Making it easier to do business in Ontario

In a Q&A session, Ontario Investment Office vice-president of strategic accounts, Trevor Dauphinee explains how both local and foreign companies alike can use the department as a one-stop source for information to increase business growth.

 

Q) Why is it important for a region like Ontario to have organisations working on behalf of the province, its many companies and the people they employ?

Ontario has a highly diversified economy with various sectors, each with unique issues and opportunities, including aerospace. Over half of the world’s top 25 global aerospace companies have key operations in Ontario. As the industry continues to perform well, Ontario sees aerospace as a key growth engine for the province in the upcoming years.

That is why the province works closely with the Ontario Aerospace Council (OAC), a not-for-profit organisation that is comprised of over 200-member companies and 20+ associate/affiliate members. The OAC spans all tiers, business activities and sizes.

The purpose of the OAC is to enhance recognition of the Ontario aerospace industry as a leader in global aerospace markets, build stronger capabilities in the industry to assure continued growth and prosperity, and act as a catalyst and facilitator to deliver value to its members.

Q) What kinds of incentives are there to interest UK and European companies in investing/relocating to the region?

It may surprise you to know just how low Ontario’s corporate taxes, employer healthcare expenditures, and overall business costs are compared to other jurisdictions. Ontario has the lowest overall business costs in the G7, and employer health costs in the U.S. are nearly double those of Ontario. Finally, our corporate income taxes are nearly 13% lower than in the US.

More importantly, Ontario is a place where innovation lives – where collaboration with top-ranked universities and R&D facilities will help drive companies’ progressive concepts and help them to find globally successful solutions.

We have an abundance of talent, from the skilled trades to the most sophisticated areas of engineering and business.

Lastly, doing business in Ontario means having unprecedented access to the global marketplace. Ontario is a geographic neighbour to the US with approximately 80% of our aerospace products shipped across the border. Having an operation in Ontario allows organisations to have better market access to the states.

Q) Are there any success stories you can relate about UK/European aerospace tier supply chain companies that have already relocated?

France-based Safran Landing Systems (formerly Messier-Bugatti-Dowty) is a world leader in aircraft landing and braking systems and on-ground movement. The company partners with the world’s leading civil and military aircraft programmes. Safran’s Ontario operation has approximately 800 employees and is dedicated to the design and development of landing gear systems for fixed-wing aircraft and rotorcraft. Projects supported include the Boeing 787 and the Bombardier Global Series.

Thales Group, also based out of France, is a world leader in mission-critical information systems for defence and security, aerospace and transportation. Thales Canada has 1,400 employees in Halifax, Quebec City, Montreal, Ottawa, Toronto and Vancouver working in defence, aerospace and transportation markets.

Airbus Helicopters Canada is a centre of excellence for France-based Airbus Helicopter Group’s light single helicopter modifications. The Fort Erie, Ontario-based facility is responsible for customising helicopters to fulfil Canadian orders, and also manufactures key composite components to supply Airbus Helicopters Group’s global operations. Lastly, Ontario-based Magellan Aerospace has key operations in the UK for its global customers.

Q) What tangible benefits has Ontario’s Jobs and Prosperity Fund brought to new companies moving into the region?

The Jobs and Prosperity Fund is a 10-year, $2.7 billion fund created to support a dynamic and innovative business climate, improve productivity and market access for Ontario companies and sectors.

The province uses the Jobs and Prosperity Fund to partner with businesses to encourage new investments that enhance productivity, innovation, going global/ new market access, and support the province’s key sectors and clusters. One of the Fund’s key target sector is advanced manufacturing, which includes aerospace.

Since January 2013, Ontario has announced over 30 projects with government commitments totalling over $630 million, leveraging over $6.5bn in private sector investment.

Jobs and Prosperity Fund projects are responsible for creating and retaining over 35,000 jobs in Ontario.

Q) What kind of capabilities can the province’s aerospace supply chain offer aerospace OEMs?

Ontario’s aerospace sector is a strong contributor to our province’s economy with revenues of over $6bn per year, and a GDP impact of over $3.2bn (direct) and $1.8bn (indirect) per year.

Key strengths and capabilities of our aerospace sector include avionics and electronics, aerostructures and landing gear, MRO modifications, aircraft integration, and satellites and spacecraft.

In fact, Ontario is home to a world-renowned landing gear cluster. Ontario based companies provide landing gear for 75% of all Boeing and Airbus commercial aircraft programmes.

Q) What are the aerospace programmes the aerospace companies in the region actively engaged in?

Ontario’s over 200 aerospace technologies and work-force related companies manufacture and develop regional, business and special-purpose aircraft, small turbine engines, landing gear systems, aerospace structures and electrical systems, as well as providing MRO services.

Our world-renowned landing gear cluster includes companies like Safran, Héroux-Devtek, UTC Aerospace Systems, and Sumitomo Precision Products.

Dozens of Ontario-based aircraft suppliers are part of global programmes such as the Airbus A320, Airbus A350, Boeing 737, Boeing 777, Boeing 787, Bombardier’s Global Series and Lockheed Martin’s F-35, to name a few.

Ontario-made aerospace parts and systems are used on virtually every passenger aircraft in the world; therefore, we expect continued success in our aerospace segment throughout the entire value chain.

Q) What kinds of manufacturing and production technological innovations solutions are involved, i.e. advanced materials, additive manufacturing, etc.?

Ontario’s manufacturing excellence extends across many industries, including automotive, aerospace, and medical devices. These industries are particularly well-suited for the advantages that advanced manufacturing offers, including: process and product innovations, reduced waste, and streamlined supply chains. Ontario’s well-trained manufacturing labour force, combined with our academic foundation of 44 post-secondary institutions – most of which devote time and space to advanced manufacturing – position Ontario to be a leader in this area.

The aerospace industry in Ontario is being affected by changes to production processes and the use of new materials. Many Ontario based companies are moving towards the integration of technology focused models that allow them to be more efficient, enhance production innovation and increase responsiveness to customers. This is being done by utilising new manufacturing processes that include the use of advanced systems that provide in-house data analysis capabilities and feedback mechanisms that are capable of automating process control systems at various stages of manufacturing. These processes ultimately have major cost management benefits.

Ontario aerospace companies are also using additive manufacturing in their production methods. Major benefits of these methods include: faster production, weight reductions without compromising strength, lower costs, and ability to address design changes quickly.

Q) How does the region intend to respond to the OEMs demand signals for new and advanced technological innovations in the future?

Ontario recognises that the aerospace sector is always changing. That is why the province is committed to helping to revolutionise the industry through innovation. This is done by partnering with aerospace companies through programmes like the Jobs and Prosperity Fund (JPF) for new and innovative projects.

The province of Ontario also connects companies (both domestic and foreign) to innovative SME’s and dedicated academic and research institutions. A good example of a collaborative partnership geared at developing new innovation is the Downsview Aerospace Innovation and Research group. This is an industry-academic effort whose goal is to create an aerospace hub in Toronto, Ontario that will develop the next generation of aerospace workforce and technologies.

Q) Are any tax breaks on offer to interested overseas companies?

The Province offers among the most generous research and development tax structures to companies, allowing tax credits of up to 60% of costs – one of the most competitive among all G7 countries. New companies can also take advantage of Ontario’s highly competitive and low corporate tax rate. This has opened the door to immense growth and investment in Ontario.

Q) Can you comment on the recent news surrounding the Boeing vs Bombardier debacle – particularly what effect it will have on the region?

We are disappointed with the US Department of Commerce’s preliminary determinations against Bombardier. Although Ontario does not produce any major C Series work packages, we know that final rulings against Bombardier could have ramifications across all company operations.

The Governments of Canada and Quebec are confident that support to Bombardier is consistent with existing trade rules, and are hopeful that the final determinations will be in Bombardier’s favour. Ontario will continue to support the governments of Canada and Quebec, and defend the interests of our provincial aerospace industry, including Bombardier.

Airbus’ investment in the C Series programme is a strategic partnership that will strengthen the aircraft’s global reach. The partnership should ensure the viability of the C Series programme, which may include those jobs in Bombardier’s Belfast facility devoted to the C Series. A successful C Series programme will help strengthen Bombardier and all of its business lines.

Q) Finally, what other challenges i.e. recession, competitiveness, skills, funding, does the region’s cluster/company expect to overcome next year?

We recognise that there are some challenges for the Province to overcome in terms of global competition. Competition is fierce in the advanced manufacturing sector, but Ontario continues to be competitive thanks to its skilled workforce and innovative company base.

The Government of Ontario remains committed to attracting investment, promoting the province’s aerospace industry, and improving the industry’s competitiveness.  This is a sector that provides high-skilled and high-paying jobs.

To help stay competitive, Ontario supports trade missions that allow companies to capitalise on new opportunities in global aerospace markets, and hosts supplier days to introduce global aerospace companies to Ontario-made products, processes, and technologies.

www.investinontario.com

Mike Richardson :