Features Operations
Positioned for takeoff

The 2013 Economic Action Plan, which was unveiled by the federal government in Ottawa on March 21, contains several important measures for the aerospace industry in Canada. It also constitutes an excellent short-term response to the Honourable David Emerson’s Aerospace Review report, released late last year.

The budget includes earmarks for consultations on a national research and technology network in support of the industry.

Key budget commitments, which include continued funding for the Strategic Aerospace and Defence Initiative (SADI) and the creation of an Aerospace Technology Demonstration Program, come as a direct response to recommendations contained in the Emerson Report. Additional measures that will have a significant positive impact for the Canadian aerospace industry include the use of key industrial capabilities for military procurement, small business incentives, skills development, domestic financing, and technology development. The Action Plan also contained a commitment to review the Emerson Report recommendations to better support Canada’s space leadership and capabilities.

The government’s continued support for the growth and competitiveness of the aerospace industry is very encouraging.

Canada’s global success depends on the development of innovative technologies and securing sales in this highly competitive global industry. Supportive and well-implemented government programs are critical, and the Aerospace Industries Association of Canada (AIAC) will continue to work with the government to move the Emerson Report’s recommendations forward.

The Economic Action Plan can be downloaded in full at www.budget.gc.ca. Here are key highlights that will impact the aerospace industry, with references to their location in the budget. 

Aerospace-specific measures
Budget 2013 provides an excellent response to the Emerson Report with the following commitments:

• Strategic Aerospace and Defence Initiative (SADI): The government will continue to provide stable funding of nearly $1 billion over five years and commits to reviewing SADI’s administration and operation in the coming year. (p. 113)
• Technology demonstration: Creation of an Aerospace Technology Demonstration Program with $110 million in funding over five years beginning in 2014-15, and $55 million annually thereafter, to be partly funded by SADI at $20 million per year. (p. 115)
• Technology collaboration: Launching of consultations regarding the creation of a National Aerospace Research and Technology Network to be led by Industry Canada. (p. 115)
• Certification: Review of cost-recovery rates for aircraft safety certification to ensure the program responds to growth in demand for certification. (p. 116)
• Space leadership and technologies: The government is currently reviewing volume two of the recommendations made in the Emerson Report. (p. 116)

Other significant measures
Other measures introduced in the Economic Action Plan that will have an impact on the aerospace industry include:

• Military procurement/Key industrial capabilities: The government commits to ensuring that purchases of military equipment create economic opportunities for Canada by developing key industrial capabilities. (p. 106-109)
• Export Development Canada: Domestic financing powers extended to March 2014 or until new regulations come into force. (p. 135)
• A two-year extension of the temporary Accelerated Capital Cost Allowance (ACCA) for machinery and equipment. (p. 101)
• Sustainable Development Technology Canada (SDTC): $325 million over eight years to support the development and demonstration of small-scale clean technology projects. (p. 200)
• Creation of a $200 million (over five years) Advanced Manufacturing Fund in Ontario to be delivered by FedDev. (p. 106)
• National Research Council: $121 million over two years to “invest in NRC’s strategic focus” and foster business
• innovation. (p. 199)
• Industrial Research Assistance Program (IRAP): $20 million over three years for a new pilot program to help small and medium enterprises (SMEs) commercialize their products. (p. 199)
• Granting councils: $37 million annually to support research partnerships. (p. 193)

Small business-specific measures
Several initiatives supporting small business were also announced in the Economic Action Plan, including:

• Expansion and extension of the hiring credit. (p. 122)
• Additional red tape reduction. (126)
• Access to research and business development services through IRAP. (p. 199)

Skills development
The Economic Action Plan addresses skills development through:

• Creation of the Canada Job Grant, in collaboration with the provinces and territories, for training unemployed and underemployed Canadians. (p. 67)
• Promotion of education and development of new outreach efforts in high-demand fields such as science, technology, engineering, mathematics (STEM) and skilled
• trades. (p. 74)
• Support of the use and reduction of the barriers to access apprentices in skilled trades. (p. 69)