State of the Canadian Aerospace Industry 2018

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Features of the State of Canada’s Aerospace Industry 2018 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 2018 Report:

  • Innovation, Science and Economic Development Canada (ISED) developed detailed economic models, statistics and analysisFootnote * based on Statistics Canada and global private independent research organizations’ data
  • Analysis reflected the latest Statistics Canada revisions of economic impact multipliers for the 2012-2017 period, including the measurement of jobs and GDP impact from the Canadian aerospace industry, its value chain, and associated consumer spending
  • 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 **

See Annex A1 and A2 for aerospace industry definitions and economic impact methodology principles, respectively

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Aerospace industry icon  Aerospace industry ecosystem

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

  • Canadian aerospace industry salesFootnote ** were made up of:
    • commercial aerospace (86%)
    • defence aerospace (12%)
    • space systems (2%)
  • The space systems manufacturing industryFootnote *** in Canada was highly skills focused and civil oriented
  • Among overall defence activitiesFootnote **, aerospace captured more than 30% of sales and close to 50% of research and development (R&D)

Figure 1: Share of GDP by Canadian aerospace industry segment, 2017

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Share of GDP by Canadian aerospace industry segment 2017
Aerospace manufacturingFootnote * 68%
Aerospace MROFootnote * 32%
Footnote *

See Annex A1 and A2 for aerospace industry definitions and methodology principles, respectively. MRO is maintenance, repair, and overhaul

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Footnote **

Based on the latest (2016) available information

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Footnote ***

Beyond space systems manufacturing, space activities include applications such as satellite operations, value-added applications, and space-based broadcasting

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Source: ISED’s economic model estimates based on latest revised data from Statistics Canada, the Canada Revenue Agency, the Canadian Space Agency and enterprise-level observations, 2018; Canadian Defence, Aerospace and Marine Industries Survey (2016), 2018

Aerospace industry iconEconomic indicators

The aerospace industry contributed close to $25 billion in GDP and almost 190,000 jobs to the Canadian economyFootnote * in 2017

  • Positive 5-year growth in its GDP (+6%) and jobs (+2%) contribution to the Canadian economy, despite a slight decline in both between 2016 and 2017
  • Revenues of close to $29 billion with direct employment of 85,600 Canadians
  • Close to 75% of aerospace manufactured products were exported in 2017

Figure 2: Contribution to GDP and employment, 2017

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Canadian aerospace industry contribution to GDP, 2017
Aerospace industryFootnote ** Canadian suppliers to the aerospace industry Consumer spending by associated employees
$12.9 billion $6.8 billion $5.1 billion
Canadian aerospace industry contribution to employment, 2017
Aerospace industryFootnote ** Canadian suppliers to the aerospace industry Consumer spending by associated employees
85,600 58,400 44,500
Footnote *

Gross Domestic Product (GDP) is the total unduplicated value of the goods and services produced in an industry, country or region during a given period. Jobs refer to full-time equivalent employees. Economic impact indicators include 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). See Annex B1 and B3 for detailed aerospace industry GDP and employment contributions to the Canadian economy by year (2012-2017)

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Footnote **

Direct economic impact from enterprises for which aerospace is the main activity

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Source: ISED's economic model estimates based on latest revised data from Statistics Canada National Input-Output Multipliers (2014) adjusted to 2017 GDP and jobs (in 2007 chained dollars), 2018

The Canadian aerospace industry is national

  • Most aerospace manufacturing activity takes place in Central Canada

  • Western and Atlantic Canada captured close to 60% of MRO activities

  • MRO activity grew by over 25% while manufacturing activity saw a slight contraction between 2012 and 2017Footnote *

Figure 3: Aerospace employment share by region, 2017

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Aerospace employment share by region 2017
  Quebec  Ontario Western Canada  Atlantic Canada
Manufacturing  52% 28% 15% 5%
MRO 21% 23% 43% 13%
Footnote *

See Annex B3 for detailed aerospace industry GDP and employment contributions to the Canadian economy by year (2012-2017)

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Source: ISED’s economic model estimates based on latest revised data from Statistics Canada, the Canada Revenue Agency and enterprise-level observations, 2018

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

Figure 4: Overall rank

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Overall Rank

1. Civil flight simulator production

  • #1 - Civil flight simulator production

3. Civil aircraft production

  • #2 - Business aircraft production
  • #2 - Regional aircraft production
  • #4 - Large jet production
  • #4 - General aviationFootnote ** production
  • #5 - Helicopter production

3. Civil engine production

  • #1 - Turboprop engine production
  • #1 - Helicopter engine production
  • #4 - Turbofan engine production
Footnote *

Rankings based on final production

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Footnote **

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

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Source: Flight simulation: Frost & Sullivan, Commercial Flight Training and Simulation Market (2016); Aircraft production: average of Forecast International and Teal Group (2017), 2018; Engine production: Forecast International (2017), 2018

Aerospace industry icon  Global value chain participation

Over 60% of Canadian aerospace product exports were supply chain related

  • The share of supply chain exports has increased by almost 50% over the past 15 years (2003-2017)

Figure 5: Aerospace exports by product category, 2017

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Aerospace exports by product category 2017
Final products 37%
Simulators 4%
Airplanes, rotorcraft, and spacecraft 33%
Aerospace supply chain components  63%
AeroenginesFootnote * 57%
Avionics  15%
Landing gearFootnote * 10%
Other parts  18%
Footnote *

Aeroengines and landing gear include their respective systems and components

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Source: Global Trade Atlas (2017), 2018

Aerospace industry icon  Innovation and skills

Share of STEMFootnote * employment in aerospace manufacturing was almost 3X the manufacturing average in the top three in terms of civil aircraft, engines, and flight simulators

Figure 6: Employment share in aerospace manufacturing by occupation type, 2017

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Employment share in aerospace manufacturing by occupation type, 2017
Production related  52%
STEM 26%
Corporate functionsFootnote ** 22%
Footnote *

Science, technology, engineering, and mathematics
(Women made up close to a quarter of those employed in STEM occupations – an increase of over 100% between 2012 and 2017)

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Footnote **

Includes management, administration, marketing, and unspecified occupations

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Source: Statistics Canada’s special tabulation of occupation by industry, 2018

Aerospace was the number one R&D player among all Canadian manufacturing industries

  • R&D performed by aerospace manufacturing totalled $1.7 billion in 2017
  • The aerospace manufacturing industry contributed close to a quarter of total manufacturing R&D in Canada and was over seven times as R&D intensive as the manufacturing average

Figure 7: Canadian manufacturing industry R&D and R&D intensity, 2017

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Canadian manufacturing industry R&D 2017
Aerospace manufacturing  24%
All other manufacturing  76%
Manufacturing industry R&D intensityFootnote * 2017
All manufacturing  3%
Aerospace manufacturing 22% Over 7X higher
Footnote *

R&D intensity is calculated using the ratio of R&D to GDP based on Statistics Canada’s CANSIM tables

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Source: ISED’s economic model estimates based on latest revised data from Statistics Canada, the Canada Revenue Agency and enterprise-level observations, 2018

The Canadian aerospace industry was actively engaged in R&D collaboration with a variety of partners

  • Firms capturing more than 70% of the aerospace industry’s activityFootnote * collaborated on R&D with academia, government, and suppliers

Figure 8: Aerospace industry collaborative R&D activityFootnote * by partner type, 2016

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Aerospace industry collaborative R&D activityFootnote * by partner type 2016
% of total aerospace industry sales 
Academia 75%
Suppliers 73%
Government 71%
Customers 67%
Other companies 64%
Footnote *

Any R&D collaborative activity that may have occurred between 2014 and 2016. Values represent the enterprises’ share of total aerospace industry revenues. ISED estimates based on the survey data and activity among firms that more fully responded to the collaborative business practices questions

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Source: Canadian Defence, Aerospace and Marine Industries Survey (2016), 2018

Key FindingsFootnote *

The Canadian aerospace industry is:

Footnote *

According to the latest data

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Aerospace industry iconAnnexes

Annex A1 – Definitions of the Canadian aerospace manufacturing and MRO service industries

Annex A2 – Economic impact methodology principles

Annex A1 – Definitions of the Canadian aerospace manufacturing and MRO service industries

Aerospace manufacturing industry

Main activities:

  • Aircraft assemblies, subassemblies and parts
  • Aircraft engines and engine parts
  • Aircraft fuselage, wing, tail and similar assemblies
  • Tail and wing assemblies and parts (empennage)
  • Flight simulators
  • Developing and producing prototypes for aerospace products
  • Space systems
  • Telecommunication satellites and components
  • Avionics
  • Helicopters, propellers and parts

Aerospace MRO service industryFootnote *

Main activities:

  • Aircraft heavy maintenance, servicing and repairing
  • Aircraft engines maintenance, servicing and repairing
  • Aircraft components and other systems maintenance, servicing and repairing
  • Aircraft line maintenance (aircraft servicing at airports – excluding sales of fuel revenues)
  • Aircraft ferrying services
  • Aircraft inspection services
  • Aircraft testing services
  • Aircraft upholstery repair
Footnote *

Excludes MRO activity performed by manufacturers and airlines

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Annex A2 – Economic impact methodology principles

Footnote *

Inclusion of key firms in space manufacturing, avionics manufacturing, flight simulator manufacturing and MRO service providers

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Footnote **

GDP better represents activity that actually occurs within Canada in contrast to revenues that include foreign content as well as R&D, employment and revenues from outside of Canada (even if it was performed by a Canadian firm)

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Footnote ***

Economic model estimations are not comparable to older estimates in previously published reports as Statistics Canada’s Input-Output framework has been updated for all industries in April 2018

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Footnote ****

The difference relates to 2016 estimates that are based on the 2014 multipliers released in April of 2018 (the most current available) versus initial estimates that were based on 2011 multipliers

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Annex B

Annex B1 – Economic impact indicators (2017)

Annex B2 – Industrial indicators (2017)

Annex B3 – Industrial indicators (2012-2017)

Annex B1 Economic impact indicators (2017)Footnote *

Impact on Canadian GDP ($ millions)
  Aerospace industry Canadian suppliers to aerospace industry Consumer spending by associated employees TotalFootnote **
Aerospace manufacturing 8,613 3,511 3,081 15,204
Aerospace MRO 4,025 3,251 2,034 9,310
Aerospace total 12,638 6,762 5,115 24,514
Impact on Canadian employment (jobs)
  Aerospace industry Canadian suppliers to aerospace industry Consumer spending by associated employees TotalFootnote **
Aerospace manufacturing 53,588 26,645 25,011 105,244
Aerospace MRO 31,998 31,705 19,379 83,082
Aerospace total 85,586 58,350 44,391 188,327
Footnote *

National Input-Output Multipliers (2014) adjusted to 2017 GDP (in 2007 chained dollars) and employment

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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)

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Note: Due to rounding, numbers presented may not add up precisely to the totals provided

Source: ISED’s economic model estimates based on latest revised data from the Statistics Canada Business Registry and CANSIM, the Canada Revenue Agency, and enterprise-level observations, 2018

Annex B2

Industrial indicators (2017)Footnote *
  Aerospace manufacturing Aerospace MRO Aerospace industry total
GDP ($ millions) 8,613 4,025 12,638
Employment (jobs) 53,588 31,998 85,586
Revenues ($ millions) 21,151 7,831 28,982
R&DFootnote ** ($ millions) 1,744 42 1,786
ExportsFootnote *** ($ millions) 15,069 N/AFootnote ** 15,069Footnote **
Footnote *

National Input-Output Multipliers (2014) adjusted to 2017 GDP (in 2007 chained dollars) and employment. Revenues and R&D are in current annual dollars

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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"

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Footnote ***

Export figures are sourced from Trade Data Online (2017), 2018. Export data for aerospace MRO is not available

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Note: Due to rounding, numbers presented may not add up precisely to the totals provided

Source: ISED’s economic model estimates based on latest revised data from the Statistics Canada Business Registry and CANSIM, the Canada Revenue Agency, and enterprise-level observations, 2018

Annex B3

Industrial indicators (2012-2017)Footnote **
  Industry 2012 2013 2014 2015 2016 2017 % change from 2012 to 2017

GDP
($ millions)

Aerospace manufacturing 8,974 9,474 10,325 9,787 9,167 8,613 -4.0%
Aerospace MRO 3,195 3,247 3,520 3,664 3,802 4,025 + 26.0%
Aerospace total 12,169 12,722 13,845 13,452 12,969 12,638 +3.9%
Aerospace contribution to Canadian economyFootnote ** 23,231 24,236 26,369 25,753 24,976 24,514 +5.5%
Employment (jobs) Aerospace manufacturing 56,648 58,079 60,140 57,648 55,725 53,588 -5.4%
Aerospace MRO 28,541 28,695 30,242 31,314 31,457 31,998 + 12.1%
Aerospace total 85,190 86,773 90,382 88,961 87,182 85,586 +0.5%
Aerospace contribution to Canadian economyFootnote ** 185,362 188,570 196,635 194,523 191,119 188,327 +1.6%

Revenues
($ millions)

Aerospace manufacturing 15,860 17,397 20,863 22,550 20,234 21,151 + 33.4%
Aerospace MRO 6,985 7,022 7,401 7,663 7,698 7,831 + 12.1%
Aerospace total 22,845 24,420 28,264 30,214 27,932 28,982 +26.9%
R&DFootnote ***
($ millions)
Aerospace total 1,843 1,993 2,052 2,003 1,825 1,786 -3.1%
Footnote *

National Input -Output Multipliers (2014) adjusted to 2017 GDP (in 2007 chained dollars) and employment. Revenues and R&D are in current annual dollars

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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)

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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 s stem. 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 Experiment al 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

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Note: Due to rounding, numbers presented may not add up precisely to the totals provided

Source: ISED’s economic model estimates based on latest revised data from the Statistics Canada Business Registry and CANSIM, the Canada Revenue Agency, and enterprise-level observations, 2018

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