The State of the Canadian Aerospace Industry

image of Coverpage

PDF version

Features of the State of Canada’s Aerospace Industry 2017 Report

Summary:
This joint Innovation, Science and Economic Development Canada (ISED) and the Aerospace Industries Association of Canada (AIAC) report presents the latest facts and figures on the Canadian aerospace industry including its economic impact, global value chains, and innovation perspective. 

ISED and the AIAC have partnered to provide evidence-based, relevant, quality and timely analysis to both industry and government decision makers

For the State of Canada’s Aerospace Industry 2017 Report:

  • Innovation, Science and Economic Development Canada (ISED) developed detailed economic models, statistics and analysis based on Statistics CanadaFootnote * and global private independent research organizations’ data
  • The Aerospace Industries Association of Canada (AIAC) consulted and validated research findings with its network on business drivers, issues and trends
  • ISED and the AIAC jointly published the latest statistics
Footnote *

Several aspects of the Statistics Canada Annual Survey of Research and Development (R&D) in Canadian Industry have been redesigned in 2016, including concepts, methodology, the collection method and the data processing system. The concepts and definitions employed in the collection and dissemination of R&D data are provided in the Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development (Organisation for Economic Cooperation and Development (OECD), 2015). According to this definition: "R&D comprises creative and systematic work undertaken in order to increase the stock of knowledge—including knowledge of humankind, culture and society—and to devise new applications of available knowledge"

Return to footnote * referrer 

Aerospace industry icon

Aerospace industry ecosystem (2016)

The Canadian aerospace industry ecosystemFootnote * is interlinked with the space and the defence industries

  • The Canadian aerospace industry is broken down into two main activities: manufacturing (70% of GDP), and maintenance, repair & overhaul (MRO, 30% of GDP)Footnote *
  • Beyond space systems manufacturing, the space industry includes satellite operations, value-added applications and space based broadcasting
  • The Canadian aerospace industry includes both civil and defence activities

Figure 1: Canadian aerospace industry ecosystem

the long description is located below the image
Description of Figure 1

Canadian aerospace industry ecosystem

  • The Canadian aerospace industry ecosystem is interlinked with the space and the defence industries
  • The Canadian aerospace industry is broken down into two main activities: manufacturing (70% of GDP), and maintenance, repair & overhaul (MRO, 30% of GDP)
  • Beyond space systems manufacturing, the space industry includes satellite operations, value-added applications and space based broadcasting
  • The Canadian aerospace MRO industry includes both civil and defence activities
Footnote *

2014 GDP ISED economic model estimates are based on data from Statistics Canada, the Canada Revenue Agency, the Canadian Space Agency and enterprise-level observations, 2017

Return to footnote * referrer 

Aerospace industry icon

Economic indicators (2016)

The aerospace industry contributed close to $28 billion in GDPFootnote * and 208,000 jobs to the Canadian economyFootnote ** in 2016

  • The industry generated $27 billion in revenues and employed over 87,000 Canadians in 2016
  • Canadian aerospace industry GDP and jobs remained relatively stable over the past 5 years, contracting slightly in the past 2 yearsFootnote ****

Figure 2

the long description is located below the image
Description of figure 2
Canadian aerospace industry contribution to GDP, 2016
Aerospace industryFootnote *** Suppliers to the aerospace industry Consumer spending by associated employees
$12.9 billion $8.5 billion $6.4 billion
Canadian aerospace industry contribution to employment, 2016
Aerospace industryFootnote *** Suppliers to the aerospace industry Consumer spending by associated employees
87,200 70,600 49,900

Source: ISED’s economic model estimates are based on data from Statistics Canada, the Canada Revenue Agency and enterprise-level observations, National Input-Output Multipliers (2011) adjusted to 2016 GDP (in 2007 chained dollars), 2017

Footnote *

Gross Domestic Product (GDP): total unduplicated value of the goods and services produced in an industry, country or region during a given period

Return to footnote * referrer 

Footnote **

Includes the aerospace industry (direct economic impact from enterprises for which aerospace is the main activity), suppliers to the aerospace industry (indirect economic impact from enterprises for which aerospace is not the main activity), and consumer spending by associated employees (induced economic impact)

Return to footnote ** referrer 

Footnote ***

Enterprises whose main activity is aerospace, see Annex 1 for aerospace industry GDP and employment contributions to the Canadian economy

Return to footnote *** referrer 

Footnote ****

See Annex 3 for a breakdown of aerospace GDP and employment contributions to the Canadian economy by year (2011-2016), 2017

Return to footnote **** referrer 

Aerospace industry icon

Regional activity (2015)

The Canadian aerospace industry is national

  • The majority of aerospace manufacturing activity in 2015 was located in Central Canada
  • Western and Atlantic Canada captured close to 60% of aerospace MRO activities

Figure 3

the long description is located below the image
Description of figure 3
Aerospace employment share by region, 2015
  Aerospace manufacturingFootnote * employment share by region, 2015 Aerospace MROFootnote ** employment share by region, 2015
Quebec 55% 18%
Ontario 25% 24%
Western Canada 15% 44%
Atlantic 5% 14%

Source: ISED’s economic model estimates are based on data from Statistics Canada, the Canada Revenue Agency and enterprise-level observations, 2017

Footnote *

Represents the share of aerospace manufacturing employment by region (2015), 2017

Return to footnote * referrer 

Footnote **

Represents the share of aerospace MRO employment by region (2015), 2017

Return to footnote ** referrer 

Aerospace industry icon

Global value chains (2016)

More than 60% of Canadian aerospace product exports were supply chain related

  • The share of supply chain exports increased by more than 20% over the past 15 years

Figure 4

the long description is located below the image
Description of figure 4
Aerospace exports by product category, 2016
Final products Airplanes, rotorcraft and spacecraft 35%
Simulators 4%
Supply chain components Aerospace components 61%
Aerospace supply chain components by type of product, 2016
Aerospace supply chain components AeroenginesFootnote * 53%
Avionics 16%
Landing gearFootnote * 13%
Other aerospace parts 18%

Source: Global Trade Atlas (2016), 2017

Footnote*

Aeroengines and landing gear include their respective systems and components

Return to footnote * referrer 

Aerospace industry icon

Global rankings (2016)

In a country comparison, Canada rankedFootnote * in the top three in terms of civil airplanes, helicopters, engines and flight simulators

Figure 5

the long description is located below the image
Description of figure 5

Canada ranks:

  • Number 1 in civil flight simulation
  • Number 3 in civil aircraft production
    • Number 2 in business aircraft production
    • Number 3 in regional aircraft production
    • Number 3 in helicopter production
    • Number 4 in general aviationFootnote ** production
    • Number 4 in large jet production
  • Number 3 in Civil engine production
    • Number 1 in turboprop engine production
    • Number 1 in helicopter engine production
    • Number 4 in turbofan engine production

Source: Flight simulation: Frost & Sullivan, Commercial Flight Training and Simulation Market (2016); Aircraft production: average of Forecast International and Teal Group data (2017); Engine production: Forecast International (2017), 2017

Footnote *

Rankings based on final assembly production volume

Return to footnote * referrer 

Footnote **

General Aviation: includes all aircraft not used in either commuter services or airline service (excluding business jets and rotorcraft)

Return to footnote ** referrer 

Aerospace industry icon

Research and development (2016)

Aerospace was the number one R&D player across all Canadian manufacturing industries in 2016

  • R&D performed by aerospace manufacturing totalled $1.64 billion in 2016Footnote ***
  • The aerospace manufacturing industry generated close to 30% of overall Canadian manufacturing R&D and was six times as R&D intensiveFootnote ** as the manufacturing industry average

Figure 6

the long description is located below the image
Description of figure 6
Manufacturing industry R&DFootnote *, % share, 2016
Aerospace manufacturing 29%
All other manufacturing 71%
Manufacturing industry R&D intensityFootnote **, 2016
Aerospace manufacturing 18%
All manufacturing 3%

Source: ISED’s economic model estimates are based on data from Statistics Canada, the Canada Revenue Agency and enterprise-level observations, 2017

Footnote *

Several aspects of the Statistics Canada Annual Survey of Research and Development in Canadian Industry have been redesigned in 2016, including concepts, methodology, the collection method and the data processing system. The concepts and definitions employed in the collection and dissemination of R&D data are provided in the Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development (Organisation for Economic Cooperation and Development (OECD), 2015). According to this definition: "R&D comprises creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge"

Return to footnote * referrer 

Footnote **

R&D intensity: R&D/GDP

Return to footnote ** referrer 

Footnote ***

See Annex 2 for a detailed breakdown of Canadian aerospace manufacturing R&D figures

Return to footnote *** referrer 

innovation icon

Innovation practices (2014)

Innovation practices in the Canadian aerospace manufacturing industry

ISED analyzed innovation practice data for the 2012-2014 period which were released in 2016 by Statistics CanadaFootnote *

Aerospace industry icon

Innovation

Four types of business innovationFootnote **: product, process, organizational, and marketing innovation

Aerospace industry icon
Aerospace industry icon

Adoption

Adoption of advanced manufacturing and supply chain management innovation

Aerospace industry icon

Collaboration

Collaboration practices for innovation with industry, academia and government research institutions

Aerospace industry icon

Skills

Skills development practices for the adoption of advanced technologies

Footnote *

Statistics Canada Survey of Advanced Technology (2014), 2016

Return to footnote * referrer 

Footnote **

Four types of business innovation practices based on the Organisation for Economic Co-operation and Development (OECD) Oslo Manual Guidelines for Collecting and Interpreting Innovation Data: product innovation, process innovation, organizational innovation and marketing innovation

Return to footnote ** referrer 

innovation iconAerospace manufacturers outpaced the manufacturing average in the use of all typesFootnote * of innovation practices

  • Process innovation was more prevalent than product innovation among Canadian aerospace manufacturers

Figure 7

Business innovation practices
Share of enterprises engaged (%) | 2012-2014

the long description is located below the image
Description of figure 7
Business innovation practices, share of enterprises engaged (%), 2012-2014
Product innovation Process innovation Organizational innovation Marketing innovation
Product development Quality management Manufacturing and control management Collaboration Marketing and others
All manufacturing 24% 52% 49% 24% 32%
Aerospace manufacturing 50% 90% 70% 50% 57%

Source: Statistics Canada Survey of Advanced Technology (2014), 2016

Footnote *

Four types of business innovation practices based on the Organisation for Economic Co-operation and Development (OECD) Oslo Manual Guidelines for Collecting and Interpreting Innovation Data: product innovation, process innovation, organizational innovation and marketing innovation

Return to footnote * referrer 

innovation iconTwo times more aerospace manufacturers developed new technologies than the manufacturing average

  • 50% more aerospace manufacturers also customized/modified existing technologies compared to the Canadian manufacturing average

Figure 8

Method of acquisition or integration of advanced technologies
Share of enterprises engaged (%) | 2012-2014

the long description is located below the image
Description of figure 8
Method of acquisition or integration of advanced technologies, share of enterprises engaged (%), 2012-2014
  Develop new advanced technologies Customize/modify existing technologies
All manufacturing 15% 22%
Aerospace manufacturing 29% 32%

Source: Source: Statistics Canada Survey of Advanced Technology (2014), 2016

adapt iconAerospace manufacturers surpassed the manufacturing average in advanced manufacturing technologies

  • Nearly twice the share of smallFootnote **** Canadian aerospace manufacturers adopted computer-integrated manufacturing compared to other small manufacturers

Figure 9

Adoption of advanced manufacturing technologies
Share of enterprises engaged (%) | 2012-2014

the long description is located below the image
Description of figure 9
Business innovation practices
Share of enterprises engaged (%) | 2012-2014
  Supply chain collaboration and visibility applicationsFootnote * Flexible manufacturing systemsFootnote ** Computer-integrated manufacturingFootnote ***
All manufacturing 9% 15% 7%
Aerospace manufacturing 29% 24% 15%

Source: Statistics Canada Survey of Advanced Technology (2014), 2016

Footnote *

Supply chain collaboration and visibility systems refer to the ability to track parts, components or products in transit from the manufacturer to their final destination. The goal is to improve and strengthen the supply chain by making data readily available to all stakeholders, including the customer

Return to footnote * referrer 

Footnote **

Flexible Manufacturing Systems (FMS) refers to single or multiple machines with fully integrated materials handling capabilities controlled by computers or programmable controllers; capable of single or multiple-path acceptance of raw material and single or multiple-path delivery of the finished product

Return to footnote ** referrer 

Footnote ***

Computer-integrated manufacturing (CIM) refers to completely automated production, in which a central computer controls and integrates all manufacturing processes

Return to footnote *** referrer 

Footnote ****

Enterprise size definitions: small enterprises (10-99 employees); medium enterprises (100-249 employees); large enterprises (more than 249 employees)

Return to footnote **** referrer 

collaboration iconAerospace manufacturers collaborated significantly more than the Canadian manufacturing average

  • SmallFootnote * Canadian aerospace manufacturers collaborated three times more with academia and four times more with Government research organizations compared to other small Canadian manufacturing enterprises

Figure 10

Collaboration practices
Share of enterprises engaged (%) | 2012-2014

the long description is located below the image
Description of figure 10
Collaboration practices, share of enterprises engaged (%), 2012-2014
  With other companies With universities, technical institutes or colleges With government research organizations
All manufacturing 18% 8% 6%
Aerospace manufacturing 35% 25% 23%

Source: Statistics Canada Survey of Advanced Technology (2014), 2016

Footnote *

Enterprise size definitions: small enterprises (10-99 employees); medium enterprises (100-249 employees); large enterprises (more than 249 employees)

Return to footnote * referrer 

innovation iconSignificantly more aerospace manufacturers increased their employment of skilled workers to introduce innovation than the manufacturing average

  • All sizesFootnote * of aerospace manufacturers outperformed their Canadian manufacturing industry counterparts in terms of increasing their employment of skilled workers to introduce innovation

Figure 11

Recruitment of employees for the adoption of advanced technologies
Share of enterprises engaged (%) | 2012-2014

the long description is located below the image
Description of figure 11
Recruitment of employees for the adoption of advanced technologies
Share of enterprises engaged (%), 2012-2014
  Large enterprises Medium enterprises Small enterprises
All manufacturing 34% 30% 21%
Aerospace manufacturing 52% 46% 26%

Source: Statistics Canada Survey of Advanced Technology (2014), 2016

Footnote *

Enterprise size definitions: small enterprises (10-99 employees); medium enterprises (100-249 employees); large enterprises (more than 249 employees)

Return to footnote * referrer 

Aerospace industry icon

Key findings

  • The Canadian aerospace industry contributed close to $28 billion in GDP and 208,000 jobs to the Canadian economy
  • Canadian aerospace manufacturing supply chain exports have grown faster than final products
  • Canada maintained its global leadership position in civil airplanes, helicopters, engines and flight simulators
  • Canadian aerospace manufacturing demonstrated innovation leadership by:
    • Being the number one manufacturing R&D player
    • Outpacing the manufacturing average in terms of use of all four types of innovation practices: product, process, organizational, and marketing innovation
    • Collaborating significantly more with industry, academia and government than the Canadian manufacturing industry average
    • Increasing its employment of skilled workers significantly more than the manufacturing average to introduce innovation
Aerospace industry icon

Annex

Annexes

  • Annex 1 – Economic impact indicators, 2016
  • Annex 2 – Industrial indicators, 2016
  • Annex 3 – Industrial indicators, 2011-2016

Annex 1—Economic impact indicators, 2016
Canadian aerospace industry economic and employment impactsFootnote *

Impact on Canadian GDP ($ millions) 
Industry  
Type of impact Aerospace industry Suppliers to aerospace industry Consumer spending by associated employees TotalFootnote **
Aerospace manufacturing 8,995 5,222 4,216 18,433
Aerospace MRO 3,897 3,269 2,134 9,300
Aerospace total 12,892 8,491 6,350 27,733

 

Impact on Canadian employment (jobs)
Industry  
Type of impact Aerospace industry Suppliers to aerospace industry Consumer spending by associated employees TotalFootnote **
Aerospace manufacturing 55,724 41,694 32,971 130,389
Aerospace MRO 31,448 28,895 16,912 77,255
Aerospace total 87,172 70,589 49,883

207,644

Source: ISED’s economic model estimates based on data from the Statistics Canada Business Registry and CANSIM, the Canada Revenue Agency, and enterprise-level observations, 2017

Footnote *

National Input-Output Multipliers (2011) adjusted to 2016 GDP (in 2007 chained dollars) and employment. Revenues and R&D are in current annual dollars

Return to footnote * referrer 

Footnote **

Includes the aerospace industry (direct economic impact from enterprises for which aerospace is the main activity), suppliers to the aerospace industry (indirect economic impact from enterprises for which aerospace is not the main activity), and consumer spending by associated employees (induced economic impact)

Return to footnote ** referrer 

Annex 2—Industrial indicators, 2016

Canadian aerospace industry economic indicatorsFootnote *
Metric Aerospace manufacturing  Aerospace MRO Aerospace total
GDP ($ millions) 8,995 3,897 12,892
Employment (Jobs) 55,724 31,448 87,172
Revenues ($ millions) 19,509 7,696 27,205
R&DFootnote ** ($ millions) 1,640 40 1,680
ExportsFootnote *** ($ millions) 15,755 N/A N/A

Source: ISED’s economic model estimates are based on data from the Statistics Canada Business Registry and CANSIM, the Canada Revenue Agency, and enterprise-level observations, 2017

Footnote *

National Input-Output Multipliers (2011) adjusted to 2016 GDP (in 2007 chained dollars) and employment. Revenues and R&D are in current annual dollars

Return to footnote * referrer 

Footnote **

Several aspects of the Statistics Canada Annual Survey of Research and Development in Canadian Industry have been redesigned in 2016, including concepts, methodology, the collection method and the data processing system. The concepts and definitions employed in the collection and dissemination of R&D data are provided in the Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development (Organisation for Economic Cooperation and Development (OECD), 2015). According to this definition: "R&D comprises creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge"

Return to footnote ** referrer 

Export figures are sourced from Global Trade Atlas (2016), 2017

Return to footnote *** referrer 

Annex 3—Industrial indicators, 2011-2016

Canadian aerospace industry economic indicatorsFootnote *
  Industry activity 2011 2012 2013 2014 2015 2016 % change from 2011 to 2016
GDP
($ millions)
Aerospace manufacturing  8,712 9,082 9,616 10,147 9,613 8,995 3.3%
Aerospace MRO 3,211 3,291 3,347 3,520 3,769 3,897 21.4%
Aerospace total 11,923 12,373 12,963 13,667 13,382 12,892 8.1%
Aerospace contribution to Canadian economyFootnote ** 25,516 26,467 27,695 29,195 28,457 27,733 8.7%
Employment (Jobs) Aerospace manufacturing  54,067 56,649 58,078 60,140 57,647 55,724 3.1%
Aerospace MRO 27,049 28,541 28,695 30,242 31,314 31,448 16.3%
Aerospace total 81,116 85,190 86,773 90,382 88,961 87,172 7.5%
Aerospace contribution to Canadian economyFootnote ** 192,962 202,668 206,391 215,015 211,814 207,644 7.6%
Revenues
($ millions)
Aerospace manufacturing  16,147 15,860 17,397 19,959 21,588 19,509 20.8%
Aerospace MRO 6,620 6,985 7,022 7,401 7,663 7,696 16.3%
Aerospace total 22,767 22,845 24,419 27,360 29,251 27,205 19.5%
R&DFootnote ***
($ millions)
Aerospace total 1,662 1,837 1,990 2,050 1,845 1,680 1.1%

Source:ISED’s economic model estimates are based on data from the Statistics Canada Business Registry and CANSIM, the Canada Revenue Agency, and enterprise-level observations, 2017

Footnote *

National Input-Output Multipliers (2011) adjusted to 2016 GDP (in 2007 chained dollars) and employment. Revenues and R&D are in current annual dollars

Return to footnote * referrer 

Footnote **

Includes aerospace industry (direct economic impact from enterprises for which aerospace is the main activity), suppliers to the aerospace industry (indirect economic impact from enterprises for which aerospace is not the main activity), and consumer spending by associated employees (induced economic impact)

Return to footnote ** referrer 

Footnote **

Includes aerospace industry (direct economic impact from enterprises for which aerospace is the main activity), suppliers to the aerospace industry (indirect economic impact from enterprises for which aerospace is not the main activity), and consumer spending by associated employees (induced economic impact)

Return to footnote *** referrer 

Date modified: