Thank you very much, Madam Chair. I really appreciate the opportunity to speak with you and committee members today and contribute to your very important study.
Over the last 25 years, WestJet's investments have fundamentally improved commercial aviation in Canada and have been an essential and key contributor to Canada's aerospace sector.
Through WestJet, 300 million Canadians have been given more democratic access to lower fares in 39 domestic markets, resulting in over $4 billion in trickle-down impacts that support suppliers, provide wages to our employees and economic activity in our cities and tourism sectors.
This crisis has had a profound impact on our entire industry, affecting over 600,000 jobs in travel and tourism and over 250,000 in aerospace, the industry we are here to speak about.
All of the witnesses today have one shared goal: an innovative, connected and prosperous Canada. Together we face an unprecedented challenge and one that will need decisive leadership. Our competitor countries have already developed plans to protect their aerospace and aviation industries and jobs. We need the same commitment here in Canada, and your study will help us forge a path forward.
In ISED's restart, recover, and reimagine prosperity expert panel, they identified air travel as the industry sector hardest hit by COVID-19 and amongst the sectors needing tailored assistance to preserve jobs and business.
Jim Quick, president of Aerospace Industries Association of Canada, noted that a safe restart plan for air travel is essential to the vitality of the aerospace sector. He said:
Airlines drive demand for the manufacturing output that makes up 69% of Canada’s aerospace and defence activity. They are also significant buyers of the maintenance, repair and overhaul (MRO) services that make up the remaining 31% of our sector’s business. Without question, our industry needs planes in the skies, and support for the airlines needs to include support for the industry that keeps those planes in the skies.
We could not agree more.
In that industry council report, it communicated the aerospace sector's vital importance to Canada, which included over $31 billion in revenues and its value chain of over $20 billion in contributions to the GDP with 160,000 direct jobs tied to the Canadian economy.
Its operations are well dispersed across Canada and are a strategic pillar of our knowledge and manufacturing economy. Of these firms, 93% are exporters, and 70% of the aerospace manufacturing firms co-operate with academic partners supporting our research ecosystem.
Our role at WestJet is as a key supporter and investor. In 2019, our investments totalled $2.7 billion with our suppliers and netted $5.4 billion in economic output, with 25,000 jobs associated with running our business.
For committee members, here are some examples of key partnerships of ours from coast to coast: StandardAero, $32 million in 2019; Boeing Canada, $24 million in 2019; KF Aerospace, the largest private sector employer in Kelowna, $32 million in 2019; and GE Aviation, who is also a major partner. Sadly, these expenditures and investments have taken a dramatic decline as a result of COVID.
The COVID-19 crisis and the drop in demand for air travel has had a critical and enormous impact. Our industry is reporting losses in revenue of over 40%, and 95% of our companies are reporting various levels of shutdowns.
It's not just the jobs. These companies are central to the community and cultural fabric of Canada. They invest in R and D and anchor vital aerospace hubs. A recent survey WestJet conducted of our key suppliers showed that 94% of these companies invest in key community priorities like indigenous rights, environmental organizations and local charities.
We continue to work collaboratively with our partners to plan for Canada's economic recovery. At WestJet we are not seeking policies that strictly support our bottom line. We are seeking a recovery framework that will lower the cost of travel for Canadian families, ensure our workers have appropriate wage supports, introduce green credits to continue to green our fleet, and ensure that Canada has a competitive global airline based in the west.
There are two main priorities we recommend this committee include in its report.
The first is that, given global uncertainty, we believe Canada must prioritize domestic travel and negotiate a transparent and clear policy with provincial governments. This could be based on COVID levels or based on the percentage of Canadians vaccinated. We believe this should be a priority item. We also believe that Canadians should see their country safely this summer.
The second is to transition the Alberta pilot project on arrivals testing and include funding for testing in the upcoming federal budget. The relationship between testing and quarantine requirements must evolve, and we note and appreciate the Prime Minister's commitment to work on this.
To conclude, we thank our employees who have suffered so much, but we continue to serve Canadians. Everyone in our company continues to fight for you. Our approach to this crisis has been rooted in our commitment to serve Canadians and conduct ourselves in a transparent manner with all levels of government. We will continue to be a collaborative partner with all of you as we work towards a safe and responsible recovery.
Thank you.