A Practical Guide to Doing Business in Canada's Aerospace Industry


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Aéro Montréal, Quebec's aerospace cluster, is a strategic think tank created in 2006 that groups all the major decision makers in Quebec's aerospace sector, including companies, educational and research institutions, associations and unions.

Aéro Montréal's mission is to mobilize industry players around common goals and concerted actions to increase the cohesion and optimize competitiveness of Quebec’s aerospace cluster. It aims to foster the growth and expansion of the cluster to ensure that it may continue to create wealth for Montreal, Quebec and Canada. Over the years, Aéro Montréal adopted a strategic action plan that includes the creation of working groups. These working groups are dedicated to six areas of intervention, namely supply chain development, branding and promotion, innovation, human resources, defense and national security and commercialization and market development.

The US, and the State of New Hampshire, sent a delegation to the 4th edition of the Aerospace Innovation Forum, to explore their participation with the industry's global leaders and the latest developments in the lifecycle management of new aircraft platforms.

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A Practical Guide to Doing Business in Canada's Aerospace Industry

  1. 1. A Practical Guide to Doing Business in Canada's Aerospace Industry Presentation for U.S. Firms Participating in AeroMontreal's Aerospace Innovation Forum 2013 Gina Rebelo Bento CS Canada – Aerospace Specialist
  2. 2. About Canada Prime Minister: Stephen Harper Conservative Party of Canada Population: 35 Million 2nd Largest Country in the World • 10 provinces & 3 territories • 6 time zones • 2 official languages Rich in Natural Resources 2nd Largest Oil Reserves in the World Common border with the U.S. Longest land border in the world
  3. 3. U.S.-Canada Partnership • World’s largest trading relationship • $1.3 Trillion Economic Relationship • U.S. Exports to Canada surpassed $355B in 2012 (16% of total U.S. exports) • Our Largest Trading Partner • Canada and the United States trade $1.9B in goods and services daily. • Investment Partners • Canada is the U.S.' 4th largest foreign investor. “No two nations match up more closely together, or are woven together more deeply, economically, and culturally than the United States and Canada.” President Barack Obama
  4. 4. Where are the Opportunities? • • • • Aerospace Automotive Energy & Environment Government Procurement – Defense Products and Services – Safety & Security Equipment • Information and Communications Technology • Mining • Travel and Tourism
  5. 5. Moving Goods Across the Border Two important documents required by U.S. Customs and Canadian Customs alike for all shipments are: 1. Commercial Invoice 2. Certificate of Origin A signed statement of origin on the invoice is sufficient for goods valued at less than $2,500 when imported under NAFTA provisions.
  6. 6. Moving People Across the Border • Options for Business Travel Between the USA & Canada 1. Business Visitor 2. Trade Agreements (NAFTA & TN Visas) 3. Intra-company Transfer • Points of Inadmissibility 1. Criminal Record 2. Medical Condition
  7. 7. Product Certification In aerospace, Transport Canada and the FAA work very closely together. In general: • Contact the Standards Council of Canada www.scc.ca. • CSA International – A complete list of products that CSA certifies for Canada; http://www.csa.ca • ULC – A complete list of products that ULC certifies for Canada; http://www.ulc.ca/ Underwriters Laboratories (UL) in the United States and CSA have a memorandum to accept each other's test results. However, each issues its own certification marks. • CGSB – A complete list of products that CGSB certifies for Canada; http://www.ihs.com/products/industry-standards/organizations/cgsb/index.aspx • BNQ – A complete list of products and services that BNQ certifies for Canada; http://www.bnq.qc.ca/
  8. 8. Export Finance Tools • Small Business Administration SBA Export Express offers financing up to $500,000. • Export Import (Ex-IM) Bank The official export credit agency of the United States.
  9. 9. Webinar Series Upcoming: • • • • • Selling Security Products to the Government of Canada, November 2, 2013 Temporarily Moving Technicians and other Service Exporters Across the Border, January 30, 2014 Temporarily Moving Capital Equipment & Tools Across the Border, February 30, 2014 Handling Duties and Taxes – NAFTA, HST & other Considerations, February 13, 2014 U.S. Export-Import Bank Financing Recorded Webinars Available: • • • • Temporarily Moving “Tools of the Trade” Across the Border Advantages of the Non-Resident Importer Program Sending your Employees to Canada: Requirements for Temporary Workers The Basics of Selling to the Government of Canada – Using the New GETS
  10. 10. Canada and U.S. Aerospace & Defense Trade Defense Production & Development Sharing Agreements Since WW1 & WW2 The Canadian ITAR Exemption U.S. companies can bid on Canadian government military tenders
  11. 11. Selling into Canada's Aerospace Industry: A Few Market Characteristics
  12. 12. Key Facts about Canada’s Aerospace Industry General Overview • In 2012, it generated approximately $22 billion • 19 largest aerospace companies generate 87% of sales5 • Key clusters are Montreal, Quebec (approx. 60% of the Canadian market) and Ontario (approx. 27%)6 Civil Aircraft Sector • 84 % of output is from civil aircraft manufacturing; military is 16% 7 • In the U.S., military is 52% of output, civil is 48% output 8 International Trade • Over 82% of production is exported • Canada buys 5% of the U.S aerospace exports, accounting for 50% of our imports • Canada is the 2nd largest aerospace supplier to the U.S with 17% of their imports The Canadian aerospace market is uniquely well positioned to capture a significant portion of the next generation aircraft’s production
  13. 13. Global Aerospace Growth Markets: Canada is a Major Player
  14. 14. Global Aerospace Growth Markets – The Next Five Fears…..
  15. 15. Canada is Home to Leading Aerospace Players Canadian American European
  16. 16. Characteristic #1 – Supply Chain Integration / Top Down Pressure from OEM
  17. 17. Characteristic #2 – Cluster Grouping in Quebec and Ontario Montreal is the only place in the world where all of the components to build an aircraft can be found within a 30 mile radius. Montreal, along with Seattle and Toulouse, is one of the world’s top 3 aerospace hubs.
  18. 18. Characteristic #3 – Wide Array of Sub-Sectors Dominated by Aircraft/Aircraft Parts & MRO
  19. 19. Tailoring Your Sales Pitch….A Few Tips
  20. 20. Generally, Canadian Companies Are Looking For: • • • • • • • Certifications (ISO 9000, NADCAP, etc..) Quality Control & Reliability Engineering / R&D Capacity Financial Soundness & Management Vision Risk Management & Capacity to Take On Risk Presence in Low Cost Centers (i.e. Mexico) Export Controls / ITAR Compliance Programs For smaller Canadian aerospace companies, geographic proximity also plays a role.
  21. 21. Market Entry Strategies A few things to keep in mind…  Importance of a local partner  Seek partners/reps in more than one region  Sensitivity to French business climate in Quebec  Leverage the knowledge and network of the U.S. Commercial Service in Canada  Access the supply chain through systems integrators, in addition to contacting the OEMs  Risk-sharing partners > Suppliers  Sign up with OEM supplier programs
  22. 22. Contact Information Ottawa • • • • • • Richard Steffens, Minister-Counselor; Richard.Steffens@trade.gov Enrique (Rick) Ortiz, Deputy Minister-Counselor; Rick.Ortiz@trade.gov Lucy Cicero Latka, Sr. Commercial Specialist; Lucy.Latka@trade.gov Tracey Ford, Commercial Specialist; Tracey.Ford@trade.gov Luz Betancur, Commercial Specialist; Luz.Betancur@trade.gov Louise Doré, Commercial Assistant; Louise.Dore@trade.gov Montreal • • • • Enrique (Rick) Ortiz, Principal Commercial Officer; Rick.Ortiz@trade.gov Connie Irrera, Commercial Specialist; connie.irrera@trade.gov Gina Bento, Commercial Specialist; gina.bento@trade.gov Sue Bissi, Commercial Assistant; sue.bissi@trade.gov
  23. 23. Contact Information Toronto • • • • • Frank Carrico, Principal Commercial Officer; Frank.Carrico@trade.gov Doug Jacobson, D/Principal Commercial Officer; Doug.Jacobson@trade.gov Ruth Williamson, Commercial Specialist, Ruth.Williamson@trade.gov Stefan Popescu, Commercial Specialist, Stefan.Popescu@trade.gov Pixie Irving, Commercial Assistant, Pixie.Irving@trade.gov Calgary/Western Canada (Alberta, Saskatchewan, Manitoba, British Columbia) • • • • Cindy Biggs, Principal Commercial Officer; Cindy.Biggs@trade.gov Crystal Roberts, Commercial Specialist; Crystal.Roberts@trade.gov Connie Smith, Commercial Assistant; Connie.Smith@trade.gov Jared Byrne, Commercial Assistant; Jared.Byrne@trade.gov
  24. 24. Questions & Answers ??? Thank You!