My name is Jim Quick and I am the president and CEO of the Aerospace Industries Association of Canada. I am pleased to be here today to present some urgent challenges facing the aerospace industry in Canada. Before I do that, let me give you an overview of the impact of the aerospace industy on the Canadian economy.
The Canada aerospace industry is the fifth largest in the world. It generates revenues of more than $22 billion annually. It employs more than 80,000 highly qualified workers across Canada. We invest approximately $1.4 billion annually in R and D, and we contribute $1.5 billion in tax revenues to federal and provincial governments. Our industry R and D initiatives are highly integrated with Canadian universities, with more than 25 universities, colleges, and research centres offering aerospace programs and activities as part of their curriculum.
The Canadian aerospace industry offers extraordinary potential for growth in every province and region of the country. In fact, the forecast for global demand for commercial aircraft is estimated to be at 29,000 units, representing $3.2 trillion over the next 20 years. A Deloitte report indicates that a 10% increase in market share would generate an additional 45,000 highly skilled and high technology jobs for Canada. A substantial increase in R and D intensity and access to skilled workers could result in doubling aerospace jobs over the next 10 years.
That being said, the aerospace competition globally is extremely fierce. Other nations, industrialized and developing, have and are developing very competitive aerospace industry sectors, and Canada must keep pace. That is why we are very pleased with the 2011 budget commitment to review all policies and programs having an impact on aerospace, with the view of providing Canada with a strategic aerospace policy framework. We thank the government for proposing it and the opposition for supporting it. This review will provide us with an opportunity to ensure that we remain competitive and a world leader in aerospace.
While we are anxious to start this work, there are three initiatives I would like to raise today that would help industry in the short term. They include investments in technology demonstrators, the preservation and enhancement of scientific research and experimental development--or the SR and ED tax credit--and ensuring efficiency of the Canadian aircraft certification process.
The commercial aircraft manufacturing industry is in the midst of a technology revolution. For example, the rapid shift from primarily metal aircraft to those largely comprised of composites has resulted in the fundamental and rapid change in the competitive landscape for OEMs and the international supply chain. The competitive advantage has been recognized by other aerospace countries, as evidenced by their growth and investments in composite demonstrator projects.
Unfortunately, Canada lags behind other jurisdictions in this area, and as a result we are missing opportunities to participate in aircraft development and design and the production of major structural components. If Canada had collaborative demonstrator projects, it would significantly increase our ability to compete in those international jurisdictions.
Industry, universities, and government research bodies would like to partner with government to develop technology demonstrator programs. This is the type of partnership that has allowed other jurisdictions to leap ahead of Canada. If we are to retain or preferably increase our global ranking in technology demonstrator programs, this is critical. AIAC recommends that government and industry partner to launch a technology demonstrator program. We expect the program would be around $240 million over a four-year period, and that would be cost-shared by government and industry.
The SR and ED program and SADI are of strategic importance to the continued creation of high-value, high-skill jobs in Canada. Earlier this year we commented on the SR and ED policy review project and basically asked government to look at considering whether or not SR and ED needs to be refundable regardless of entity size, or make SR and ED credible against income and payroll taxes. We want to allow R and D costs to occur outside of Canada and be eligible for SR and ED tax credits and allow the protection of research and development intellectual property.
In order to compete in a competitive global marketplace, Canada's aerospace companies must follow through on all aspects of commercialization, sale, and delivery of products. Aerospace is a highly regulated sector. All designs and regulated manufacturing processes must be reviewed and approved by the civil aviation branch of Transport Canada.
AIAC recommends that programs such as Transport Canada's aircraft certification program be maintained and possibly enhanced to ensure continued economic growth and job creation.