Industry Committee on March 9th, 2021

[Suzanne Benoît]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Our next round of questions goes to Mr. Ehsassi, for five minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair.

I will begin with Mr. Greenley.

First of all, heartiest congratulations, Mr. Greenley. MDA has been a huge home-grown success story. I want to congratulate you on that.

You mentioned the new space economy, and how it's currently worth approximately $450 billion, but you estimate, in the next decade, it will surpass $1 trillion.

Is Canada well positioned, as far as that new economy is concerned? How do we commercialize on opportunities that would become available?

[Mike Greenley]

The key thing is to recognize that we have a strong space sector in Canada. The space sector is emerging and breaking out. The space sector shares a number of the supply chain participants with the aerospace sector, which means that with this rapidly taking off space economy, as we double down on success in that market, we definitely have the foundation to grow.

In terms of having key government programs in the area of earth observation, space-based communication and space exploration—as we now start to return to the moon, as society now goes to inhabit the moon in 2024—ensuring Canada's participation in those anchor programs would provide the foundation for us to then further commercialize the outputs of those programs into the market. We are seeing that on Canadarm3 with immediate commercialization opportunities for on-orbit servicing and space tourism. We would also see that in the areas of earth observation and communications.

[Ali Ehsassi, Liberal, Willowdale, ON]

Ms. Benoît, you were explaining to us that several countries have provided some assistance to the aerospace sector. Given that our approach has been a tiered approach, I'm sure you're aware that so far, for example, Canada has supported the aerospace sector with approximately $2 billion with the Canada emergency wage subsidy. We've always been supportive as far as R and D is concerned, and as far as IRAP investments are concerned.

You were touching on the experience of other countries. You specifically alluded to the U.S., Germany and the U.K., and the support they have provided. Given your interest in that, each one of them have very different elements to their packages.

Which one of those packages do you think did a better job in terms of the elements of their assistance?

[Suzanne Benoît]

As I mentioned earlier, it's very important to support innovation. The aeronautics sector is an innovative sector. It takes at least 10 to 15 years to design an aircraft.

[Ali Ehsassi, Liberal, Willowdale, ON]

Ms. Benoît, I'm specifically asking about the packages that were put together by each one of those three countries. Which elements did you like in each one of those packages, comparing the different approaches that were adopted?

[Suzanne Benoît]

That's the position those countries have adopted. As I mentioned, France, for example, has decided to design a green aircraft, a hydrogen-powered aircraft, by 2035. The funding allocated for that project is therefore incredible.

It then realized that businesses, SMEs, in the supply chain were being hit very hard, since the major aircraft manufacturers weren't delivering their aircraft because the airlines aren't taking possession…

[Ali Ehsassi, Liberal, Willowdale, ON]

Ms. Benoît, are you saying the French approach is the better approach for our country as well?

[Suzanne Benoît]

Yes. The United Kingdom has also introduced an enormous innovation program.

Talent is what drives the aerospace industry. It can't be lost; it must be retained. Later on, in 10 years, it won't be the morning after…

[Ali Ehsassi, Liberal, Willowdale, ON]

You haven't answered my question as to the specifics of those packages.

[Suzanne Benoît]

The French, the U.K. government, yes.

Those countries are making massive investments in innovation and that's what we have to do here in Canada as well.

[Ali Ehsassi, Liberal, Willowdale, ON]

So, are there no preferences among those very distinct three approaches?

[Suzanne Benoît]

I think the French model is more inclusive: it also provides for assistance to SMEs in the supply chains. Consequently, we have to ensure we have measures that help SMEs manage their cash flows, a very tough task these days, because they have no revenue, as you might expect.

[The Chair, Liberal, Sherry Romanado]

I apologize for interrupting.

Mr. Ehsassi, your time is up.

We will now begin the next round of questions.

Mr. Lemire, you have the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

My question is for Mr. Chartrand from the International Association of Machinists and Aerospace Workers, the IAMAW.

Why do you think the federal government hasn't yet provided assistance to the aerospace industry since March 2020, in other words, during COVID-19?

As we've seen, France, the United States and Great Britain have already made special assistance available.

Could we say it's due to laxism on the government's part?

[David Chartrand]

Yes, I think so, and I also think the government has long supported the aerospace industry halfheartedly. It doesn't do enough.

Aerospace in fact requires long-term investment, venture capital. However, at the risk of offending some with my comments, I would say that, since members of Parliament are elected for four-year terms, they don't necessarily see any short-term results and therefore are likely less interested in investing in this industry, which, however, does so much for Canada. For example, 93% of businesses in this sector export their products. That means new money injected into our economy. This is an extremely important industry.

Why hasn't the government taken action? You mentioned the assistance provided by France, the United Kingdom, Germany and other countries. Some of those countries have begun a second round of funding and support for their industries, whereas we're still on our first. We're discussing it, and we'll discuss it till we're blue in the face. As Ms. Benoît said earlier, we're losing talent with every passing day. Some have been laid off and others have moved on to other industries.

Failure to extend the emergency wage subsidy will mean more layoffs. Many people are retiring, and knowledge isn't being passed on as a result of the industry's tenuous position. Which is why funding is urgently needed.

Earlier a member discussed a choice between two options. That made me think of someone who doesn't have a lot of money and hesitates between buying medication or food for the children. These aren't choices we should have to make. This industry must be supported, and urgently so. We're wasting a lot of time and talent, and we're also foregoing potential investments by large businesses and SMEs.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

In fact, you'd like to have a short-, medium- and long-term vision so we can have predictability, establish a national aerospace policy and acquire significant financial support.

How large do you think that support should be?

[David Chartrand]

I haven't done any calculations, but what Canada does should be proportionate to what other countries have done for their industries. I'll let others do the math. I think we need a policy because…

[The Chair, Liberal, Sherry Romanado]

Pardon me for interrupting, Mr. Chartrand, but your time is up.

I would ask members and witnesses to monitor their speaking time.

Mr. Garrison, you have the floor for two and a half minutes.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

Thank you very much, Madam Chair.

I guess you'd be able to tell that I am my party's defence critic. I'm usually in the defence committee. I want to talk about another upcoming procurement, which is an estimated $11 billion to replace the aging north warning system in Canada.

I'll direct my question to Mr. Greenley.

Have there been any approaches by the government to aerospace and space industries about innovative ideas on how we could replace the old radar system with something much more forward looking? Is this an opportunity for another nationwide competition of best ideas?

[Mike Greenley]

There has not been a lot of formal discussion yet around the replacement for the north warning. You get that in casual conversations in the background. People obviously see that coming.

There's certainly an opportunity there for ground-based technologies to sense over the north in addition to leveraging space-based technologies in combination to be able to have a solid solution. Canada would certainly have a capability in its industrial sector to deliver that. Firms like ours are in a position to lead that kind of discussion.

It's absolutely an opportunity for a program to engage the industrial base in this area.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

So far, there have been no formal consultations at all with the industry.

[Mike Greenley]

Not that I've seen.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

Here's another good idea we can pass forward through both defence and industry, for the long-term future of the aerospace industry.