Review says Canadian controls hamper aerospace sales

Thu Nov 29, 2012 4:55pm EST

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(Reuters) - Canada's aerospace industry is not selling as much as it could in countries such as Russia and China because of overly zealous government enforcement of controls designed to guard against leaks of sensitive technology, an industry review released on Thursday says.

Companies in other North Atlantic Treaty Organization countries, which have more "balanced" controls, are picking up the slack, the report said.

The controls are designed to protect national security and to preserve Canada's unique trade relationship with the United States, but evidence suggests the Canadian government's interpretation and application of the controls "may be unduly sweeping and rigid, even going further, in some instances, than is typical in Washington".

"The result is lost business for Canada with no material enhancement of security," said the independent, government-mandated review, which looked into the competitiveness of Canada's aerospace and space industries.

It urged Ottawa to review its rules to see whether they are unnecessarily restrictive.

The country's aerospace sector is the fifth biggest in the world, and is dominated by Montreal-based Bombardier Inc, which is the world's No. 3 civil aircraft manufacturer. Bombardier has struggled to find customers for its all-new, narrow-body C-Series jet, which is set for its first flight by the middle of 2013.

Other prominent Canadian aerospace companies include flight simulator manufacturer CAE Inc and Heroux-Devtek, a maker of landing gear systems.

The review, which was chaired by David Emerson, a former federal minister of trade, industry and foreign affairs, also urged Canada's Conservative government to be more aggressive in opening doors for the aerospace industry in foreign markets.

"Canada, almost culturally, has been reticent to engage in aggressive 'diplomacy' of this kind," the review said.

"Companies indicate that other governments have taken notice of Canada's relatively passive approach and have sometimes interpreted it as a lack of enthusiasm for, and commitment to, Canadian products."

Industry Minister Christian Paradis welcomed the report saying the government is "committed to helping the sector grow and add to the nearly 160,000 direct, indirect and induced jobs the industry supports".

The Aerospace Industries Association of Canada said in a statement that the review recognized the "critical juncture the aerospace and space industry is facing, and the urgent need for government, industry, academia and unions to adapt to a rapidly changing and highly competitive global environment".

(Reporting By Nicole Mordant in Vancouver; Editing by Peter Galloway)

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Comments (2)
DavidinWY wrote:
I agree in principle with the safeguarding of technology from countries like China. China is notorious for reverse engineering of patented materials, that they then sell for less. The Chinese are not entirely alone in this, America and any other country you can name does it too. The problems can be that very complex items take a lot of money to develop and test. They may have to stand up to great stress, and knock-offs may not. If your talking about landing gear……. If a satellite dropped out of the skies of a pre-industrialized planet, even if they could reproduce it, how should they know it was supposed to be launched into orbit and transmit some signal to a television? On the other hand, say your airplane uses those Canadian landing gear and they find a broken part, why shouldn’t they be able to make all the parts, and be able to take the landing gear apart, and put it back together again?

Nov 30, 2012 1:08am EST  --  Report as abuse
RET_SFC wrote:
Say “sufficiently” zealous and get it right.

It is not merely that “we will sell you the rope to hang yourselves”; it is that we will have sold them the rope maker’s factory. We in the US, particularly, may expect in not too many years that China will be able to outbid us for food grown in our own country — and we practically gave them the money. Talk about selling one’s birthright for “a mess of pottage”; we do it for smart-phones and tablets.

Canadians: Be smarter than we are — it’s not difficult.

Nov 30, 2012 6:56am EST  --  Report as abuse
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