Speaking Points
The Honourable Christian Paradis, PC, MP
Minister of Industry
Ottawa, Ontario
December 5, 2012
Check Against Delivery
Thank you and good afternoon, everyone.
It is my pleasure to open the 2012 Canadian Aerospace Summit. You have chosen a fitting theme this year: "Bold Steps for an Exceptional Future." It captures the excitement and energy and optimism of an entire industry.
These summits are always important because they provide opportunities to understand the big picture, to network and to form partnerships to carry your business forward.
This year, however, is special, but not only because 2012 marks Canada's 50th anniversary in space. As your program points out, the aerospace sector, at this time, is facing both particular challenges and impressive opportunities.
The challenges are similar to those facing other export-oriented sectors. But that makes them no less important.
You're facing several pressures:
- the strength of our dollar;
- the vital importance of constant innovation to remain competitive;
- the necessity of gaining access to fast-growing markets; and
- the requirement to operate in a globalized supply chain, to name just a few.
And all of this is happening against a backdrop of tremendous expected growth in the industry. Taken together, these changes mean that we need to rethink and reimagine the future of aerospace in this country.
And that's exactly why our government asked David Emerson to carry out a comprehensive review of Canada's aerospace and space programs and policies.
I received Mr. Emerson's report last week. And I want to thank him again for his outstanding work. I also want to again thank Sandra Pupatello, Jim Quick and Jacques Roy for their important contributions. And last, but certainly not least, I want to thank the AIAC and its members for their involvement. I know that many of you participated in the six industry-led working groups that supported the Review. Your time, your ideas and your expertise were critical to this process. Thank you.
Let me assure you that we are carefully reviewing the report's recommendations, with an eye to developing the way forward.
But before I get into some of the issues raised in the report, I think it is important to consider the larger economic backdrop against which this summit is being held.
As you well know, uncertainty continues to affect the global economy. Recovery is fragile. Progress is slow.
Canada has come through the recent turmoil better than most. Indeed, we have some of the strongest economic fundamentals anywhere in the world.
That said, we need to be forward looking. We know that innovation, ideas and ingenuity are what will matter in tomorrow's economy. And manufacturing lies at the intersection of all of these.
On this front, our government has:
- lowered taxes;
- eliminated tariffs on machinery;
- extended the capital cost allowance; and
- focused on reducing red tape so that you can spend less time filling out forms and more time running your business.
The manufacturing sector is the foundation on which our economy is built. From coast to coast to coast, Canada has builders, designers, innovators and engineers. We lead the world in some of the newest and oldest fields.
In sectors as divergent as plastics, food processing, information technology and aerospace, Canadians are world leaders. If you look at your sector alone, its importance to our economy is undeniable.
You know the numbers. You know that your industry has a direct impact on our GDP. You know that you support nearly 160,000 direct and indirect jobs. And you know that, over the last 10 years, the productivity growth of your industry has outpaced the rest of the G7.
Those numbers are important, but they don't tell the whole story. Because behind the numbers are jobs. Jobs that support families. Jobs that provide competitive wages and anchor communities. Jobs that drive innovation and productivity. Jobs that give us the capacity to create new products, new processes and new possibilities.
Our government recognizes that you face challenges within this ever-changing business environment. For example, the rise of emerging economies is reshaping the competitive landscape.
On the one hand, this is a tremendous opportunity, and demand from the Asia-Pacific region could eventually make it the largest market for commercial aircraft deliveries. On the other hand, new competitors are emerging—many of them influenced by their government and backed by its resources.
Combined with this is a fundamental shift in your industry's business model. A model in which original equipment manufacturers are systematically globalizing their supply chains and requiring other firms to become risk-sharing partners.
These two fundamental changes demonstrate the true impact of globalization, where physical distances matter less and less.
Your industry deals almost exclusively with parts and materials that are of the highest value. So in relative terms, it costs next to nothing to move something around the world. And this means that pressure from jurisdictions with lower labour costs is increasing.
That's why innovation is so important. It's key for separating Canada from those lower-cost jurisdictions.
The Emerson report says it best:
Fortunately, Canada's aerospace and space industries have had the foresight to make innovation priority number one. The magnitude of the industry's investments in R&D shows that. Indeed, Canada's aerospace manufacturing sector has an R&D intensity four times that of the Canadian average for manufacturers.
And it is not just the top-tier players investing. In fact, some very impressive work is taking place among SMEs.
The industry's accomplishments in this area are even more impressive in terms of the across-the-board collaboration going on—from partnerships between firms to those with academia, with governments and with world leaders from other countries.
As innovation models shift, I expect that this will increasingly become the norm. In fact, these kinds of collaborations are exactly what we are looking at through the Strategic Aerospace and Defence Initiative (SADI). As we support your quest to be more innovative and competitive, we are working with firms to develop advanced technologies, attract and retain a highly skilled workforce, and collaborate with universities and colleges.
Our government and your industries have long been partners in innovation. Through SADI, we have committed $827 million to 26 advanced research and development projects over the past four years alone.
And we have seen great things come from your collaborative work with the National Research Council of Canada and the Natural Sciences and Engineering Research Council of Canada.
Government support extends to other domains as well. We've created opportunities through our Industrial and Regional Benefits (IRB) policy. Over 60 major procurements have been subject to this policy. And over $22 billion in IRB activity is underway.
Let me turn to the space side of things for a moment. Canada's space sector is a sophisticated research and innovation leader, successfully turning investment in knowledge into a global advantage in several niche areas such as robotics and satellite communications. Our government will be your partner, helping you secure access to new projects and create opportunities to gain crucial flight heritage.
But government activities and priorities in this area often tend to revolve around a small number of larger, long-term projects. This can create real challenges for industry, which is something the Emerson report speaks to.
We will be considering this carefully while taking into account our broader economic agenda and other government priorities.
On that note, let me conclude by returning to the Emerson report.
My message to you today is simple: our government understands the challenges you face. The role you play. The jobs you create. The contribution you make. The future you are building.
And we intend to be an active partner. We are committed to building on our partnership with AIAC—and the entire sector—as we create the industry of tomorrow.
That's why our government launched the Review in the first place. And it's why I am working with my Cabinet colleagues to give the findings the consideration they deserve. Believe me when I tell you that this report is not going to sit on a shelf collecting dust.
I will continue to champion this industry across the country and around the world. And you make it easy. In moving forward, we will build on the momentum of this anniversary, this summit and this report.
We are committed to getting it right, to supporting the long-term global competitiveness of this industry. We need to work together—on the aerospace as much as on the space side—to secure Canada's success over the long term. We need to innovate, to increase our market access and to develop our global supply chain.
And, yes, this will take some time. Consensus building, especially around important things, always does. But we will take action. Action so that companies like those represented here today, ones on the leading edge of technology, can keep pushing the frontiers of what is possible. And so, as Canadians look ahead to the economy of tomorrow, they will look, as they have for over 50 years, to aerospace.
I wish you a very successful summit.
