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Michaila Byrne

A Case Study: The Canadian Cluster

The world’s most dynamic and established “big three” aerospace clusters — locations where a plane can be built from tip to tail — are undisputed. While Seattle, Washington, (U.S.) and Toulouse (France) have been in contention for the crown for over 40 years, it’s the third-place spot that stands out for its unique profile.

A curious case study, unlike its rivals that are largely famous due to a singular name association, the Quebec region is distinctive due to its hosting of five OEMs: Airbus with the A220, Bombardier with private jets, Bell Helicopter, engine manufacturer Pratt & Whitney, and simulation manufacturer CAE.

Marsha Walden, president and CEO of Destination Canada explains that restoring air access and routes through international airline partnerships was central to the country’s Covid recovery strategy. We also hear from Laurel Broten, CEO of Invest in Canada, who mentions that the region is offering incentives to allow write-offs for machinery and equipment, as well as tax incentives: “With federal investments of $350 million for sustainable aviation technology, R&D incentives like $500 million in clean fuel compliance payment revenues, and extensive free trade agreements, Canada is positioned well for global companies seeking sustainable solutions.”

Additionally, the costs of domestic travel are unaffordable for everyday Canadians and driving long distances to avoid paying allegedly exorbitant ticket prices is becoming increasingly commonplace, something Eric Tanner, vice president of revenue management for ultra- low-cost carrier Flair Airlines, attributes to a “flawed” user-pay model for airports and lack of oversight on airport fees. “The regulations, policy, infrastructure, and costs are built around the legacy business models of Air Canada and WestJet, making it difficult to maintain low fares due to high airport fees and taxes. For example, one airport increased its improvement fee from $15 to $25 overnight. There’s no accountability, and airlines have no choice but to pay these fees, which are passed on to customers.”