Uniquely suited for the North American Aerospace Defense Command Mission, the twin-engine Block III Super Hornet is able to operate in the harshest environments and perform virtually every mission in the tactical spectrum.
By Jennifer Seidman, International Strategic Partnerships, Boeing
When Boeing and Canada made aviation history more than 100 years ago with a single airmail delivery flight, few would have imagined the billions of dollars in aerospace growth and development it would bring. A new economics study reveals that the investment and growth for Canada workers and industry is accelerating to record levels.
“Every time a Boeing jet flies, it does so with a large number of parts made in Canada by Canadians,” said Rick Clayton, economist at Ottawa-based Doyletech Corp. “Boeing contributes to Canada from coast to coast to coast, and it’s time this story was told. Boeing represents the kind of global industrial partner and champion Canada needs.”
In March 1919, as the feature of an exposition, William “Bill” Boeing and pilot Eddie Hubbard flew 60 letters from Vancouver, British Columbia, to Seattle, Washington, in Boeing’s C-700 seaplane. It was the first international airmail flight. Since then, Canada has become a customer, a supplier and a partner to Boeing in both the defence and commercial sectors.
Numbers Tell the Story
Five years ago, Boeing retained Doyletech to track Boeing’s impact in Canada. Doyletech’s analysis focused on more than just Boeing’s economic impact in Canada. It also analyzed Boeing’s regional impacts; technology innovation; exports; and use of highly qualified personnel. Doyletech also measured how Boeing is an “Agile Producer,” an important factor as it is the mainspring for why Canada benefits so much from Boeing’s work in Canada.
“The numbers tell the story,” Clayton said. He explained that it was important to start with a baseline of data. The foundation is the work and analysis completed in the first report. In 2015, Boeing directly spent about CDN $2.0 billion in Canada, one of the highest amounts of any aerospace company headquartered outside the country. This total included more than CDN $400 million for output from Boeing’s Winnipeg plant, as well as purchases elsewhere across Canada for parts that went to Boeing assembly plants in the United States.
About 95 percent of the total value was exported from Canada to the United States or other countries. “Offshore purchasers are largely paying for those Canadian jobs,” Clayton said. “But it didn’t stop there as ‘indirect and induced’ effects kicked in as Boeing’s spending reverberated around the Canadian and regional economies.” Taking those effects into account, the total economic impact in 2015 was CDN $3.9 billion, supporting 17,500 jobs.
Faster and Higher
The Boeing F/A-18 Super Hornet Block III on offer to the Royal Canadian Air Force as part of the Future Fighter Capability Project.
“While the 2015 analysis was an important snapshot of how Canada’s aerospace industry was benefitting from Boeing’s partnerships and investments, it is important to follow the trends over many years,” Clayton explained. As a result, Boeing asked Doyletech to do a complete review based on 2019 data.
Just released, the new report reveals that Boeing’s direct spending soared to CDN $2.3 billion, a dramatic 15 percent increase in four years. When the indirect and induced effects are calculated, this amount more than doubles to CDN $5.3 billion, with 20,700 jobs. “These are high-quality, high-productivity jobs,” Clayton explained.
On average, each worker in Canada currently contributes about CDN $90,000 to GDP annually. The aerospace sector does considerably better: in 2016, each worker contributed about CDN $134,000 to GDP. But Boeing’s contribution is significantly higher even than that: a CDN $255,000 contribution to GDP per worker. This growth is much faster than that of the Canadian economy as a whole.
Canadian Innovation
Canada’s aerospace growth is not just about the dollar value. Thanks to years of growing partnerships with Boeing, Canada is known as a global leader in composite materials research and development.
These materials are growing in use all over the world, thanks to their extraordinary strength. Applications range from airframe components to Formula 1 racing cars. “This is exactly the way an organized Canadian research effort is supposed to look,” Clayton said. “Canadian opportunity is transformed into Canadian technology which is transformed into Canadian leadership and excellence.”
Promises Made, Promises Kept
Boeing investment in Canada goes far beyond the supply chain as the company has delivered on billions of dollars in Industrial and Technological Benefits (ITB) obligations dating back more than 25 years. The work started with the sale of the F/A-18s in the mid-1980s and progressed through more recent obligations including acquisition of, and sustainment work on the C-17 Globemaster and the CH-47F Chinooks, in order to meet Canada’s domestic and international missions. Other projects focused on Small Unmanned Aerial Vehicles and Wideband Satcom Satellites.
Investment Opportunity for Canada
Expanding upon the more than 100-year history of partnership between Canada and Boeing is just one piece of the puzzle. As the Canadian government evaluates its future fighter, it is clear the Boeing Super Hornet is the only platform with predictable, affordable lifecycle costs. The costs are the lowest among current U.S.-made tactical aircraft, confirmed by the U.S. Government.
“Considering the operation and sustainment of an aircraft represents approximately 75 percent of its total lifecycle cost, the opportunity to minimize these expenses is critical to ensure the long-term sustainability of the program and continued benefit to the Royal Canadian Air Force (RCAF) and the Canadian taxpayers,” said Jim Barnes, director of Boeing fighter programs in Canada.
With the Legacy Hornet already in its fleet, the RCAF can utilize existing physical and intellectual infrastructure, reduce aircrew and maintenance training, and leverage other support aircraft already in use today – like air refueling tankers. These infrastructure reuse opportunities, combined with an active production line, ensure a timely delivery to the RCAF, and a quicker introduction to operations than the other competitors, Barnes said.
Uniquely Suited for the RCAF Mission
Reaching full operational capability with the U.S. Navy in 2025, the Block III Super Hornet delivers next-generation upgrades that include enhanced network capability and processor, longer range, unrivaled payload flexibility, reduced radar signature, an advanced cockpit system, enhanced communications system, as well as an increased airframe life that extends out to 10,000 hours.
Uniquely suited for the North American Aerospace Defense Command mission, the twin-engine Block III Super Hornet is able to operate in the harshest environments and perform virtually every mission in the tactical spectrum. Its shorter landing and takeoff distances also make it a great fit for the dispersed operating environment in Canada’s north.
And with no set retirement date for the U.S. Navy, the Super Hornet’s robust capability insertion plan will help keep the RCAF tactically relevant for decades to come.
