Thank you, Madam Chair and members of the committee, for the opportunity to appear today on behalf of Canada’s aerospace industry.
I would like to start by acknowledging budget 2025’s removal of aircraft from the job-killing luxury tax. That decision and the support of this committee are protecting Canadian aerospace jobs, strengthening domestic competitiveness and supporting the hundreds of thousands of highly skilled workers across the industry. I want to thank the Minister of Finance, all parties and this committee for supporting the removal of the tax.
As I've said before at this committee, Canada’s aerospace industry is truly a strategic national asset, with a world-class workforce and key industrial capability spanning civil aviation, defence, space and emerging technologies. Our industry contributes more than $34 billion annually to Canada’s GDP, supporting over 225,000 well-paying jobs right across the country, and we remain Canada’s leading manufacturing R and D sector.
Canadian aerospace is export-driven, innovation-intensive and deeply integrated into North American defence, security and economic systems. In today’s geopolitical environment, aerospace is not simply a top manufacturing sector; it is a strategic, sovereign capability, as outlined directly within Canada’s new defence industrial strategy. AIAC welcomes the release of the strategy, but the focus now must shift from strategy to execution, with industry engaged early and consistently as government moves forward with its implementation.
Canadian aerospace firms require clear demand signals, long-term visibility and predictable procurement timelines to invest with confidence. As Canada’s Secretary of State for Defence Procurement, Stephen Fuhr, said, “Industry doesn’t invest money on ‘maybe.’ They want more surety...and that’s what the DIS is supposed to provide—clarity on where we’re headed.” We couldn't agree more.
For government to deliver on the strategy, procurement reform must be a strategic imperative. Procurement systems must be not only fair, open and transparent, but also timely, effective and outcome-driven. Innovation mechanisms such as BOREALIS and the Defence Investment Agency have an important role to play in procurement reform, accelerating Canadian innovation and industrial scale-up. The investment agency in particular has the opportunity to create a more agile, responsive and outcome-driven approach, but the agency must be informed through early and ongoing engagement with industry to ensure alignment with industry timelines and supply chains.
We are pleased to see defence funding increase to 2% of GDP, along with the government’s commitment to 5% in the coming years. I would encourage the committee to ensure that this is a continued recommendation.
This brings me to my next point, which is that civil aviation and defence are two sides of the same coin. One cannot thrive without the other. To that end, Canada needs a complementary federal aerospace industrial strategy. A coordinated federal strategy for aerospace would help align investments, strengthen sovereign industrial capacity and grow Canadian exports across the civil, defence and space sectors.
Canada-U.S. aerospace supply chains are deeply integrated and have been built over decades through shared production systems, certification frameworks and trusted industrial partnerships. These supply chains cannot simply be restructured or replaced overnight. AIAC is strongly encouraging governments on both sides of the border to maintain zero-for-zero aerospace trade through the ongoing tariff and CUSMA discussions.
Lastly, accelerating aerospace innovation and getting products to market depend on a responsive and well-resourced regulatory environment. Transport Canada plays a critical role in certifying new technologies, maintaining safety standards and supporting Canada’s international reputation as a top-tier aviation regulator.
Canada is one of the only countries in the world capable of building an aircraft from nose to tail and certifying it domestically. That certification capability is a crown jewel of Canada’s aerospace sector, and we cannot allow it to erode. AIAC is recommending a review of Transport Canada’s aviation-related governance structures, alongside stable and predictable resourcing for civil aviation activities.
Canada’s aerospace sector remains the country’s leading manufacturing R and D industry because of its highly skilled Canadians bringing innovative ideas to life every day. The industry is ready to deliver. The opportunity is now for government and industry to move with the urgency and ambition required to strengthen Canada’s economic sovereignty and security in an increasingly competitive world.
If I could offer this to all parliamentarians, we have workers and industry in every single region of the country and would be pleased to host any of you at our facilities over the upcoming summer break.
Thank you, and I look forward to the discussion.