In a struggling economy, Canada's aerospace industry is flying high
When Airbus SE announced its latest order for the Canadian-built A220 jet at a news conference in Mirabel, Que., this past May – a fun-loving affair attended by a beaming Prime Minister Mark Carney and cheerful employees carrying heart-shaped signs – the list of superlatives ran long.
VIPs queued up to speak in an aircraft hangar bathed in blue light and proclaimed it the single biggest order to date for the airliner: A sale of 150 jets to low-cost carrier AirAsia worth US$19-billion at list prices.
It was also the biggest order in history for a Canadian-made commercial airplane, eclipsing Bombardier Inc.’s regional jet sales over the years, as well as all other deals.
Airbus executives called it a clear win that would anchor thousands of high-skilled jobs. Political leaders said it was proof the world’s appetite for goods manufactured in Canada remains strong at a time of international trade strife and global unrest.
And for the first time anyone could remember, the Prime Minister of Canada was involved in cementing the sale. Mr. Carney met personally with AirAsia chief executive Tony Fernandes to press the case for the Quebec jet, doing the kind of promotion that government leaders in the U.S. and France routinely take on but Canadians have generally shied away from.
The merriment in Mirabel, when all was said and done, was maybe the most visible symbol yet of a new era for Canadian aerospace manufacturing and maintenance.
The plunge in global air travel during the COVID-19 crisis that forced planes to the ground, paralyzed production and sent lenders into a tizzy seems now to be a distant memory. In its place is a rebound in demand that shows no sign of slowing.
Executives at Airbus, Bombardier and other players are now dealing with record backlogs for their civil aircraft and positioning themselves for a wave of defence spending that could deliver sizeable increases in revenue and profit.
If their goods remain tariff-free, if they can work through lingering supply chain and labour problems, and if Ottawa can back the industry with a more formal strategy beyond what’s already been announced, business leaders say it could truly be a multi-year boom.
“I think it’s a golden moment,” Bombardier chief executive Éric Martel said in an interview. “I was concerned when the geopolitical issues started, with first Ukraine and Russia and then now with Iran. But you know what? I haven’t seen things slow down.”
Everywhere, there is evidence of growth.
Airbus has doubled its workforce in Canada since 2016 and now employs more than 5,300 people in the country, its largest presence outside of Europe. Bombardier and de Havilland Inc. just broke ground on new manufacturing facilities in Montreal and Calgary respectively to bolster output. And parts suppliers such as Héroux-Devtek Inc. and Groupe Meloche inc. are in full-on acquisition mode as they try to bulk up their capabilities.
“I believe we’re in a very positive dynamic, one capable of propelling Canada and its aerospace sector toward major momentum for an entire generation,” said Catherine Guillemart, vice-president of public affairs for Airbus Canada.
The data underpins the confidence. Over the last five years to the end of 2025, Canada’s aerospace manufacturers and providers of maintenance, repair and overhaul, or MRO, boosted their collective revenues by 76 per cent to $45.7-billion, according to newly published figures from the federal government and the Aerospace Industries Association of Canada. Revenues rose about 7 per cent last year over the year before, the numbers show.
The exports picture is equally positive. Manufacturers building in Canada shipped $28.2-billion worth of aerospace equipment in 2025, according to the data, up 54 per cent since 2021 and up about 10 per cent from 2024 to 2025. An increased share of exports to Europe and Asia was the main driver of the growth, according to the published figures.
Canada now ranks in the global top five for manufacturing non-military flight simulators, engines, and aircraft. About 94,200 people work directly in the domestic aerospace industry, with the main hub for manufacturing in Quebec and MRO activities dominated by Ontario and Western and Northern Canada.
At Bombardier in Montreal, Mr. Martel is unashamedly bullish about the future. In the company’s latest quarter, it booked orders for an average of 3.6 new jets for every plane it delivered. The number of individuals who can afford to fly privately continues to grow at a pace of 6 per cent per year, he says – a key reason why private jet fleet operators such as NetJets and Vistajet are snapping up planes.
Bombardier is so busy it’s running out of manufacturing space. After launching a new component-making facility in California last year and opening a US$400-million factory at Toronto Pearson International Airport in 2024 for its Global jet family, the company is now spending $100-million to build a plant next to existing facilities in Montreal to relieve some of the production pressure.
On a recent visit to the Montreal site, the space crunch was clear. Global 5500 and 6500 jets were positioned on an angle so more could be squeezed into the hangar. The company has also eliminated some offices to make room for work previously done on the plant floor that’s now needed to park aircraft.
“I’ve never worked with so much backlog,” Mr. Martel said. “I’ve got three, four years [of orders to fill] ahead of me, easily.”
It is a highly dynamic and transformative period for aerospace, engine-maker Pratt & Whitney Canada’s new president, Satheeshkumar Kumarasingam, said in an emailed response to questions. “Demand is strong across both commercial and defence, and the industry is moving from recovery into a new phase of growth, modernization, and technology. The companies that will lead the next aerospace cycle are investing in technology, talent, and industrial capacity.”
Across the country in Alberta, there’s no better example of that than de Havilland Canada’s new Field project. The aircraft maker, known for its iconic yellow water bombers and other rugged bush and regional aircraft, is building a new aerospace base 30 minutes east of Calgary that it calls one of the most significant investments in Canadian aerospace infrastructure in decades.
The 1,500-acre site is expected to host a new aircraft assembly plant, runway, parts manufacturing and distribution centres, and an MRO facility. An employee training space, administration buildings and a plane museum are also planned. The company has said it will do final assembly for the DHC-515 firefighter aircraft at the field, as well as the DHC-6 Twin Otter and the Dash 8-400 turboprop – both of which it is striving to bring back into production after assessing customer needs.
Its ambitions don’t stop there. The company has also been talking to Sweden’s Saab AB about building the Gripen fighter jet under contract should Ottawa choose to buy those jets for its Armed Forces, says Neil Sweeney, who leads de Havilland’s communications and government relations. Aerospace isn’t just the domain of Quebec and Ontario, he says.
“We’re in this for the long haul,” Mr. Sweeney said, adding the privately held company has doubled its employee count to more than 3,000 over the past three years, most of them located in Canada, and expects to double it again over the next five. “This is a company that is deeply committed to the country and we’ve got all kinds of opportunities to grow.”
Canadian parts and system suppliers are also thinking big. And they’re trying to scale up to boost their production power and deepen their relationships with larger customers, which are desperate to increase the stability and resilience of their supply chains.
Longueuil, Que.-based Héroux-Devtek, a maker of landing gear for Boeing airliners and U.S. Navy fighter jets, sold itself last year to American private equity firm Platinum Equity Advisors LLC in a transaction worth $1.35-billion. One of the chief reasons for the deal was that it wanted to do major acquisitions but the value that public markets attributed to the company made that difficult, according to Gilles Labbé, Héroux-Devtek’s executive chairman.
In the roughly 17 months since the deal’s close, Héroux has bid seriously on at least four takeover opportunities but they haven’t yielded agreements, said Martin Brassard, the company’s chief executive. The price buyers are willing to pay at the moment is “crazy” but the manufacturer continues the hunt, he said.
Groupe Meloche, a maker of aircraft structure components and engine parts for Bombardier and Pratt & Whitney, among others, is also in pursuit of takeover targets. The Beauharnois, Que.-based company struck a deal in May to take over France’s Groupe Rossi Aéro, expanding into Europe in a transaction that will give it critical scale and bring it closer to Airbus’s main base in the French city of Toulouse.
Meloche’s financial health is now a far cry from where it was at the start of the decade, when it was clobbered by a double whammy of the lengthy grounding of Boeing’s 737 Max fleet as well as the outbreak of the COVID-19 pandemic. Global regulators ordered the Boeing jets to the ground following two fatal crashes linked to the aircraft’s flight stabilization software.
The company, a Boeing engine part supplier, lost about half its revenue within weeks in early 2020, prompting its main lender to dispatch a special accounts officer to its headquarters to verify that it had a good plan to work through the crisis.
“We were losing money for almost three years,” said CEO Hugue Meloche, whose father started the company now controlled by private-equity firm Novacap. “This was probably the worst industry to be in during COVID but right now it’s probably the best. The pendulum is coming back.”
What could spoil the party? Plenty, starting with the possibility that Canada’s aerospace industry could get caught up in the same trade war that has battered other sectors such as steel and forestry.
For decades, global aerospace has operated in a largely tariff-free environment under bilateral and multilateral trade policies originating from a 1979 World Trade Organization agreement on civil aircraft. There have been major disputes between countries during that time but the system has survived. Today, it’s a heavily integrated manufacturing ecosystem with cross-border transfers of everything from planes to seats and spare parts.
Now, however, the U.S. Department of Commerce has wrapped up a Section 232 investigation into imports of commercial aircraft, engines and related parts and determined they present a national security threat.
“Decades of foreign government market interventions have unfairly eroded our producers’ global market share,” and affected the ability of American companies to meet economic and national defence demands, a White House fact sheet published July 9 reads.
President Donald Trump isn’t imposing import duties on aerospace products right away, though. Instead, he’s ordered administration officials to negotiate with trading partners on possible adjustments. The President “may also take other actions he deems necessary,” including if the pacts negotiated are not entered into within 180 days or are “ineffective,” according to the White House fact sheet.
For now, Canadian aerospace exports remain tariff-free under the Trump administration’s exemption for goods stamped as compliant under the United States-Mexico-Canada Agreement.
Many executives and legal experts say chances are low that the aerospace industry will be the subject of any drastic changes, in part because the U.S. is a major net exporter of aircraft and parts. America’s aerospace and defence sector has maintained a positive trade surplus for more than 70 years – the only manufacturing industry in the country with a positive trade balance, according to the U.S. Aerospace Industries Association.
Any change would rip through the supply chain, with potential negative effects both in the U.S. and internationally. Bombardier, for example, has 2,800 suppliers in the U.S. and warns that any new American duties would probably cause more pain south of the border than in Canada in terms of jobs and layoffs.
Others point out that there are no major voices on the U.S. side calling for greater protectionism in aerospace, unlike in other sectors such as steel. “There’s not really a constituency pushing” for change, said Jonathan Epstein, a trade lawyer with Holland & Knight in Washington, D.C. In fact, there has been intense lobbying for the status quo, including from GE Aerospace CEO Larry Culp, according to U.S. media reports.
Supply chain disorder could also kill the buzz. The issue was a major one during the pandemic as lockdowns shut down factories and consumer spending shifted, and it continues to generate headaches. Manufacturers describe an environment now where just as one problem gets resolved, more seem to pop up unexpectedly due to war and other reasons.
Take GKN Aerospace. In May, the maker of advanced windows and canopies for commercial and military aircraft such as the Boeing 737 and the Lockheed Martin F-35 fighter jet, stopped a factory in the Los Angeles suburb of Garden Grove after an overheating tank containing chemicals triggered fears of an explosion. About 50,000 nearby residents were forced to evacuate as a precautionary measure. And supply to customers was compromised for days, if not weeks.
“The problems we’re working on now, they weren’t on the radar two months ago,” Mr. Martel said of Bombardier, adding late parts are affecting the sequencing of production lines. “We can still deliver our planes, but it’s a bit chaotic.”
While not as headline-grabbing as trade or supply struggles, labour remains the No. 1 issue for many manufacturers, says Mélanie Lussier, head of Aéro Montréal, Quebec’s main industry trade group.
Quebec’s aerospace sector alone currently employs 43,000 people. She estimates 65,000 people will be needed within 10 years, not counting the workers required to fulfill contracts that will be awarded in defence.
“This will be the major thing impeding growth,” Ms. Lussier said.
Premier Christine Fréchette’s government announced several initiatives this past week to boost the number of aerospace workers being trained in the province, including an expansion of the National School of Aerotechnics.
The problem cuts across the country. At KF Aerospace in Kelowna, B.C., Canada’s largest commercial maintenance, repair and overhaul provider, CEO Tracy Medve says finding the right balance of skilled labour has been an issue for years.
The company partnered with Mohawk College on a new training centre for aviation technology in Hamilton and it’s doing the same in the Okanagan. But that still might not be enough to offset a looming wave of retirements.
“The senior skilled people are going out the other end a little faster than you can bring people in through school and apprenticeship time,” Ms. Medve said.
Still, she said she’s optimistic about the future. The company also trains Canadian Air Force pilots, modifies aircraft, and offers passenger charters and cargo flight operations as well as leasing. It opened an office in Ottawa in April – an effort to deepen its relationship with national decision-makers.
“I think we’re in a good, solid place right now to see some stability now for the next short while,” Ms. Medve said. “In addition to the general demand that we have for aerospace in this country, I think there’s also a movement towards Canadian carriers doing more maintenance work in Canada. And that hasn’t always been the case.”
Canada’s position as an aerospace power stretches back to the Second World War, when this country made planes for the Allied effort far from the reach of German bombers. Ever since, the Canadian government has been a commercial partner with the sector in one way or another.
Aerospace companies have provided high-skilled, high-paying jobs, and successive governments going back decades have tried to hold on to the expertise in aerospace design and manufacturing through a series of funding programs. Much of that money has gone to Bombardier, eliciting widespread criticism at times from pundits who argue the manufacturer has squandered much of what it had through mismanagement and over-ambition.
Today, however, Airbus wouldn’t have the footprint it does in Canada without Bombardier, which continues to cut a new path as a $31-billion maker of private jets. And many voices are arguing this country needs much more ambition, not less, if we want to avoid slipping into middle-power mediocrity.
As aerospace manufacturers and countries around the world jostle to develop the next generation of cleaner aircraft and cutting-edge technology, Ottawa’s role in developing Canadian aerospace and helping sell its products is as crucial as ever, said Mehran Ebrahimi, an aerospace specialist at the University of Quebec at Montreal. And it needs to do more, he said.
When you look at what the Americans and Europeans are spending, sometimes via defence programs that cross-pollinate commercial aircraft development projects, the sums invested run in the $20-billion and $30-billion range per year, Mr. Ebrahimi said. “It’s not with one billion, two billion here and there that we’re going to move the needle,” he said. “We’re a long way from what’s needed.”
Plotting a course to follow is also important. Many industry leaders are still calling for a specific national aerospace policy and vision, something that goes beyond the designation as a “key sovereign capability” in the federal government’s recently released Defence Industrial Strategy.
Such a policy would help focus political leadership, they say, and maintain coherence even across changes in government. It would also set priorities for action.
“Canada is one of the very few countries in the world that can design, build, certify, export and sustain aircraft and aerospace systems” from nose to tail, said Mike Mueller, president of the Aerospace Industries Association of Canada. “We can do even better. We’re seeing it on the defence side, which is great. But we also need to see it on the civil side.”
Stable support for research and development, advanced manufacturing and talent development will be critical for Canada to remain a global aerospace leader, said Pratt & Whitney’s Mr. Kumarasingam. Sustained long-term investment is needed, he said, echoing comments from other executives.
“Canada was a true aerospace powerhouse and we kind of lost that partnership between the federal government and the industry,” de Havilland’s Mr. Sweeney said, adding the first thing Ottawa could do is back its champions by buying their products. His company has pitched the idea of a national waterbomber fleet, for example. Canada doesn’t have to look past its own borders to buy surveillance and transport aircraft, either.
“I do think that there’s a renaissance that can happen in the country if we choose to grab it.”
