Welcome to the 128th season of the Canadian Club Toronto, Canada's Podium. For over a century, this platform has been a gathering place for visionaries, public figures, and decision makers to discuss the most pressing issues of our time. We've been having important discussions and debates around this podium for well over a century. I call this a historic podium of record. Our club's always been a forum for visionaries, public figures, and decision makers to command attention to the issues of our time.
The Canadian Club is one of the most important podiums anywhere in the world that a Canadian can speak to, tell Canadians what it is that they think, develop those thoughts. And so I want to thank you for that very very much.
Please join me in thanking our esteemed panelists today.
Through our programs and events, including our youth and young leaders programs, our diversity partnerships, our joint events, and our media and social media opportunities, we offer you access to dynamic, political, social, and business figures from abroad and right here at home. The platform from which the eloquence of Canada has flowed all of that time. Whether it be business, education, politics, sports, arts, and culture. If someone wants to say something to Canadians about this country and about the future of this country, this is the venue you choose.
Good afternoon again and welcome back. I hope you had a chance to enjoy lunch and the conversation at your tables. My name is Shazan Chu, president of Canadian Club Toronto. To those joining us online, welcome. We're glad to have you as part of this important discussion. Today's event is generously sponsored by TD and PWC. We thank you both for your commitment to supporting public dialogue and Canadian innovation. And of course, thanks to our seasoned sponsor, the Canadian Bankers Association, to Air Canada as our official airline sponsor, and to Canada's Forest Trust, which helps us reduce our carbon footprint by planting and maintaining a smart forest in our honor. If you haven't already done so, I encourage you to visit our website at canadianclub.org. You'll find membership information, upcoming events, and on demand recordings from past sessions. And please also consider sharing today's discussion on your favorite social media platform. It helps us reach new audiences and extends the conversation beyond this room. Now, I'm sure many of you have questions about the future of aerospace defense and innovation in Canada. Please use the question cards on your table. Our team will collect them and share them with today's moderator. And if you choose to do so, please write clearly and legibly to save our moderator from squinting. Thank you. For our online participants, please use the submit a question button on the right hand side of your screen. At this time, I would like to introduce our guest of honor. Éric Martel is the president and CEO of Bombardier, a role he has held since 2020 after previously serving as CEO of Hydro Quebec. An engineer by training, he has built a distinguished career in aerospace and energy leadership. He is also a strong advocate for education, innovation, and community engagement across Canada. After remarks, Mr. Martel will sit down with the honorable Parn Bey, corporate director and senior adviser at Teneo, who will moderate today's conversation. Eric, Canada's podium is yours.
So ladies and gentlemen, good afternoon. It is a real pleasure for me to be here today. Our country is at a pivotal moment. Over the past few months, we've seen a generational shift in how our federal government approaches defense investment with Canada's commitment to reach 5% GDP in defense spending by 2035. This could position Canada once again as a key player on the global security stage if the investments are done in a strategic way, leveraging also the immense capability we have in Canada but also seeing them as a nation building opportunity. This will drive productivity and innovation in our country. Achieving this will require strong partnership with government, industry, and the people who turn ideas into action every day. What's remarkable is the level of public support for this change. Canadians understand the importance of protecting our nation, but sustaining that support depends on showing the economic and social benefits. Defense spending isn't just about ships or aircraft. It's about jobs, innovation, and communities that thrive. As the leader of a company that has been designing, building, and supporting the aviation industry for over 30 years, I see firsthand our innovation, investment, and human talent intersect with investment and others. Every aircraft we deliver, every research initiative we undertake at Bombardier contributes not only to our company, it contributes to Canada's economy and global reputation as well. In 2024, Bombardier's operations supported 48,500 jobs in this country and contributed 7.4 billion to Canada's GDP. Salaries for these employees total more than $3.2 billion and government revenue reached 1.2 billion through taxes and income and production. With over 95% of our aircraft, actually more than 98% now destined for international markets, Bombardier contributes to 5% of Quebec's total exports and we also represent 1% of all Canadian exports. These are not just numbers, they represent livelihoods, communities, and expertise that can sustain a national industrial base for decades. Looking forward, we project that between 2025 and 2029 our manufacturing activities alone will contribute an estimated 39.6 billion to Canada's GDP and support over 258,000 jobs across the country. This includes 3.3 billion in GDP contribution from R&D investment, which cultivates skills, innovation, and new technologies that benefit industries and academia. Bombardier's R&D program employed thousands of interns and students every year, ensuring a continuous transfer of knowledge. Canada is one of very few nations capable of designing, engineering, building, certifying, and servicing aircraft to the highest standard. Actually, if you count the number of countries that can do it from A to Z, there's about four of them and we are one of them. And yet key questions remain. How can Canada contribute to drive innovation while supporting economic growth and strengthening national security? How can strategic investment maximize our economic prosperity and our sovereign security capabilities? Other countries like European Union, the UK, Australia, and notably the US have linked national security to domestic industry a long time ago. They've made strategic investments that strengthened their militaries and their economies. I always like to give the example of the French. De Gaulle, who was a general before he became president, said we need to build this capability in our country. That was in the 1960s and today the French are probably after the Americans the most autonomous country in building military capability. So by investing strategically, we can build a robust, innovative, and sustainable defense industrial base, benefiting Canadians from coast to coast, and create jobs and employment. Canada already has a strong foundation. Our defense industry contributes nearly 10 billion dollars of our GDP and supports around 80,000 jobs. Yet much of this work focuses on supporting foreign product. This is okay. But in areas where we have comparative advantage, we can also develop and support homegrown solutions. We can be a link in value chains controlled abroad, but can also lead some of these value chains by sitting on top of the innovation ladder for some of the capabilities our women and men in uniform need. In my view, if we are able to support our allies with innovative solutions, it will make Canada more indispensable on the international scene. We as a country have the talent and the expertise from coast to coast and we have the will, the skill, and the drive to do more to develop our own products and technologies while creating opportunities for Canadians here at home. Thank you.
Thank you.
Thank you Eric very much. Well, so Eric, it is five years ago as of this spring you came back to Bombardier and took on the responsibility of CEO. What did things look like then?
Yeah, it was a difficult time. If you go back to April 6, 2020, the whole world was stopped. COVID was hurting us at that moment. Coming back was challenging because the first nine months at Bombardier I had to restructure the company. We sold our train division, our CRJ business to MHI, and one of our plants in Belfast. But the idea was to focus on the right thing and we felt we were the best private jet maker in the world and could compete nose to nose. We made difficult choices, stopped producing small jets like the Learjet, focused on the medium and large segments, and accelerated our services business. Our services business was $1 billion US in 2020, last year it was $2.2 billion, more than doubling in four years. We also created Bombardier Defense. We made the right strategic choices, executed properly, and it's a turnaround story. Today we're in a very good place and will grow our defense and services business significantly.
It wasn't always that way that you would expect that if there was news from Bombardier that was going to be good exciting news, but you underscored the fact that 1% of Canada's exports are produced by Bombardier.
Absolutely. And there are a number of things. 50,000 jobs directly and indirectly created by Bombardier.
Um, some of the things you didn't mention, you have just been recognized as part of the TSX30. Over the last three years you're among the best performing companies on the TSX. Your stock compared to where you were when you came in 5 years ago is about 1,400% higher.
than it was at that time.
I hope you all bought a few. I hope you all bought a few seconds.
I wouldn't applaud him for that. He didn't tell me he was going to do that at the time.
I'll tell you the next time
if you'll let me know next time.
But that brings us then to an important question. You've unveiled the Global 8000, the fastest commercial business jet available today, at Mach 0.94, with a range of 8,000 nautical miles. You can fly from Los Angeles to Singapore non-stop. Truly remarkable Canadian technology and ingenuity. Can you sustain the level of growth you've seen, particularly with the political and economic uncertainty in 2025?
You raise a good question. Technology and innovation are part of Bombardier's DNA. The Global 8000 is the flagship of the entire industry. But we want to serve our country even more. There are only about four countries that can design, build, and certify a plane, and we are one of them. This capability will be needed to protect our country. It requires government, industry, and labor working together. We have existing products like the Global Eye, based on our platform, which we developed with Saab. It took time, but now Sweden, UAE, and France have bought it, and we're taking market share from large American companies. We can do more if we are synchronized. I've seen a change in tone in Ottawa over the last few months. We can work with DND to anticipate needs and develop new products, create jobs in Canada with well-paid positions in aerospace and defense. If we get supported, there's no limit to what we can do in this country.
Let's pursue that. I'm a former minister of national defense. I applaud the announcement that the government has committed to 5% of GDP. For too long we have contracted out our defense to others. When you do that, you become a protectorate. What Mr. Carney is talking about is assuming more responsibility for our own defense. If I understand you correctly, there's an opportunity not just to buy off-the-shelf equipment, but to create product in Canada for our defense and to sell to others.
Yeah, our procurement practice needs to evolve. The military didn't have money for many years. The easiest solution was to buy from the Americans off the shelf. Now we have the possibility to work ahead, develop solutions, be a leader in at least one thing. We're working with the Pentagon on an 80s surveillance plane, delivering the third prototype. The US will buy a bunch and then market it to others, creating jobs in the US. We're building the Global in Toronto, but the modification is done in the US. Eventually we could do that here too.
Eric, when I was president of the Canadian Chamber, I often heard from Canadian companies that their toughest sale was at home. They made their first sale abroad, and the first question was 'Has your own country bought it?'
What's the track record here in Canada in terms of our using government procurement, federal or provincial, to actually drive development in Canada?
The truth is it's been non-existent. Bombardier has been exporting 98% of its products. Canadian government procurement has been zero for many years. That's an opportunity to turn it around. We could have worked together on a big procurement two years ago, but the easier solution was to buy from Boeing. Now we're working with Leonardo on a maritime patrol airplane to replace the P8 that Canada just bought. If we had known 10 years earlier, we could have developed a Canadian product that others would now buy. We need to work together to anticipate needs, develop products, and create jobs. We have the innovation and R&D capability to serve our country.
Okay? In terms of first being self-confident, but also having influence on the rest of the world like we used to. By the way, during the Second World War, we built 16,000 airplanes in five or six years. We had a can-do attitude. We can do this. Our aerospace industry exists because of that. Now the government is committing to equipping the Canadian forces. There's talk about onshoring business. We can't do everything. Does it make sense for us to make fighter jets in Canada?
I think the fighter jet is a specific question. We need to be smart. Many countries build fighter jets, it would be tough to compete and take 12-15 years. But we can be amazingly good in a niche market, like early warning airplanes. We anticipated that 12-15 years ago and now every country wants our product. We can partner on fighter jets, maybe take a part of the next generation. The government would need to decide to be at the table. In the shorter term, there are opportunities with drones and payloads. We can work with the military to develop what they need.
So if we can't do everything and we have to identify niches, we want to look at niches where there's a need in Canada...
But where we have an expertise in Canada that makes us competitive with the rest of the world, and that we can build upon in the aerospace sector. What are some of those niches that you would see? You mentioned drones as a possibility.
Drones is a possibility. Surveillance is another. Surveillance is another one, you know, early warning system, maritime patrol, control, maritime patrol is another one. So we're considering right now. We announced a partnership at the Paris Air Show with the Italian, which is, you know, these guys are very capable. So now we're teaming up. Our team are working together, and this could be the next product that could replace the P8 of Boeing, as an example.
And does the government today have a defense industrial strategy?
