Industry Committee on May 27th, 2008

[William Geary, President, Boeing Canada Technology, The Boeing Company]

I can speak to that from the Boeing Company standpoint. We do not compete with the other members of the panel; we actually see them as our collaborators.

In the case of Magellan, they are a key supplier to Boeing commercial aircraft and a key supplier to Boeing Winnipeg. Our collaboration with CIC has been from its inception; we actually invest and collaborate in the work that Sean's team does on behalf of industry in general. We don't look at any of the members on the panel here as competition. We look at them as collaborators.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

So you will now see my second question coming.

The government has made unprecedented military purchases from Boeing. Did those contracts have a direct impact here in Manitoba? Earlier, you told us that you make sure that you buy in Canada. I agree with that, and often say that people have to be sure to buy in Quebec. I would like to know if that has affected any of the contracts you have obtained, Mr. Hoffman.

[William Geary]

I probably do not have the facts right, but when the minister announced the industrial regional benefits here a couple of months ago, I believe the announcement was in the $350 million or $360 million range for investment that the Boeing company had already identified as part of the most recent C-17 purchase by the Canadian government.

A lot of that is directed here locally in Manitoba. The work statement that is in Boeing Winnipeg is a chunk of it, and some of the work we do with our suppliers in the city, such as Cormer, and with others in other parts of Canada—Arnprior in particular, Centra, IMP out in the Atlantic provinces, and others—is connected indirectly through some of that activity.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You told us a little earlier that you had to have internationally recognized researchers and that you had to go and look for talent like that. This committee has often been told that. We get the impression that researchers are like hockey players: you get them by offering them huge salaries. I hoped my sons would do that. Not so, unfortunately, nor are they interested in politics.

Will these advantages and economic benefits allow you to bring researchers to Manitoba? Is your ability to attract researchers here one of your competitive advantages?

[Peter Hoffman]

The key thing we focus on is the government investing in and graduating talented engineers. If you look around the world, there are parts of it where degreed engineers are being produced at a tremendous rate—in China and India. We're suffering in the United States, and I believe here in Canada to a certain extent, with young people not being interested in the technical areas, so as a company we're not only engaged with higher education and reaping the benefits of those highly trained engineers who come out of the universities, but we're also engaged at the K through 12 level in trying to get kids excited about technology and thinking about it as a path, not being intimidated by the science and the math that's required to go into that field.

We really think it needs to be a grassroots effort. When we see governments actively engaging at that young age and trying to build that pipeline.... To me that's movement in the right direction.

[The Chair, Conservative, James Rajotte]

Mr. Boitson, do you want to comment?

[Don Boitson]

I was going to answer that as well. We have somewhat of a model here. I am also the president of the Manitoba Aerospace Association. When you look across the board, it's true that we really are partners here, because we sit at the same table. Willy is a board member, and so is Standard Aero and others.

So we have some collaborative ventures in which we share, and we co-fund a chair for aerospace at the University of Manitoba with the larger companies here.

We also work with our provincial and federal counterparts to look at the human resources training sector of it. As a matter of fact, this Friday we have a bunch of grade six students coming in for an aerospace day. It's very important to have that collaborative activity, starting young and continuing throughout not only elementary school but into junior high and into the Red River colleges and universities.

We need to keep actively promoting, and aligning with the programs coming forth from the federal government helps as well.

[The Chair, Conservative, James Rajotte]

You have thirty seconds left.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

I would like to ask Mr. Olson a quick question.

You intrigued me when you said that there are opportunities that bring aerospace and the automobile industry together. With the price of gas, my mind immediately went to vehicles that use less gas. But what did you mean?

[Kim Olson]

In preparing for this talk, one of the observations I had as I was looking at some of the sites on Industry Canada and so forth was I recognized Precarn as being one organization that hasn't been on our radar screen particularly. They focus a lot on robotics and that type of development.

While we have some clear applications in robotics within Standard Aero, in terms of processing, there may be other types of applications in development that we could undertake across some of those sectors if in fact we sort of recognize that we have cousins in different sectors working in complementary technologies.

[The Chair, Conservative, James Rajotte]

Do you want to add something briefly?

[Peter Hoffman]

I might add that Boeing has a number of relationships with the automobile industry. In particular, we've had a standing technology collaboration relationship with the Ford Company for over 11 years. In addition, for the past three years--we've just extended that relationship an additional five--we've had a relationship with the Renault Formula One race team. There, it's more of the high-end technology; with Ford, it's more specific applications, passenger comfort, the aging population and those type of things. We find a lot of crossover between the technologies that the automotive industry is interested in, as well as the technology we need.

[The Chair, Conservative, James Rajotte]

Thank you.

Merci, Madame Brunelle.

We'll go to Mr. Carrie, please.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

I want to thank the witnesses for being here. I could probably talk to you guys all day--coming from Oshawa--when you're talking about automobiles.

I wanted to talk about something we really haven't touched on, and that is environmental policies with governments. We're always pushing you guys to develop lighter materials, composites, better engines, things along those lines. So my first question delves into whether there is something that governments are doing around the world to, let's say, encourage environmental green technology in the aerospace sector that we should be doing here, or are you aware of something that maybe we could do?

The second question I want to talk about is more or less this defence procurement program. We've talked a little about satellites. I wanted to touch on WTO issues, free trade agreements, things along these lines.

It seems Canada is always criticized for being the Boy Scouts. I know in the States, I've talked to some guys and they say paint it green, paint it grey, and we'll call it a military expense, and that's where a lot of the American government really invests in the high-end R and D. We talk about a level playing field, how we can go about doing that.

But the bottom line is, we want to get more of that R and D here, and we want to get those value-added or higher-end jobs here.

I'm going to stop there. Let's hear your comments on those across the line, because I only have six minutes.

[The Chair, Conservative, James Rajotte]

Mr. Geary.

[William Geary]

Thank you.

The element of the environment is an important aspect that the Boeing Company is taking on in a vigorous way this year. We're doing it as a response to some of our market access in Europe, but more so because we see it as a competitive advantage in the future.

All of our manufacturing entities inside the company are going to be required by the end of the year to be certified under the ISO 14001 standard. That's the International Organization for Standardization. That standard is focused on not only using less energy, fewer resources, and putting less waste into the earth at the end of the day, but how you can leverage that in ways that give you a design advantage where you're thinking in terms of your carbon footprint, from the design aspect all the way through the use and life cycle of the product. So as one of the internal manufacturing entities inside of the company, Boeing Winnipeg will be certified by the end of the year under the standard.

I think a government entity can approach standards and things of that nature in a fashion that makes them not punitive, but more of a competitive advantage for industry. Although I don't have any answers to offer, as corporations are being asked to become better global citizens and better stewards of our economy, you might think in terms of how we can do that in a competitive way that doesn't become a disadvantage for them in the products they're trying to sell and offer the marketplace.

[The Chair, Conservative, James Rajotte]

Mr. Olson.

[Kim Olson]

Regarding the environmental aspects, I think maybe the government could consider the investments required to move to more sustainable processes. In some cases, these are quite considerable, and perhaps there could be some more creative ways to support them or incentives for those who undertake them.

For the long term, first of all, doing so would place us in a more competitively green environment by having our industry at the forefront of adopting those technologies, and secondly, there is the overall sustainment aspect that comes with that. In many cases, these greener processes can in fact provide a much more economically competitive solution to the particular work at hand as well. We have some examples of that within our business.

[Colin Carrie, Conservative, Oshawa, ON]

Do you have examples of what governments around the world have done? Do you have anything specific for us?

[Kim Olson]

Nothing comes immediately to mind to use as an example.

[Colin Carrie, Conservative, Oshawa, ON]

You can write us later.

[Don Boitson]

If I could just touch on the second comment, I know there's little time here, but it is about R and D, and you mentioned things like free trade or other areas, and how we can open that up.

I do know there has been a shift over time away from funding agencies like DREV and DRES, which are the Defence Research Establishment Valcartier and the Defence Research Establishment Suffield, and a few of these areas that were involved heavily on the research side in the past, where there were a number of partnerships, again with industry.

Again that sort of strategic direction back to military and technology funding in some of those areas needs to be made, and as well with the NRC, the National Research Council. Again, there are some areas, like those in Sean's organization, the CIC, that are getting in some of the automated equipment, getting in some of the new technologies and processes.

If we look at some of that funding, to expand some of the technology areas and make them a priority, I think it could work.

Sean, I'm not sure if you want to....

[Sean McKay]

I'm not sure the comments I would make in response to your specific question would be relevant.

[Colin Carrie, Conservative, Oshawa, ON]

You mentioned earlier that a lot of your customers are foreign customers. Is there anything the Canadian government can do to help enable you to make sales, or enable them to make sales in other countries? Is there something we're missing out on that we should be doing?

[Kim Olson]

Many of our customers are foreign because that's where the activity is taking place. There are trade commissions. We endorse those types of things that go on that raise the profile. That type of activity might support more the Asian markets and so forth. That's probably the one market where we see a lot of activity under way in terms of expanding aerospace.

I talked about foreign commitments and building in-country capability. We're seeing more and more in China, India, and Japan the building of that in-country capability, which inevitably will pull work that we're involved in out of North America, and Canada for that matter. One of the big drivers there is that we're battling against low-cost labour. I guess we have to continually work at solving that problem. I don't have the answer right now.