Aerospace Industry

Aerospace is a vital and growing component of Canada's economy, a leading employer and contributor to research and development as well as the country's top exporter of advanced technology.

Canada is one of only a handful of nations with a full range of aerospace design and manufacturing capabilities. Although a number of companies are subsidiaries of foreign corporations, in many cases they have been assigned - and capitalized on - mandates to manufacture for the world market. The industry represents the best in aircraft, electronics, avionics, communications, simulators, space technology, repair and overhaul, gas turbine engines and engineering. In the late 1990s the industry's annual sales topped $13 billion. Exports routinely accounted for 71% of sales.

Having focused on niche markets, the Canadian industry is the fastest growing aerospace sector in the world. By the year 2000, it is projected to be the 4th largest in the world and, by the turn of the century, sales are expected to reach $17 billion, with nearly 80% destined for export.

History

Bombardier Inc. is Canada's principal aircraft manufacturer and the 3rd most important civil aircraft manufacturer in the world. Its aerospace operations incorporate 2 long-standing elements of the industry: Canadair, which started in the 1920s as the Aircraft Division of Canadian Vickers Ltd in east Montréal; and Toronto-based De Havilland, active in Canada since 1928. It also owns Shorts Brothers in Ireland and Learjet in the United States.

In its early years Canadair designed and manufactured a series of airplanes, starting with the Vedette, the first Canadian flying-boat design. The company was relocated at the Cartierville airport in the Montréal suburb of Saint-Laurent during World War II and, under federal ownership, was an important centre of military aircraft production for Canso amphibians. In 1947 the government sold Canadair to the US Electric Boat Company, bought it back in 1976 and then sold it to Bombardier in 1986. Canadair is an important producer of executive jet aircraft such as the Challenger series and the Regional Jet, which pioneered the commuter jet market.

Toronto-based de Havilland, originally a subsidiary of the de Havilland Aircraft Company of England, sold and serviced aircraft designed in the UK. Manufacturing came later, culminating in large-scale WWII production of Anson, Mosquito and Tiger Moth aircraft. The Canadian team's first serious design venture was the Chipmunk trainer, followed in 1947 by the famous De Havilland Beaver, progenitor of a sequence of short-takeoff-and-landing (STOL) aircraft: the De Havilland Otter, Caribou, Buffalo, Twin Otter and Dash 7. Building on this heritage, de Havilland now produces several models of the Dash 8, the market leader in turboprop commuter aircraft.

In 1974 the government purchased de Havilland to secure the development and production of the Dash 7 and the continued operation of the company as an aircraft manufacturer in Canada. In 1986 de Havilland was sold to the Boeing Commercial Aircraft Company from which Bombardier purchased it in 1992.

The first modern aero-engine design unit in Canada dates to 1944 when the National Research Council of Canada (NRC) established Turbo Research Ltd in 1944 in the Toronto suburb of Leaside. A specification for a turbojet was drawn up and design of the TR 4 engine (Chinook) began.

In 1945 A.V. Roe (Canada) Ltd was formed to provide a domestic aircraft- and engine-design manufacturing capability, particularly for defence. The new company took over the assets of Victory Aircraft Ltd, at Malton, Ontario, which had produced Lancaster bombers during WWII. The Turbo Research team joined the group at Malton a year later. In the summer of 1946, the Royal Canadian Air Force requested the design and development of a turbojet engine, the Orenda, with a thrust equal to that of any contemporary engine under design abroad. By 1951 the team of engineers and technicians had expanded and a new manufacturing plant was constructed, opening in 1952. Within 17 months 1000 Orendas had been delivered to the RCAF, and production eventually reached 3824.

A.V. Roe began design and development of a supersonic engine, later called the Iroquois, in 1953. This engine was chosen to power the Avro Arrown (CF-105) supersonic all-weather fighter. On 20 February 1959, just a few weeks before the first Iroquois-engined Arrow was to take to the air, the government cancelled the aircraft and engine programs. The termination of the Arrow was a watershed in the history of the Canadian aerospace industry. Over one weekend the work force at A.V. Roe shrank from 5000 to 1000, with a total of 14 000 workers losing employment throughout the industry. Since then Canada has not sought self-sufficiency in aerospace weapons systems.

The Malton aircraft facilities of A.V. Roe continued under de Havilland direction until 1963, when the Douglas Aircraft Company assumed ownership to produce wings for its DC-9 commercial jet. Later the Douglas parent company was taken over by the McDonnell (US) Company and the Malton facility became McDonnell Douglas Canada Ltd. The Canadian entity has developed into an important manufacturer of wings for the MD-80, the DC-10, the KC-10 and the MD-11 aircraft. McDonnell Douglas Canada's parent corporation was merged into Boeing in August 1997.

Pratt & Whitney Canada Inc (PWC) is the 2nd largest company in the Canadian aerospace industry. It designs and manufactures highly successful turboprop jet turbines, accounting for more than 50% of the world market for small and medium-sized engines. Pratt & Whitney established the Canadian company in 1929 as a parts and overhaul facility for Wasp radial engines. During WWII the business grew, owing to the substantial use of Pratt & Whitney engines by the military.

Studies during the mid-1950s indicated that the piston-engine business would decline, and it was decided that PWC would organize a team to design and develop gas turbines for general aviation. An engine specification for a propjet of about 500-shaft horsepower, designated the PT-6, was developed. The engine is still pre-eminent in its class. Later engines have included the JT-15 fan-jet and the A-50 series used in the Dash 7 and other aircraft.

By 1978 there were 50 models of the PT-6 and the JT-15D in production, and both engine families set global standards for general aviation engines. The company currently manufactures the PW100 series of engines that power the majority of the world's regional commuter airliners, and it is also developing new generations of engines for helicopters and small executive jets. The PW150 series, currently under development, will power the latest generation de Havilland Dash 8-400 70-passenger commuter aircraft.

This historical view of the industry would be incomplete without reference to Canadian Aircraft Electronics. CAE has grown from a fledgling post-WWII electrical and electromechanical repair and overhaul service in Montréal to become the world's leading supplier of full-motion simulators of commercial and military aircraft. Its subsidiaries around the world design and manufacture aircraft simulators, visual systems and related advanced technology products marketed in more than 45 countries.

The 3rd largest company in the industry is Bell Helicopter Textron (Canada), headquartered north of Montréal. Bell's presence in Canada is relatively new; its Mirabel facility opened in 1985, when production of the Bell 206 was moved from Texas. Since then, Bell has shifted design and production of its complete line of civil helicopters to Canada, and Bell Helicopter Textron (Canada) sales now exceed $1 billion per year. More than 1500 helicopters have been manufactured at Mirabel.

In space-related activities, Canada's industry is modest by comparison with the US, Russian and European industries, but Canadian capabilities are world class in selected niches. The industry originated in the 1920s with ground-based research projects for the study of Earth's upper atmosphere conducted by scientists from the University of Saskatchewan. An extension of these researches using high-altitude balloons was initiated in the 1950s by DRB and led to work with sounding rockets, developed by Bristol Aerospace, Winnipeg, using the Black Brant rocket. In 1954 the army conducted the first series of rocket firings at Fort Churchill, Manitoba.

At the end of 1958, the US National Aeronautics and Space Administration (NASA) accepted a DRB proposal to create jointly a sounding satellite, the Alouette I, which was supported by a network of Canadian ground stations at Ottawa, Prince Albert and Resolute and 10 other stations around the world. The satellite was launched in 1962 and was a significant technological success. This entry into the field of space technology aroused considerable interest in using the technology for communications satellites. In September 1969 Telesat Canada was formed to provide domestic communications services by satellite throughout the country. Hughes Aircraft Corp (US), with Northern Electric and Spar Aerospace, designed and developed the Anik I, II and III satellites, launched in November 1972, April 1973 and May 1975 respectively. Canada became the first country in the world to own and operate a domestic Satellite Communications system.

So highly rated is Canadian satellite technology that the federal government found itself in early 1999 considering a non-US launch partner for Radarsat-2, a follow-on to its 1995 Radarsat-1. Data from both can help scientists determine crop yields, ice conditions in the Far North, potential mine sites and the health of Canada's forests. The problem with the second-generation spacecraft was that its imaging technology could discern objects as small as 3 m across, day or night and through clouds from a 900 km orbit, compared with 7 m for Radarsat-1. American intelligence agecies, which contended that any satellite capable of imaging below 5 m resolution is a national security concern, were urging NASA not to launch Radarsat-2.

In order to develop the capabilities of its space industry, Canada undertook in the mid-1970s to provide a Remote Manipulator Arm (CanadaArm) for the US space shuttle. The arm was successfully deployed during the second flight of the space shuttle Columbia in 1981, and gained world recognition for the technological capability of Spar Aerospace and the NRC. The Canadarm has subsequently flown on every NASA space shuttle mission and has been instrumental in the recovery and return to earth of satellite payloads. Today Canada is a leader in space robotics. The second generation Canadarm and SPDM "space hand" are being used to build the International Space Station.

Canada's Aerospace Industry in the Late 1990s

More than 400 companies in Canada are involved in aerospace. The industry is located in every region of the country with main production centres in Montréal and Toronto. More than 60 000 people work in this sector of the economy.

The industry's output includes an impressive range of advanced technology proprietary products such as Bombardier's Regional Jet transport, Challenger and Global Express business jets and Dash 8 family of commuter transports; civil helicopters produced by Bell Helicopter Textron (Canada); and the family of small and medium-sized aircraft engines designed and built by Pratt & Whitney Canada. Canadian firms also produce aircraft systems and subsystems, structural components and other parts for aircraft manufacturers in Canada, the US and Europe, and carry out repair and overhaul on a wide range of aircraft, aeroengines and component parts. In addition, Canadian aerospace firms are world leaders in simulation and visual systems, satellite communications systems and systems integration.

The industry comprises 3 tiers of capabilities and products. The first tier includes the principal companies with integrated design and production capabilities for fully integrated, stand-alone systems like complete aircraft, satellites, air-traffic control systems and simulators (primes). The second tier companies manufacture systems and major substructures like engines, landing gear, wings, fuel control systems, environmental control systems and communication systems for the principal companies in Canada and abroad. The third tier comprises suppliers of components and parts and other specialized services.

The industry's customers are primarily commercial. Sales to military customers have been steadily declining as a proportion of total sales for more than a decade. However, this focus on commercial markets is complemented by important core capabilities in dual-use electronics for defence customers. The United States Department of Defense is a significant customer, and through defence economic cooperation instruments like the Canada-US Defence Production Sharing Agreement (DPSA) and Defence Development Sharing Arrangement (DDSA), Canadian firms have privileged access to US defence procurement markets.

Aerospace is a research and development (R&D) intensive industry, accounting for more than 15% of all industrial R&D performed in Canada. The industry re-invests more than 12% of sales revenue in R&D, which is a high-risk undertaking for any company with new product development costing hundreds of millions of dollars at the outset. The federal government is an essential investment partner in aerospace R&D.

Aerospace is one of 3 sectors - the others being environmental and "strategic enabling" technologies - that the federal government supports through Technology Partnerships Canada (TPC), a 1996 budget initiative. TPC's annual funding partially underwrites companies' development of new products through "repayable contributions," with the government hoping to recoup at least its investment once a product has reached agreed production levels. The World Trade Organization ruled in early 1999, on a complaint by Brazil's state-supported aerospace industry, that TPC was an implicit export; Canada responded by committing to redraft the program to meet WTO requirements.

The TPC program is a follow-on to the Defence Industry Development Program (DIPP), which helped to finance both defence projects and civilian projects initiated by the aerospace industry. The Dash 7 aircraft and the civilian PT-6 and JT-15 aero engines are examples of development projects partially funded by DIPP. Today TPC investments are supporting development of the Bombardier CRJ 700 regional jet, the Dash 8-400 turboprop, the PW150 engine, and numerous other new products vital to the future of Canada's aerospace industry.

Aerospace products, such as complete aircraft, aero engines and the electrical, electronic and mechanical subsystems, represent a complex and highly demanding application of advanced technology. The requirement for maximum safety and performance, with minimum weight, is a major reason why aerospace emphasizes the use of new and improved materials and new design and production technologies. The industry is a leader in computer-assisted design and manufacturing. The skill rating of engineers, technologists and production workers reflects the high design and quality standards of this industry. Canada's aerospace workers are among the most productive in the world.

As an employment generator, aerospace ranks high among Canada's advanced technology sectors - each $100 million in aerospace sales generates more than 1200 jobs across the country. It supports thousands of jobs in many other industrial and service sectors in Canada; 1000 jobs in the aerospace sector generate 500 jobs elsewhere in the economy.

The larger companies in the industry are unionized and labour relations are generally satisfactory. The main unions are the Canadian Auto Workers and the International Association of Machinists and Aerospace Workers.

Canadian aerospace firms are world leaders in a number of niche markets, and Canada's share of the world market for aerospace products and services is growing at an impressive rate. Aerospace is an intensely competitive business. Since 1986 industry sales have grown 140%, double the rate of growth of the economy as a whole. Keeping ahead of the competition requires Canadian firms to sustain their investment in technology development and penetrate new emerging markets.

Institutions and Societies Speaking for the Industry

The Aerospace Industries Association of Canada (AIAC) represents the interests of more than 200 aerospace firms from every region of the country. Its mission is to enhance the international competitiveness of the industry advocacy, intercompany cooperation and export promotion.

The industry's technical society is the Canadian Aeronautics and Space Institute (CASI).

Aerospace Companies The breadth and depth of Canada's aerospace sector is illustrated by this sampling of companies across the country:

Atlantis Aerospace Corp, Brampton, Ont: designs and manufactures flight and maintenance training devices for the world's civil and military fixed-wing and rotary markets.

Avcorp Industries Inc, Richmond, BC: founded in 1986, has divisions in BC and Québec designing and manufacturing metal, plastic and composite components for a global market.

Canadian Marconi Company, Ville Saint-Laurent, Qué: an acknowledged industry leader in communications, avionics, navigation and air traffic management systems.

Computing Devices Canada Ltd, Nepean, Ont: a world leader in defence electronics with unique experience in digital signal processing, command and control systems design, secure communications and cockpit displays.

DEW Engineering & Development Ltd, Ottawa, Ont: has carved out a rapidly-growing global market for specialized boarding bridges which enable airports to accommodate a wider range of aircraft.

Diamond Aircraft Industries Canada, London, Ont: founded in 1992, it has developed, certified and manufactured a light 100% composite aircraft, the Katana, which quickly became a standard for flight training.

Eurocopter Canada Ltd, Fort Erie, Ont: supplies at least 20 aircraft a year, both new and used, to operators in Canada, and also has a world product mandate for high-performance light twin-engine helicopter which it has sold on at least 3 continents.

Gallium Software Inc, Nepean, Ont: its main product, InterMAPhics, is the only field-proven commercial off-the-shelf solution for real-time operational displays in civil air traffic control and military command and control.

Héroux Inc, Longueuil, Qué: designs, develops and manufactures a range of aerospace products, notably landing gear systems and related components for a range of commercial and military aircraft builders.

Kelowna Flightcraft Ltd, Kelowna, BC: widely recognized for its expertise in upgrading and integrating avionics systems as well as for its development of structural modifications for transport aircraft.

Litton Systems Canada, Toronto, Ont: with facilities also in Halifax, NS, it employs more than 1000 engineers, scientists, technologists and other specialists in researching, designing and manufacturing electronics for commercial and defence applications.

MacDonald, Dettwiler and Associates Ltd, Richmond, BC: has broad experience in the space, defence and civil transportation sectors.

Magellan Aerospace Corp, Mississauga, Ont: a Canadian-based company, it has operations in global markets for engines, airframe structures, space sciences and defence technologies. Its Canadian divisions include Orenda Aerospace (engines) of Mississauga, Bristol Aerospace Ltd (airframe structures, engine components, unmanned vehicles and rockets) of Winnipeg, Man, and Fleet Industries Ltd (metal and composite aircraft structures and components) of Fort Erie, Ont.

NMF Canada, Saint-Janvier, Qué: its design and construction of the world's largest computer-controlled shot peen forming machine has enabled it to process large machined wing panels to fine tolerances.

Pelorus Navigation Systems Inc, Calgary, Alta: since its inception in the mid-1980s, it has manufactured, installed and maintained navigation and related equipment at more than 200 airports on six continents.

PRIOR Data Sciences Ltd, Kanata, Ont: an innovative software engineering and systems integration specialist, it supplies performance-critical technologies which enhance air traffic management and safety.

See Aviation; Military Aviation.