Evidence of meeting #34 for Transport, Infrastructure and Communities in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
NDP
Director General, Canadian Aviation and Space Museum
Yes, as I said earlier, it is extremely important. If you consider Bombardier's production line alone, the company will need 500 engineers for the CSeries. So it is crucial. That request is not coming from anywhere. We need to have a supply chain that will accommodate these industries. We are talking about an investment at the outset. We are a part of that supply chain. We want to teach children in Grades 1, 2 or 6 about becoming engineers, because there is a serious shortage in that area. The supply chain is vital to support and sustain the industry and factories, and to promote Canada's high-tech sector.
NDP
NDP
Mike Sullivan NDP York South—Weston, ON
My colleague across the way talked about the goal of reducing fuel. Bombardier is doing that with the composite wing manufacture and the great strides.... However, they have said to us they realize that the Chinese are going to steal this and start doing it in a few years. They, then, are looking at the next generation.
Is there a “next generation” that you see, in terms of making the planes lighter?
Curator, Canadian Aviation and Space Museum
Can I say something nasty here? If you compare Bombardier to Airbus, Airbus has sections of their website that talk about airplanes where you push a button and the covering of the airplane becomes translucent, and they talk about the new engines. They have all sorts of cool stuff online.
Try to ask Bombardier what they are doing, and they'll say they're not telling you, so it's very hard in some cases. They may have wild projects like that—super-efficient aircraft, maybe hydrogen fuel, completely revolutionary shapes that are being developed by Boeing and Airbus and other companies—but trying to pry information out of them can be a tad complicated. We wish we were able to show that but again, in their case, they choose to be not secretive, but very private about it.
Other companies such as Boeing and Airbus choose to be more open, which doesn't mean they will build the airplane with a translucent skin or that they will build the airplane that looks like a manta ray. Whether they will or not, I don't know, but they probably have projects like that. They have to. I have a feeling that they probably have multiple teams working on certain ideas. So they're developing a number of ideas, which can be like the fuel pump with wings or something a bit wilder, or something completely wild. They come up with ideas, look at how the marketing of something like that would work, something that looks like a normal airliner could probably sell quite well. Something that looks completely wild and crazy, would passengers be nervous?
Probably a great deal of market research is being done in private to get projects like that. They have projects. They have to. They're in the projects business. Even the CSeries—they may very well have in their computers the whatever series that will follow that. It's very preliminary because in 15 to 20 or 25 years when that airplane appears, there might be hydrogen fuel. They might have engines that are being developed in the States or elsewhere, or perhaps they may have development with Pratt & Whitney Canada and Pratt & Whitney U.S.
They won't share that with us, and it's understandable. It's a very competitive industry. The idea of the Chinese.... I wouldn't say everyone copies everyone else, but they go to the air shows and they look at what they're doing. There are great ways of designing airplanes, but at the moment, there's pretty much a shape of an airliner, and there are certainly ideas about aerodynamics. You cannot do wild and woolly things and expect you'll be able to produce an airplane that will be easy to maintain, easy to repair, that will fit inside the hangar, that will be able to use the current facilities. It can be a very conservative industry in that sense, which is a bit odd. So they can be wild and woolly and in some cases they can be very straight and focused, because you have huge amounts of money.
The 747, for example, Boeing pretty much bet the house on that. Had the thing flopped, they would have been in really deep trouble. When you have problems like that, it's a huge industry and huge sums of money are involved.
Conservative
Jeff Watson Conservative Essex, ON
Thank you, Mr. Chair. Thank you for a very interesting presentation and testimony here today.
In terms of the presentation today, there wasn't much distinction with respect to the role of government or the necessity for government involvement between military and non-military purposes. It seemed to be woven together, and I hope we can pry the two apart a little.
With respect to non-military application, the commercial side of aviation, if you will, and the development of innovation, can you talk about the historical access to venture capital, for example? How has the industry historically financed its own innovation? Where do they go? What does that look like, other than the government push side of things?
Curator, Canadian Aviation and Space Museum
To start, a lot of the innovations that are being used in commercial airliners, anything from jet engines to composite materials to computers and other things, very often, it's by the military. The military pays for it. If you look, for example, at the engines of the Challenger and the original regional jet, the basic engine was developed for military programs. So a lot of the R and D was paid for by the military; there was a great deal of piggybacking.
Composite materials, for example, my understanding is that there are certain types of alloy, like the aluminum lithium alloy that's being used by Bombardier on the CSeries, the pioneers as far as that was concerned were the military. The military was looking at ways to reduce weight for combat aircraft, so they did a lot of research, paid companies to develop special alloys that eventually became cheap enough and reliable enough to become usable by civilian operators, because you have to open panels...the military have different requirements.
It's not everything, but a lot of things come from the military. It's not like the automobile industry. There's a lot more involvement of the military, at least on the research and development of new products, new ideas like jet engines, radar, stealth—no not stealth technology—composite materials, and afterwards they become commercially available because the prices go down low enough that they can be produced for airliners. The military tend to be more interested in performance than penny-pinching.
Conservative
Jeff Watson Conservative Essex, ON
I think my colleague, Ms. Rempel, very adequately drew the distinction in terms of the sustainable adoption of technology between market push and pull. I want to look at the research side of that. There is a research push and a research pull, as well. If you look at the way R and D is done in different countries, for example, we have very different models.
The pull side of it, I think, is everything from government directives that sort of change the environment, industry needs, and what they want to research. On the other side of it, the Canadian system, I think you could broadly say if you're looking at the National Research Council, NSERC, and other things like that—as you begin to get into the granting councils—it's research driven, not an industry-driven model.
They're looking to study something, sometimes out of curiosity, and I'm not only talking about basic science, but I'm talking about applications of basic science, even. Sometimes they fit into these other parameters, what industry wants, or what government wants from it. As a result, I think we have some of the best “public research in development” investment levels in the world relative to other countries, but we have poor commercialization of product compared to other countries. Having said that, the net benefit of our system is that we're training a lot of people in the research-driven side. That may be the plus side of it.
What is the historical record, if you're looking at this from an historical perspective, about university-led research in either invention or commercializing innovation? How effective is that model? What can you point to, historically, coming from that model? What are your thoughts on that?
Curator, Canadian Aviation and Space Museum
As far as aerospace engineering is concerned, if that's the direction you want to go to, the pioneer in that respect was.... It might still be the University of Toronto, what they call the University of Toronto Institute of Aerospace Studies—UTIAS, I think, is how you pronounce it. As far as development is concerned, they certainly do research. They provide assistance to small companies. There is very often basic research, students going to their specialized areas and becoming engineers so that they're hired by companies. There is certainly a great deal of research being done for research's sake, although that is changing.
If you look at NRC, my understanding is that there is a focus to make it more industry driven, or in order to make it available to industry. Although there have been cases in the past—for example, I believe it's called the crash position indicator—various devices that might have been developed, if not completely internally, at least partly, by NRC that were certainly put out in the market.
The same thing holds also for the de-icing of aircraft using electricity. NRC was heavily involved in that, and the research was made available. Nowadays, pretty much everybody uses electrical de-icing on airliners.
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
Thank you, Mr. Chair.
Maybe I can pick up a little bit on where Mr. Watson left off.
One of the comments that was made during the presentation was that new innovations start on a level playing field, so there's no previous experience for any one of the parties to draw on. Historically, the ones who have won, for lack of a better term, that innovation race.... Can you give us an historical perspective on why you've seen them win that innovation race?
Curator, Canadian Aviation and Space Museum
Every case is different. In some cases it might be luck, and in some cases it might be circumstances. In some cases it might be countries with deep pockets. It's extremely variable. Even then, that sort of a leadership role may or may not last a long time, because in some cases.... Look at Japan, for example—
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
I'd rather that you look at the historical context within the Canadian framework, the Canadian companies that have innovated. Where have they seen their advantage come forward?
Curator, Canadian Aviation and Space Museum
As far as de Havilland Canada is concerned, they tend to be rather conservative in their work. They innovated in the way of developing aircraft, but in terms of new ideas, revolutionary ideas, because of what they made—bush aircraft, utility airplanes, transport planes—they tended to keep technology rather low.
You should look at companies like Avro Canada. The jetliner was very innovative. You're looking at the second jet airliner in the world. Trans-Canada Airlines was very interested. I wouldn't say invested, but it certainly helped develop the specification. There was research done at the NRC.
Circumstances changed—the Korean war—and TCA got nervous about the airplane also, so they pulled out. By pulling out, it sort of greatly injured the project. In order to sell it, if your national carrier is not interested, it doesn't help. The Korean war put the final nail in the project. If you look at the Avro Arrow, or the CF-100, there was a government need; the air force needed a Canadian airplane developed for Canada's geography. It was developed, it was produced, it proved successful after some bugs, but it proved to be very successful, so government assistance, as far as contracts and research were concerned, proved fruitful.
You need continuity, but circumstances can change. It's extremely fluctuating.
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
You also talked about some of the work that Bombardier has been doing in innovation. The success of that, and you commented on the export market. You talked about the aerospace industry being largely in Canada, and the export market is just simply because of the demand issue, right?
Curator, Canadian Aviation and Space Museum
There's not enough demand here.
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
There's not enough demand here, so I guess that's what I'm looking at. This innovation these companies are bringing forward, is it because of a government directive, or because they're looking outside the Canadian...? If you could address it from that perspective, that is kind of where I want to go.
Curator, Canadian Aviation and Space Museum
By and large, especially as far as commercial aircraft are concerned, you have to look outside. You have to develop a product that will sell on the open market outside, especially the United States. If you get American airlines to buy your product, you're halfway there, because they are the main market in terms of aerospace and airliners. Other projects as far as the military.... That was a problem in a way in the 1950s, when it was thought that if the government buys aircraft, you design the aircraft, the air force buys them, and you've done your job. In terms of exports, you try, but very often the products were so specialized for Canadian requirements that they couldn't sell overseas. That's a problem. The idea is to export. You have to develop something that is either so simple, like a utility airplane that everyone buys, or something that is so new and revolutionary, like a regional jet, that everyone will want it, too.
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
So just looking forward to the future, we have a country like India that by 2020 is saying they will need 3,000 more aircraft. Is that the type of market penetration that we'd be looking at? The necessity of free trade agreements is to bring that forward.
Director General, Canadian Aviation and Space Museum
The other thing is that in any innovation, it's that pull-push. It has to be a perfect storm. If you take the jetliner, the Korean War comes along and it doesn't have the market that it needs. But you take the regional jet.... Before the regional jet, de Havilland U.K. tried the same sort of thing, but there was no market for it so it flopped. It was the perfect storm. The CRJ came along at the right time. If I take the Q400s coming out of Toronto, years ago turboprops were not the way to go. The consumer again wants to go fast. They want to get there soon, and they want to get there in comfort, so taking a jet, climbing up, getting above the turbulence, and then coming down takes a lot of fuel. It's not as efficient. Jet engines are efficient up top, but then there's less turbulence, so the consumer likes it.
Conservative
The Chair Conservative Merv Tweed
I'm sorry, I have to stop you there.
We have time for one last question from each party, if they so desire to do that. I'll give each one two minutes.
I am circulating a document that I need to have approval on before the meeting ends.
Are there any questions?
Mr. Sullivan, final question.
NDP
Mike Sullivan NDP York South—Weston, ON
Your last little intervention was that the export market is clearly how.... As you suggested, since 1960, the planes haven't changed a whole lot in terms of their design and structure. They look essentially the same. So as a market opens up, say in India, what the Canadian manufacturers will want to look to is where they can sell their product now.
It's not really about innovation. There's a little bit of innovation, but it's not really about creating a new technology. Maybe with hydrogen fuels or with clear bubbles or whatever it is Bombardier is working on, there might be some innovative technology in the distant future, but we're not seeing that today. It's not as if government can say, do some R and D and we might be able to create another Canadian industry here. We have a Canadian industry.
Does that Canadian industry continue to need government encouragement in order to make sure they stay here? We have a world in which the lowest wage is where everybody wants to go. Is there some necessity to prod them to stay here and continue to build here for those emerging markets?
Curator, Canadian Aviation and Space Museum
You have a number of issues because innovation in and of itself is not what the airlines want. It's a question of whatever will be the cheapest possible. You want to carry as many bodies as you can for as little as possible in order to break even. So the idea of innovation is not innovation in and of itself. It's innovation in order to make money or survive in some cases. It's the same thing for the airlines and the aircraft manufacturer.
In terms of the government helping, there's certainly the idea of not getting in the way and having as many levels of government—internationally, as I mentioned earlier—sort of pulling in the same direction. That gets very difficult. If you look at India and China, for example, we think of them as big markets. It's in their interest, because they want to industrialize, to have their own aerospace industry. They have a huge market internally so they can certainly sell the aircraft internally. In some cases in China, they might sort of suggest to the airlines that they buy Chinese aircraft. Once they satisfy the internal market and if they have the aircraft—they may actually already have the aircraft that are of world quality—they will be able to export on their own. Canada is sort of exporting there. It may be more difficult than we think. As time goes by, it's an extremely competitive market, and understandably enough. It's a well-paying job. There's lots of money. There's some prestige involved as well.
Governments—Americans, Chinese, Indians, Europeans—certainly there's a great deal of lobbying, as in our aircraft is good and their aircraft is sort of good, but not as good. It's an extremely competitive market. There was no way of predicting where Bombardier would be here today 30 years ago. It's very difficult to say how Bombardier will fare in 15 or 20 years. The CSeries airplane looks very promising. There's no doubt about it, but the Concorde looked very promising, too. I wish them better than that.
