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AEROSPACE SECTOR Remarkable Achievement Given the Country’S Relatively Small Population

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AEROSPACE SECTOR Remarkable Achievement Given the Country’S Relatively Small Population PROFIT PERFORMANCE STABILITY PROFIT PERFORMANCE INNOVATION DIVERSITY DIVERSITYINV STABILITYEST IN PROFIT PERFORMANCE INNOVATION PROFIT DIVERSITY STABILITY STABILITY DIVERSITYCANADA’S COMPETITIVE INNOVATION ADVANTAGES PROFIT DIVERSITY STABILITY PROFIT PERFORMANCE INNOVATION PROFIT DIVERSITY STABILITY PERFORMANCEAEROSPACE INNOVATION SECTOR DIVERSITY PROFIT PERFORMANCE STABILITY PROFIT PERFORMANCE STABITLITY PROFIT DIVERSITY STABILITY DIVERSITY INNOVATION PROFIT PERFORMANCE STABITLITY PROFIT DIVERSITY CANADA’S CANADA RANKS THIRD GLOBALLY in terms of civil-aircraft production—a AEROSPACE SECTOR remarkable achievement given the country’s relatively small population. With some 700 companies, Canada’s The Canadian aerospace sector is an CANADA’S KEY international leader in terms of export STRENGTHS aerospace manufacturing intensity and trade diversity, with value and maintenance, repair, and chain partners in the United States, » Commercial and business aircraft » Europe, Asia and South America. Helicopters » Utility and general-aviation overhaul industries generated aircraft » Aircraft engines » Avionics » direct annual revenues of Thanks to Canada’s membership in the North Aerostructures » Flight simulation, pilot American Free Trade Agreement (NAFTA) and air-traffic-control training » Landing- more than $27 billion in 2016, and one of the world’s best multi-modal gear systems » Advanced-composites a nearly 20 percent increase transportation systems, the sector is well manufacturing » Airframe, engine and from 2011. The sector directly integrated into the North American market. component MRO » Satellites, robotics and space-based services » Product development employs over 87,000 people and Aircraft parts manufacturers based in and testing for cold weather conditions is responsible for approximately Canada typically enjoy the lowest cost structure among G7 countries.2 208,000 jobs across Canada. Highly integrated into global The aerospace-manufacturing sector is one 1 Innovation, Science and Economic value chains, more than of the most research and development (R&D) Development Canada and the Aerospace intensive in the Canadian economy. Industries Association of Canada, State of 60 percent of product exports Manufacturing R&D performed by the Canada Aerospace Industry, 2017 Report. by the industry are from the aerospace sector totaled $1.64 billion in 2016, representing nearly 30 percent of all 2 KPMG. Competitive Alternatives 2016. aerospace supply chain, manufacturing industry R&D in Canada. a share that has increased 3 Air Transport Association of Canada; Canada’s expertise in flight training is also Transport Canada (2015). by more than 20 percent recognized around the world. In 2015, over the last 15 years.1 Canada’s 169 certified flight schools issued 1,186 commercial-pilot licenses.3 Canadian flight schools provide training in diverse climates and geographies, enabling pilots to develop superior professional skills. Canada’s Maintenance, Repair and Overhaul (MRO) sector generates $7.7 billion in annual revenues and directly employs 31,000 highly skilled workers.1 Its strengths include: » Full ‘nose-to-tail’ services for single and twin-aisle commercial transports, regional jets and turboprops, as well as business and military aircraft, and helicopters » Engine and accessory repair and overhaul for gas-turbine and piston engines AEROSPACE CANADA IS AN IDEAL LOCATION for aerospace CLUSTERS investment, with world-class GREENLAND clusters in Montréal, Toronto, ALASKA Vancouver and other centres (USA) throughout the country. YUKON NORTHWEST NUNAVUT TERRITORIES NEWFOUNDLAND & LABRADOR BRITISH COLUMBIA ALBERTA MANITOBA QUEBEC Edmonton SASKATCHEWAN Saskatoon Vancouver PRINCE EDWARD ONTARIO ISLAND Calgary Québec City NOVA SCOTIA Winnipeg Ottawa Halifax UNITED STATES OF AMERICA Montréal NEW BRUNSWICK Waterloo rTo onto London Niagara WESTERN PROVINCES: Aerostructures, composites, Magellan Aerospace, MDA, Messier-Bugatti-Dowty, airframe MRO, helicopter MRO, defence electronics, space L-3 Electronic Systems Services, MHI Canada Aerospace, systems, earth observation, engines, engine MRO, small- Northstar Aerospace, P&WC aircraft manufacturing , cold-weather engine testing QUEBEC: Aerostructures, civil helicopters, commercial » Leading companies: Asco Aerospace Canada Ltd., Avcorp, and business aircraft, training and simulation, avionics, Boeing Canada, Cascade Aerospace (IMP Group), engine components, landing gear, engines, engine MRO Vector Aerospace (Airbus Group), General Dynamics Canada, » Leading companies: Aerolia, Bell Helicopter, Bombardier, CAE, KF Aerospace, Magellan Aerospace, MacDonald Dettwiler and Esterline CMC Electronics, GE Canada, Héroux-Devtek, LISI, Associates (MDA), Pratt & Whitney Canada (P&WC), Mechtronix, P&WC, Premier Aviation Rolls-Royce Canada, StandardAero, Viking Air Ltd Safran, Stelia,Thales Canada, Turbomeca Canada ONTARIO: Rotorcraft manufacturer, commercial and business ATLANTIC PROVINCES: Precision machining and aircraft, satellite-payload subsystems, landing gear, ECS, complex assemblies, composites, gas turbine MRO, electrical power, engine parts, MRO, space robotics, display MRO, design and manufacturing, engines systems, aerostructures, gears and gears assemblies, engines » Leading companies: APEX Industries, Bluedrop, Vector » Leading companies: Airbus Helicopters Canada, Bombardier, Aerospace (Airbus Group), IMP Group, P&WC, Slemon Park United Technologies Aerospace Systems, Honeywell Canada, RECENT INVESTMENTS On June 1, 2015, LISI Aerospace Canada, a subsidiary of French group LISI Aerospace, announced an investment of more than $12 million in a new In May 2016, Bell Helicopter Textron In February 2017, GE Aviation production line that will make titanium Canada announced the relocation stated it will spend $238-million assembly components for the global of its assembly program to Quebec. to modernize its aircraft engine aerospace industry. The investment will This investment is expected to parts plant in Bromont, Quebec. allow the company to hire 116 skilled create more than a 100 jobs. workers over the next three years. Pratt & Whitney Canada is planning a $67-million investment over the next six years at its manufacturing facility near the Halifax airport. CANADA’S ADVANTAGES RESEARCH & HIGH R&D LOGISTICS AND DEVELOPMENT (R&D) INTENSITY MARKET ACCESS With annual R&D investment of more The Canadian aerospace manufacturing Canada has a highly developed transportation than $1.6 billion in 2016, Canada is an sector is six times more R&D intensive than infrastructure and duty-free access to the U.S., industry leader in the development of Canada’s total manufacturing average. Mexico and many other global markets. Under aircraft technology and applications.1 NAFTA, Canada enjoys preferential access to one of the largest and most important markets EXPORT in the world. Further, with the Comprehensive COMPETITIVENESS Economic and Trade Agreement (CETA) with the European Union provisionally in force, Export Development Canada (EDC) Canada has guaranteed preferential access provides commercial solutions ranging to European markets. In addition, Canada’s from commercial financing support for recent FTA with South Korea, which entered inbound foreign investment to export- into force in January, 2015, represents market financing of aircraft sales. Also, the Canada’s first FTA in Asia and provides a Canadian Commercial Corporation (CCC) is strategic gateway to this dynamic and fast- the Government of Canada’s defence and growing region. These trade agreements security export-sales organization, connecting enable aerospace investors in Canada to government buyers in other nations to benefit from integrated global supply-chains Canadian technology and expertise through and seize new export-market opportunities. government-to-government contracts. LOCATION DUTY-FREE SKILLED LABOUR Canada is an attractive location for all MANUFACTURING The Canadian aerospace industry has a deep tiers of the aerospace value-chain. TARIFF REGIME talent pool and employs 89,000 workers. Tier 1 multinationals can leverage Canada’s Canada has a world-class higher-education supplier base and skilled labour while Canada is the first country in the G-20 to offer system with 19 Canadian universities among a tariff-free zone for industrial manufacturers; using Canada as a base to pursue markets the top 500 in the world.4 Canadian institutions there are no tariffs on manufacturing inputs. in the U.S. and other countries. Tiers 2 awarded over 14,000 undergraduate As a result, investors can import advanced and 3 suppliers can use a Canadian degrees in engineering in 20155—more machinery and equipment free of import location to enter into the many global than the U.S. on a per-capita basis—and duties. Along with the straight-line depreciation value-chains present in Canada. approximately 3,000 students graduate that Canada allows for manufacturing and from aerospace-related courses programs processing equipment, these duty-free at Canadian institutions each year. policies mean that investors can quickly write off capital investment in Canada. “Mirabel is a vital part of Bell Helicopter’s long-term growth strategy and the decision to move final assembly of the Bell 505 Jet 4 Shanghai Jiao Tong University, Academic Ranking of World Universities (2015). Ranger X to Canada confirms our commitment to our Mirabel, Quebec, 5 Engineers Canada, Canadian Engineers for Tomorrow (2010-2015). workforce and infrastructure.” — Mitch Snyder, President
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