Environment and Sustainable Development
Date: 2023_04_20
Chamber: HOUSE OF COMMONS
Mr. Ryan Williams: this is an exciting time for aerospace. Just this morning, we got to watch Starship, SpaceX's newest project, live in our office. Starship is twice as big as the Saturn V rockets, with 35 rocket engines. It blasted off this morning from Boca Chica, Texas. It went almost into space and unfortunately got caught in a spiral and kept going around and around before they had to hit the self-destruct button. It reminds me a bit of the Liberal government, but that is a story for another time. It is very exciting, because we are seeing private space companies in the U.S., and of course representing the whole world, involved in space travel. With respect to another story, the Artemis II crew was announced a couple of weeks ago, including Canadian Space Agency astronaut and RCAF captain Jeremy Hansen. It is very exciting that we have a Canadian astronaut joining the U.S. on the Artemis missions as we go back to the moon. That is something we can be very proud of. From the field of engineering that deals with the design, development, production and operation of vehicles and systems that operate in the earth's atmosphere or in space, Canada has a dynamic industry with aircraft, spacecraft, satellite and missile systems, which of course we call the aerospace sector. I know that many of our colleagues have talked about great companies that are operating here in Canada, including in Montreal and other parts of the country, all working on different systems in the aerospace sector. Let us be clear on this, and this report is very clear: We need to get back to the basics. The Canadian aerospace sector is not broken, but the government's role is. In my last point, I am going to talk about what this report really spoke about and what we need to do. Number one, we need to identify aerospace as a pillar of Canadian industrial policy again. We have seen it blanketed. We have a term that we hear from experts and from witnesses all the time when we are talking about the spectrum of industrial policy. It is that we spread the peanut butter too thin. In Canada, we seem to think that we are just going to give everything to everyone and that at the end of the day maybe that is going to be a really good strategy with which Canada evolves, but it is not. We seem to spread it all too thin. Aerospace is one of those industries in Canada that we can afford to put more into, and we are going to get more out of it. I am going to talk specifically about that. Before I do that, I want to say that I am happily splitting my time today with the member for South Shore--St. Margarets . The second part is very important. When we talk about aerospace, it means that we put an emphasis on research and development and first-stage innovation. When we talk about other sectors in Canada where we need to succeed, it is about putting an emphasis on first-stage innovation, research and development, because when we put an emphasis on research and development, we are getting something out of that. Something that we are also studying in the science and research committee right now is owning what we create or commercializing our IP. When we are looking at all these strategies, there is not just one thing we have to do. We have to do all these complex things at the same time, but we really need to commercialize IP and put more money into research, and then of course focus on aerospace as being one of those industries. Part of that is going to be deregulating the industry. Also, what is probably most important is establishing a national procurement strategy to support defence and the aerospace sector. I really want to focus on that last point first, because it is the most important. The Washington Post had an article yesterday that was really concerning because it mentioned that the Prime Minister told NATO that Canada will never meet its spending goal. That is very concerning. Canada's widespread military deficiencies are harming ties with security partners and allies. These shortfalls lead the Canadian Armed Forces to not be able to participate fully across the world. We have had really big problems with not meeting our commitments with NATO and our commitments across the world. The Americans are concerned about our ability to protect our Arctic against Russian and Chinese aggression. The Germans are concerned about whether Canada will continue to aid Ukraine. Turkey is disappointed by the Canadian military not being funded enough to support transport of humanitarian aid when it had an earthquake earlier last month. Haiti is frustrated by Ottawa's reluctance to lead a multinational security mission. However, this is the biggest glaring hole in economic opportunity. Other nations, like Germany, the U.K., Australia and the U.S., have figured out how to make defence policy industrial policy, and have that policy create powerful paycheques to their citizens and proud, private enterprises that provide income to their countries. This is what Canada needs to do, and what it needs to do with defence when it relates to aerospace. The key differential between our approach to defence policy and the British approach is that industry is included in the definition of defence policy from the outset. By the time the British defence and security policy is stable, most of the companies selected to deliver the products and services have already been identified as part of a defence strategy and then a procurement strategy. In 2017, 56% of the U.K. procurement was sole-sourced with a large majority awarded to the British industry providing billions to the country's GDP. How does that relate to Canada and the aerospace industry? Well, let us look at our neighbour south of us and, of course, to the rocket launch this morning. A really big stat is from NASA, which has a bigger budget than Canada's defence budget as a whole. When we look at SpaceX, a private industry, 85% of its budget comes from NASA. When we talk about that rocket this morning exploding, probably bad news for Elon Musk, but great news for the engineers and part of the product, because they are going to build a new rocket and try again. That is part of first-stage innovation with companies. They are going to put more of that money into those industries. The thousands of engineers, product designers and workers, as I alluded to earlier, who are part of that process is just astounding as well as the GDP that is put back from it. One side note is that SpaceX is involved with Starlink, and that American company, funded, of course, by the defence policy and NASA, is actually providing Internet to Canadians. Hundreds of thousands of Canadians are getting Internet not from Canadian companies but from the U.S. company Starlink, from Elon Musk, which is a part again of this procurement policy that was started by NASA. NASA funds 85% of SpaceX and no doubt will be funding all new projects for space going forward. We can see how defence spending ends up being a Canadian prosperity plan. It is good for Canadians and powerful paycheques, and it also can be, of course, a great industrial policy. I want to go back to R and D and what we used to have. We used to have a couple of programs with the Conservative government, prior to the Liberal government, like SADI and AIAC that were specific to the aerospace sector. Again, those specific programs went into research and development for the sector for certain companies. We had a witness come to the committee from Heroux-Devtek Inc., Mr. Gilles Labbe, who talked about a landing gear process. This is a company in Quebec that had a landing gear project, and when he talked about the project, he talked about a ticket that normally costs between $50 million and $70 million U.S. with the process taking as long as five years. Through those SADI programs that we used to have from the government, that was almost entirely funded by the government. It helped that company save five years and evolve. That company went from having 200 employees to now over 2,000 employees. What happened with that R and D program is that the SADI was evolved into the SIF program. However, again, with that peanut butter spread too thin, the SIF program looks at many different industries and not aerospace specifically or targeted specifically. What has happened is that those companies are finding they are missing out on that first-stage innovation and the R and D. When we look at R and D as a specific purpose of industrial policy, what we should be looking at are examples such as DARPA advanced manufacturing in the U.S. and, of course, looking at specific sectors. Again, to my point, aerospace needs to be a specific sector that we put R and D into, and when we look at procurement policies, we should certainly see it as a bright future and Canadian industrial policy, which is the only way we are going to help this industry succeed. We have a lot of different issues that we need to look at across the defence spectrum, but certainly aerospace is going to be able to fulfill that. As Canadians, we certainly we need to reach for the stars and start looking at aerospace again as not just an industry but a major industry for industrial policy, research and development, procurement policy and, again, looking at investing in defence and linking that to the aerospace industry to ensure that Canada succeeds, those workers succeed and those companies succeed.