Finance Committee on Oct. 6th, 2026

[Mike Mueller]

Thank you for the question, and thank you for your strong support for aerospace. It was great to see you at the grand opening of a certain company in Mirabel.

I think those types of things are signals that, from an industry perspective, are responding to the signals of the defence industrial strategy. Then there's the legislation that's before us today in, I guess, two different forms. I haven't seen the new one either, but maybe just from first principles, we're very supportive of the legislation. As I mentioned in my opening remarks, the ambition of the government is there. We're supportive of the increased defence spending. We're supportive of the defence industrial strategy, which clearly identifies, in our case, aerospace as a strategic sector for the country. That's a very good signal. What we are seeing is that, at the working level, the policies and the governance aren't keeping pace with the ambition.

In my view, this legislation is critical, because it will give the opportunity to reform the governance of where we want to go on the defence industrial strategy, which is a good path forward.

There are certain other irritants and barriers, such as security clearances. If you're going to engage with industry early and in advance to determine what the needs of the Canadian Armed Forces are, if you don't have the security clearances in place, you can't have those discussions. Again, maintain the rigour of that program, absolutely, but putting some more resources into it so that industry can access that in order to have those conversations is absolutely critical.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

You also mentioned—I think it was you or Mr. Arcand—that our current mapping of the sector is fragmented. In order to make sure that we do have an integrated supply chain, as much as we can, we should improve that mapping of the industry.

Who do you think should do that? Should government lead that process, or should industry associations play a more active role in doing that?

[Mike Mueller]

I think it's a little of both. I think there's definitely a role for government, and government is championing some of these in certain areas. However, I do feel that if we take a look at the defence industrial strategy and identify those key 10 sovereign capabilities—we all know what those are—then really mapping out the supply chains underneath them is absolutely critical. That needs to be done right across the country, so that we can position industry for success in a lot of these procurements, both here in Canada and also internationally, as we're expanding some of the opportunities through different trade deals and different defence procurement mechanisms.

Having that understanding of the industry right across the country in a very detailed, granular manner would be extremely helpful. I know we're willing to come together with government to do some of that work, absolutely.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you.

Mr. Arcand, thank you for being here. We'll have to go a little faster.

The manufacturing sector is indeed undergoing massive change. Of course, the tariff environment creates uncertainty. That contributes to slowing the investment process. You mentioned demand signals and the importance of providing clear demand signals. I also think that's quite important.

How do you see that being implemented in an effective way? Is it through long-term framework agreements? How would that work?

[Alan Arcand]

Yes—

[The Chair, Liberal, Karina Gould]

You'll have to get to it another time. Mr. Leitão's time is up.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

I still have 10 seconds.

[The Chair, Liberal, Karina Gould]

No, you don't.

[Voices]

Oh, oh!

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Okay.

I will raise that with you.

[The Chair, Liberal, Karina Gould]

Maybe someone else will ask for a follow-up.

We will now continue with Mr. Garon for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

Welcome, witnesses.

I'll start with you, Mr. Mueller. Let's talk more about the topic my colleague, Mr. Leitão, raised: the possibility of an industrial strategy for the aerospace and aeronautics sector.

We know that the government has a defence industrial strategy and that it's bearing fruit. We're seeing it back home in Mirabel, we're seeing it in Longueuil and we're seeing it in the cluster, that's for sure. However, for several years now, the industry, unions and the Bloc Québécois have been calling for an aerospace industrial strategy.

From what we understand, there are strong linkages between the civilian and military sectors. These products have long cycles, and these two sectors reinforce one other.

Sometimes, when we talk to the government, we're told that there's no need for an aerospace industrial strategy because there's already a defence strategy. The government points out that it awards contracts and grants. That's true, and I'm not suggesting that the current approach is bad. However, when we meet with industry people, they tell us that there is a need for an aerospace industrial strategy, especially since we're the only country in the world that can build a helicopter or a plane from start to finish but doesn't have such a strategy.

Can you explain to me how such a strategy would differ from a defence strategy?

[Mike Mueller]

Thank you for the question.

I couldn't agree with you more. I'm pretty proud to have represented one of the few industries in the world that can design, produce, manufacture and export that aircraft right around the world. I want to thank you for your strong support of our industry. It was great to see you also in Mirabel a few weeks ago.

I would say that the defence industrial strategy is a great first step on the defence side, but you're absolutely correct to point out the dual-use nature of our industry and the need for an aerospace industrial strategy that encompasses that. If anyone is saying there's not a need for that, I don't know where that's coming from. I think I've been coming to this committee and a lot of other committees for many years now, advocating for that aerospace industrial strategy. One of the key portions under that aerospace industrial strategy is the dual-use component. Again, there's a lot of attention on the defence side. We support the industrial strategy there, but on the civil side, that really needs some attention. Things that need to be addressed include items like Transport Canada's civil aviation group and making sure they have the resources as you're putting money into innovation and technology.

My colleague here talked about a lot of regulations with respect to aerospace. We support that, because it's safety around that, but if we don't have government keeping pace with industry on the innovation side of things, we'll start falling behind. A concern of ours is making sure that we have the resources to keep pace and making sure that there's that industrial strategy that complements the defence industrial strategy, absolutely.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Not to detract from the good work that's been done, but we'll certainly continue to advocate for that, because it's a good idea.

Madam Chair, how much time do I have left?

[The Chair, Liberal, Karina Gould]

You have two and a half minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I'll direct this to you, Mr. Mueller.

You quite rightly expressed the needs of the industry, manufacturers and exporters in terms of cutting red tape and streamlining. I think those are entirely legitimate concerns.

Certain manufacturing businesses in my riding and in my colleagues' ridings have told us that there's a certain amount of red tape when it comes to refunding retaliatory tariffs, for example. We know that there are refund mechanisms. Some businesses need inputs that they can't order from anywhere other than the United States. For example, there's a company that needs very thin copper wiring. For these businesses, what we have been told is that there's still some red tape or discretionary power at the Department of Finance that means that this process could still complicate matters for businesses.

As part of the countermeasures adopted by the Government of Canada—which we supported aside from a few details—do you have any proposals so that, when a company has no choice but to import a material from the United States, it's possible to simplify that and ensure that companies don't face an excessive administrative burden in that context?

[Mike Mueller]

Thank you for the question.

That is a huge concern of ours. Aerospace thrives on zero-for-zero trade. We have a 1979 agreement through the WTO, which has that in place. We need to maintain that zero-for-zero trading access internationally, both within North America and right around the world.

I would say on the remissions program that I'm pleased to see the government including aerospace manufacturing within that remissions program. That's absolutely critical. Again, thank you to this committee for your support on that.

Where we do see some challenges with respect to timelines, because it's a cash flow issue in some respects, we've been working with members to make sure that's prioritized with the government. It's a very tough situation and an ever-evolving situation, and anything the government can do to help speed up some of those timelines is appreciated.

[The Chair, Liberal, Karina Gould]

Thank you, Mr. Garon.

Mr. Lefebvre, you have the floor for five minutes.

[Eric Lefebvre]

Thank you, Madam Chair.

My question is for the president and CEO of the Aerospace Industries Association of Canada, Mr. Mueller.

Thank you for being here today.

My question is very simple: Have you heard about Maritime Launch Services leasing land in Nova Scotia for aerospace launches?

[Mike Mueller]

I have heard about them, yes.

[Eric Lefebvre]

Do you know who signed that contract?

[Mike Mueller]

I'm not privy to that information. I think that would be between the Government of Canada and the company. I'm not involved in any of that.

[Eric Lefebvre]

Do you know anyone who was involved in the process of leasing that land to the provincial government of Nova Scotia?

[Mike Mueller]

I'm not privy to any of the information other than what I've read in the media.

[Eric Lefebvre]

Do you think that land was exceptionally well suited for aerospace activities?