Industry Committee on March 9th, 2021

[Mike Greenley]

Absolutely.

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

I want to return to the question of green propulsion with the same kind of question for Madame Benoît. I think she may have already answered it, but I just want to go back and ask what the government response to this idea has been.

Have there been any concrete talks going on or any acknowledgement of what a good idea this seems to be?

[Suzanne Benoît]

Is your question for me?

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

Yes.

[Suzanne Benoît]

In fact, since last September, we've been discussing it with the government, with the department of Mr. Bains at the time. It's a project that's evolving but that hasn't yet come to fruition. We're hoping for good news in the next budget.

We have nothing for the moment, although we've met with the new minister, Mr. Champagne, on the subject.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Baldinelli.

You have the floor for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

I'd like to thank the witnesses for being with us today and follow up on some of the questions that were asked.

Mr. Mueller, in terms of your comments earlier, you mentioned that your association proposed the “Vision 2025” document, and you said you have yet to hear after four years. I want to see if that's correct.

I'm looking at the document, and it talks about six priorities for prosperity. It seems that all of those initiatives still apply today: increased workforce, ensuring small and medium enterprises have access, the new technologies, green propulsion, even talking about procurement ideas.

Is that still the case, and what should the core elements of a support program be today if they've changed from the 2025 document?

[Mike Mueller]

The “Vision 2025” document is very much still relevant today, and I would say even more relevant today considering everything that's been going on.

I could go back and touch on a comment I made in my opening remarks about the commitment of past Parliaments to our industry, because I think that's instructive to your question too.

Support for the aerospace industry is absolutely long standing, such as with the 1959 defence industry productivity program, which was replaced by the technology partnerships Canada program in 1996, and then by the strategic aerospace and defence initiative in 2007. These were all aerospace-specific programs.

These were all replaced by a sector-agnostic program, the strategic innovation fund, in 2017. The real concern for the industry was when aerospace was shut out of the supercluster initiative in the past few years.

As I said before, as aerospace is a globally competitive industry and other countries are doubling down on supports, we need the government to do the same here. We need the government to send the signal that Canada supports and views its aerospace industry as strategic. That needs to come, again, through a sector strategy—I think the “Vision 2025” document lays that road map down very well—and also programming that is not sector agnostic.

Internationally, if we look at competitiveness, the number one competitive advantage we have is our skilled workforce, and 100%, that is absolutely true. We have the real danger now of losing some of that competitive advantage, and at the bottom of that scale is the signal that the government is sending. We're very much looking at the upcoming budget to send a signal that Canada views aerospace as strategic and also important.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you. I'd like to follow up on that notion of a skilled workforce.

In your “Vision 2025” document, you talk about, “Inspire, recruit, train and hire 50,000 students from Canadian universities, colleges and vocational schools..”.

I have three aerospace firms in my riding alone: Genaire, Fleet aerospace and Airbus Helicopters. When you talk to them, there's the notion of bringing in young talented people to begin that process of retention—a learning and skilled workforce—so that when people do retire and leave the sector, they're able to continue.

What is needed from that standpoint?

Mr. Chartrand can maybe offer some insights as well on that.

[Mike Mueller]

I'll start at the high level and turn it over to Mr. Chartrand.

You're absolutely correct. What's missing, from our perspective, is that long-term strategy, that industry-specific support. We have companies right now that are moving workforces around, looking to where different packages would come....

We're losing that skilled talent. You're right about ability for the older generation to download the information to the newer generation. The bottom line is that they need things to work on, and that's where we need government support.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Mr. Chartrand.

[David Chartrand]

I agree with Mike on that.

Before this pandemic, our industry had problems and we had massive labour shortages. Through this pandemic, right now what's happening is that our union has about 10,000 people on layoff, furlough or not at work currently.

I know there are several thousands of workers right now who are out of work. Many of them are recycling themselves and going into other industries, and the more senior employees, to give space to the younger ones, are retiring. By doing that, though, there's no transmission of information, knowledge, etc.

I think it's really important to support training and these employers, to keep these older workers at work to train the new generation of workers and all that. I think there's something to be said on that side.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Madam Chair, I just saw the red card, so I know that means my time is up.

[The Chair, Liberal, Sherry Romanado]

Perfect timing, MP Baldinelli.

Our next round of questions goes to MP Jowhari.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Madam Chair.

Thank you to all the witnesses.

I'd like to split my time between Mr. Chartrand and Mr. Greenley.

Let me start with you, Mr. Chartrand.

In your opening remarks, you talked about research and development, green technology and the concept of an aerospace innovation fund, and then you transitioned into bringing examples of how other governments or other jurisdictions have combined all of these as success factors.

As you were going through your testimony, government programs such as the strategic innovation fund, BDC, EDC and the Government of Canada procurement strategy stood out in my mind. I looked at the AIAC's proposed recommendations, including to establish the restart strategy. Can you tell how, in a very specific way, we can support the restart strategy using existing resources in a very effective way? I am referring to mobilizing things such as SIF and BDC to give funding to small businesses, and EDC to secure insurance for sending our support internationally, and government programs.

[David Chartrand]

I don't want to get into the specifics of which program. I don't think there's any sector-specific program right now. Essentially the programs that exist are not dedicated to aerospace, to our industry. That's one thing. I think we have a lack of structure. We have a lot of things that are ad hoc, that come and go, and I think we need a strategy put in place so that the industry is supported on an ongoing basis.

I know that I don't have much time, so I want to talk about the example of Airbus. Mike and Suzanne were talking about support for the aerospace industry. You have to have a strong supply chain. You have to have somewhere where people can be trained and you're able to get manpower for these companies that decide to come and invest here. I can tell you that a couple years ago, Airbus came here, and their eyes were lit up. They wanted to invest a lot of money. They wanted to make a mini Toulouse out of Mirabel and the Montreal area. That would have brought in a lot of ripple-effect work for other smaller companies. I can tell you that for the last couple of years, or more in the last year, they've been disillusioned, and they're not thinking the same way that they were a couple of years ago. Why? Because there is a lack of a support by the government for the aerospace industry.

When these companies do their five-year plans and they're looking at where they're going to invest and where they're going to grow, they're not looking at Canada with as much interest as they did in the past, because of the laxity and because of the time it's taking to get support for our industry. I think it's imminent. It scares me—I don't know if if scares government or not—that major employers like Airbus, who made a decision to come and invest here, are going to look at their five-year plans and see that there's no support from the government and start looking at where else they can invest. I think there's a feeling of urgency and that the federal government needs to move, and it needs to move quickly, to build a sector approach, a strategy for our sector and dedicated funding through something like an EXIM bank. You were talking about EDC. They won't make loans if you don't have a contract in hand. There are programs that exist, but they're not very accessible right now, and they're not dedicated to just aerospace.

[Majid Jowhari, Liberal, Richmond Hill, ON]

You're talking about the accessibility of these programs, then.

[David Chartrand]

Yes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay, thank you.

Quickly, with about a minute left, I'm going to Mr. Greenley.

Mr. Greenley, you talked about the Government of Canada acting as an anchor, and you talked about three dimensions of that anchor. You also talked about investment in technology as well as a long-term space plan, and you talked about some regulatory framework in there, if I recall your comments.

Can you expand on the long-term space plan specifically with regard to what regulatory framework we can introduce?

[Mike Greenley]

In a long-term space plan, we would look at a full space economy and ensure that Canada was fuelling that economy. The elements include earth observation, space-based communication, new markets such as on-orbit servicing, space-based assembly, space manufacturing and, in about 10 years, space-based mining. All of these things are building up now, so having anchor programs in these areas will ensure the continued evolution of the economy towards economic growth. These areas would require adjustments to regulation to ensure that, from operational control centres in Canada, we could operate spacecraft to service satellites or assemble things in space to enable those things. That's an example.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[The Chair, Liberal, Sherry Romanado]

We will now start our third round of questions.

Mr. Généreux, you have five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Madam Chair.

Mr. Greenley, you talked about a 3B strategy, “build back better”. Can you explain exactly what, in your mind, you are looking for, and in terms of money as well?

[Mike Greenley]

Specifically, there are anchor programs that people could invest with now. If you take something such as MDA's next generation interceptor observation satellite, where the customer will become a buyer of that, there could be pre-buy of that capability like happened on RADARSAT-2. There is a notion of the next generation space-based communications to support 5G networks from space. We can conduct a $300-million to $500-million program to be able to conduct a next generation demonstration of Canada's space technologies and get back into the telecommunications sector using our industrial base.

Telesat LEO has been provided some support by the Canadian government, but additional support would certainly be welcomed into the Telesat Lightspeed program, which enables a large Canadian supply chain.

I think we can put together a space package of programs including things like that as part of building back better.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Okay.

Do I understand correctly that you were public and you became a private business?