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Aerospace industry targets contracts in China, India

Canada's aerospace industry is jockeying for global contracts as China and India expand their commercial aviation sectors and governments move to replace their aging military aircraft.

"There will be lots of opportunities over the next 20 years for Canadian companies," said Claude Lajeunesse, president of the Aerospace Industries Association of Canada.

Canada ranks fifth among the world's largest aerospace manufacturing and services suppliers, trailing the United States, France, Britain and Germany, according to an association-commissioned report by Deloitte & Touche LLP.

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Besides expanding their civil aviation markets, "China and India are competing for regional influence and are determined to dominate the region in terms of defence spending," the report notes. "Research and development spending by the aerospace sector also plays a critical role in the Canadian economy," notably investments by aircraft maker Bombardier Inc., engine and parts supplier Pratt & Whitney Canada Corp. and flight-simulator maker CAE Inc.

An estimated 78 per cent of Canadian aerospace products are exported.

On Wednesday, Montreal-based CAE said it has secured new military deals in more than 10 countries in contracts totalling $100-million, including work for the U.S. Navy.

CAE chief executive officer Marc Parent, who previously served as the aerospace association's chairman, said in a recent speech that "research and development is in our industry's DNA. Our ability to innovate has placed us among the best in the world."

CAE, which also trains pilots, signed recent contracts to sell four full-flight simulators to airlines in Asia and Europe. "As global airlines add new aircraft and routes to meet growing demand for air travel, particularly in the emerging regions, they look to advanced simulation-based training to meet regulatory requirements and enhance safety and efficiency," CAE group president Jeff Roberts said in a statement.

Mr. Lajeunesse welcomed Ottawa's support for the aerospace sector in Tuesday's budget, saying he is optimistic the backing will be in place after the next federal election, especially plans to review programs that affect Canada's competitiveness and maintain stable funding for the Strategic Aerospace and Defence Initiative.

Canada's aerospace industry generated $22-billion in revenue and employed 79,000 people in 2009, with a corresponding payroll of $4.6-billion, according to the Deloitte & Touche study.

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The report cautions that Canada must continue to innovate because of rising global competition, where customers such as China and India increasingly become rivals for contracts.

"It is anticipated that many of these developing nations will be heavily supported by their governments in the hopes of creating a strong domestic aerospace industry. These countries are Brazil, China, India and Russia," the study says.

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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