Maintaining and strengthening Québec as a world leader in aerospace

MONTRÉAL, QC – Aéro Montréal, Québec's aerospace cluster, has submitted its brief to the Québec Government's Taxation Review Committee.

0 October 23, 2014

Aéro Montréal recommends that the government restore its support for research and development (R&D) and for productivity measures. This will ensure the sustainability of economic benefits such as high quality jobs, exports and innovation, and consolidate and even increase Québec’s leadership in the world’s rapidly-growing aerospace industry.

“Over the years we have built a world-class aerospace industry, a comprehensive ecosystem that is the envy of many regions around the world,” said Maria Della Posta, Senior Vice President, Sales and Marketing, at Pratt & Whitney Canada and Chair of the Board of Directors of Aéro Montréal. “Our aerospace industry has long been recognized as one of the top performing high-tech manufacturing sectors of Québec’s economy. Our efforts have paid off: Québec is now the world’s sixth-largest producer of aerospace equipment and Montréal is the world’s third-largest aerospace centre.”

“This favourable positioning is the result of the remarkable vision of our major business leaders who generate profits and tax spinoffs in Québec,” added Suzanne Benoît, President of Aéro Montréal. “The sustained support of governments over the years has also clearly helped to make a difference. Refundable Québec tax credits have helped to facilitate major R&D investments and fostered the creation of global centres of excellence in Québec.”

“But we can’t afford to take these results for granted,” Ms. Benoît noted. “We have to recognize that the aerospace industry doesn’t have any dedicated tax support, that it has already suffered three rounds of cutbacks in the past few years, and that this could jeopardize future investments in our industry. In the highly competitive environment in which our companies operate, we must continuously invest in R&D and productivity. Innovation is more critical than ever before. That’s why we are recommending to the Québec Government that it restore in the next budget the conditions that were in effect prior to last June. They have achieved convincing results. Their implementation will contribute significantly to maintaining and strengthening Québec’s place among the world leaders at a time when the global industry will continue to experience strong growth.”

Two recommendations
Our recommendations aim to restore winning conditions for Québec’s aerospace industry: competitiveness, predictability and stability.
1) Support for R&D
Restore the refundable tax credit for R&D to 17.5% for large companies and 37.5% for aerospace SMEs in the Government of Québec’s next budget.
2) Productivity Support
Restore the 20% refundable tax credit for investments relating to manufacturing and processing equipment to accelerate the move towards automation and the adoption of digital technologies by aerospace SMEs (robots, automated intelligent cells and digital technologies, etc.) in the Québec Government’s next budget, and maintain the existing rate for other companies in the sector.

About Aéro Montréal
Aéro Montréal, Québec’s aerospace cluster, is a strategic think tank that groups all the major decision makers in Québec’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 Québec’s aerospace cluster. It aims to foster the growth and expansion of the cluster so as to ensure that it may continue to create wealth for Montréal, Québec and Canada.

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