Contemplating a view to the future
As president and CEO of the Aerospace Industries Association of Canada, Jim Quick is tasked with significant and varied responsibilities. Quick and his team work closely with OEMs, academia, industry leaders, R&D specialists and government officials to ensure Canada’s aerospace footprint remains strong both here at home and on the global stage. It’s a significant responsibility given the Canadian aerospace industry contributes some $29 billion to the GDP and its 700 companies nationwide are responsible for the employment of more than 180,000.
And while a sluggish economy has taken a toll in 2015, the fall-out from the federal election means a new government needs to be familiar with policies, procedures and strategies that will drive this critical industry going forward. That’s where Quick and his team come in. Opportunities on the civil side over the next 25 years will be significant, as major aircraft manufacturers such as Airbus, Boeing, Embraer, Bombardier and more, race to keep up growing global demand for aircraft. And though Canada does not manufacture a fighter jet, MRO and ISS opportunities on the defence side are growing. A stronger role in the space race is also at stake.
Wings sat down with Quick in his downtown his Ottawa office to discuss AIAC’s progress, trends and challenges that lie ahead. As always, his enthusiasm for the task at hand was very apparent.
W: The ADSE event in British Columbia this fall was once again a success. What are your thoughts on the event and do you feel the B.C. aerospace community is becoming a more cohesive unit?
JQ: Yes, the team in B.C. once again this year produced a world-class event. I am proud of the progress we have made with ADSE and we intend to build upon the success over the next few years. With our increasing partnership with the federal government to do program delivery in the West, we believe ADSE offers a signature event that draws attendees based on strategies that are important to the region. The success of this event is in large part thanks to the commitment and partnerships we have developed through AIAC Pacific with the federal government, provincial government and the city of Abbotsford. We are all working hard to ensure the success of this event, and I’m looking forward to seeing how it continues to grow in coming years.
In terms of the program, from a technical standpoint, we think we are focusing on the right things. We have brought in people who were not there in the past – companies like Airbus and Boeing – to give them a better understanding of what capacity and capability there is in the region and what opportunity exists. AIAC Pacific is helping to ensure B.C. and the West have that strong voice. I am happy with out success so far.
W: There has been concern expressed to Wings in the past that there is a layer of disconnect in collective aerospace vision and structure out West on various levels. Any comment?
JQ: I believe what we have been able to create in B.C. has been a positive experience for all involved. There is certainly an appetite for a more expanded role for the AIAC in western Canada and we are interested in playing whatever role we can to ensure we are speaking with one voice. That is not only good for the industry, it is also what government’s at all levels are looking for – a unified voice is a win for all.
W: It seems initiatives like AIAC Pacific are a strong step in establishing a united front to drive aerospace in the region, especially in a region that may be challenged by fragmentation due to location.
JQ: It’s true. This has brought a common focus and objective to what the industry needs to do. I am hopeful it translates into a more cohesive approach in the West – one where we can get other provinces involved and look at the West as a significant contributor to the national aerospace program – there is no reason why we can’t do that.
W: Could the AIAC look at a model that introduces another extension to the association – say a Manitoba, Saskatchewan, Alberta chapter?
JQ: We are prepared to do whatever we can to ensure we have a unified voice and consistent approach in the west. We have to find a way to bring the West together so it is seen as a well-constructed supply chain option for major OEMs because the global supply chain has very specific requirements in terms of what they want from suppliers.
The day of AIAC introducing a small company to Boeing, Airbus or Bombardier are gone. There is a different dynamic in terms of Tier Ones and Tier Twos and their role within the supply chain. OEMs are looking for more from their suppliers in terms of taking on more risk and more investment and larger work practices. What we are trying to do – which includes what we are trying to do in the West – is to make sure we are adapting to the new dynamic and ensure our programs and services allow for companies to grow within it.
W: You also must account for the Asia-Pacific market, where demand for aerospace and aviation products is growing exponentially. There are many opportunities for Canadian companies.
JQ: I think the West coast has a strategic advantage when it comes to Asia-Pacific. We are going to have to build 34,000 new aircraft in the next 20 years and almost half of these aircraft will be in Asia. Having this relationship will be significant.
W: Let’s chat about the recent announcement by the federal government to give $18.6 million to Centennial College for a new aerospace campus at the Downsview Airport in Toronto. How important is this announcement in establishing a future aerospace cluster at the site – and what would that mean for Canadian aerospace as a whole?
JQ: It is excellent news because I think Downsview is a very viable option for our industry. I believe our industry needs Downsview and I think Ontario needs Downsview, and certainly the city of Toronto. I believe we can present Downsview in a way where we can compete with other clusters across the country and develop its own brand.
What concerns me is that we seem to be very slow in making it happen. The federal government has stepped up and the province has done the same from a provincial standpoint, but it is really time for us as an industry to look at Downsview and see the benefits that it can bring to the national approach. We need to figure out what we want to do, how we want to do it and with whom.
W: And the challenge as well is getting that message out. This is a story that should engage the mainstream media – and they really haven’t grabbed it. Frankly, this doesn’t make sense to me.
JQ: There needs to be a plan. One of the things we suffer from in this case is we need to engage governments – federal, provincial and municipal – and determine what needs to be done at Downsview. Then there is the industry itself and other related stakeholders. There needs to be a comprehensive strategy as to how we do this and exercise the strategy using all the players we can. We have a role to play but I don’t think we are being maximized in terms of what we can be doing to help.
W. Do you have the same kind of disconnect amongst industry players in Ontario? Is it a similar scenario to the B.C. aerospace community?
JQ: It is a different scenario in Ontario from the standpoint that there are different players here. There is the academic side, there is the training side at the college level, there are manufacturers, there are aviation stakeholders involved. But for me, it comes down to having a plan and executing that plan.
W. How is the AIAC meeting the objectives outlined in the Jenkins report? Are you happy with the progress?
JQ: Coming out of Jenkins was the national defence procurement strategy and we played a rather significant role – along with CADSI – in helping the government roll out that strategy. From a policy standpoint – the use of value propositions, the move from IRBs over to ITBs – these are all very, very solid policy decisions that have been made. From this perspective, from a policy perspective, I think we hit the nail right on the head. The challenge we are going to have as DPS gets rolled out, and what people looking at it will ask is when are we going to start doing procurement? This is the challenge for us. We need to get procurement out the door so we can look at the policy framework, implement it and find out if we need to be adapting anything as we go along. It’s one of the ways of government saying to the industry, “Here are our expectations and what are you prepared to put on the table to help build capacity. If you want us to buy your product, here is what we are expecting from you.”
One of the reasons we are so focused on the supply chain is OEMs have heard the government, and they have heard ministers, and they get it. Now, we have to make sure that as OEMs, we are developing value propositions that have a supply chain that can actually respond to what it is that they want to be doing in Canada. But the test is going to be as we get procurements out the door.
W: How about meeting the objectives of the Emerson report? Are you happy with the progress?
JQ: On Emerson, I believe that between industry, AIAC and government, we have done a great job getting the recommendations that Emerson wanted implemented. In my estimation, more than 85 per cent of the recommendations either have been implemented or are in the process of being implemented. The big things that are left are more on the space side and we were late getting to that because there had to be some decisions made including appointing a new president and CEO of CSA the space agency. I am very pleased with the government approach to the implementations and I think new programs like technology demonstrations, research and technology networks, supply chain development – these are all things that we felt we needed to do in order to be more competitive globally. The government has done a good job of working with us in terms of the implementation. And not only the implementation but also the intent of what David Emerson wanted, the philosophy, which had to be followed through as well.
W. In spite of a slow year economically, are there positive signs going forward? Is there a sound strategy in place for national aerospace development?
JQ: As we go forward in 2016 and beyond, I think what Jenkins and Emerson did for us was it allowed us to catch up on the program and policy front with a lot of our competitors. Now, we need to be looking at what we do now – post Emerson, post Jenkins, to allow us to be more competitive. So, on the space side, we have to deal with funding the appropriate technology strategy and we need a long-term space vision for the country. This needs to be supported by government and industry.
On the aerospace side, we need to look at a growth agenda for small- and medium-size companies – and with the global supply chain, understand that there are new realities inside of it. We need to ask ourselves, how are we developing our supply chain to take advantage of the new realities and new opportunities? So, we are talking to the government about a range of programs and ideas that we can use in order to develop a growth strategy for small- and medium-sized companies.
On the defence side, we still have to do the follow through on DPS. But there are other things we need to be looking at going forward like MRO and ISS – what’s the future for Canada here? We don’t build fighter jets in Canada. So, the Canadian interest and strategy here is around in-service support. The companies we have here are some of the best ISS companies in the world. So, how do we maintain that? And it is going to be a tough discussion. One of the things we are proposing going forward is doing a deeper dive in terms of a policy and program perspective to determine what exactly needs to be done. Canada can maintain and leverage its global-leading capacity in ISS and MRO.
W: What can we do to stay at this level?
JQ: When you look at the regions of the country, we have some companies here in Canada that are the best in the world. We cannot allow them to lose that global advantage. What I am hoping we are able to convince the government to do is to look at it and say, what strategically do we need to be doing inside these sectors in order to maintain our competitive advantage? This is something we are proposing going forward, but a lot of the details still need to be worked out.
W: Is it difficult advancing the needs of the aerospace community in light of changing governments? It seems like a constant re-education process.
JQ: We look at it as a challenge and an opportunity. It is part of the electoral process and you know, every four years, there will be an election. You have to get your ducks in a row to prepare for that and you have to have a strategy as to how you are going to work with a new government. This is the challenge, but the opportunity is you can put new vision and ideas around programs and policy on the table for a government to consider.
W: From the perspective of the association and its advocacy efforts with government and industry, are you pleased with the progress AIAC has made in the past year? What are the opportunities ahead?
JQ: Over the past few years, we have been able to do quite a bit of work with federal and provincial governments around program policy – and what we need to do to be more globally competitive. The federal and provincial governments have listened to what we think needs to be done post Emerson and Jenkins, and we have worked together to ensure that happens.
I get up every morning and I am pretty excited. Every day we have a different challenge, a different opportunity and it has been a lot of fun. I think we have been able to achieve a lot of things with good government partners and my sense is, at least from the companies who are members of the AIAC, they have seen good progress.