Thank you and good afternoon, everyone.
Let me acknowledge our host today, Aéro Montréal, for its continued leadership of Quebec's aerospace cluster. It is hard to believe that you have only been operating since 2006, given the significant contributions you have made to this industry and to our economy.
I recall Aéro Montréal's participation at the Farnborough International Airshow last July. You were a strong addition to Canada's presence at the event.
As you well know, part of Aéro Montréal's core mission is to optimize the competitiveness of Quebec's aerospace cluster. As Minister of Industry, I share in this mission and I certainly value the time we spend together at forums such as this one.
Ladies and gentlemen, your industry has long been at the leading edge of our economy. Your track record in research and development is more than impressive, and you have earned your reputation as a strong creator of highly skilled jobs and technical expertise.
But it is important that we don't rest on past successes. There has been rapid growth in air passenger travel in emerging markets. This demand—combined with high jet fuel prices—could prompt airlines in these markets to modernize and expand their fleets, boosting demand for your products.
This is exactly the type of opportunity Canadian firms must be ready to seize. Our government is putting in place solid measures to support you in doing just that.
We have created a sound economic framework, harmonized regulations and reduced red tape.
Our overall tax rate on new business investment is the lowest in the G7 by far. We've lowered the corporate tax rate from more than 22 percent in 2007 to 15 percent today. And we removed the federal capital tax.
We are also eliminating tariffs on machinery, equipment and inputs, making Canada the first tariff-free zone for manufacturers in the G20.
And through our Global Commerce Strategy, we are successfully negotiating trade agreements with dynamic and influential economies in fast-growing markets, including Europe and the Asia-Pacific region—opening doors and potentially positioning your firms for long-term prosperity.
Now, I know our focus today is small and medium-sized enterprises, so let me elaborate on what our government, through Economic Action Plan 2013, is doing for this segment of our economy.
To start, the Hiring Credit for Small Business will be expanded and extended for one year, allowing smaller firms to reinvest in job creation.
Meanwhile, SMEs will benefit from $20 million over three years for a new pilot program to be delivered through the National Research Council's Industrial Research Assistance Program. This pilot program will help SMEs access research and development services at post-secondary and other non-profit research institutions of their choice.
Furthermore, access to another scarce resource—capital—is also important to Canada's SMEs. Our government recognizes that venture capital is essential in supporting a more innovative economy, by providing the investment needed for high-potential businesses to grow.
But Canada's venture capital market has been challenged on a number of fronts in recent years. That's why we held extensive public consultations to specifically determine how to best help create a sustainable, private sector–led venture capital sector in Canada.
The message we heard was that changes were needed to better assist the venture capital market to create jobs and support the economy in Canada. We have started that process.
Based on the results of the consultations, the Prime Minister announced in January 2013 the Venture Capital Action Plan, a comprehensive strategy for deploying $400 million in new capital over the next 7 to 10 years, which is expected to attract close to $1 billion in new private sector investments in funds of funds.
Our government's new approach will better target resources in order to create an efficient private sector–led venture capital industry that will better support jobs and economic growth throughout Canada.
Complementing this approach are two Economic Action Plan 2013 measures, which propose:
- $60 million for high-potential incubator and accelerator organizations to expand their services to entrepreneurs; and
- $100 million through the Business Development Bank of Canada to help innovative firms graduate from business accelerators and create jobs and prosperity.
For our innovative and ambitious SMEs, these measures will have real, measurable and positive effects, helping them to make their ambitions reality.
With that said, I would now like to turn to some other recent federal initiatives that promise to assist the aerospace industry, including our government's response to the Emerson Report on aerospace programs and policies.
Our government is carefully reviewing Mr. Emerson's report and we are making good progress. In the meantime, Economic Action Plan 2013 announced some early measures, such as:
- Providing close to $1 billion for the Strategic Aerospace and Defence Initiative to support pre-commercial innovation. At the same time, we will look at improving the program's administration and operation, including making it more accessible for SMEs.
- Establishing a new Technology Demonstration Program to assist projects with strong commercialization potential and promote cross-industry collaboration.
- And launching consultations on creating a National Aerospace Research and Technology Network. As you know, the Consortium for Research and Innovation in Aerospace in Quebec has done impressive work to promote collaborative aerospace research. Over the coming months, we will consult industrystakeholders, provincial governments and research institutions for feedback on how we can establish a national network.
Beyond these measures, we are looking at the other Aerospace Review recommendations.
In addition, we continue to look at ways to help SMEs innovate and grow using existing policies. In February of this year, I announced a change to Canada's Industrial and Regional Benefits (IRB) Policy that will support Canadian SMEs.
The change, called the Investment Framework, encourages contractors to engage in innovative research and development with Canadian SMEs—keeping jobs here at home while spurring innovation and economic benefits in communities across the country.
This will leverage millions of dollars of new investments—private money our companies need to grow, compete and create jobs.
I would like to add a few words on an issue you may have heard about in recent weeks concerning the International Civil Aviation Organization, or ICAO.
As an important player in the global aviation industry, Canada has been its host nation since 1947. With a strong aerospace industry and an extensive network, Montréal and Quebec are best suited to continue hosting ICAO.
We are working closely with the province, the city and other key stakeholders to ensure that ICAO remains in Montréal.
Ladies and gentlemen, I would like to close by reminding you that our country is universally recognized for its success in weathering the global recession, its low-tax environment, its highly educated and skilled labour force, and a financial sector that is the envy of the world.
But we cannot become complacent. In a fast-changing, competitive global economy, Canadians must continually aim higher to avoid falling behind. I am happy to say that the aerospace industry has taken a leadership position in this regard.
Together, the initiatives in Economic Action Plan 2013 and the efforts of important industry-led organizations like Aéro Montréal are creating the conditions for our firms to further establish themselves in global supply chains.
And our government looks forward to continuing to work with you in the months ahead to further improve Canada's position in the global aerospace industry.
Thank you.
