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CDR ONE-ON-ONE – Mike Mueller, President & CEO, AIAC

CDR ONE-ON-ONE – Mike Mueller, President & CEO, AIAC

BY JOETEY ATTARIWALA

Mike Mueller

President & CEO of AIAC

CDR recently sent Aviation Editor, Joetey Attariwala, to interview Mike Mueller, the President and CEO at the Aerospace Industries Association of Canada (AIAC), the national association representing Canada’s aerospace manufacturing and services sector. As AIAC gears up for the Canadian Aerospace Summit, being held at the Shaw Centre in Ottawa on November 7 & 8, we asked Mike Mueller to give us a preview of what is planned for this year’s show. Here is their discussion.

Prior to joining AIAC, Mr. Mueller held senior leadership roles in the federal government where he navigated a wide variety of issues and policies. He brings a wealth of industry knowledge and government experience that has proven invaluable as the industry grapples with the effects of the global pandemic and a highly competitive global marketplace.

CDR: Mr. Mueller, thank you for taking the time to speak with CDR. You are now 2 years into your position as President and CEO of AIAC. How would you describe Canada’s aerospace industry today, and how do you feel the association is doing in its advocacy for the industry?

Mueller: It’s great to be in touch with you again, Joetey. I really appreciate all the things you do as an expert and advocate for our industry. First off, I have to say it’s been just an absolute privilege to represent the industry, so I offer a special thanks to the members and to the board for entrusting that to me. It’s a fantastic industry doing so many interesting things right across the spectrum, so it’s a pleasure.

I came into the position during COVID and at that time the industry was not in very good shape, especially with respect to civil aviation. We were doing much better on the defence side because of the long-term nature of those contracts. There are a lot of challenges coming out of COVID so it’s been good to see the industry come through that and we’re looking to continue to strengthen and grow the industry in all areas. Defence activity in Canada represents about 17% of the gross revenues for aerospace in 2020 — we’re going to have some updated numbers coming out hopefully next year, so it’ll be interesting to see the updates.

We saw quite a few jobs being lost through COVID so it’s encouraging to see the industry bouncing back. We’re not fully recovered from COVID, but the latest numbers from 2022 show that we just added 14,000 aerospace jobs and the industry contributes $27 billion in GDP. A pressing issue right now is labour market concerns and availability of labour, but there are significant opportunities coming for industry. Specific to defence would be NORAD modernization, and our continual push for investments in defence to meet our NATO commitments.

CDR: What is the status of AIAC membership?

Mueller: I was pleased that our membership held through COVID. It’s a testament from our members that they saw value in what we are doing — industry stuck with us, which is greatly appreciated, and it’s because we delivered results for the industry — we had an aggressive advocacy campaign for support for the industry and that resulted in $2 billion for the aerospace industry for budget 2021 through the Strategic Innovation Fund and the Aerospace Regional Recovery Initiative. It’s the first time we’ve seen significant support like that in the current government’s mandate. So, we achieved results on behalf of the industry and I’m pleased that we’re seeing growth on the membership side.

CDR: What does the recent Federal cabinet shuffle mean for the Association and for the Canadian aerospace industry?

Mueller: The federal cabinet shuffle presents lots of changes to the aerospace industry. Minister Champagne kept his portfolio, which is good news because he’s been a champion for the industry. We see significant changes at Defence, Procurement, Transport Canada, and also PSPC. We’re looking forward to working with Minister Blair at Defence, Minister Duclos at PSPC, and Minister Rodriguez at Transport Canada, as well as Minister Boissonault at ESDC [Employment and Social Development Canada] — all of those are very key for the aerospace industry. I’ve already had a good discussion with Minister Duclos on some of the procurement opportunities and challenges. There’s lots of changes but change brings opportunity too, so we’re looking forward to that engagement. I should also mention that we are pleased to see Minister Anand as President of the Treasury Board — she understands procurement, she understands defence, and she knows the specifics of those files and also the complexity on defence spending, so we’re looking forward to working with her at Treasury Board.

CDR: You and I have previously spoken about a national aerospace strategy. Does Canada have an existing strategy and why is having one so important?

Mueller: We don’t have one, and we need one. That’s the bottom line. All of our competitor nations have aerospace strategies, but we’re lacking one in Canada. We need a comprehensive, forward looking aerospace plan for civil, defence and space that really leverages our country’s competitive advantages against other nations, and would position Canada to lead in a host of areas, including on the sustainability front. That’s a priority for the industry and also for the government. We need clear goals, measurable targets, and hard commitments to really guide and energize industry in what is a rapidly changing marketplace to really position them to thrive. If you have a strategy, it will provide industry with predictability to support the aims and objectives of the federal government, and be a clear line of sight to allow some of those necessary transformations to occur. And really, we’re all looking at the same goal which is contributing to the safety and security of the country, and that coordination between departments to make sure that there’s no contradictions so everyone has sort of a North star, if you will, to really prioritize the sectors of our industry.

CDR: So, what needs to be done to develop a National Aerospace Strategy?

Mueller: The most important aspect is a willingness from government to work together with industry on this, and the political will to make it a priority. Industry is ready and willing to do our part, but it really needs to be a collaborative effort between government and industry. Industry can put forward the best plan in the world but without the government agreeing to it, it will not go anywhere. We really need to drive that together. That’s part of what we started to do with Vision 2025 where we put together some of those high-level pieces of what a strategy could look like and we’re going to be doing more work on that in the near future.

CDR: You’re speaking about the need for a national aerospace strategy in the wake of a federal cabinet shuffle. Developing such a strategy sounds like a no-brainer, and I question politicians on why it hasn’t already happened, so do you see movement from a federal perspective to make such a strategy a reality?

Mueller: It’s definitely been an uphill battle, but I think we’re starting to see some recognition that there is a need for a strategy, which is encouraging. We have new cabinet ministers, so we’re going to be having those discussions and advocating on behalf of industry. We have seen the government move on strategies for other sectors in the economy, and we need the same for aerospace. Aerospace is an economic driver in the country — wages are higher than the average manufacturing wages in the country. We’re one of the only countries in the world that can build aircraft from start to finish, so there is huge potential and if we had a strategy, we could take it to the next level. I think we’re starting to see a small recognition of that, but we have more work to do.

CDR: Do you feel that defence procurement in Canada should be tied to supporting Canadian industry before anybody else?

Mueller: Everything that we advocate for right across the board is for the benefit to the industry in Canada, and that’s why we need to do the hard work of developing a strategy. We need to have a discussion on what are the key capabilities and capacity that we want to have here in Canada. In the absence of a strategy, what happens is we’re recapitalizing the Air Force on a case-by-case basis. If you had a strategy, you could knit everything together, the civil side, defence, environmental sustainability, space — you could have a common strategy that would guide a lot of these pieces. You painted the example right there Joetey, on why we need a strategy.

CDR: It has been reported that Canada is one of the top 10 aerospace countries in the world. What is your assessment of that ranking because I don’t hear much about that anymore.

Mueller: To be honest, we’re losing ground, and we’re losing ground because we don’t have that strategy. That’s again why a strategy is so incredibly important as it needs to take into account defence procurement, innovation, R&D, and certification. We need that strategy, to keep pace with the rest of the world. Another piece is that we’ve seen a shift under this government from dedicated aerospace programs to sector agnostic programs. That’s of concern when you are looking for investments, especially when we have challenges from an aerospace perspective with programs like the Strategic Innovation Fund. We need focused interest from the government on the aerospace industry as we drive economic growth.

CDR: There have been some major defence procurement files awarded in the last year, namely the Future Fighter Capability Project and the Strategic Tanker Transport Capability project. Where do you see future opportunities for the aerospace industry in Canada?

Mueller: There’s lots of opportunities that are resulting from the contracts that are already there, which is good, so we’re pleased that the government has been moving forward on those. There’s still lots of opportunity remaining with NORAD modernization in particular. There’s about $40 billion that the government committed to modernize NORAD over the next two decades — Arctic over the horizon radar, the surveillance piece, the infrastructure upgrades. We need to do a better job at positioning Canadian industry to take advantage of those opportunities. On the NATO side we have the new DIANA program that will enable innovation here in Canada. We also have opportunities for maintenance, repair and overhaul on the major procurement projects.

CDR’s Attariwala with Mike Mueller at ADSE 2023 – Credit: Joetey Attariwala

CDR: What are you expecting from the Defence Policy Update (DPU)? 

Mueller: We’re eagerly awaiting the release of the DPU — I think it’s absolutely essential to understand where the government intends to go with its defence policy update. We had a lot of discussions with Minister Anand, so what’s going to be critical for me is that industry’s perspective is taken into account. We need to be a partner to the government to give the defence policy update goals and ambition, and one of the big commitments that I’m looking for is engaging clearly with industry, and having industry be a partner in whatever comes next from the DPU.

CDR: How can Canada become an even greater player in the global aerospace industry?

Mueller: 80% of what we produce in Canada is exported, so that aspect is hugely important. One of the things we’re talking to government about is how to improve the export permit process. There’s a real opportunity for increased exports for aerospace and in particular with the defence sector. This is critical as exports help with our economic recovery and growth. We need government to work with industry to strengthen the processes that we have. We have four main issues with the current system — we’re seeking clarity, timing, transparency, and we think there’s some process issues that can be tackled with respect to export permits. Businesses need clarity to understand what the rules of engagement are and where they can and can’t export to. We need a process in place to advise businesses on timing, because there doesn’t seem to be consistency with timelines regarding the decision making process for export permit applications. We also need to strengthen service standards that are there. On the transparency side, businesses need to know where the application is in the system. So, having industry and government sitting together and figuring out some of these processes is going to be key.

CDR: What’s next for AIAC?

Mueller: We’re looking forward to the Canadian Aerospace Summit happening in Ottawa on November 7 and 8. It’s the premier aerospace specific event in the country and we already have confirmation from the Commander of the Royal Canadian Air Force, LGen Eric Kenny, as well as LGen Blaise Frawley, Deputy Commander of NORAD. We’re going to have folks from industry like Eric Martel, President and CEO of Bombardier; Martin Brassard, President and CEO of Héroux-Devtek; Helene Gagnon, Chief Sustainability Officer at CAE, and that’s just the tip of the iceberg. We’re going to be making further announcements over the next little while, so stay tuned. I encourage all of your readers to come out and join us for this event.

CDR: Thank you.

Joetey Attariwala is CDR’s Aviation Editor

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