May 15, 2009

To many Canadians, The Boeing Company is little more than just another big American corporation that has little to do with Canada. It is therefore not surprising that when the Canadian government considers contracting major defence projects to Boeing, many feel that this provides little or no benefit to Canadian industry. Why not buy Canadian instead of sending tax payers’ money south? Particularly in times like these, when the economy desperately needs the government to provide support in face of a global economic crisis, this is a legitimate question.

But Boeing is much more than an American company – Boeing is global. Although their corporate headquarters are in Chicago, Boeing is truly worldwide in scope, and directly employs people in 70 countries. In Canada alone, where Boeing has been active for nearly 100 years, 1,500 highly skilled workers are employed at facilities in Richmond (BC), Vancouver, Winnipeg, Calgary, Ottawa, Trenton, Montreal, and Halifax. But when the entire supply chain is considered, Boeing provides work for a much greater number of Canadians. More than 200 Canadian defence and aerospace firms supply goods and services to The Boeing Company, with an annual economic impact of close to $1 billion. This makes Canada Boeing’s second largest supplier base. Our Canadian partners provide not only day-to-day maintenance services for Boeing products, but also high-technology equipment and services, including software, satellite subsystems, infrared detection devices and advanced composite structures for many of Boeing’s military and commercial products.

One of the most prominent ways Boeing contributes to Canada’s aerospace and defence industry is through the Industrial & Regional Benefits (IRB) policy. Under the IRB program, companies that win government contracts are required to invest into Canada an amount equal to the contract value. As stated in the government’s Canada First Defence Strategy, the goal of this policy is to support industrial and regional economic development in Canada. This in turn helps to improve Canadian international competitiveness and economic growth, and will produce effective Canadian partners in the supply chain of international defence and aerospace equipment manufacturers.

Boeing takes its IRB obligations very seriously, and has never failed to deliver. Over the last 30 years, Boeing has implemented Industrial Participation Programs totaling $US 30 billion in more than 35 countries. Since 2001, Boeing has agreed to some $2 billion in Canadian IRB commitments, and successfully completed the program for the CF-18 Phase I modernization. Boeing is also on track to meet its obligations under the CF-18 Phase II modernization, the C-17 Acquisition and In-Service Support Programs, and the Small Unmanned Air Vehicle program. Boeing’s IRB investments benefit Canadians from coast to coast.

However, Boeing’s contribution to Canada’s economy is not limited to IRBs. Since 2001, Boeing has committed a total of $5 billion of work in Canada – more than twice its IRB obligations. But, even this represents only a part of Boeing’s overall economic footprint. By creating high-paying jobs for Boeing employees and contractors, Boeing contributes indirectly to the creation of jobs that provide goods and services to Boeing suppliers. In recent years, the subcontractor role is becoming more and more important, as Boeing increasingly contracts outside suppliers for key design and long-term support for supplied products. The expertise and experience these contractors acquire during their work with Boeing will help them to offer new products and services to other companies in a wide range of industries, both in Canada and abroad.

Today, Canada’s defence and aerospace industry depends on Boeing, and Boeing depends on Canada’s defence and aerospace industry. Whether it is the commercial or defence business – Canada and Boeing will continue to be inextricably linked as they have been for nearly 100 years.
Harry W. “Pete” Peterson is Vice president, Boeing Operations International, Inc.
© 2009 FrontLine Defence