Canada’s aerospace manufacturing industry requires industrial strategy to remain ahead of global competitors

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Without a sector-specific national aerospace strategy, Canada risks losing ground to competitors that will not be easy to regain, argues the head of the Aerospace Industries Association of Canada. PHOTO courtesy of Airbus.

Canada’s aerospace sector is facing a growing array of “ambitious and well-funded” competitor countries vying to be aerospace leaders on the global market and must up its game to keep pace, warns Mike Mueller, president and CEO of the Aerospace Industries Association of Canada (AIAC).

Aerospace has become part of the strategic agenda for countries such as the United Kingdom, Germany, the Netherlands, Luxembourg, Ireland and Australia and they’re pursuing defined, coordinated industrial strategies. Meanwhile the U.S. routinely uses defence procurement to stimulate innovation, Mueller points out. He adds the reality that Canada’s international competitors have gone “all-in and we need to do the same” was made very clear throughout comprehensive industry consultations that AIAC completed over the past six months. The consultations were aimed at helping determine what is required to best position Canada’s aerospace industry for the next 20 or 30 years from both an innovation and environmental sustainability perspective.

“If Canada is to compete on this level, strategic action through a sector-specific national aerospace strategy is needed,” Mueller argued in an opinion piece published in the Hill Times, an Ottawa-based newspaper read by policy makers. “A renewed partnership with government through a full scale, cross-departmental aerospace strategy spanning civil aviation, defence and space is an urgent requirement…Without focused coordination, Canada is at real risk of losing ground that will not be easy to regain, especially given how our country has slipped already.”

Mueller believes there are “tremendous opportunities” should Canada leverage its strengths and focus efforts through an organized, coordinated approach, ensuring alignment across the country when it comes to innovation. He specifically points to the growing importance of continental defence, which could allow for novel use of strategic defence procurement and collaborative innovation to drive domestic and R&D exports.

“Our industry has called upon Canada’s government to increase its defence budget to meet its NATO commitment, go forward with NORAD modernization in coordination with the industry, and expedite procurement initiatives,” Mueller wrote.

Mueller also argued that Canada’s aerospace industry must make a significant stake in green technology innovation and in the global space economy, which he wrote is growing at an unprecedented rate.

“Canada must be positioned for the unbelievable opportunities ahead in the trillion-dollar marketplace that is being projected, building on our long-standing history of developing space technologies to secure Canada’s place in the new space era,” Mueller wrote. “Capitalizing on these opportunities requires a concerted partnership with government through a road map that ensures industry and government are working in concert to achieve our collective goals.”

In 2021, aerospace contributed $24.4 billion to Canada’s GDP, including $12 billion in direct impacts from manufacturing and maintenance, repair, and overhaul. That was down 38% from a direct impact of $16.6 billion from direct impact in 2019, with COVID-19 responsible for much – but not all – of that drop.

Aerospace lost 35,000 highly skilled jobs during the pandemic but skilled labour was in short supply even before the pandemic.

“Getting talent back and fostering new talent is a substantial challenge. The good news is that this industry continues to lead all other manufacturing industries in R&D,” Mueller wrote.

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