The Future of Aerospace: Up in the Air
- May 24, 2019
A national strategy of support and investment is critical if Canada’s aerospace industry is to remain globally competitive
The truth is in the numbers. Aerospace is one of Canada’s most important manufacturing sectors. In the State of the Aerospace Industry 2018 report by the Aerospace Industries Association of Canada (AIAC), the sector has experienced positive growth over the past five years. It contributes about $25 billion to the country’s GDP, directly generates close to $29 billion in revenues, and invests nearly $1.8 billion in research and development (R&D)—significantly more than any other manufacturing sector in the country. And it employs almost 200,000 Canadians.
This robust sector is playing on a global landscape. According to the report, which pulls from 2017 activity, about 75 per cent of manufactured products are exported, and 60 per cent of those are supply chain components.
Globally, Canada is ranked first for civil flight simulation, second for business aircraft production, and considered one of the top three countries for civil aircraft, engines and flight simulation production. And just last year, it was among the highest in the world for total manufacturing GDP.
These are some strong numbers. But if you look at what emerging economies and other countries are doing in terms of investment and government support, Canada’s aerospace sector is potentially at risk of losing its high ranking status. An AIAC release reported that aerospace manufacturing employment has dropped five per cent and its GDP contributions have declined by four per cent since 2012.
“We continue to create high quality jobs, invent technologies that are global leading, and create relationships that are essential to our sector and the future prosperity of this country,” says Jim Quick, president of AIAC. “However, we’re seeing indicators that are showing that we’re actually slipping and that aerospace in Canada is not keeping up with the rest of the world.”
The aerospace sector thrives on innovation, which clearly relies on a tremendous amount of R&D—to be a global competitor it’s essential. Today, Canada has a reputation as a good environment that companies are attracted to do business in. But as Quick points out, “if that environment starts to erode, we’re going to lose that investment.
“Our contribution to R&D has decreased by $200 million in the past two years. The reason why this is happening is because [Canada is] taking the focus off aerospace specific R&D support programs and opening those programs up to other sectors and industries, a one size fits all strategy,” says Quick. “We’re doing this at a time when our competitors are doubling down on creating aerospace programs to help drive innovation and technology development.”
For Canada to remain a global leader a long term national strategy is paramount. “There are emerging aerospace economies that want what Canada has. If we don’t have a strategy that says how we’re going to be global leaders, we’re going to fall behind,” says Quick. “Another concern is technology in general. We want to ensure that we have a world-class supply chain that allows us to compete in any jurisdiction across the globe. Technology and innovation are the key elements of that.”
Moira Harvey, executive director of the Ontario Aerospace Council, echoes Quick’s perspective. “What’s really critical is that there’s government involvement. We need support from both the federal and provincial government to make sure the sector meets competitive challenges and exceeds expectations with respect to our supply chain, which often crosses many borders. If you look at countries that have very successful aerospace sectors, there is significant involvement and investment by government.”
Fortunately, many companies playing within this sector are diversified across the various segments—commercial, business and defense—which helps them navigate the ebbs and flows of demand. Harvey says that the commercial aerospace market is stronger than it’s ever been. If you look at projections from Airbus and Boeing, they’re both looking at ramp ups to over 50 aircraft per month. “That might not seem like much if you look at it from an automotive side, but for aerospace it’s huge to do that many units per month. Of course, the supply chain is going to have to ramp up to deliver on that.”
Canada’s supply chain is vast, intricate, and made up of many small to medium companies. Quick says we need to help them grow and scale up. “When companies come here to look for a supply chain, they’re not just worried about if we can develop certain kinds of technologies or build certain platforms, they’re also concerned about whether those companies have sufficient revenue, employees, and are financially healthy.”
In aerospace, there are stringent requirements for safety and certification, which requires investment. And there are other costs involved such as infrastructure and employees. But one of the biggest changes that will directly impact small to medium companies is how traditional manufacturing methods are changing with the entrance of additive manufacturing.
“Our small to medium enterprises need to be better educated on what this means for their businesses, what opportunities there are, and how they can morph into the shop of the future,” says Harvey. “Assemblies that might be 20 different pieces right now might change to one or two pieces in an additive manufacturing scenario. How do some of our smaller shops embrace that technology? It’s really about how we can enable our smaller companies, which are our life blood, to make sure they can transform themselves and still be viable and valuable.”
In terms of government programs, there is the Strategic Innovation Fund (SIF) by Innovation, Science and Economic Development Canada, which offers investment funding for R&D. Although it is open to all Canadian businesses, there are some funding recipients that are in the aerospace sector.
Coulson Aviation, a family-run company based in Port Alberni, BC, received an investment from SIF of almost $3.4 million last year.
Founded in 1960 as a forestry company, Coulson Group has evolved over the years into a conglomerate of companies servicing a variety of industries such as aviation, forestry, manufacturing and environmentally friendly cleaning technologies.
Coulson Aviation is an interesting hybrid within the aerospace sector—it’s the only company in the world that specializes in large helicopters and air tankers designed to fight fires. Its primary markets are U.S. and Australia. The SIF funding it received was to support a first-of-its-kind R&D initiative to convert a Boeing 737 plane into a dual-purpose aerial fire fighting tanker.
“The 737 is the highest produced and arguably one of the best aircraft in the world,” says Britton Coulson, vice president of Coulson Aviation. “The modification that we did was the largest ever done to a 737 and we put about 140,000 touch labour hours into it. Our multi-use RADS-XXL 4,000 USG tanking system is a real engineering feat, we are the only ones to ever modify the lower lobe primary structure and many people said it couldn’t be done. Where there’s a will there’s is a way, and the entire Coulson team has the will to be the best.”
The first 737 is currently on contract in Australia, and not only is it capable of fighting fires, but it’s also the first air tanker that can move passengers.
“The passenger transport capability was another design feature we put in to generate additional value for our customers,” says Coulson
Coulson Aviation invests more than $3 million in R&D per year. “For us, it’s about a passion for fire fighting and the desire to be the best we can be. By doing our design in-house, it gives me and the modification/maintenance/flight crew intimate knowledge of the system and we all actively participate in the design. This creates a unique team orientated atmosphere,” says Coulson. “Any time you do new innovative things and push the boundaries there are a lot of technical risks. Everything we do is high risk and its our job to de-risk as much as possible; we do this by relying on our group of experts and taking feedback from all users early in the program.”
Turbulence in the workforce
Canada’s aerospace sector certainly has a growth momentum and extraordinary future potential. But the skilled trades and labour shortage, which is echoed across all manufacturing industries, poses a major issue for aerospace.
Quick says the industry is under extreme pressure to get trained and qualified workers to do the work required. And a study released by the Canadian Council for Aerospace and Aviation (CCAA) projects it will need 55,000 new workers within the next five years.
The federal government doles out billions of dollars each year to the provinces for skills development and training. And while some provinces are offering programs that work well and in favour of aerospace as an industry, Quick says a national approach and a human resources strategy is needed to maintain this industry as a top employer in the country.
OAC and the Ontario Manufacturing Learning Consortium developed a program through the province's Youth Skills connection funding. “A group of associations got together to develop a methodology and training curriculum that was industry defined and industry lead,” says Harvey.
Too often, people think they have to be a pilot or engineer to work in aerospace. This program helped defined the various roles and opportunities on the shop floor and create awareness about what the aerospace industry has to offer.
And Harvey points out that the CCAA also has a student workplace training program. “The OAC and CCAA are collaborating on positions where we cross over and working with industry groups to really determine what it is that employees need to be able to do.”
Interestingly, due to aggressive diversification and employee recruitment and retention programs, the aerospace industry has doubled its female workforce, according the AIAC 2018 industry report.
And the aerospace industry’s share of STEM (science, technology, engineering and mathematics) workers accounts for three times the national manufacturing average—female workers make up about 25 per cent of STEM-related aerospace jobs in Canada.
To address all of these major issues and build a solid national strategy for investment, support and labour, AIAC recently launched Vision 2025, an industry led initiative to start a dialogue between industry, government and stakeholders.
Former Deputy Prime Minister and Quebec Premier, Jean Charest, will lead the initiative, which will consist of discussions and input gathered throughout the year to set priorities and a national strategy for Canada’s aerospace industry.
“What we want to achieve with Vision 2025 is to make sure Canada and the aerospace industry is recognized as a strategic economic driver. Mr. Charest’s report will identify the key things we need to happen for us to be in that position,” says Quick.
“We need to make sure Canada has a clear focus and long-term strategy. Without that, Canada is at risk.” SMT