Evidence of meeting #34 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

8:50 a.m.

Conservative

The Chair Merv Tweed

Good morning everyone and welcome to meeting 34 of the Standing Committee on Transport, Infrastructure and Communities. The orders of the day, pursuant to Standing Order 108(2), call for a study of innovative transportation technologies.

Joining us today from the Canadian Aviation and Space Museum are Mr. Stephen Quick, the director general, and the curator, Rénald Fortier. Welcome.

I understand you know the process. We'll open the floor for you to make some comments and then we'll move to questions from the committee, so please proceed.

8:50 a.m.

Stephen Quick Director General, Canadian Aviation and Space Museum

Thank you very much.

Mr. Chair, members of the committee and parliamentary secretary, on behalf of our board of trustees and its chair, Gary Polonsky, as well as our president and CEO, Denise Amyot, I would like to thank you for your invitation and the opportunity to present our point of view.

Please allow me first to give you a brief overview of who we are and what we do. I will make it brief.

The Canada Science and Technology Museums Corporation's vision is to engage all Canadians with their scientific and technological past, present, and future.

The Canada Science and Technology Museums Corporation operates the three national museums that house the richest collection of Canadian achievements in science, technology and innovation. Those museums are the Canada Science and Technology Museum, the Canada Agriculture Museum and the Canada Aviation and Space Museum.

We are here today to provide you with an overview of what history can teach us about the public sector's contribution to innovations in transport, particularly in the area of aviation in Canada.

You might be interested to know that we have embarked on a six-year energy literacy initiative entitled let's talk energy: engaging ideas for Canada's future. This initiative aims at helping Canadians gain a deeper awareness of energy issues facing our country and understanding the underlying science. We have mobilized the creative capacity of the three museums in the corporation to do three major exhibitions on this theme and have enlisted 24 science centres and museums from across Canada, so far, to engage Canadians on this theme.

We are keenly interested in presenting the technological innovations that will help our country become a world leader in sustainable energy production and consumption, and notably for this committee, which is why I mention it, transportation, infrastructure, and communities.

Technology, innovation, energy, and sustainability are the key thrusts for the future of our country and our museums are committed to not only engaging Canadians about their heritage, but also to providing the incubator for the birth of innovations that will secure our future. As museums our remit is science and technology. Innovations in transportation feature heavily in our collection, which is celebrated through our exhibitions and programs. Most notably, these include new composite materials and technology in biofuels, bioplastics, and biocrops.

I wish to commend the committee for engaging in this study. The Canada Science and Technology Museums Corporation is supported by curators; Dr. Rénald Fortier is with us today. They look after collections covering marine, rail, and road modes of transportation, as well as aviation—which is ours—and could be at your disposal to answer questions salient to these areas of concern at future meetings.

I will ask Dr. Rénald Fortier, our chief curator for aviation, to present a historical perspective on the history of aviation in Canada and the importance of the contribution of the Canadian public sector in supporting innovation in that industry. He will focus his remarks by period in order to give them a structure and contemporary context. You will see that success for a high-tech industry like aviation depends upon the adoption of a holistic approach to the environment that supports and nurtures it. This is not realistically feasible with private sector resources alone. This environment is supported by a number of key elements, namely education, research, training, infrastructure, certainly public policy, support for domestic and foreign markets, and active retention of expertise, which is really key especially given the ebb and flow of the market needs in conflicting sales and operating conditions.

Continuity is paramount to success given the longer gestation periods of such high-tech machinery, and the fragility of the infrastructure and markets that support it. As a national museum, the Canada Aviation and Space Museum is striving to be an integral part of this infrastructure through the creation of a creative campus that will provide the incubator for generating innovative solutions to the issues that face the industry and by showcasing not only its history but its future. We are part of the supply chain.

A historical overview is important in order to better understand where investments in this holistic environment and its infrastructure are necessary, and so at this juncture, I will pass the microphone to Dr. Rénald Fortier.

Thank you.

8:50 a.m.

Rénald Fortier Curator, Canadian Aviation and Space Museum

Good morning.

There are a number of ways to approach the history of aviation, especially from the point of view of innovation and technology. Very quickly, each period in history can be used to bring about and illustrate certain aspects of it.

For example, in the early days of aviation, around 1903 to 1914, when the first airplanes flew, it was pretty much a level playing field. No one had the experience of building aviation or designing aviation. Pretty much everyone started from scratch. One could argue the same thing is true of, for example, biofuels.

Everyone is starting pretty much from scratch, so the history can, I would say, bring lessons or can illustrate that different technologies appear at different times, and in some cases, all start from scratch and from the same basic level.

Before 1914, very few knew aviation here. During the Great War, it was mainly the British who set up an aircraft manufacturing company in southern Ontario to provide aircraft for training schools, for flight schools in Canada, and to train pilots for service overseas.

With the end of the war, the company sort of disappeared. There was no market here. After the war, there was no military market, and civilian-wise there was very little.

During the interwar years, you have the rebirth—the second phase of the aircraft industry. The federal government—there was an air force—wanted to replace the older machines they had received from the British. Therefore, it was decided that a nucleus of aircraft manufacturing in Canada would be set up.

It chose Canadian Vickers in Montreal to develop a series of aircraft for the air force, but not for combat roles. It was asked to provide aircraft, Canadian-designed, for resource development—for example, forestry patrol and aerial mapping—because the air force knew they wouldn't be able to get lots of money anyway, and lots of money for combat aircraft.

So, it was decided to have aircraft that could be used by the civil authorities for resource development. That was the role of the air force for much of the interwar years, until rearmament took place in the mid-thirties because of tensions in Europe. Again, that policy of developing the industry was not something that the government came up with, it was something imposed on them from the outside.

There were tensions. They knew that something could happen, so precaution let us rearm slowly, according to our resources. Aircraft were ordered for production in Canada. By and large they were British designs, because at the time the Canadian air force was closely aligned with the Royal Air Force, for training and combat equipment.

If you look, for example, at civilian operators, the situation was quite different. Civilian operators used mainly American aircraft, ones called bush planes, small aircraft fitted with floats or skis to operate all over Canada. That's how certain companies came to Canada, to build aircraft for the Canadian market.

These companies discovered that there was a market in Canada. Rather than import into the country and face tariffs and taxes, they decided to build the aircraft here. That's why a number of companies were created in the late twenties to cater to that market, and also to cater to another market, which was also developed by the Canadian government, and that was the flying clubs.

The flying clubs were set up by the federal government as schools that could develop trained pilots in case of emergencies. Of course, these aircraft could be either manufactured in Canada or assembled in Canada. You have companies like de Havilland Aircraft of Canada, which was formed in a way to provide aircraft for the flying club movement.

Also you have airmail. Airmail worked very well. You had trains that would carry the mail across the country very satisfactorily, but subsidies were given to the struggling bush operators to carry mail in outlying areas where there were no trains and where mail could take a while to get through. By using that to help the operators—because they were struggling and didn't make a whole lot of money, if any, profits at all—the mail subsidies were very helpful. They helped them carry through from year to year, because at that time, in commercial operation in Canada, until pretty well the Second World War, the end of the months were painful. The end of the year was very painful. There was a lot of turnover and companies disappeared and reappeared.

You have rearmament for the air force, as I said, mainly British aircraft for service here. The British also offered contracts to Canadian manufacturers to help build up a potential in Canada for combat aircraft to be used by the British outside Canada.

That was the situation in 1939; you were looking at fewer than 4,000 employees in about eight companies. The industry was small, just looking at 300 aircraft ordered over let's say four years, that's about 75 aircraft per year. You have about eight aircraft manufacturers.

The number of aircraft built per year was minuscule. The industry was struggling. The Second World War started. You had military contracts increasing. You had the fall of France in the spring of 1940, and, if I may use the expression, all hell broke loose.

At that time, military budgets went through the roof. We had to do something. We had to produce a lot more aircraft. It was urgent. There was the so-called phony war from 1939 until mid-1940. There was a war on, but it didn't really change much. One of the things, though, was the training plan of the British Commonwealth. It was one of the major accomplishments of Canada during the Second World War. You're looking at 1939. There was a nucleus of training establishments for the air force. By the middle of the war, you were looking at 100 bases and 100-plus schools, plus the supplementary airfields for emergency use as well as all the roads, networks, control towers, equipment, and aircraft.

By the end of the war, Canada had trained something like 125,000 air crew. That's gunners, radio operators, pilots, the whole gamut. This was for fighters and bombers for service mainly overseas, but also for local defence. That's a lot—125,000 people. My personal calculation is that it was probably one of every eight Allied air crew trained during the war.

That made a huge impact on pilot training. Aircraft manufacturing was fairly small—you're looking at about 16,000 aircraft. You may think 16,000 is huge, but over 800,000 aircraft were made during the Second World War. Aircraft-wise, Canada was not all that significant. Training-wise, Canada was very significant. This was a massive construction effort, an infrastructure project. In 1939 when that was signed, there was nothing. A few years later, you had 100 schools running seven days a week. It was a massive accomplishment.

Towards the end of the war, the government realized that the war would end and that we would win. It looked really good. They decided to do something so that when the war ended we wouldn't have a collapse of the industry, like the one that had taken place in 1918-19. In 1944, you had about 120,000 employees—about 30,000 women. The number had started to go down. I think they were hoping that if the war continued until 1946, the number would go down significantly, so that the number of firings would not be too great. They would be able to manage it and have some sort of nucleus of an industry. The big manufacturers would survive and would be helped with government contracts after the war. But the war ended unexpectedly in August 1945. You had about 80,000 who just went pfft! Most of them were fired. The contracts were cancelled. There were no more military contracts, so it was not a fun period for the industry.

In the early postwar years, you had production of airliners like Canadair. At the end of the Second World War, the government wanted to preserve the big manufacturers at least as a nucleus. One was Canadair, which is now part of Bombardier in Montreal. You had the de Havilland Aircraft company in Toronto, which is now also part of the Bombardier empire. You had Avro. Of these three companies, two were British-owned—Avro and de Havilland. The third one became American-owned—that's Canadair.

In the early postwar years, you had the production of airliners. The war was over, and we had to develop something. The air force needed transport. The airline TCA—Air Canada—needed transport aircraft. There were projects and high-tech innovation. The first jetliner to fly in North America was Canadian. It was made by Avro Canada. It was the second in the world, actually. There was certainly innovation there. As to jet production, there was little experience in starting at ground level rather than in mid-stream. It was uncertain whether Canada, with its limited resources, would be able to compete in developing this new technology.

Then the Korean War happened. The jetliner was put aside in order to produce combat aircraft for the Cold War. You had massive increases in government spending for defence. Canadair got massive orders, as did de Havilland. All the manufacturers were producing massively, using factories that had been put up during the Second World War by the federal government. They used machine tools that in some cases dated from the Second World War. They had been paid for by Ottawa because the industry didn't have the time, money, or resources to build the factories and obtain the machine tools. The federal government went to American manufacturers and told them what they needed. They got the tools and distributed them across the industry.

During the Cold War, there was massive development, massive production. The production capability was so large that they could afford to give away something like 900 aircraft to smaller NATO countries who were struggling because they had been devastated during the war.

Canada was a big player as far as aircraft manufacturing was concerned, either manufacturing foreign aircraft under licence, mainly American ones, or designing aircraft of its own and producing aircraft design here. There was a great variety, some of them fairly low-tech, like bush planes, for example. De Havilland continued to produce bush planes throughout the 1940s, 1950s, and 1960s, exporting them all over the world. Of the three great manufacturers, it was pretty much the one that was most independent. It exported most of its planes.

That's a very significant aspect of Canadian aircraft manufacturing. By and large, the internal market is too small. Unless you have large military budgets, as in wartime or the death of the Cold War, there's not enough internal market; you have to export. Whether it's aircraft engines or subcomponents, you have to export, which means you need products that are exportable.

Bush planes, such as the Beaver, were examples of that. A bush plane is a pickup truck with wings. Everybody can use a pickup truck. They were exporting them like crazy, all over the world.

The combat aircraft is a more specialized market. If you design your own aircraft—again, the cost of design was such that by the late 1950s Canada had overextended itself a bit. We were trying to build and design a variety of planes. The cost of aircraft designing was very high and producing them was very high as well, so eventually a wall was hit.

Canada had to realize that realities were such that high performance aircraft.... We had to specialize. We had to reduce, to diversify, to build what we could under licence, or to design what we could, in order to export these aircraft. That turning point was the late 1950s and early 1960s, and I can end that very quickly.

In the early 1960s you had the cancellation of the Avro Arrow. Avro Canada went out of aircraft manufacturing. The engine side continued, but not designing new engines. They were manufacturing engines for other people. De Havilland Canada lost its major customer, which was the U.S. Army. De Havilland exported mainly to the U.S. Army, not the Canadian armed forces. In the mid-1960s they lost that, for reasons I can go into if you have questions.

Canadair was doing relatively well. But again, you had decreases in defence budgets, so that was a turning point in the mid-sixties. Pratt & Whitney Canada, however, was beginning its climb to greatness, and by the mid-seventies Canadair and de Havilland Canada were in trouble. The federal government took over both companies and eventually sold them to Bombardier.

We had concentration of the aircraft industry. Avro was gone. So we had one aircraft manufacturer, one main engine manufacturer—Pratt & Whitney Canada—and a great deal of expertise in other areas, like simulators, for example.

I probably went over my time. I apologize. But in a nutshell, it's one of the largest industries in the world as far as aerospace is concerned. With regard to exports, it's one of the major export industries in Canada. It's a high-tech product. It's well-paying jobs.

It's the future in the way that there are great possibilities as far as new aircraft, new engines, simulators.... There is research being done in biofuels and alternative fuels. There's a great potential there, but in order to continue that the industry will need new products.

There are a variety of ways to help the industry. Government should be a part of that and has been a part of that pretty well since the early days.

I'll be quiet now. Thank you.

9:05 a.m.

Conservative

The Chair Merv Tweed

Thank you very much.

Ms. Chow.

9:05 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

What role do you think the government should play now? I know you're dealing with the history, but what are some of the challenges facing the aviation industry?

9:05 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

You have research and education, for example. There are a number of engineering schools in Canada that teach aerospace engineering. You have to help research; therefore, you need to have researchers—NRC, for example. They need equipment in order to conduct this high-tech research, so it's about renewing the equipment.

You have the idea also of the various levels of government—municipal, provincial, national, international, as well—if I could use the expression, trying to row in the same direction.

You don't want duplication. You don't want conflicts when you try to help the industry to export. That is a main purpose. You have to develop the aircraft and sell the aircraft, so having government....

For instance, if the Quebec Government wants to help Bombardier sell its aircraft, that's good. Would the federal government want to do the same thing in the same places? They might want to go to other places so they can cover as many places as possible to get the aircraft sold.

9:05 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

Bombardier, for example, has been working with the federal government in China, in Shanghai, and in other places where they're trying to sell, because the Chinese government is building a lot of airports now, and the industry is taking off there.

But beyond what we're already doing, are you familiar with what else the federal government can be doing, especially connected with Transport Canada, not necessarily with industry and trade, because this is the transport committee. Are there legislative problems or barriers that are preventing scientists from taking a product to market, or are there regulations that are making it difficult?

9:10 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

I must say, being a historian, I tend to be a bit more interested in the past than in the future, although we have been asked in our corporation to be a lot more open to that aspect at present and in future. The exhibition we have now on energy looks at new material, so I've learned a great deal about the research that's being done at NRC, for example.

But as far as Transport Canada is concerned, Nav Canada is certainly an aspect of that, which is quite important. They have great expertise in air traffic management and that should be helped. In terms of the material, the software they have can be exported. That, again, helps them to build on that, to design more software, to improve air traffic management, because that's a significant aspect.

The idea of transportation is a lot more than aircraft. The aircraft play a role in efficiency, so do airports. Air traffic management is a very crucial point because, if you can stack more airplanes in the same volume because you know precisely where they are, you can increase efficiency and reduce your consumption. So Nav Canada has a great role. Helping them as much as possible, given the budgetary limits, might be difficult.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

If there is one mistake that previous governments have made, historically—either they didn't put up barriers, or they did not come in at the right time—what would that incident be? What one lesson should we learn from? Is it not contributing, or not making the right decision?

9:10 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

There are so many cases. In some cases the right decision.... It's hard. You do the best you can at the time.

But one of the main things, in my mind, would be continuity. You come up with issues, you want to help, and consult as broadly as possible with the provinces—and internationally, if you have to—and develop policies and directives. Once you've decided what they are, stick with them as much as possible.

Regarding efficiency, the industry, the idea of continuity, and not changing your mind would be very useful.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

So consistency, having a plan, having a policy that would be locked in for 10 or 20 years is important.

9:10 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

A partial lock would be good. It's the idea of having—being able to change it if need be—some sort of guidelines and having a direction whereby everyone paddles in the same direction. That might be difficult in a federal country, especially with international affairs as well that come into conflict. But the idea of continuity is very useful because nowadays developing an aircraft program in the CSeries, for example, takes years. Developing anything takes years, so if you have changes of policy mid-term, it's very difficult.

If you have big changes, as in the case of the Concorde, for example—it may be off topic, but the Concorde was a great idea, supersonic airliners. Everyone was going to fly supersonic in the seventies and eighties. You had the question of pollution in the atmosphere, the idea of sonic booms over continents, the cost of fuel, and the oil crisis. It seemed like a wonderful idea and it hit a brick wall.

So you cannot predict what will happen, but the idea of flexibility, with the idea of having a direction where you're going, is very important.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

In your mind, in the period of let's say the last 30 or 40 years, did the Canadian government have the kind of policy that was able to direct the industry?

9:10 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

Certainly there were efforts. In some cases it was reactive efforts. When the government took over Canadair and de Havilland—in a way they didn't have much of a choice, the companies might have gone under—those were reactive policies, which were very good in that case. It supported the industry and helped it, and eventually Bombardier took over and it's one of the largest aerospace industries in the world.

9:10 a.m.

NDP

Olivia Chow Trinity—Spadina, ON

That's a very good example of something collapsing and the federal government stepping in to support it for a little while. Then, because it was able to continue, Bombardier stepped in and—