AEROSPACE IN QUÉBEC WE WILL TAKE YOU HIGHER

Companies Employees Sales

215 43,500 $12.1B

2

Montréal is one of the world’s top three aerospace centres, along with Toulouse and Seattle. And it is growing fast!

A World Leader

Small turbine engines Aerospace

telecommunications

Simulation / modelling

technologies

Regional jets

Maintenance and

repair of commercial

and military aircraft

Commercial

helicopters

Military industry Military gear systems

3

A Highly Diverse Cluster

Company Specialty Workers

Bombardier Aircraft 15,500

Pratt & Whitney Turbine engines 5,000

CAE Flight simulators 3,500

Bell Helicopter Textron Helicopters 1,950

Rolls-Royce Canada MRO 900

L-3 Communications MRO 880

Esterline CMC Electronics Avionics 825

Héroux-Devtek

Landing gears 815

4

Key Players

Source : MEIE, 2013

5

Concentration of World Leaders

6

Pre-competitive R&D

Universities

Technology Demonstration Green Aviation R&D

Public Research Centres

Collaborative Organizations

7

OEMs

Tier 2-3 & MROs

Sub-contractors

Associations

Academia

Research

Centers

Unions

Aéro Montreal

80% of Québec aerospace production is

exported.

70% of Canadian aerospace R&D is done here.

(Value of over $700 million)

Québec accounts for more than 55% of Canada’s

total aerospace production, and more than 50% of

the Canadian workforce

8

Serving The World

9

Expenditures 1 000 000$

Salaries 900 000$

Materials 100 000$

Québec tax credits 14% of salaries 126 000 $

Canada tax credit 15 % of R&D

expenditures

205 350 $

Overhead expenses (proxy) 55% of salaries 495 000$

Expenditures eligible for credit

1 369 000$

Total tax credits 331 350$

Cost to the Company 668 650$

Net Cost of R&D Expenditures

R&D project of $1 million ($900 000 in salaries)

Canada Tax Credit: $ 205,350

Québec Refundable Tax Credit: $126,000

10

+ 33%

Net Cost of R&D Expenditures

106.3

104.9

102

101.6

101.6

100.9

99.9

98.6

97.4

97.1

96.9

95.8

84.1

0 10 20 30 40 50 60 70 80 90 100 110 120

Sydney, AU

Osaka, JP

Frankfurt, DE

London, UK

Seattle, WA

San Diego, CA

Chicago, IL

Milan, IT

Wichita, KS

Toronto, ON

Montreal, QC

Amsterdam, NL

Monterrey, MX

Aerospace – Aircraft Parts (US=100)

11

Comparison of Total Annual Costs

Source : KPMG, Guide to International Business Location Costs, 2013

12

Skilled

Labour

Force + Generous

Incentives

+ Low-Cost

Facilities

+ Easily

Accessible

Sites

4,800+ new

aviation graduates

each year

Financial assistance

available for CAPEX

and workforce

training

Tax credit on R&D

expenditures

Low facility

operating costs

Time zone aligned

with the U.S.

Strong business

ties with

the U.S.

Conclusion