Backgrounder: The National Aerospace and Defence Strategic Framework
(Source: Industry Canada; issued Nov. 25, 2005)
The National Aerospace and Defence Strategic Framework (the Framework) is a comprehensive framework of programs and policies, as well as new measures, to support the growth of Canada's aerospace and defence (A&D) industry from coast to coast and build on its strong competitive position globally. The Framework recognizes that both industry and government must identify priorities, and develop a framework for collaboration.

The Framework is national in scope and represents a collaborative way forward, drawing upon private sector dynamism and public sector commitment. It looks out over a 20-year time horizon and endorses the vision developed by stakeholders across the industry through the Canadian Aerospace Partnership:

“Canada will be home to a growing, innovative and diversified industry, recognized as a leader in serving global A&D markets and a preferred location for investment.”

To this end, the Framework calls upon all stakeholders to focus effort and investment on seven strategic areas that will enable the industry's future success:

1. Strategic initiatives and major platforms

Large, multi-year international projects in the aerospace, defence and space sectors represent some of the best long-term growth opportunities for the Canadian industry. Beyond the business benefits of participation, major platforms represent opportunity for technology access and development, as well as the establishment of long-term relationships. This access is critical as our industry competes for future business from around the world.

The Framework will support Canada's participation in strategic projects, both in Canada and abroad, consistent with Canada's international trade obligations. A successful example in this regard is the Joint Strike Fighter program whereby Canada as a nation chose to participate, enabling small and large companies from across our industry to now make important contributions to this international endeavour, and Canadians to enjoy the industrial and economic benefits.

2. Technology development and commercialization

The fundamental driver of the aerospace and defence industry has always been research and development (R&D), and the industry is founded upon products that have the highest level of technology. Growth of the most successful aerospace and defence firms is directly linked to the investments in R&D that lead to successful product commercialization. For the industry to remain successful, there will need to be sustained investment in product and process innovation at all points in the supply chain, from companies and governments alike.

For that reason, the Framework creates an A&D technology development program. The program will contribute to the costs of industry-led R&D projects, supporting the development and application of the technologies that will define the growth of Canada's A&D sector. The A&D technology development program will invest in long-term strategic initiatives, support collaborative projects between two or more partners, invest in demonstration projects that enable Canadian firms to prove their capabilities for providing more enhanced, and more complex inputs, and support the development of small- and medium-sized enterprises across the entire A&D supply chain. Specific funding levels for the program will be confirmed in the forthcoming budget cycle.

3. Human resources and skills development.

A labour force that is well trained, adaptable, and up to date in its skills underpins strong R&D performance as well as the world-class manufacturing and business processes that are key to high productivity. Canada's A&D workforce has proven its quality, and the evidence is our enviable world ranking in terms of aerospace industry performance. However Canada faces challenges in maintaining our position, not least owing to demographic shifts, and the Framework takes as a key goal the continued development of our skilled workforce.

The Government will support innovative skills development projects in the A&D sector through existing and upcoming programs at Human Resources and Skills Development Canada, such as the recently announced Workplace Skills Strategy.

The Government will also encourage partnerships among universities, industry, government and not-for-profit organizations which will provide stimulating training environments and employment opportunities for students.

4. Trade development and market access.

Canadian A&D products and services are world class, and industry requires the promotion of, and access to, an equitable international marketplace. SMEs in particular require support when venturing in the export market.

Consistent with the CAN-Trade initiative led by International Trade Canada, the Framework includes the development of a comprehensive A&D investment and trade strategy, focusing on foreign direct investment and promoting Canadian capabilities abroad. The Government of Canada will also continue to participate aggressively in international A&D events to disseminate market information and intelligence about international business opportunities to Canadian A&D firms. The Government will also pro-actively seek global opportunities to increase industry participation on major A&D platforms and defence procurements.

5. Sales financing

Government sales financing support complements that provided by commercial lenders, and the Government of Canada's support in this area has played a crucial role in developing the Canadian industry, and allowing Canadian firms to compete with foreign companies supported by their national governments. The Government will establish an Aircraft Sales Financing Framework to provide competitive and defensible sales financing in a fiscally prudent manner, and consistent with Canada's international trade obligations. This Aircraft Sales Financing Framework will support the sales of Canadian manufactured aircraft. The Government also commits Canada to active participation in the current Organization for Economic Cooperation and Development discussions on the Aircraft Sector Understanding.

6. Security and the environment

The A&D industry plays a key role in helping the Government protect Canadians, and helps ensure that our interests and laws are being respected and enforced. Through space projects, it also provides invaluable support to Canadian efforts to monitor and protect our environment. The Framework underscores the importance of Canada participating in those major international security, defence and space programs that support Canada's interests, as well as the importance of working with international partners on space exploration and defence and security research.

7. Public procurement

Given Canada's relatively small domestic defence requirements, a government procurement environment is needed that better leverages public procurement as an instrument to promote industrial development, innovation and commercialization by Canadian firms. The Framework commits to the development of a framework designed to better leverage industrial development from procurement, including the consideration of policy options that would make the Industrial and Regional Benefits Policy more focussed on the A&D sector and the technologies of importance to its future.


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