Good afternoon. Thank you for the invitation to join you today.
My name is Mark Beauregard. I'm the vice-president of regulatory affairs at the Aerospace Industries Association of Canada. I'm a professional engineer and business person. I've spent over 30 years in the Canadian aerospace industry.
AIAC member companies manufacture aeronautical and space products, and they engage in aircraft maintenance, repair, and overhaul. We contribute over $28 billion to the economy each year, and help to employ well over 200,000 people. Over 80% of the aerospace industry's goods and services are exported, and much of this is for civil applications.
Our industry complies with a vast regime of safety standards and regulations designed to ensure that air travel remains safe, reliable, and sustainable. Canada has long been a leader in aviation regulations worldwide. Transport Canada's civil aviation branch, TCCA, is known worldwide as one of the big four regulatory bodies, along with the U.S. FAA, Europe's EASA, and Brazil's ANAC.
TCCA's certifications and approvals make it easier for Canadian manufacturers and service providers to do business in foreign jurisdictions, thereby increasing the sector's global competitiveness. A TCCA certification or approval with its worldwide recognition is the final and essential step in the innovation value stream for Canadian civil aviation products and services.
Recognizing the importance of the aerospace industry to the Canadian economy, the federal government, provincial governments, and municipalities have long invested directly and indirectly in the Canadian aerospace sector. The federal government's efforts to support innovation, through programs such as the innovation superclusters initiative, the strategic innovation fund, and the accelerated growth service, are highly welcomed by the industry, and numerous aerospace firms will benefit from these programs. However, these government investments are not optimized unless TCCA's certification and standards departments are adequately funded to provide timely certifications and approvals at the end of the innovation value stream.
Let me give you a few numbers to illustrate the scope of the problem.
Over the past 10 years, Canada's aerospace industry has grown substantially. Our economic impact has increased by approximately 31% in GDP terms. Productivity has increased by 39%, and R and D spending by 64%. Over the same period of time, the budget for Transport Canada's certification and standards branches has not increased at all. In fact in real terms, it has actually been reduced.
This inadequate funding is having a significant negative impact on TCCA's ability to support the industry's export competitiveness and on TCCA's global reputation. It has resulted in delays on certifications and approvals, it has created bottlenecks, and it is impeding the industry's ability to keep up with demand. The international aviation community, which includes foreign aviation authorities, has expressed concerns to us regarding TCCA's ability to maintain its regulatory leadership.
Transport Canada senior management and other Government of Canada departments have recognized the critical role of TCCA in the value stream, and have initiated various temporary measures to address the funding shortfall. That has been an encouraging start, but more needs to be done, and urgently.
Our recommendation to this committee and to the government is that budget 2018 establish additional, predictable, and stable funding for TCCA. We recommend that the budget for TCCA be increased by approximately $30 million over five years. This is indeed a modest amount, only $6 million a year, which will help to ensure that our $28-billion industry continues to bring products to market quickly and competitively. The budget increase should be used to hire much-needed and highly specialized certification staff, to increase focus on effectively negotiating bilateral airworthiness and maintenance agreements, and for the updating and modernization of TCCA's regulatory framework.
In conclusion, we urge you to review the current budget at TCCA, in particular with respect to the certification and standards branches. It would be really tragic if the innovation value stream, that governments fund to a large degree with industry, is dampened by inadequate funding at TCCA.
Thank you for your attention. I'm happy to answer any questions you may have.