AIAC TESTIFIES BEFORE HOUSE OF COMMONS COMMITTEE ON EXPORT PERMIT PROCESS

May 4, 2021

Mike Mueller

President & CEO (Interim)
Aerospace Industries Association of Canada

House of Commons’ Standing Committee on Foreign Affairs
Ottawa, Ontario

Thank you, Mr. Chair.

Good afternoon everyone.

It’s a pleasure to be here on behalf of the Aerospace Industries Association of Canada.

As always, we appreciate your interest in our industry and your willingness to work with us on the challenges we are facing.

With respect to the export permit process, there’s a lot of frustration within the aerospace and defence industry.

And we’ve been raising these frustrations to government – along with concrete examples of the issues – for many years now.

Unfortunately, the situation is not improving.

Let me just state at the outset that given the current economic situation, this isn’t simply about businesses being frustrated.

There are real economic opportunities being missed. 

Opportunities that could yield significant financial dividends here in Canada. 

As most of you will know, aerospace is an industry that is highly export intensive. The inability to get product out of Canada, has severe economic impacts.  Impacts that ripple across the supply chain.

I should also preface that our industry is also concerned about ensuring Canadian values are respected in all our dealings and support an effective export permitting process.
But why do we have concerns?

What exactly are the challenges we’re facing?

Hundreds of millions of dollars of work has been lost and hundreds of millions more is still at stake all supporting good paying Canadian jobs.

There are four main issues from our perspective – and they involve:

Clarity, Timing, Transparency and Process.

ON CLARITY:

Companies are looking for some assurances of where they can, and cannot export.

Right now, we don’t have that.

And while industry is sensitive to the fact that government needs to keep certain aspects of its diplomatic work pertaining to security confidential, surely there’s a way for government & industry to work in better alignment to ensure significant time and resources aren’t wasted on ventures that will never move ahead because permits will never be issued.

Companies are spending a lot of time and capital to tee up new business. In many cases, years of work. 

Significant costs are incurred. Significant energy is expended.

Only to be told sorry, better luck next time.

Clarity is needed.

We’re asking for government to work with us to strengthen the process. It’s not in anyone’s interest to waste time and resources. And this is currently the case, on all sides.

TIMING

When it comes to timing, the service standards for permits are all over the map.  

We have issues that have taken months, and in certain cases even longer.

Businesses need assurances if they are exporting from Canada that the timing to secure the permit is not going to jeopardize the sale.  

We have raised this issue several times. And we know that officials at Global Affairs Canada, often times are hampered by the time other stakeholders take to review the application.  

But delays are delays.

And the result is lost business opportunities.

TRANSPARENCY

That bring us to transparency.

It would be extremely helpful for business to have the ability to find out where their applications are within the system.

Currently, once the application is submitted, businesses are in the dark.

It doesn’t have to be this way. Our friends and allies, like the United States, have a system that offers businesses more detailed information in terms of the progression of the application.

We’ve shared this with officials. And it’s something that deserves to be explored.

Finally, on the overall process.

It is our firm belief that an overall review is needed to ensure the process doesn’t inhibit the ability of business to export from Canada.

As part of the review, we believe the concept of a triage system should be explored.  

This is just one of the potential ways to streamline things to better improve timelines.

For example, if an application is submitted that is part of a previous application that was already approved by the department, there should be a mechanism to fast-track the process. Why repeat cumbersome, duplications when they’re not needed?

Improving clarity, timing, transparency and the overall process, is long overdue.

If these issues aren’t addressed, the Canadian companies with subsidiaries outside of Canada will shift their operations there. It’s as simple as that.

Work packages, and more importantly, jobs and capability will leave the country.

I don’t think anyone here wants to see that happen.

We were encouraged to see funding in Budget 2021 to strengthen the administration of Canada’s trade control regime, this is a good first step but more resources are required specific to the export permitting process.

So we ask for your support on this and on the need for an overall review of Canada’s export permit process.

A signal has to be sent from the political level to ensure that this is deemed a priority.

Please help us ensure that our businesses are able to responsibly export their product, without undue delay, and compete in the global marketplace.

     Thank you