MIKE MUELLER – CDR ONE-ON-ONE
President & CEO – Aerospace Industries Association of Canada
CDR sent Senior Staff Writer & Aviation Editor, Joetey Attariwala, to speak with Mike Mueller, the President and CEO of the Aerospace Industries Association of Canada (AIAC). They discussed the status of Canada’s aviation industry, particularly with respect to defence, and how the industry views Canada’s new government in the midst of a trade war with the United States. Here is their discussion in full.
CDR: Mr. Mueller, thank you for taking the time to speak with me. How would you characterize the current state of Canada’s aerospace industry, and particularly the defence sector?
Mueller: Well, thanks, Joetey, and thanks for everything CDR is doing on behalf of the industry. I would say there’s a sense of optimism, and a lot of it is being driven by the Prime Minister and the government’s commitment to defence. We saw the announcements on NATO funding — first 2%, then 3.5% and then 5%, so there’s quite a bit of optimism with respect to the defence side of the business. One of the things I’ve been cautioning the government, though, is that we can’t ignore the civil side, because especially in aerospace you need a strong civil side to build a strong defence industrial base within the country. We’ve seen a lot of activity through the summer but we’re looking forward to the fall. It’s all about action, execution, and implementation.
CDR: Canada has traditionally been a global leader in aerospace. AIAC just held its quarterly board meeting in Winnipeg, so I’m curious to know where you see the Canadian aerospace industry standing in terms of global competitiveness, innovation and talent?
Mueller: We have so much to offer, both to Canada and the world, and if we look at defence in particular, one of the key policy pieces that we discussed at the board meeting was the need for an industrial strategy, both for defence and for aerospace, so we’re encouraged by the government commitments to develop both of those strategies. We’re also encouraged by the commitment to establish a new Defence Procurement Agency.
A couple of things we really need to see within the defence industrial strategy is an assessment of and prioritization of Canadian key industrial capabilities and capacities: how do we continue to build up the Canadian defence industrial base. Aerospace is a phenomenal industry in that it creates, and has created, well-paying family-supporting jobs. We have over 225,000 workers who we support through this industry, so there’s huge economic prosperity that comes along with the increase in defence spending, but there’s also a deterrence benefit to having a strong industrial base in the country. I think that, if done right, the defence industrial strategy and the Defence Procurement Agency will provide both.
In terms of global competitiveness, that requires a sharp analysis of our sovereign capabilities. We need to have the government support those through the defence industrial strategy, build the defence industrial base, and then you’re absolutely right, you need to be able to export those internationally. Seventy percent of what we produce here in the country is export-related, so having the focus on exporting key capabilities and capacity is critical. Identifying what you need, providing what you need, having the Canadian government be the first buyer, and then scaling and exporting is how we grow our global competitiveness while strengthening our defence sector at home.
WHY INDUSTRY NEEDS A ‘DEMAND SIGNAL’
CDR: Do you see a shift in the way that the government is approaching aerospace capability in Canada, specifically in the defence sector? For example, do you see a path to renewed OEM type endeavors like that which we see in Turkey or South Korea, for example?
Mueller: We are seeing some encouraging signals, but industry is waiting for details and next steps. If Canada is to have a defence industrial strategy, it needs to provide the long-term vision for industry to make the investments necessary to develop key capabilities for the future, particularly for the Royal Canadian Air Force. I think back to my discussion with Minister Fuhr at ADSE. The Minister put it well when he said something to the effect that industry does not invest money on a maybe, they invest money on a certainty. We in the industry often refer to that as a demand signal. We need that demand signal through the defence industrial strategy, but then that demand signal needs to turn into actual orders, ideally through a Defence Procurement Agency. Industry needs that long-term certainty through some of these policies that are being developed, and then, if we get that, yes, Canadian industry can provide whatever is required.
We saw a prime example of that through COVID when the government provided the certainty, provided clear timelines, identified the capability that was required, and then provided the funding. Industry pivoted at an extraordinarily fast pace to build ventilators as an example, so we know it can be done. That whole story to me really demonstrates what is possible when the right ingredients — clarity, certainty and support — are there. That’s what we need to see from a defence industrial strategy, but it has to start with political will and leadership.
That’s why we were pleased to host Prime Minister Carney at one of our member facilities for that announcement on September 5, where the Prime Minister talked about the need for a defence industrial strategy and the need to support the Canadian defence industrial base through procurement. We strongly support that vision. There’s a lot of detail that needs to come, and we’re working with the government on that, but overall, we are optimistic.
CDR: What key indicators or trends are you monitoring to gauge the health of the Canadian aerospace sector?
Mueller: That’s a great question. One of the key indicators we keep looking at is the State of the Industry report that comes out every year, where we monitor very closely GDP and jobs. We take a look at the raw numbers year over year, and we’ve seen the industry growing and jobs being created across the country. One area of concern is the limited availability of skilled workers. We hear that in all different regions. Having those skilled tradespeople available to support the industry is critical. You’ve heard me say this before, we do amazing things in aerospace — we’re in space, in the sky, making aircraft fly, and we’re very forward-thinking and visionary. But at the end of the day, none of that happens without the people supporting it. And so, while we need that broader policy framework in the form of a defence industrial strategy, if we don’t have the skilled workforce of the future, we’re not going to be able to continue to compete at the level we need to. So that’s a concern and a challenge right now.
TOP PRIORITIES
CDR: What are the industry’s top priorities for workforce development, and how are you working with government and academia to address them?
Mueller: We work very closely with our regional associations because so much of this is dependent on training and support mechanisms at the provincial level. Industry is doing some very innovative things to design programs to train the workforce, which is encouraging, but we need more support at both the provincial and federal levels to ensure we have the skilled workforce that’s going to propel the industry for the coming decades.
CDR: Are there specific policy or regulatory barriers that inhibit the Canadian defence aerospace sector from global competitiveness?
Mueller: The main barrier is the lack of a strategy, which means we don’t have the long-term demand signal for what we’re doing in this country, and that’s why industrial strategies, both on the defence and civil sides, are absolutely critical. On the specific barrier side, if you can’t export what we make, then that’s a huge issue. CCC [Canadian Commercial Corporation] does a good job supporting the industry, but we need to see some reform in the export-permitting process to give industry more certainty to export. That’s both a regulatory policy issue and a political issue that needs to be addressed.
CDR: Let’s talk about the upcoming Aerospace Summit that AIAC is hosting. What is your theme and what are you looking forward to?
Mueller: Thanks for asking! We’re very much looking forward to the Summit, which is happening earlier this year on October 28 and 29 in Ottawa. The theme is challenges and opportunities, and I think that fits our discussion just perfectly. We’ve got a lot of challenges on the horizon — trade-related challenges, labour market challenges — but there’s a lot of opportunity at the same time, and optimism with respect to defence spending commitments from the Canadian government.
We have a great line-up of speakers for the Summit this year: the new Commander of the Royal Canadian Air Force, Jamie Speiser-Blanchet; the American Ambassador Pete Hoekstra; the new Federal Industry Minister, Mélanie Joly, the Federal Defence Minister, David McGuinty and more still to be announced. We’re expecting a very good showing from industry and also government representation, because it will be the first Summit with the new Carney government in place. We’ll also have an expanded trade show space, so there’ll be more foot traffic through the exhibit areas. On the civil side, it may be of interest to some of your readers that we’re also holding the Transport Canada Certification and Delegates Workshop, so there’ll be targeted discussion on issues of relevance to Transport Canada. So we anticipate some great speakers, great discussion, a real opportunity to showcase the sector, and substantive dialogue with the government to move the industry forward.
CDR: AIAC recently hosted ADSE. What are your reflections on how it went and what’s the future for the show?
Mueller: Well, first of all, thanks to you and everyone for coming out to the show. I would say ADSE 2025 was very successful. We had a great lineup of speakers, some very senior, high-level government officials, and the chance for industry to showcase their plans for the future right across the spectrum. All-in-all, a really great event.
I would say one item that came up repeatedly was the need for a renewed, strengthened relationship between industry and government, one based on greater collaboration, greater trust, and coming together to ensure that, on the defence side, we’re providing the Canadian Armed Forces with what’s required while also building the Canadian defence industrial base. So that discussion of a cultural shift was front and centre, and we’re starting to see that carry forward across government. More needs to be done, but it was an encouraging start. We will continue to emphasize ADSE as a premier event to link voices across the aerospace sector.
CDR: How is the membership of AIAC in this period of a trade war and global reorganization?
Mueller: We had our membership stick with us through COVID, and we’ve subsequently grown. We’re seeing a lot of interest in the association because there’s recognition of the work we’ve been doing to position and advocate for the industry. There’s more interest in the association due to the influence and the access we have to the government and the constructive discussions happening, particularly on the defence side. I think everyone recognizes the need for associations and a strong, unified voice in times of challenge and opportunities, and right now aerospace has both.
OPPORTUNITIES FOR INNOVATION
CDR: Where are the biggest opportunities for innovation in Canada’s aerospace sector?
Mueller: That’s a good question. I think there are a couple. There’s a huge focus on defence dual-use technologies, which is front and center, and we see a lot of interest from the government on that. Also in the context of defence are drones and the operating systems that go along with that, so there’s a huge step forward in innovation on some of those pieces. We haven’t lost sight of the sustainability discussion and the innovation that is coming along with that, both from an environmental perspective and a resource perspective. So there’s lots of opportunity. If you’re not innovating in aerospace, you’re not going to be around for long, so it is an absolute focus of the industry. We also have to embrace non-traditional aerospace innovation like how AI, quantum computing, machine learning fit into that equation, and also on the manufacturing side to make it more efficient. Canada is a huge country and it needs a robust aviation sector — without it I can assure you that the nation will not thrive.
CDR: How is Canada’s aerospace industry navigating global competition, particularly from countries that heavily subsidize their national champions?
Mueller: I would answer that question exactly like the other ones. The reality is our competitor countries have strong, coordinated industrial policies. If you take a look at Australia or the UK, they have a national security threat assessment, then they have a defence industrial strategy, and then they operationalize that in a timely manner, removing risk throughout the systems. If Canada is going to be competitive internationally, we need the same policies to guide the industry and create that alignment. We’re encouraged by the federal government turning their attention to that. We are looking forward to the defence industrial strategy in particular, because my hope is that it will provide the long-term demand signals that will then turn to firm commitments. That will allow Canadian industry to continue to build a strong and resilient defence industrial base, and with the support of the government, export what we’re doing or what we’re creating.
CDR: What markets should Canadian aerospace firms be targeting more aggressively?
Mueller: We do see some opportunities in Europe with respect to the government’s announcement on ReArm Europe and SAFE [Security Action for Europe]. So, there’s definitely opportunities to diversify there. We also see opportunities in Asia and the Pacific region. There is a push from the government to diversify trade, but we cannot ignore the North American defence industrial base. My view is that this is not a zero sum game. There’s opportunities in all regions and we are very supportive of the efforts to diversify our partners and markets. We applaud the government in opening up some of those doors, but we can’t ignore the North American market and the integrated nature of our supply chains. We need to strengthen both.
CDR: Thank you, Mr. Mueller, for your time and perspective.
Joetey Attariwala is CDR’s Senior Staff Writer & Aviation Editor
