Question Period Note: CANADA’S AEROSPACE SECTOR - IMPACT OF U.S. TARIFFS

What has been the impact of U.S. tariffs on Canada’s aerospace sector?

• The Government of Canada is committed to maintaining a strong Canadian aerospace industry and the good-paying jobs that come with it.

• The Canadian and U.S. aerospace industries are highly integrated, and spur innovation and economic growth on both sides of the border.
• Canada is investing in the aerospace industry to strengthen it and build a strong Canadian economy that is connected to reliable trade partners.
• U.S. tariffs are hurting million of people on both sides of the border by raising costs, raising prices, and lowering demand.
• Canada will continue to take all measures necessary to support Canadian workers, businesses, and consumers.

U.S. Section 232 National Security Investigations in Aerospace

• The Government of Canada continues to argue that Canadian aerospace products do not constitute a national security risk for the U.S. In fact, the Canadian products currently under review contribute to a broader North American resilience and security, from which both Canada and the U.S. benefit.

The Canadian aerospace sector is of national strategic importance to Canada and a key industry for Canada’s national security. In 2024, it contributed $34.2 billion to gross domestic product (GDP) and 225,000 jobs to Canada’s economy. Investing $1.2 billion in research and development (R&D) in 2024, the sector is Canada’s largest R&D spender among manufacturing industries. The sector actively participates in global supply chains and ranked in the global top five across civil flight simulators, engines, and aircraft segments.

National in scope, Canada’s aerospace sector is home to a wide range of industry-leading manufacturers of aerospace products, including aircraft, helicopters, engines, simulators, landing gear, and aerostructures and components as well as space robotics and satellite systems for communications and Earth observation. The industry also supplies a wide array of maintenance, repair and overhaul (MRO) services for aircraft and aircraft components.

Canada and the U.S. share a deep and longstanding industrial relationship in aerospace characterized by highly integrated supply chains and significant cross-border investments in products, facilities, R&D, and labour.

The aerospace sector is highly export oriented with the U.S. comprising 63 percent of Canada’s current global exports. Currently, Canadian exports of aerospace products that are CUSMA compliant enter the U.S. duty free. However, any changes to this approach resulting in Canadian exporters facing tariffs would be very detrimental to the sector.

On May 1, 2025, the U.S. Secretary of Commerce announced an investigation to determine the effects on the national security of imports of commercial aircraft and jet engines, and parts for commercial aircraft and jet engines. On July 1, 2025, the U.S. Secretary of Commerce announced a separate section 232 national security investigation of imports of unmanned aircraft systems (UAS) and their parts and components. These investigations have been initiated under section 232 of the Trade Expansion Act of 1962 and could eventually lead to the imposition of new tariffs. As part of these investigations, the U.S. Department of Commerce requested public comments and Canada has provided submissions to both investigations.