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

9:20 a.m.

Conservative

The Chair Merv Tweed

Thank you.

Before we go to Mr. Adler, we'll take a one-minute recess. We've had a bit of a technical problem, so we have to take a one-minute break. We're going to reboot, then we'll come back to you, so we'll suspend for one minute.

9:25 a.m.

Conservative

The Chair Merv Tweed

We are back and technically sound again, so I'll go to Mr. Adler.

9:25 a.m.

Conservative

Mark Adler York Centre, ON

Thank you, Chair.

Thank you to the witnesses for appearing today.

Mr. Fortier, as a historian, could you review some of the history of the aerospace and aircraft industry in Canada?

I just want to preface my comments by saying that I represent the riding of York Centre, where Bombardier is located, the largest private sector employer in the GTA, and they were just awarded yesterday, as you probably know, a contract from WestJet to produce 20 Q400s with an option for an additional 25. We're all very happy about that and York Centre is bringing lots of jobs and investment to my community.

Mr. Fortier, I just want to ask you how has the history of the development of the aerospace and aircraft industry in Canada been skewed, if you will, by involvement from government, notwithstanding wartime production but during peacetime production?

Let me give you an example. In 1986 when the CF-18 maintenance contract was awarded to Montreal instead of Winnipeg, it caused a whole big political scandal. Then in the early 1990s when Boeing owned de Havilland and wanted to sell it, there was a consortium from Europe that was interested, and the Ontario NDP government of the time wanted to be a partner and own an aircraft industry. Could you talk a bit about that, and in light of those examples, about how government involvement can really skew the private sector development of Canada's airplane or aerospace industry?

9:25 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

It can happen. It's probably not only Canada; that sort of thing can happen in different countries.

You might have to remind me about the first aspect of your question.

On the second one, the purchase from a European consortium, I'm not all that familiar with all the details, but there was certainly an interest, as you said, and eventually when the federal government approved the whole thing, eventually Boeing disposed itself of de Havilland because it was sold to the Ontario government and to Bombardier, and eventually the Ontario government pulled out and Bombardier became the sole owner.

My understanding as far as that general sale was concerned was that the Ontario government was certainly concerned, but Boeing had great problems with de Havilland because Boeing had experience with big airplanes, long-range aircraft, jets on their own soil, and they had this little company that had its own culture. You have company cultures, and they had massive problems so they were trying to find a way to divest themselves of it.

Why exactly the Ontario government objected might have been a question of job loss. It's possible, and I'm not just fabricating here, but it's possible that the European consortium might have decided that since they were making regional airliners that in a way competed with something that de Havilland could build, they might have wanted de Havilland to become more of a subcontractor to them—that is to make parts rather than make complete aircraft. That might have been part of the concerns that the Ontario government was involved with.

9:30 a.m.

Conservative

Mark Adler York Centre, ON

It turned out it wanted to be a partner with the European consortium. The Ontario government wanted to be a partner with the European consortium initially.

9:30 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

Okay, that's my mistake. I was not aware of that, but eventually it became partners when it was sold to Bombardier. The idea might have been they wanted to have some sort of control over it.

9:30 a.m.

Conservative

Mark Adler York Centre, ON

At the de Havilland facility, 90% of what Bombardier produces is for export. They also produce all of the planes that Porter Airlines uses.

They have told me that they have benefited by the free trade agreements that our government and previous governments have negotiated, but particularly the nine that we have negotiated since we've been in power.

Could you talk about the advantages historically of how free trade can benefit the aerospace industry and the airplane industry in Canada?

9:30 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

Historically speaking, I'll give you a foreign example. The airline industry in the interwar years in Europe very often was government-owned, and very often they ordered aircraft that were built in their country.

In some cases, they were not necessarily the best aircraft available, but they were the aircraft that were built in the country, whereas in America from the mid-thirties onward pretty much until Airbus came along—with some exceptions—the airline industry was dominated by U.S. airliners. So there were cases where European airlines were stuck with European airplanes from their own countries. They were not bad airplanes, but the American ones were better.

So we certainly have that aspect to it. In Canada TCA/Air Canada was in a rather different situation. There was no airline manufacturing here in the late thirties. There was some after the Second World War, Canadair and the North Star, for example, but by and large, the policy—because it was a crown corporation, owned by the government—was don't get us into trouble, don't embarrass us, don't have deficits, and if you want to buy American or British, you buy the best airliners available.

There was something about the North Star. There was some encouragement to buy it, but TC was involved in the development of the aircraft. They were able to get what they wanted and eventually it proved to be a reliable airplane. TC was also involved in the development of the jetliner by Avro and that didn't pan out, but they tried certainly to keep the airline.... You're an airline. You do the airline stuff. We're the government. We're paying you, but do what you have to do.

9:30 a.m.

Conservative

Mark Adler York Centre, ON

Could you just jump back to the CF-18 maintenance contract and how that really skewed not only the political environment, but how Winnipeg really suffered and the industry really suffered in Winnipeg for that political decision?

9:30 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

Politics do play a role and you have large players like Bombardier. In the United States it's the same thing. You have “senators from Boeing”, they're called, probably behind their backs. There's a lot of lobbying that takes place. In some cases, some areas of the country will come up in second position.

9:30 a.m.

Conservative

Mark Adler York Centre, ON

But all things being equal, letting the marketplace decide where those jobs should have gone, it should have been Winnipeg, right?

9:30 a.m.

Curator, Canadian Aviation and Space Museum

Rénald Fortier

I have to say I'm not familiar enough with the file to actually look at it.

9:30 a.m.

Conservative

Mark Adler York Centre, ON

With hindsight, it's possible.

9:30 a.m.

Conservative

The Chair Merv Tweed

I'll have to stop there, but thank, Mr. Adler, for the support for Winnipeg, and my province.

Ms. Rempel.

May 3rd, 2012 / 9:30 a.m.

Conservative

Michelle Rempel Calgary Centre-North, AB

Good morning, and thank you to the witnesses for their presentation.

We're here today to talk about innovation in the aviation sector. Maybe I'll start by talking about the difference between invention and innovation. Invention is commonly referred to as creator-driven. It's the creation of something new whereas innovation is usually something that responds to a market demand, something that provides some sort of a public benefit, be it a social benefit or economic growth.

So with that concept in mind, we also have to look at the difference between market pushes and market pulls. Market push is the push of an invention into the market to try to create a demand, whereas a pull is where there's an existing demand that you can easily adopt a technology to. So bearing those four principles in mind, how do you think that Canadian aviation could allow for better adoption of technology, knowing that the path to adoption is usually a market pull factor?