Face the facts with... Michel Audet

A: The aerospace industry has become a major factor in the Québec economy in the 1990s: in the last nine years, its grown 30% and now encompasses 260 companies. Quebec alone accounts for nearly 55% of the Canadian aerospace industry. It employed 39,100 workers in 2002, a slight decrease on the record level of 2001. That represents about 7% of the industrial workforce, which shows the prime importance of this sector in our economy. Annual sales reached $10.5 billion, of which 80% is export.

This places Montréal region, where most of the companies in the sector are located, among the first in the world.

Q: Your party came to power in the provincial elections on 14 April. As the new Economy Minister, you are the first member of your government to travel on an official visit abroad. What message do you have for the business world in general and to the aerospace sector in particular?

A: For the first time in years, Québec is run by a federalist government, committed to staying in Canada and to working with our Anglophone compatriots. We want to improve the business climate and make foreign investors more welcome in our country.

We have sent a strong message to the business world with our budget by reasserting our commitment to a zero deficit.

It obviously has come with some cuts in the inducements for companies, but Québec remains a very business-friendly region. We still have a very competitive fiscal environment for businesses. Still, though, our medium term objective remains to reduce both taxes and red-tape.

Q: What makes Québec attractive to the aerospace industry?

A: There are three main advantages for an aerospace company to come and settle in the Greater Montréal area.

The first is the quality of education of the workforce, in particular in technical and engineering. There are five big universities educating our younger generation to engineering carriers, with the Ecole des Métiers de l'Aéronautique specialising in aerospace. That gives us an edge in terms of R&D capabilities, as companies can find highly qualified, mobile, bilingual employees here.

The second advantage is the fiscal environment in Québec. All investment in R&D gives rise to a tax credit. I want to stress that companies will have this rebate even if they don't make a profit and therefore pay no tax: the so-called "tax credit" is actually based on the amount of investment made in R&D.

This is especially beneficial for start-up companies.

The third main reason is what I would call the ‘Silicon Valley' effect. There's now a cluster of highly performing companies. The biggest, multinational companies attract an array of smaller ones in their vicinity – sub-contractors, innovative start-ups – and they benefit from each other's presence.

Q: Are you specifically targeting French firms, considering your common linguistic heritage?

A: I have come to the Paris airshow with more than 30 Québec firms, alongside another 20 from the other parts of Canada, to help them make business contacts with firms from the world over, not only French. Here, they can show their products and services, they can discuss their projects with their peers, prepare partnerships, or even sign contracts. The team of financial and economic advisers who accompany me are here to facilitate this process.

Q: What are you expecting from your visit to the Paris airshow?

A: I understand that, in the current worldwide environment of recession and deflation, corporate capital investment is feeble. However, the Québec economy stands as an exception: domestic demand is strong, consumer confidence is high and we expect growth of 2.5% for 2003.

In the difficult economic situation we're in, I also believe there are great opportunities for our flagship company, Bombardier Aerospace. Airlines will increasingly make use of regional aircraft for their operations as they offer greater flexibility with low operating costs. We'll be there to support Bombardier and help them make the most of the consolidation.

Source: Flight Daily News