$200M FOR AVIATION TRAINING
Ottawa, Quebec loan money to CAE
The provincial and federal governments plan to give aviation simulator maker CAE nearly $200 million over the next five years to help the company develop a new “innovation campus” in Montreal.
The campus is part of a larger “digital transformation” that will see the Montreal-based company spend a total of $1 billion over the next five years to develop a new generation of flight simulators and new training services in the areas of aviation, defence and health, the company said on Wednesday.
As part of the plan, CAE will create 400 new jobs across the country, of which 335 will be in Montreal. Also, 1,700 employees will receive retraining.
“The company will also add 550 new co-op internships and double the number of scholarships for students,” Prime Minister Justin Trudeau said during a speech at the company’s Montreal headquarters.
Government money will help the company move faster than it could on its own, said Marc Parent, CAE’s president and CEO.
“Where the help from the government really comes in, it helps us to accelerate the very sizable investment,” he said. “One-billion dollars of investment over five years for a company like ours is a very large sum.”
All of the money, except for $10 million from the federal government and $5 million from the provincial government, will be paid back, he said.
“It’s not a subsidy, it’s a loan. That’s going to permit us to hire now, invest now,” he said. “We’re a good corporate citizen, we will repay that money.”
Government support of the aerospace sector has “created this industry where we punch way above our weight as a country,” he said.
But not everyone agrees the government should be writing multimillion dollar cheques to private companies.
“This is boilerplate corporate welfare. This is a company that is receiving taxpayer money, we don’t get to know the terms of the loan, we don’t get to know when it’s paid back,” said Aaron Wudrick, the federal director of the Canadian Taxpayers Federation. “I’m encouraged by their insistence that they’re going to pay it back, that’s better than not paying it back, and I encourage them to let the public know when they do.”
While Wudrick said he’s opposed to all forms of “corporate welfare,” there are also broader concerns about transparency.
“If we’re going to measure the benefit to taxpayers, we need to know how much it’s costing us in the end and what we’re getting out of it,” he said.
CAE has around 70 per cent of the world’s aviation-simulator market and has expanded into training as well as the development of health-care simulators in recent years.
That drew praise from Couillard during his speech. The premier said that when he trained as a surgeon, his first surgical experience was with a real patient. Surgical simulators have saved lives, he said.
For CAE, the goal of the digital transformation is to create a “sustainable advantage,” said Parent.
“We don’t have a burning platform at CAE; things are good,” he said. “But that’s when you need to invest.”
CAE, which trains more than 120,000 pilots a year, also sees a growing need for aviation training, Parent said.
More than 300,000 new pilots will be needed during the next 10 years, due to retirements and growth in air travel, and only about half that number have started training.
“By using unique insights derived from data and analytics, we will create extremely realistic environments tailored to the specific needs of each pilot,” he said.
The company reported profits of $355.7 million during its most recent fiscal year, which ended on March 31.
The company employs more than 8,500 people in 35 countries. More than 3,200 of those workers are employed at its headquarters in Montreal.
The company will also add 550 new co-op internships and double the number of scholarships for students.