Remarks by Todd Young Vice President and General Manager, Turboprops Bombardier Regional Aircraft
at the Toronto Industry Network Council Lunch
Thursday, October 27, 2005

Thank you very much, Marion, for your kind introduction.

Mayor Miller, Members of Council, Ladies and Gentlemen, I am very pleased to welcome you to this gathering. The Toronto Industry Network is delighted to be able to host this lunch that builds on the success of last year's excellent event. As with last year's lunch, the purpose of this gathering is to forge closer links between the industrial manufacturers and decision-makers of this City. You may have already met some of the many senior executives, workers and association representatives here today who reflect the essence of manufacturing in Toronto.

We have again assembled for your inspection a wide group of products made in Toronto. It is quite remarkable to consider the huge range of goods made by this City's industrial sector, many of which find themselves not only into local or regional markets but are also bought by customers around the world.

On behalf of all of us at Toronto Industry Network, I would like to acknowledge all the help provided by Teresa Bailey of the protocol office in making this event possible. Further, I want to say we have appreciated the opportunity to interact with various City departments, particularly with the staff at economic development including Karen Thorne-Stone, Kyle Benham, Ian Cameron and Glenn Walker.

Aircraft manufacturing has been part of Toronto's industrial scene since 1929 when de Havilland Aircraft opened its Canadian facility in Downsview. De Havilland became synonymous with the development of short take off and landing aircraft such as the Beaver, Twin Otter and Dash Series that put Canada on the aviation map.

Since 1992, Bombardier has owned the Downsview facility and manufactures the Q-series (as in really quiet) Turboprop Regional Airliners. Additionally, we produce components and the final assembly of the Global Series Business Aircraft. Further, the wings for the Bombardier Learjet 40 and 45 models are manufactured by us and sent to our plant in Wichita, Kansas.

At present, Bombardier employs 3,100 highly skilled people in Downsview. We are the anchor for almost 100 other aerospace companies in the GTA who employ an additional 9,000 people. Bombardier is pleased to support the community through events such as the Papal visit in 2002 and the 2003 Rolling Stones concert staged to revive Toronto's tourism. Bombardier is also the world-leading manufacturer of rail transportation equipment and maintenance solutions. Bombardier has manufactured the entire fleet of almost 400 Bi-level cars for GO Transit, and we are also responsible for the maintenance of GO's fleet, ensuring that the trains carry passengers safely and on-time every day. Bombardier also manufactured the entire fleet of new TTC subway cars, and looks forward to continuing to be the supplier of choice for passenger rail solutions in Toronto.

With the increasing orders for the Q-series turboprop, we have a growing confidence in the future for our Downsview facility.

Today, our facility can see a promising future as our markets grow; this brings me to the theme of this year's lunch, which is Business Retention.

Frankly, Toronto's industry is facing difficult times. While a few of us are doing well, many are facing very serious challenges. We are all confronted with stiff competition from international competitors and our sister plants. Rising energy costs, uncertain electric power supplies, rising local land costs and competition from the regions on our doorstep.

While there have been some new companies coming to town and expansions of existing ones, the list of name companies that have left Toronto during the past two years is depressingly impressive: Imperial Oil, Kodak, Labatt's, Colgate-Palmolive, Reichold Chemicals, DRG Packaging and so on. The City's own statistics tell the story of the decline of manufacturing in Toronto.

However, the Toronto Industry Network is here today because it believes strongly in Toronto's future as a place to live and do business. We know that industry provides well-paying, skilled jobs and fills an important niche in the employment mosaic. We want to continue to be a part of Toronto.

T.I.N. members employ about 35,000 people and we calculate that approximately three times that number find work with our suppliers and direct customers in Toronto. Many of our employees make their homes in Toronto. Industry helps to support local retail and skilled independent trades. Part of the benefit of our presence in our communities is the tangible support of activities such as children's sports teams, social services such as the United Way and the Daily Bread Food Bank, health-related services, and special community projects. Every time a company leaves Toronto, its passing causes a ripple effect in the community affecting those who have become unemployed, the suppliers who have lost business, the local hockey team that has to find another sponsor, and so on. The remaining companies and residents of Toronto have to take up the shortfall in their property taxes and City services they purchase. How can we all do a better job of keeping business here? Might we suggest four ways:

1. Costs – For the past 10 years, companies have had to reduce their costs substantially to remain competitive. It has been a brutally painful time that has not ended. However, as in the case of my company, it has emerged stronger and more resilient. We suggest the City has to take a very serious look at its own costs in relation to its core businesses.

2. Competitiveness – Toronto has its competitors too. Not only are the 905 communities vying for our business but also the enticing call comes from places like Alberta. We really commend Mayor Miller and his Council for ensuring that development charges would not apply to plant expansions and new construction. Reforming the property tax ratios is another key initiative, which will send an important message that Toronto is business friendly again. Revising the water rate structure so that major water users including hospitals, do not unfairly subsidize residential capital works, such as wet weather flow, is a priority.

3. Consultation – We think the dialogue between industry and the City has improved greatly. We participate on the round table for the environment and we look forward to sitting with Mayor Miller at his roundtable for business. T.I.N. meets often with City staff (sometimes at their request). We encourage the City to find ways to better communicate internally to ensure that policies and programs support the needs of industrial employers and do not have unintended adverse effects. This will go a long way towards improving the relationship between the City and stakeholders such as industry. We can offer expertise and help in overcoming some of the City's challenges.

4. Preserving industrial lands & employment areas - Our industrial neighbourhoods are under punishing attacks from developers wanting to convert properties into residential or big box assessment. The risk is low and the profit high. Further, the new official plan allows many uses such as schools and places of worship in our neighbourhoods putting people at unnecessary risk and our businesses in unenviable positions. We applaud Planning and Economic Development's efforts to protect our neighbourhoods, but much needs to be done. Toronto needs its industrial lands to provide future employment.

Our businesses are benchmarked all the time against the industry average and we had better be in the top quartile or we will risk unwelcome scrutiny. Toronto must never be satisfied with average results. We must devise ways to be seen to be more competitive.

To conclude, one of Toronto's most important assets besides its residents, are its industries that provide employment, pay taxes and help put our great City on the map. How we, and others on the outside, perceive the City plays a key role in the struggle for business retention. While there are many very positive reasons for doing business here, we also think there are important things that can be done to improve the City's position. We look forward to working with you to achieve this goal.

Thank you for your attention.