aircraft-related productivity and research and development, but it's a position that could quickly wane if industry and government lack a long-term plan to guide investments. Look no further than space, where Canada's investment as a percentage of GDP has slipped noticeably from 8th place in 1992 to 18th today. “We have a strong industrial base. We are some of the greatest R&D contributors globally from an aerospace perspective. All the fundamentals are there and our companies have worked hard to put those fundamentals in place,” said Quick. “We have an opportunity to leverage that competitive advantage to grow and innovate. [But] if we don't do that, I think we are at risk of following behind.” AIAC in October launched Vision 2025: Beyond Our Imagination, an industry-led initiative intended to spark a conversation among industry, government, the public, and other stakeholders that will lead to recommendations to shore up Canada's future in the aerospace sector. The initiative is being led by Jean Charest, a former federal cabinet minister and provincial premier, and currently a partner with McCarthy Tétrault in Montreal. Charest served as premier of Quebec between 2003 and 2012, a period following the downsizing of the 1990s when responsibility for many programs shifted from federal jurisdiction to the provinces. Investment in aerospace was one such area and Charest steered several strategic bets in the sector, including support for Bombardier. “I believe in this industry. I certainly have a pretty good understanding of how important the role of government is in this. Whether it is R&D or procurement, this is an area where governments have a pretty key role to play,” he said. “What I also remember from that experience is that we never lost money. Whether it was through the Export Development Canada or other ventures, the governments of Canada never lost money in the industry,” he added. “It has created thousands of good paying jobs [and] it has been part of the branding of the country. When you look back, it is unusual to have a country of 36 million people for this type of industry. The only way for us to support it is to be able to sell abroad. We are exceptional in that way because we built this industry without having an internal market.” Over the next four months, Charest will be conducting a series of meetings and roundtables across Canada, beginning with the Canadian Aerospace Summit in Ottawa Nov. 13 to 14, to engage industry, government and other stakeholders, including the public, in a discussion about the future of the sector. The roadshow will include stops in Toronto and Montreal in December, and in Vancouver, Winnipeg and Halifax in January. The intent is to gather the key elements industry is looking for and make the case to government about the importance of the sector to the country. Charest has already meet with Navdeep Bains, Minister of Innovation, Science and Economic Development, and said the government will be following the process closely. “I want to get the provincial governments involved. They have a big stake in this,” he added. The roundtables are also an effort to connect Canadians to the legacy of aerospace and secure broader support for more investment. “We want to bring something constructive to the government,” said Charest of the final report, which is expected in late February or early March, in part to coincide with the budget debates and the looming 2019 election campaign. “Hopefully, the government and the political parties will take up some of the ideas that will come from our report.” That not only includes a discussion about the impact of emerging technologies such as artificial intelligence (AI), quantum computing, additive manufacturing, big data and greater analytics, but also assurances from government and educators that the people and skillsets will be there to capitalize. “The employees we have today may not be the employees we have in the future,” said Quick. “The World Economic Forum is telling us that over 40 per cent of the people that work in aerospace may not be working in aerospace in 10 to 12 years' time. And 70 per cent of those in the industry will have a different job in the industry. The disruption of some of the technologies is really going to transform how we are doing business.” Charest suggested the federal government's February announcement of a$950 million investment in five innovation superclusters was “a moment of truth for the industry.” Several aerospace companies, with AIAC support, had banded together to propose a supercluster. “It was a realization that if we really want to take hold of these new technologies, then we have to get better organized and make a stronger case to the government [about] what role they need to play in order for us to take advantage of things like AI,” he said. The aerospace sector last went through a similar exercise in 2012 when David Emerson, a former federal minister of Industry and of International Trade, led a program and policy review of aerospace and space. The aerospace report, titled Beyond the Horizon, painted a picture of a sector at a critical juncture. “If the sector is to continue to thrive and to benefit the country as a whole, all players–companies, academic and research institutions, unions, and governments–must understand and adapt to changing realities. Success depends on developing the technologies of tomorrow and securing sales in a highly competitive global arena,” Emerson wrote at the time. “Private aerospace companies will ultimately drive competitive leadership in the new global economy. But thoughtful, focused, and well-implemented public policies and programs can play a critical role in facilitating this success, by encouraging aerospace innovations involving enormous financial risk and long timelines; improving industry's access to global markets and supply chains; leveraging government procurements to support industrial development; and helping to build a skilled, adaptable workforce.” The space industry report, Reaching Higher: Canada's Interests and Future in Space, was even more stark, arguing that “business as usual will not be good enough.” To foster a competitive Canadian space industry “will require resolve, clear priorities that are set at the highest levels, and effective plans and programs to translate these priorities into practice,” stated Emerson. Both Quick and Charest believe the findings are still relevant and the sector needs a long-term vision. “That is the sense in the industry and it's enhanced by the story of the C Series, which has arrived at the end of its development,” noted Charest. “The engineers, for example, who have worked on that project are going to be looking for work. And if we are not able to give them new projects to work on, they are going to go elsewhere. That speaks to where we are right now in the industry.” “I think we are at a crossroads,” added Quick. “Space is a good example. While our competitors are growing and commercializing their space sector, we're actually falling behind. We have some space companies in Canada that are moving capacity and capability to other countries because they have long-term space programs that have been costed and that have a multi-year vision.” Though the initiative is titled Vision 2025, the intent is to begin acting on the recommendations as soon as possible, said Quick. “2025 is significant only because we feel there's going to be a pivot in our industry from a civil aviation perspective.” The subtitle, Beyond Our Imagination, was added in the hope of encouraging thinking “outside the box,” he said. “Our goal is to ensure ... we have a long-term strategy for the future, and we have policies that help us compete in a very fierce, competitive global environment,” he concluded. https://www.skiesmag.com/news/vision-2025-aiac-spearheads-initiative-aimed-at-protecting-canadian-aerospace

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  December 7, 2018 | Local, Aerospace

  Airbus reports strong progress in generating FWSAR work in Canada

  Airbus reports it is on track to provide Canadian industry with the required level of high-value work associated with the fixed-wing search and rescue (FWSAR) aircraft replacement in-service support (ISS) program. In its first FWSAR Value Proposition ISS annual report to the Government of Canada, submitted earlier this year and covering 2017, the company declared that more than 80 per cent of the ISS work was already being performed by Canadian industry in Canada. That data has now been validated and accepted by Canada. The activity, led by Airbus and its Canadian ISS integration partner AirPro – a joint venture with PAL Aerospace – is rapidly generating work and employment at partners such as CAE and Accenture. AirPro itself has already recruited nearly 20 highly qualified full-time staff to work on FWSAR ISS, and is adding resources in fields such as aeronautical engineering, architecture, construction, information technology and project management. More than 125,000 Canadian labour hours of work were performed by five companies in 2017 and the figure will grow more rapidly as many other companies begin their supply roles further into the program. The AirPro activity in particular will markedly increase as the Airbus CC-295 aircraft enters service and day-to-day ISS activities such as maintenance begin. Simon Jacques, president of Airbus Defence and Space in Canada, said: “We are proud of having made such a successful start to the development and transfer of capability to Canada with all the associated high value work that it brings. Ensuring an active role for AirPro in this set-up phase will ensure that it has a solid preparation for its ISS role in the operational phase. And this new expertise has the potential to be reused in other Canadian programs.” Canada's Industrial and Technological Benefits (ITB) Policy applies to the FWSAR contract and ensures that the total value of the contract is leveraged resulting in high-value jobs in the Canadian economy. The FWSAR program is supporting some $2.5 billion in Industrial and Technological Benefits to Canada, through high-value, long-term partnerships with Canadian industry. “The work done in Canada as part of the fixed-wing search and rescue project demonstrates the tangible benefits of our Industrial and Technological Benefits Policy for Canadian industry,” said the Honourable Navdeep Bains, minister of Innovation, Science and Economic Development. “This project will provide the Canadian Armed Forces with the equipment and services they need to keep Canada safe, and the Industrial and Technological Benefits Policy ensures Canadians have access to middle-class jobs, growing our economy along the way.” https://www.skiesmag.com/press-releases/airbus-reports-strong-progress-in-generating-fwsar-work-in-canada

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  October 1, 2018 | Local, Naval

  Canada and the U.S. reach 11th-hour trade deal

  By Kelsey Johnson After almost 14 months of tough bargaining, Canada and the United States have settled their trade differences and reached an agreement on a new North American free trade agreement. This one won't be called NAFTA, however. The trilateral deal will now be known as the United States-Mexico-Canada Agreement (USMCA). The new name seems to be a nod to U.S. President Donald Trump, who has said he didn't like the name NAFTA. The federal cabinet met at 10 p.m. Sunday for about an hour to discuss the agreement and, after it ended, the prime minister said it was “a good day for Canada” as he left the building. He said he'd have more to say on Monday. Officials from the Prime Minister's Office said there will be another cabinet meeting in the morning and likely a news conference, too. A joint statement was released by Foreign Affairs Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer. “Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA),” it stated. “USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region. It will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.” The two lead negotiators added: “We look forward to further deepening our close economic ties when this new agreement enters into force.” They thanked their Mexican counterpart, Economy Secretary Ildefonso Guajardo, for his work on the deal. On Twitter, Conservative Leader Andrew Scheer said “a good NAFTA deal is critical to Canada's economy.” “Millions of Canadian jobs rely on having free trade with the U.S. and Mexico. We will take a close look at the agreement's provisions as soon as they're available to evaluate the deal Justin Trudeau and the Liberals have signed.” Perrin Beatty, the president and CEO of the Canadian Chamber of Commerce, said that with a deal like this, it's important to see all the elements, but details are still scarce. “However, if the broad lines are as reported, @cafreeland and the Canadian negotiating team have managed to preserve the most important elements of #NAFTA under very challenging circumstances,” he said on Twitter. Canada and the United States have been working hard to resolve their NAFTA differences since the end of August, after American and Mexican officials reached a bilateral agreement of their own. However, the prime minister has said throughout the process that his government would not sign a modernized NAFTA just to get a deal. Issues at the table have included the automotive industry, dairy, dispute resolution, cultural industries and intellectual property. Canada's dairy industry, in particular, has been in American crosshairs for months, with the United States demanding more access to this country's market, as well as changes to parts of Canada's domestic milk-pricing system. The U.S. has wanted access to about 3.5 per cent of Canada's dairy market, which is similar to what Canada granted under the Comprehensive and Progressive Trans Pacific Partnership. There were strong indications this was also part of the deal reached Sunday night. Media reports say farmers will be compensated. The Americans have also asked for changes to several dairy classes. iPolitics has learned that the contentious Class 7 has been eliminated in this deal. Class 7 is a domestic pricing class that governs milk ingredients such as skim milk powder and milk proteins. The difficult politics of the trade deal were immediately on view with Parti Québécois Leader Jean-François Lisée saying on social media that Quebec dairy farms had been sacrificed by Trudeau. Quebec voters will elect a new government on Monday, with all parties saying the new trade deal could not touch Canada's dairy market. The Toronto Star is reporting that Canada has been able to preserve the dispute-resolution mechanism known as Chapter 19. The federal government had wanted to hold onto that to avoid having disputes settled in U.S. courts. Other reports say Canada has been able to maintain its exemption for culture. Ministers had arrived for the cabinet meeting Sunday amid strong indications the end was in sight for a renewed NAFTA. Freeland and Ambassador to the United States David MacNaughton had spent the day in Ottawa, taking part in an aggressive, long-distance, last-minute push to get Canada into a free trade deal. Trudeau arrived at his downtown office, located directly across from Parliament Hill, around 7:30 p.m. He did not comment as he headed into the building, but media reports from the U.S. capital were indicating a deal was near. While most ministers also stayed mum, Agriculture Minister Lawrence MacAulay said he's “always concerned about the agriculture industry.” He was joined in the meeting room by his deputy minister Chris Forbes. With files from the Canadian Press https://ipolitics.ca/2018/09/30/canada-and-the-us-reach-11th-hour-trade-deal/