2016 Canadian Aerospace Summit

The Honourable Navdeep Bains, PC, MP
Minister of Innovation, Science and Economic Development

Ottawa, Ontario

November 16, 2016

Check Against Delivery

Thank you very much, Jim [Jim Quick, President and CEO, Aerospace Industries Association of Canada], for that kind introduction and for inviting me today.

My first major speech as Minister following last year's election was at the Aerospace Summit, so I'm excited to be back.

The Canadian aerospace and space industries are important to me. And they're key contributors to the Canadian economy.

It is critically important that Canada remain a world leader in aerospace.

Last year I talked about:

• the importance of innovation and science for driving economic growth;
• my commitment to promoting high-skill aerospace and space jobs; and
• my plans to better understand your industries and what's important to you.

Today, I want to update you on the progress that has been made over the past year.

It has been an exciting year.

A major milestone was Bombardier certifying its CS100 and CS300.

This is a real game-changer for the industry. The C Series is the first narrow-body jet with a completely new design in nearly 30 years.

It also has the best environmental performance for a single-aisle aircraft in its class. And it was issued an Environmental Product Declaration—an industry first.

Last month, I was pleased to provide funding under the Technology Demonstration Program to a research consortium led by Bombardier.

This $54-million contribution will enable the development and demonstration of new technologies for next-generation aircraft.

Another notable step forward over the past year involved Bell Helicopter Textron.

The company's decision to relocate the assembly of the 505 Jet Ranger X to Canada from the U.S. was great news.

This move helps secure more than 100 highly skilled jobs in Quebec. It also strengthens the sector's presence in Mirabel.

Also this past year, Pratt and Whitney Canada negotiated an accelerated repayment of all its active contribution agreements.

This development will allow the company to improve its competitiveness by reinvesting in core capabilities in Canada.

Another huge highlight in 2016 was the Farnborough International Airshow, where I drove home the message that Canada is a great place to do business.

In fact, I accomplished quite a lot during three busy days.

I had 16 bilateral meetings with foreign companies to encourage investment and increased engagement with the Canadian supply chain.

Minister Foote and I met the five major fighter companies to launch the next phase of the Government's replacement activities.

I met hundreds of Canadians and heard about your products and services.

It became even clearer what an important role each of you plays in global aerospace supply chains.

I'm very proud of my rover-control licence, which you will find hanging in my office.

I'm also proud of the Canadian Space Agency's involvement in the recent launch of NASA's Osiris-REx spacecraft.

There's nothing more satisfying than knowing that Canadian-built technology funded by CSA is playing an important role in the mission.

My colleague Science Minister Kirsty Duncan wanted you all to know just how good it felt to be Canadian while attending the launch in Florida.

The global space industry is transforming, and governments and the private sector are seeking to capitalize on the social and economic benefits.

And Canada is no exception. That's why we've taken bold action to support space missions.

In fact, our government's engagement with the space industry is an excellent example of the active partnership we want to adopt in other industries, too.  

We've announced close to $380 million to extend Canada's participation in the International Space Station mission.

This investment includes $18 million to develop new Canadian technologies for the deep-space missions of the future.

We've reconfirmed $30 million for the Canadian Space Agency to participate in the Advanced Research in Telecommunications Systems programme, led by the European Space Agency.

And we are supporting MDA and its partners with the $54‑million contribution through the Technology Demonstration Program that I mentioned earlier.

The Government is also committed to revitalizing the Space Advisory Board.

The members of this board will be selected based on the open, merit-based criteria laid out by the Prime Minister's new appointments process.

This board will support the development of long-term priorities for Canada's space sector.

It will consult stakeholders to define the key elements of a space strategy, which will be launched by June.

Our strategic objectives will focus on using space to drive broader economic growth. We will do that by supporting talent, research and entrepreneurship within the industry.

Our government believes that a space strategy is, in effect, a research and innovation strategy.

It will support growth in the sector, and it will leverage the benefits of space for all Canadians. 

The technologies designed for today's space program can be applied tomorrow to our everyday lives.

They can point to new ways of fighting climate change, for example, or treating and diagnosing disease.

Put simply, an investment in today's space program is an investment in a higher standard of living tomorrow.

I look forward to the Advisory Board's advice on that file in the future.

Another major highlight this year was the 2016 State of Canada's Aerospace Industry report.

Published by the Aerospace Industries Association of Canada in partnership with the Government, it showed that Canada's aerospace and space industries are innovation leaders.

I'm an accountant by training, so I like to look at the numbers. And the numbers are impressive.

Aerospace leads all manufacturing industries in research and development.

In fact, it accounts for nearly one third of all manufacturing R&D in Canada.

That sort of innovation translates into economic activity of more than $28 billion every year.

It creates 200,000 direct and indirect jobs.

And these are well-paying positions.  

In fact, an aerospace manufacturing employee makes $1.60 for every dollar earned by the average manufacturing worker.

The same is true for Canada's space sector.

Space manufacturers invest about six times as much in R&D as their manufacturing peers in other industries.

The sector employs nearly 10,000 Canadians. And more than half of these employees work in high-value design jobs, such as engineering and science.

These statistics are impressive.

But, as the Prime Minister likes to say, better is always possible.

The definition of innovation is continuous improvement to remain efficient and competitive.

These days, the merging of globalization and technology means companies can source their talent, goods and services from anywhere in the world.

And when companies look to invest, they aren't always looking for the lowest-cost jurisdiction.

Instead, many companies seek the most innovative economies—the ones with the most creative and entrepreneurial people who can turn promising ideas into solutions.

Now, more than ever, we need our country to be at its absolute best, especially if we want to compete with countries around the world for the most talented people, the fastest-growing companies and the newest technologies.

Why are these actions such urgent priorities?

Because Canada and other advanced economies face new pressures.

Global companies are becoming local competitors.

Technology is digitizing and automating every aspect of our lives, including our jobs.

Climate change is reshaping the ways we meet our energy needs.

And Canada will have proportionately fewer working-age people as our population grows older.

There's no doubt that these challenges are daunting.

But low growth does not have to be Canada's destiny.

We can see these pressures as opportunities and seize the future.

With the right plan, Canada can outperform the rest of the world.

Our government calls this plan the Innovation Agenda.

Our vision is to make Canada a global centre for innovation.

Our mission is to create well-paying jobs that will grow the middle class and raise the living standards of all Canadians.

The first and most important phase in developing the Agenda was to hear directly from Canadians.

We held dozens of round-table discussions, including with aerospace and space firms. We also invited Canadians to comment online.

I would like to thank your association, Jim, for your valuable input.

In the coming months, these ideas will inform our government's work on the Innovation Agenda and Budget 2017.

Some of those ideas were part of our government's Fall Economic Statement.

So what did we hear from Canadians?

Three main themes emerged

First: people. We consistently heard about the need for more people with the right skills and experience to drive innovation and growth.

We need more people in science, technology, engineering and math [STEM]. We also need people with entrepreneurial training.

The people in this room will know that STEM skills are foundational in the aerospace and space industries.

I want more young people like Sahana Khatri to get enthusiastic about space.

Sahana is an eight-year-old girl from suburban Montréal. She's the same age as my oldest daughter.

Sahana was among thousands of Canadians who applied to become our country's next astronaut.

She wrote a letter telling me about her dream.

Sahana may be a few years too young to become an astronaut, but that kind of enthusiasm is precious.

We need to do more to nurture that love of science in our kids.

We need to show them that science is their ticket to a future space mission.

And that science opens doors to so many careers.

In fact, the number of jobs across the economy requiring scientific skills will continue to grow.

Innovation depends on good ideas, and those ideas can come from anyone, anywhere.

The bigger the talent pool, the more good ideas emerge.

I have heard from business leaders—including many of you in this room—that attracting the best and brightest from around the world will help Canadian companies grow, which will result in more jobs.

And I'm proud to say that our government has listened to your concerns. We are committed to making it faster and easier for Canadian companies to recruit global talent.

Highly skilled people with in-demand skills will soon have their visas and work permits processed within a period of two weeks—an ambitious standard.

Canadians also told us that we need to do a better job of preparing people for a rapidly changing job market.

Our universities and colleges need to be better aligned with the skills that industry demands today and those that it will need tomorrow.

For our part, the Government has been looking at ways to get the right people for the job.

For example, Canada's fourth astronaut recruitment campaign is currently under way.

The two individuals that will be selected will eventually follow in the footsteps of Jeremy Hanson and David Saint-Jacques. Dr. Saint-Jacques is currently training to fly to the International Space Station for a six-month mission.

I'm proud to say that more than 160 candidates are still in the running.

The second theme we heard this summer was about growing the next generation of globally competitive companies.

We are a nation of entrepreneurs, with one of the world's highest rates of entrepreneurship.

In fact, Canadians start more than 70,000 new companies every year.

But where we are not as strong is scaling up these companies.

Over 90 percent of aerospace and space companies are small and medium-sized.

We need to help these firms scale up to ensure that the high-paying jobs that your industry creates will stay in Canada.

In other countries, governments use their purchasing power to help companies scale up.

We know that when government is a marquee customer, it can help small companies attract other clients as they expand into new markets.

In the area of defence procurement, we have a historic opportunity in the coming decade to leverage strategic spending on military equipment.

I am pleased to see that under Canada's Industrial and Technological Benefits Policy, prime contractors have forged stronger partnerships with Canadian companies to drive innovation.

Their commitment to generate R&D activity in Canada now counts in the bid selection process.

These commitments, known as the value proposition, fully demonstrate exactly how we want to grow companies in all parts of the economy.

We want to promote commitment from our large firms to help build medium and large supply chain companies in Canada and increase export.

We want to support small companies as we do this, and that is why we set aside 15 percent of the benefits for them.

I am confident we can achieve these goals in the aerospace and defence industries. And I want to do the same all across the economy.

Take the Fixed-Wing Search and Rescue Aircraft Replacement Project as an example.

The project's value proposition was specifically structured to take full advantage of this country's strength in maintaining new equipment once it's built.

Potential prime contractors must demonstrate that they are committed to having the ongoing maintenance work for this new fleet of aircraft performed in Canada, by Canadians.

This commitment includes ensuring the Canadian supply chain has access to the necessary intellectual property and technical data to support these aircraft.

The value proposition also motivates private investment in areas that align with the Government's priorities, such as growing start-up companies into globally competitive successes.

For example, over the past year, defence contractors have invested in the R&D activities of a number of small and medium-sized companies.

They include Solace Power, QRA Corp. and CarteNav Solutions.

These investments help such companies export products related to unmanned aerial systems, software development and aerial search and rescue.

The third theme that Canadians told us was important to them is harnessing emerging technologies to achieve big things.

Government can set big-horizon goals and target resources toward specific areas to fulfill that mission.

In clean technology, for example, our government has already taken some bold steps.

First, we are investing more than $1 billion to develop clean technologies across a number of industries.

Clean technology is critical for your sector.

New technologies, such as additive manufacturing and composites, reduce not only the weight of an aircraft but also carbon emissions.

And in the space sector, emerging technologies have the potential to influence innovations in areas that more directly touch the lives of all Canadians.

Just look at the technology behind the Canadarm and the Mars rover.

That technology is now being used here on Earth for brain surgery and mining exploration.

That's the kind of innovation we want to encourage.

Our government has earmarked $800 million to strengthen innovation networks and clusters that develop emerging technologies.

The idea is to make a small number of high-value investments in areas where Canada has the potential to show global leadership.

We are also investing in industry consortiums to prepare more Canadians for the jobs of the future.

Take, for example, the Consortium for Aerospace Research and Innovation in Canada.

It was launched in 2014 to generate dialogue and collaboration between industry, academia and the research community.

In the short time since this consortium was established, it has overseen 30 projects that have come to fruition, worth more than $40 million.

When it comes to driving economic growth through innovation, our government is prepared to think big, aim high and act boldly.

But, make no mistake, driving economic growth through innovation is a daunting challenge.

It means setting ambitious goals, learning from failure and never quitting.

So I'm challenging you to invest even more in the people and technologies that will propel Canada to a more prosperous future.

Our government is prepared to do its part.

Your participation is just as crucial.

Be part of the solution.

Be part of the Innovation Agenda.

Thank you.