MR-Oh, Canada
Think of some of the major brands in aviation—Boeing, Airbus, Lockheed Martin for a start—and you usually think of the United States or Europe. And naturally, one would think that the maintenance facilities for these aircraft would be centred around the region with some of the world’s busiest skies – again, the US and Europe. But one part of the world that has become the centre of Maintenance Repair and Overhaul (MRO), as well as aviation manufacturing, is the east-central Canadian province of Ontario.
Ontario, particularly around greater Toronto, is riddled with aviation industry businesses, as well as the non-aviation businesses that benefit from it. And today, despite the collapse of one of its biggest and oldest MROs, Aveos Fleet Performance, the region’s aviation sector has proven to be incredibly resilient, even to the point of regenerating itself beyond its pre-Aveos success. This has applied to everything from training facilities to GSE suppliers.
So why Canada? And particularly Ontario?
Geography may be a factor, with the south eastern tip—where Toronto is—of Ontario being in close proximity via airplane to New York, the busiest international airport in eastern United States. But to get down to it beyond hypotheses, it of course comes down to money.
The province offers relatively low corporate tax rates as well as tax incentive programs for boosting industries in the region, with combined national and sub-national general corporate tax sitting at around 26%. Compare this to the G20 average in countries like the US at 39% and Mexico at 30%, and picture becomes clear. This has attracted the likes of Boeing, Airbus, Bombardier and many other big players to the region, either as MRO clients for local providers or as manufacturers, particularly those who contribute to the curiously-high percentage of landing gear makers.
Getting Smart, Staying Ahead
This is not just another mere tax haven story, however. The Canadian Government takes the influx of international operators more seriously than other countries might take theirs. Rather than a short-term cash grab, their policies have enabled the establishment of several aerospace education facilities in Ontario, ensuring longevity via constant development of skilled staff, adding to the already significant numbers – as of July 2016, aerospace and aviation employs 20, 000 people, and another 17,000 people in indirect roles that feed from the sector. Add this to the growing MRO sector in Quebec, and Canada is a world leader in aircraft maintenance.
The Ripple Effect
With every big industry, the benefits to the community are not always just centred around the main activity. Aviation and aerospace in Ontario is no different. From the success of those who manufacture and maintain, such as global technology giant Safran, who employ over 1,200 staff across Canada, comes the side businesses who provide the support they need. Take SafeSmart Aviation, for example.
The US-based maker of portable access equipment and other GSE has now expanded by adding a Canadian branch in the last twelve months. Seeing this opportunity, Shane Wearmouth from the Los Angeles branch made getting into Ontario a priority for their growth.
“It makes sense to have a presence in Canada,” says Shane. “Global confidence in the region’s quality of service of aircraft has now become a household fact to those in aerospace.”
And SafeSmart have already built relationships with some big names in the region. Shane says, “Bombardier have commissioned us a few times to develop customized access equipment, which they use to get their maintenance contractors up high off the ramp without any risk of falls. Now, whenever they have new aircraft in the works, or one of their clients’ maintenance facilities need height access solutions, we get the call.”
This example of side-beneficiaries’ success is just the tip of the nose cone in Canada. And this success has made business confidence in Ontario a two-way street between aerospace businesses and the government. In its 2016 budget, Ontario announced a financial initiative to give a promising industry a bigger shot in the arm, with an injection of $400 Million CDN going into a “high-growth innovation economy” centered around the sector.