Aerospace 2012 SBH Canada

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1/14The Aerospace Industry in Canada 1

The Aerospace Industry in Canada.Opportunities for Swiss Companies.

March 2012

osec.ch



Content Leader:

Georey S. L. Green, P.Eng.

President, Pegasus Global Initiatives

[email protected]

Swiss Business Hub Canada uses primary, secondary sources and tertiary sources of

information to produce a variety of reports on the Canadian market for small to medium

sized Swiss enterprises. For further information on our services, please contact:

Elias Bardouniotis,MSc, MBA

Director

Switzerland Trade and Investment Promotion

Swiss Business Hub Canada

154 University Avenue, Suite 601

Toronto, ON M5H 3Y9, Canada

Tel. : +1 416 593 5288

Fax : +1 416 593 5083

[email protected]

While this report is intended to provide an overview of this specic market and its

opportunities at the time of its edition, each individual manufacturer, exporter or company

may have to conduct their own analysis to get a better understanding of the possibilities

and opportunities available to them. You are encouraged to explore and develop your

opportunities based on research and in-depth analysis. Readers should take note that

the Government of Switzerland does not guarantee the accuracy of any of the information

contained in this report, nor does it necessarily endorse the organizations, associations,

companies and individuals listed herein. Readers of this report should verify the accuracy

and reliability of the information contained herein before making a business decision.

Swiss Business Hub Canada 2012



The AerospaceIndustry in Canada.

This article has been written to familiarize Swiss companies with the Canadian Aerospace

industry and to examine opportunities for trade and investment with Canada.

The aerospace industry is very signicant and is the fth largest in the world after the

United States, United Kingdom, France and Japan. The industry is comprised of many

Canadian and multi-national companies. Companies such as Boeing, Pratt and Whitney,

Textron, General Dynamics, ASCO and Thales have signicant manufacturing capability

in Canada. The Canadian owned industry component is large with companies such as

Bombardier Aerospace, Magellan, MDA, CAE, etc.

The industry with annual sales of $23.8 Billion is not limited to these very large

corporations. There is a supply chain in place to support the industry, whether in Canada

or other countries. This supply chain includes not only manufacturers, but also a very large

Maintenance, Repair and Overhaul (MRO) capability that serves Canadian and International

airlines and the military.

The industry produces a broad variety of products and services. Table A shows the

contribution by each group of products, in addition to the areas within these categories

where the Canadian aerospace industry is recognized as a global leader.

Table A. Product categorization.

Categories of Production % of Production Products Produced for Global Markets

Aircraft, Aircraft & Components 55 Regional and Business Aircraft

Helicopters

Landing gear systems

Airframe structural assembliesWing structure assemblies

Maintenance, Repair & Overhaul (MRO) 16 Aircraft maintenance, repair and overhaul services

Engine rebuilding and maintenance

Aircraft Engines & Engine Parts 15 Gas turbine engines

Avionics, Electro Systems 6 Power conversion and distribution systems

Integrated electronic controls

Environmental conditioning systems

Air trac control and management systems

Aviation communication systems

Simulation & Training 4 Flight simulators

Space 2 Satellite technologies

Other Products & Services 2 Miscellaneous



The industry is national and has representative companies from the Atlantic to the Pacic

coasts. The main centres are Quebec, Ontario and Manitoba, but there are substantial

manufacturing centres in the provinces of British Columbia, Alberta, Saskatchewan, Nova

Scotia, New Brunswick and Prince Edward Island.

Table B. Industry by province, showing clusters and areas of specialization.

Province Number of

Companies

Employees

(000)

Sales Clusters Specializations

Quebec 240 42 $11.1 billion Aircraft, Aircraft Components

Aircraft Engines & Engine Parts

Avionics, Electro Systems

Simulation & Training

Space

Other Products & Services

Regional aircraft

Engines

Engine Overhaul

Simulation

Helicopters

Components

Ontario 200 22 $6.5 billion Aircraft, Aircraft Components

Aircraft Engines & Engine Parts


Simulation & Training

Space

Other Products & Services

Regional & Business aircraft

Helicopters

Components

Electronic systems

Manitoba 27 5 $1.6 billion Aircraft Components

MRO

MRO

Gas Turbine repair

Composites and Structures

Alberta 20 6 $1.3 billion Avionics, Electro Systems

(Defence)

Space Science

MRO

Logistic Support to the Military

Combat radio systems, defence

system integrations

MRO (Helicopter & Narrow-

body)

Unmanned Vehicle Systems

(Integration and Development)

Space Research

British Columbia 16 5 $1.0 billion Aircraft Components

MRO

MRO

Components

Composites

Saskatchewan 5 1 $0.5 billion Space Space and Satellite Systems

New Brunswick 13 1 $0.5 billion Aircraft Components


Components

Nova Scotia 10 1 $0.5 billion Aircraft Components Aircraft Components

Prince Edward

Island

15 1 $0.3 billion Aircraft Components Components



Table C. Sales information by Product Type and Annual

Investment and Research and Development.

Highlights % of Production Canadian Dollars Export

Revenue 100 $23.8 billion $19.3 billion

Sales by Product Type Aircraft, Aircraft &

Components

55 $13.0 billion

Maintenance, Repair &Overhaul

16 $3.6 billion

Aircraft Engines & Engine

Parts

15 $3.4 billion

Avionics, Electro

Systems

6 $1.3 billion

Simulation & Training 4 $1.0 billion

Space 2 $.5 billion

Other Products &

Services

2 $1.0 billion

Civil Sales 76 $18.2 billionMilitary Sales 24 $5.4 billion

Investment in Capital $1.3 billion

Investment R & D

Investment

$0.685 billion

The Canadian aerospace industry serves the major international markets. The United States is

the largest market because of geographic proximity, close trading ties and joint programs.

Table D. Global markets served.

United States Europe Asia South and Central

America

Middle East Africa/Oceania

Percentage of Exports 58 24 7 3 5 3

Canadian companies are represented in all the industry sectors. As can be seen below,

there are a number of Prime Contractors in Canada. Some of these companies produce

a variety of aircraft from regional jets to business aircraft. Other companies manufacture

helicopters, engines and simulation and training equipment.



Table E. Information on Prime Contractors

Company Locations Specialization Ownership Website

Bell Helicopter Textron Quebec Helicopters United States www.bellhelicopter.com

Boeing Canada

Operations Ltd.

Manitoba

Quebec

Ontario

Laminate panels

Fairings

United States www.boeing.ca

Bombardier Aerospace Quebec

Ontario

Regional and Business

Aircraft

Canada www.bombardier.com

CAE Inc. Quebec

Ontario

Nova Scotia

Flight Simulators

Training

Canada www.cae.com

Diamond Aircraft

Industries Inc.

Ontario Business Aircraft Austria www.diamondaircraft.com

Eurocopter Canada Ltd. Ontario Helicopters Europe (EADS) www.eurocopter.ca

Pratt & Whitney Canada Quebec

Ontario

Engines United States www.pwc.ca

Major Suppliers by Sector

(Please note that this identies some of the larger companies,and does not include Prime Contractors)

Table F. Major Suppliers by Category, Location and Ownership.

Sector Company Locations in Canada Ownership Website

Aircraft,

Aircraft &

Components

ASCO Canada Aerospace Inc. British Columbia Belgium www.asco.be

Avcorp Industries Inc. British Columbia

Ontario

Canada www.avcorp.com

Goodrich Ontario United States www.goodrich.com

Heroux-Devtek Quebec

Ontario

www.herouxdevtek.com

Magellan Aerospace Ontario

Manitoba

Canada www.magellanaerospace.com

Messier Dowty Ontario

Quebec

France www.messier-dowty.com

Maintenance,

Repair and

Overhaul

(MRO)

Aveos Fleet performance Inc. Manitoba

British Columbia

Ontario

Quebec

Canada www.aveos.com

I.M.P. Group Ltd. Nova Scotia Canada www.impgroup.com

Kelowna Fl ight Craft Group British Columbia

Ontario

Canada www.ightcraft.ca



Sector Company Locations in Canada Ownership Website

Maintenance,

Repair and

Overhaul

(MRO)

Standard Aero Manitoba

British Columbia

Alberta

Quebec

United Arab

Emirates

www.standardaero.ca

Vector Aerospace Inc. Ontario

British Columbia

Alberta

Canada www.vectoraerospace.com

Aircraft

Engines &

Engine Parts

Liburdi Engineering Inc. Ontario Canada www.liburdi.com

Unison Industries Ontario United States www.unisonindustries.com

Rolls Royce Canada Quebec

British Columbia

United Kingdom www.rolls-royce.com

Avionics,

Electro

Systems

Esterline CMC Electronics Ontario

Quebec

United States www.cmcelectronics.ca

General Dynamics Ontario

New Brunswick

Alberta

United States www.gdcanada.com

L-3 Communications OntarioQuebec

United States www.l-3com.com

Lockheed Martin Canada Nova Scotia

Quebec

Alberta

United States www.lockheedmartin.com

Thales Canada Quebec

Ontario

British Columbia

France www.thalesgroup.com/canada

Simulation and

Training

Adacel Inc Quebec Canada www.adacel.com

Atlantis International Systems Inc. Ontario

Nova Scotia

Canada www.atlantisSI.com

Kelowna Flight Craft Group British Columbia

Manitoba

Canada www.ightcraft.ca

Space MDA British Columbia

Ontario

Canada www.mdacorporation.com

Magellan Aerospace Ontario

Manitoba

Canada www.magellanaerospace.com

Com Dev International Ontario Canada www.comdev.ca

EADS Canada Inc. Ontario

Quebec

Nova Scotia

Europe www.eads.net

SED Systems Saskatchewan Canada www.sedsystems.ca



As stated previously, the industry is represented in all industrial provinces. Further

information on the provincial clusters is located below:

Quebec:

Quebec has the largest aerospace industry in Canada. It is largely located in the

Montreal area. Below are some key facts on the industry:

225 businesses, including nearly 20 principal contractors and equipment

manufacturers and over 200 subcontractors and product manufacturers.

Employment is 42,000 jobs.

Annual growth rate of 8.5% over 24 years.

Roughly 50% of Canadas total sales.

Over 80% of Qubec production is exported.

The strength of the Qubec aerospace industry stems from the presence of several

world-class prime contractors:

Bell Helicopter Textron

Bombardier Aerospace

CAE Inc.

Pratt & Whitney Canada

Rolls Royce

The areas of expertise include:

Commercial aircraft (regional and business)

Helicopters

Turbo-shaft and turbojet engines

Flight simulators

Avionics

Landing gear

Space systems

Systems integration

Montreal is also the site of more than ten aerospace research centers, including theCanadian Space Agency and the Aerospace Manufacturing Technology.

Ontario:

Ontario has the second largest aerospace industry in Canada. The companies are located

across Southern Ontario from Ottawa to Windsor. The companies employ in excess of

20,000 skilled workers and annual sales are $6.5 billion.



World-leading aerospace companies such as Bombardier Aerospace, Pratt & Whitney

Canada, Honeywell Canada, L-3 Electronic Systems, Magellan and Northstar Aerospace

are recognized globally for their strengths in aircraft parts manufacturing, aircraft systems

development, and maintenance and overhaul and are located in the province.

Ontario is a leading supplier of:

Regional and business aircraft

Unmanned aerial vehicles

Small and medium turbine engines

Commercial helicopters

Aero structures Landing gear

Environmental systems

Electronic systems

Western Canada:

Western Canada is represented by British Columbia, Alberta, Saskatchewan and Manitoba.

Manitoba:

Manitoba is home to the largest aerospace cluster in Western Canada and is a major

centre for composite aircraft component manufacturing, aircraft structures and aircraft

maintenance, repair and overhaul. Sales exceed $1.6 billion with an estimated 5,000

persons directly employed.

Sector Capabilities

Design, development, manufacture, & repair/overhaul of:

- Composite aircraft components and assemblies

- Engine components and accessories

Repair and overhaul of:

- Commercial aircraft

- Advanced alloy turbine engines

- Piston engines and accessories

Precision machining and precision sheet metal fabrication of

high strength metals and alloys

Spacecraft and payload design and integration

Sounding rocket design and integration

Development of advanced strategic target systems

Military pilot simulator and ight training



British Columbia:

Aerospace companies in the Vancouver area benet from their closeness to the Boeing

plant in Seattle, Washington.

The specializations within British Columbias aerospace industry include:

Design, manufacture, maintenance, repair and overhaul

Advanced composite aircraft structures

Remote sensing

Satellite communication

Robotics

MRO

Training

Alberta:

Albertas thriving economy is home to 150 aerospace and aviation companies, employing

over 6,000. Alberta strengths are in specialized niches of the industry:

It is recognized for the following areas of expertise:

Robotics and Unmanned Vehicle Systems (UVS)

As part of the diversication and expansion of industry in Alberta, a strong

Unmanned Vehicle Systems sector is emerging. This innovative niche is

expected to grow tremendously in the coming years because of its wide-ranging

applications for military and commercial uses.

The industry is supported by the Canadian Centre for Unmanned Vehicles in

Medicine Hat and by the Alberta technical institutes and universities.

Because of a small population and open land, Alberta can provide test ranges and

facilities, such as in Foremost.

Defence Electronics

Currently there are 12 Alberta rms in this sub-sector, employing approximately

1,200 highly qualied and skilled people. Sales are over $264 Million, 60% of which

are exported. Companies manufacture and provide maintenance for Canadian and

foreign militaries in these areas: secure tactical communications systems, software,

specialized sensors and other components in military applications.



Products include:

Avionics navigation systems

Control systems

Global positioning systems

Systems integration

Space Sciences and Aerospace Geometrics

Alberta has over 25% of Canadas geometrics, navigation and positioning rms,

which accounts for $200 million in sales. 75% is exported to the United States

and Europe. The research done through Albertas university is world-class and isfunded by the federal and provincial governments.

MRO

Alberta-based companies provide maintenance, repair, overhaul and modication

of both military and commercial aircraft, including: avionics; airframes; engines;

equipment and component parts; interior refurbishment; and, aircraft painting.

Logistical Support to the Military

With four large military bases in Alberta, the provinces local communities are

increasingly answering the militarys local procurement needs, while on a national-

scale; the provinces industry is collaborating to enter the supply chain on larger-

scale capital procurement projects.

Eastern Canada:

Eastern Canada is represented by New Brunswick, Nova Scotia, Prince Edward Island and

Newfoundland and Labrador.

New Brunswick:

The aerospace industry is located in Fredericton and Moncton.

Areas of specialization include:

Aerospace design

Advanced composites

Communication research



Nova Scotia:

The aerospace industry is located in Halifax.


Composites fabrication

Electronic assemblies

Engine manufacturing

Prince Edward Island:The aerospace industry is located in Charlottetown.


MRO

Engine coatings

Airplane interiors

Precision components

Newfoundland and Labrador:


MRO

Systems integration

Communications systems

Summary

It can be seen that the aerospace industry is a nationally located industry. It is an innovative

and sophisticated industry that is world-class. As a result, the industry is a global force in a

very competitive global industry and is recognized for its excellence.



The Canadian aerospace industrys success has been developed through a

combination of factors including:

Using world-class technology and materials.

Investing heavily in machinery and equipment to ensure that costs are competitive

or lower than other producers.

An available educated and skilled work force.

The development of global export markets. While the US market is one of the

keys markets due to geographic closeness, joint programs, etc., there is global

recognition of Canadas aerospace capability.

The development of a wide network of research institutes and Universities.

Ongoing research being conducted within the industry. Company research

activities are encouraged by a generous system of tax credits.

Government support at all levels.

Low corporate tax.

Reduction and elimination of taris on all manufacturing inputs. Most were

eliminated in 2010, but completion will be in 2015.

Encouraging and supporting investment by international corporations to develop

operations in Canada.

The industry is acknowledged as a technology leader for the products made. Companies

work to a number of standards including ISO 9000 and AS9100.

The industry continues to grow and it is anticipated that Canadian sales will reach over $30

Billion by 2020. The momentum of this industry oers many opportunities for Swiss companies,

including the development of strategic alliances, direct investment and acquisition.

More information is available through the websites listed below:

Aerospace Industries Association of Canada

www.aiac.ca

Ontario Aerospace Council

www.ontaero.org

Association Quebecoise de laerospatiale

www.aqa.ca

Western Canada Aerospace Association

www.canadawestaerodef.ca


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Aerospace 2012 SBH Canada