The 2012 federal budget has reinforced the philosophy of a less centralized government, and more self-reliance in the space and aerospace sectors.  Some of the key issues that will impact this industry are:

– The Canadian Space Agency (CSA) budget being cut by 2.5% ($7.9 million) in 2012, and $24.7 in 2013.

– Cutbacks to other federal agencies, including the Department of National Defence

– Cutbacks to the SR&ED program.  Reductions to the SR&ED program will especially impact that space and aerospace sectors, due to the abundance of large corporations that fall under the general investment tax credit rate (to be reduced from 20% to 15% effective 2014), and the abundance of capital-intensive businesses (capital expenditure eligibilty will be phased out of the SR&ED program for 2014).

The space and aerospace sector faces continued uncertainty as the entire industry awaits the recommendations from the Aerospace Review, which will be released mid-December.