Evidence of meeting #40 for Industry, Science and Technology in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
I'm going to get to you, Mr. Hoffman. I want to ask you a question.
I was talking in front of your countrymen last week in Taiwan, and they're really concerned about the Chinese. It was brought up by Mr. Vincent that they are now in the process of producing smaller planes, but they seem to want to get in with the big guns. Is that a concern of yours as well?
Director, Global R and D Strategy, The Boeing Company
Of course, with the Chinese indicating they want to get into large aircraft, that's more competition. As we mentioned before, competition is a good thing, but we have to make sure we react appropriately to it.
The position of the Boeing company is to continue to collaborate and support the Chinese manufacturing industry—it is an important supplier to us—while at the same time keeping close watch on the competitive aspects of their desire to build large airplanes.
From a technology perspective, there's a lot we can do in the pre-competitive areas before it becomes a foot race where the best, the fastest implementer wins. And there are still a lot of opportunities, from a technology perspective, to work in niche areas without turning over the keys to the factory.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Should we be recruiting them? We all seem to have this problem. Should we be recruiting? They're cranking out...I forget the number of engineers in comparison to North America. Should we be recruiting them, bringing them here, if we can't supply our own factories? I guess that's open to....
Director, Global R and D Strategy, The Boeing Company
There are a couple of ways to approach that. The nice thing about today's technology and communication capabilities is that we have somewhat of a “design anywhere, build anywhere” philosophy, so the physical relocation of engineers to Canada or to the United States may not be a necessity. We have an extensive manufacturing network globally and a pretty extensive engineering network globally also.
We may not be utilizing Chinese engineers to the level we are other engineers around the world at the moment, but to get access to those talents is always a possibility.
Conservative
President, Boeing Canada Technology, The Boeing Company
[Inaudible--Editor]...relative to immigration laws and citizenship are the elements of the regulations that might be ITAR-related from a U.S. government standpoint; these proscribe members from countries such as China from working on certain things. In order to tap a resource base to have the right level of talent in Canada, we are going to need to work through some of these regulations that other countries might have, which we'll have to navigate among, because they make that difficult.
Conservative
Executive Director, Composites Innovation Centre Manitoba Inc.
Our organization is expanding, and we definitely feel a shortage of the appropriate resources. Actually, we just hired a landed immigrant status Canadian, but from Beijing, with a lot of experience in both the U.S. and China in developing these technologies. So we are going abroad to bring these talents into Canada.
Conservative
Liberal
Raymond Simard Liberal Saint Boniface, MB
Thank you.
I think it's fair to say that the aerospace industry is healthy. Or maybe I should be asking the question: is the aerospace industry here in Canada healthy? I believe it is. It's the third strongest in the world, and companies like Boeing and Magellan seem to be reinvesting in Canada.
One of the issues we've had in a lot of other sectors is outsourcing. Can you give us an idea whether this industry is outsourcing at this time or whether it's something we should be watching for in the future? Or is the industry too complex to just outsource to China and Vietnam and India?
Anyone?
Vice-President and General Manager, Bristol Aerospace Limited
I'm going to start off by saying—we're on a smaller scale, and I will let Willy and Peter answer—that even in a small- or medium-scale company like Magellan, we absolutely have to have the emerging markets as part of our elements and strategy. But it's not necessary to displace work from Canada or North America. We have U.K. operations. It is to continue to grow.
As we said concerning competition, if we don't have an element of, I'll say, an emerging market or low-cost input in our total work statement, we're not going to be able to compete. It's part of our strategy to have that element in there, to have some of the engineering development here and have an element of low-cost sourcing in either China or India, in order to compete at our level. It's a question of growing with them, not trying to compete head to head.
The other thing is that if you try to compete head to head, you can put a $3 million machine or a $5 million factory here in Winnipeg or you can set it up in China or India, and you know what the differences are, for instance, on straight wages. You have to pick the right areas and you have to pick the right strategies, but I'd say we have to include them as an element if we are to grow.
President, Boeing Canada Technology, The Boeing Company
I would agree with Mr. Boitson. Obviously a business like Boeing, which has to have market access around the globe, will mandate some additional regional benefits to other countries outside of Canada. In terms of the work we do here in Canada, though, we see those firms as suppliers and not entities to offload to in pursuit of a lower-cost situation. That's how we've faced it so far.
Liberal
Raymond Simard Liberal Saint Boniface, MB
Could you talk a little about the importance of having a sector council for the aerospace industry? We've had other industries before us; the forestry industry, which was devastated lately, was before us and mentioned that this would maybe be helpful, and I've heard many times from aerospace people here in Winnipeg that the sector councils have been very helpful in terms of keeping in contact with the federal government and developing strategies together.
Could someone talk to us about that?
President, Boeing Canada Technology, The Boeing Company
Any time you can have a council or an entity inside a government be an advocate for your presence in the marketplace, it's a good thing, as long as you don't create a mindset that it's there for a handout. If you can do it in terms of helping navigate strong, healthy legislation and set up the right talent and the right innovation, then I think it's a healthy way to go.
Liberal
President, Boeing Canada Technology, The Boeing Company
It could probably be strengthened, from my outlook. I've only been a resident of Canada for little under a year. I think there are some things that could be stronger and some collaboration that could be healthier, but to be honest, the influx of the government and the influence on the industry is much healthier than in the United States, where I came from.
Liberal
Raymond Simard Liberal Saint Boniface, MB
I'd appreciate it if you could provide us with some recommendations with regard to that. Certainly, something we can do is to modify the structure to improve it.
My last comment is on partnerships. Mr. Olson spoke to it previously. I know this sector has been phenomenal in terms of relationships with the Red River Community College, with universities. The private sector has actually done a lot. I'm not sure if the federal government has done its share. We only briefly spoke to education and training, and it seems to me that is the key right now. Every sector that comes to us tells us we have to educate, we have to train the proper people. We're bringing people from overseas to come in here. Are we doing enough?
You have done your job in this sector, as far as I'm concerned. I mean, the relationships you have built are incredible. I haven't seen it anywhere else. Are we doing enough to partner with you in that respect?
Vice-President and General Manager, Bristol Aerospace Limited
I would add that there were some initiatives, and I know some of them got lost, but the Manitoba Aerospace Human Resources Coordinating Committee—long name—has been working very hard with provincial and also federal counterparts. I have always said the Canadian government should stand up and say, “Yes, these are our strategic areas in our technology areas”, aerospace being one, and its biomedical activities, or whatever. Name the six or eight of them and say this is what we're going to do, this is where we're going to put funding into education, and put those education streams in. There was some talk of it previously, and I think that would be a good way to get some funding into those streams directly.
President, Boeing Canada Technology, The Boeing Company
I think in this area of creating a talent pool, it's really a matter of helping shape the mindset of parents so they can help shape the mindset of youth, that manufacturing is an attractive business to be in, that math and science are admirable fields to be in. If you can change the promotion of those with parents so that they promote it with the youth of the nation, and then help make the right standards so that the right learning is happening, it will make this a rich environment. Obviously, that is the national initiative of countries like China, where they're graduating half a million engineers, compared to what we are doing in North America.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Simard.
I 'd like to wrap up with a couple of issues. One would be your relationship with universities and the intellectual property and the research done by either. Simply for information purposes, how much of the research or technology development that you would adopt as a company would be done at a university and how much would be done in-house? Give me a general, rough, ballpark figure.
Mr. Hoffman.
Director, Global R and D Strategy, The Boeing Company
In general, the research we do with universities tends to have a longer horizon--emerging technologies, nanotechnologies, things of that type--and it's a very small fraction of the overall. I can't quote you numbers, but it's less.... The D part of the R and D is really where the bulk of the spending takes place. It gets very expensive to take a great idea and move it into a product.
Conservative
Vice-President and General Manager, Bristol Aerospace Limited
I was going to say it's definitely less than 10%. In sectors like the CIC, where you bring them in, they bridge that D component to make it a lot easier for us to work and collaborate with the university partners, with industry. So that's a way of bridging that D, but it's definitely less than 10%; the university or other funded is 90%-plus.