Statistics Canada just released the results of a survey on self-employment in the recent recession – apparently there was an increase of people who are self-employed by over 4.3% between October 2008 and October 2009.
Surprisingly, this is not solely a result of people being laid off, as paid employment fell by 3.3%. As well, most of those who were laid off were originally working in the manufacturing industry, whereas those who are now self employed are in the services industries.
Another interesting thing to note is that those who were involved in the growth in self-employment were mostly women (58%), even though it was mostly men who were self-employed before October 2008.
The aerospace and defense industry is one of the few sectors in manufacturing that is currently not only surviving but thriving amid the recession, despite the grim predictions for job losses and bankruptcies among other Canadian manufacturers, plummeting oil prices, and the ever fluctuating CDN dollar. Employment rates and revenue are even continually on the rise.
In the past year, Bombardier Aerospace introduced their much anticipated line of CSeries jets. Magellan Aerospace and Pratt & Whitney Canada invested big time in their Montreal and Winnipeg operations.
According to the AIAC (Aerospace Industries Association of Canada), based in Ottawa, the aerospace sector directly employed 82,000 Canadians in 2007. This is a significant increase from the 79,000 employees working in the industry just a year prior. Aerospace revenue increased by half a billion to $22.7B.
Aircraft parts, components, and planes, jets, etc. account for 55% of the overall revenues for the aerospace sector, the majority of which is generated by exports, especially to the US and European countries. Military sales increased by $5 billion last year, a rise of 18% from 2006.
Helping to fuel the exponential growth of the aerospace sector (no pun intended) is the increase in commercial air travel. The Current Market Outlook for 2007-2008, released by Boeing, predicted that air passenger travel will increase 5% per year, and cargo travel by 5.8%. The forecast extends these numbers for the next two decades.
Quote for April 22nd, 2009:
“The modern airplane creates a new geographical dimension. A navigable ocean of air blankets the whole surface of the globe. There are no distant places any longer: the world is small, and the world is one.”
- Wendell Willkie
Lines of credit have almost completely dried up in this recession, and it’s harder than ever for businesses to fund their new development projects. Ontario’s Advanced Manufacturing Investment Strategy (AMIS) is a great venue for Ontario manufacturers to pursue. What’s more, AMIS is available to companies from all manufacturing sectors in Ontario. The $500 million dollar provincial program focuses on:
- industrial R&D
- design/prototyping/engineering
- new/ advanced products/materials
- advanced manufacturing processes
- robotics/software development
- waste reduction
- energy conservation
AMIS, when granting a loan, can provide up to 30% of the total eligible costs of a project (up to a limit of $10M). This funding is given in the form of a repayable loan. The loan is interest free and principal free for up to five years, providing the company receiving it meets job and investment targets mutually agreed upon between the company and the province. After that period, the repayment rate is the province’s cost of borrowing, plus an additional 1%.
To be eligible, projects must create and/or retain at least 50 jobs. Alternatively, the projects must invest $10 million over the 5 year period. The costs eligible for the loan (excluding ongoing costs of production or operations) include:
- research and development
- equipment and machinery
- materials
- construction/facility improvements
- training
- overhead
- labour (one time only)
The terms for the loan are negotiated individually. After completing the application process, most companies receive word of the province’s decision within a relatively speedy 45 calendar days. This sometimes may take longer for the more complicated applications. The Minister of Finance, along with the Minister of Economic Development, approve or deny applications based on the guidelines of the AMIS Assessment Committee.
What’s more, for those manufacturers who regularly claim for SR&ED, receiving an AMIS loan has no impact on SR&ED eligibility. The AMIS loan is not affected if a business has already received an SR&ED return or income tax credits. Companies that have received AMIS funding often include extra cash procured by SR&ED towards their projects. In fact, any business that has received SR&ED credits is more likely to be meeting the AMIS eligibility requirements.
For more information about AMIS, visit http://www.ontariocanada.com/ontcan/en/progserv_amis_en.jsp
519.623.2486
