Speaking Points

The Honourable Tony Clement, PC, MP
Minister of Industry

Aerospace Industries Association of Canada Annual General Meeting

Ottawa, Ontario
October 14, 2009

Check Against Delivery

Good evening, ladies and gentlemen. It is a pleasure to be here with you this evening on this special occasion.

In 2009, Canada has had a unique opportunity to reflect on flight. This year, we celebrated the 100th anniversary of Canada’s first flight. Just over a week ago, I also marked Canada’s 25th anniversary of our Human Spaceflight Program. And tonight, it is only fitting that we remember the contributions of those Canadians who represent the foundation upon which Canada’s aerospace industry is built.

I would specifically like to recognize the vision and leadership of the champions of the Canadian aerospace industry who are being honoured today: Mr. Laurent Beaudoin, Mr. Barry Marsden, Mr. Richard Neil, Mr. Bob Brown and Mr. Kenneth Rowe. Canada’s enviable place in the global aerospace industry is truly the legacy of a past rich in technological quality and innovation in aviation.

Canada’s aerospace industry is a critical economic engine. It employs more than 83 000 skilled professionals in over 400 firms across the country. And the industry is responsible for generating significant revenues — over $23 billion annually.

We develop cutting-edge technologies that are enabling our aerospace companies to be global players even more so than before. Canada’s well-integrated position in global value chains and its worldwide reputation for innovation are paying dividends.

And yet, like most other sectors of the Canadian economy, the aerospace industry has been affected by the global recession. Many Canadian companies have had to make some difficult business decisions. But, in the end, I remain optimistic that Canadian aerospace will prevail, as our opportunities for growth are enormous.

For our part, I am happy to say that the Canada’s Economic Action Plan affirms its commitment to work with major sectors, such as aerospace, to help put in place the conditions they need to succeed and build on their role as important economic contributors.

Our government is investing heavily in science and technology. As well, we have lowered taxes, extended a 50-per-cent straight-line accelerated capital cost allowance rate on machinery and equipment purchases, harmonized regulations, and helped to create a skilled workforce. We are working to ensure that the Canadian aerospace sector continues to prosper.

It is, after all, a commitment to innovation and competition that will set Canada apart and allow it to maintain its position as one of the top aerospace nations in the world.

Through the Canada First Defence Strategy, we are in the midst of updating our equipment for our Canadian Forces. And I am sure that most of you are aware of the potential benefits that will be generated as a result of these procurements and the application of the Industrial and Regional Benefits (IRB) policy.

IRB are an important element of the Government of Canada’s procurement process, as they leverage major investments in military equipment to encourage long‑term industrial development and significant economic activity in Canada.

Since June 2006, the government has leveraged nearly $4.5 billion in contractual commitments, which come back into our economy in the form of jobs, investments in research and development, and other economic activity.

As just one example, I recently participated in an event where Boeing announced strategic business investments that are a direct result of Canada’s purchase of 15 Chinook helicopters. Our IRB policy will ensure that 100 percent of that $1.156-billion purchase will be reinvested in the Canadian economy.

At that event, I also announced important updates to the IRB policy, changes that will bring the policy in line with current business realities and provide the flexibility for firms to engage Canadian partners on major platforms beyond what their current obligations may require.

To further promote the participation of Canadian firms in global value chains, we will strategically leverage Canada’s defence procurements to access work on global fleets in exchange for work on the assets purchased by Canada.

As well, we will allow prime contractors to bank IRB credits so that new business opportunities are secured when they are more likely to arise in the future.

The government will ask major prime contractors to develop a strategic plan for achieving their IRB obligations in Canada, which we expect will strengthen Canada’s competitive advantage.

Firms will also be provided with a more flexible schedule to develop the strategic and longer-term business deals typical of the aerospace and defence sector.

We are placing more emphasis on innovation, focusing on high-skill, high‑technology areas.

The government is also enhancing its technology list, which focuses IRB investments on high technology sectors, to better reflect niche capabilities in Canada, as well as identify emerging and future government and market needs.

We expect these and other improvements will help drive more investments in our aerospace and defence sector and deliver significantly more opportunities for Canadian companies.

Canada’s IRB policy will be more effective, more flexible and better aligned with the industry’s business realities in the 21st century.

Our recent announcement of an additional $200 million in funding for the Strategic Aerospace and Defence Initiative (SADI) is further proof that your government believes and supports the industry. It is timely and it will allow companies to support future research and development projects during this recession.

SADI will continue to focus on the leverage of private sector investment in research and development, attracting international investment to Canada and developing a highly skilled workforce.

Ladies and gentlemen, our government is creating the conditions for the aerospace industry to compete and thrive in Canada.

In closing, I would like to congratulate Mr. Beaudoin, Mr. Marsden, Mr. Neil, Mr. Brown and Mr. Rowe for their contributions not only to aerospace, but also to Canada. Your ingenuity and innovative spirit are the stuff that will make Canada a leader in this industry and in the global economy.

I would also like to thank Mr. Claude Lajeunesse and the Aerospace Industries Association of Canada for the very good work they did under the Association’s Future Major Platforms (FMP) Initiative. The FMP Report’s recommendations were instrumental in formulating the changes to the IRB policy and in securing funding to support research and development.

I congratulate you on today’s successful event and look forward to continued collaboration with the industry and with the Aerospace Industries Association of Canada.

Good evening.