Aerospace funding yet another corporate handout

Opinion

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This article was published 18/01/2025 (232 days ago), so information in it may no longer be current.

Last week, the provincial government awarded Magellan Aerospace a combined $17 million in funding, with $8 million as grants and $9 million in the form of a loan to be repaid over 12 years.

Premier Wab Kinew declared this as evidence of “showcasing Manitoba as a leader in the aerospace sector and creating good high-paying jobs for Manitobans,” along with “growing the economy and securing the future of Manitoba as an aerospace hub.” The announcement was celebrated by the company, the plant chair of the union local and the head of Red River College, which has a long-standing training partnership with Magellan.

It seemed by all accounts to be a “win, win, win,” as Kinew put it.

Unfortunately, this funding package is nothing more than a blatant corporate subsidy — and an extremely ethically questionable one at that.

For starters, Magellan is a publicly traded company that is majority owned and chaired by N. Murray Edwards, the 35th richest billionaire in Canada. Edwards made his fortune by building Canadian Natural Resources Limited (CNRL) into one of the biggest oil and gas producers in the country, and also has major stakes in many other companies including the Calgary Sports and Entertainment Corporation (which owns the Calgary Flames), Resorts of the Canadian Rockies (which owns six ski resorts in Canada) and Imperial Metals. Last month, Imperial Metals was charged with 15 violations of the federal Fisheries Act for the catastrophic Mount Polley tailings disaster of 2014, which has been described as the worst mining disaster in B.C.’s history.

Of all companies in Manitoba to give $17 million in public funding to, one that is majority owned by Edwards — who has an estimated net worth of $4.6 billion — should already be close to the bottom of the list for a supposedly progressive government. If Edwards wants to invest in an “advanced state-of-the-art machining centre” and “new test environment that will support new space product development,” as boasted about in the province’s news release, he certainly doesn’t require public funds to do so.

Magellan is a private enterprise, with eventual profits largely flowing to Edwards, and should be required to invest its own money, not the public’s. Unfortunately, this decision continues a long-standing trend of many public subsidies to Magellan, including the city selling a piece of land valued at $638,000 to the company for $1 in 2010.

Then there’s the question of jobs.

Aerospace companies like Magellan are highly capital-intensive operations, using incredibly complex machinery to create high-value parts. The entire workforce at the Winnipeg plant is only 650 people, with this new funding anticipated to create another 64.

These jobs are highly skilled and well-compensated, surely, but this is far from the most efficient use of public funding for the purposes of job creation. $17 million is an awfully steep price for 64 jobs, representing more than $260,000 per new hire, particularly given that Manitobans won’t see any direct benefit from it.

Instead, this funding should have gone to hiring for public services like health care or education. If manufacturing simply had to be the beneficiary, funding jobs that would help advance the province’s infrastructural preparedness for future climate catastrophes seems far more prudent.

Finally, and most importantly, is the ethical issue of what Magellan actually makes. Along with producing various commercial aerospace products, Magellan manufactures many parts for military operations, most notably via its prominent participation in the F-35 program. The company’s Winnipeg plant is one of the largest contributors to F-35 production in Canada, churning out the crucial horizontal tail assembly that is eventually mounted onto fighter jets on Lockheed Martin assembly lines in Texas.

This contract is extremely lucrative, expected to generate about $1.5 billion in revenues for the company over its projected lifetime. But these F-35s are currently being used to wage incredibly lethal and destructive war by Israel in its war against Palestine, which has been described as genocide by Amnesty International, Human Rights Watch and many top United Nations officials. More generally, these fighter jets are immensely costly, environmentally devastating and contribute to further escalating a global arms race that has catastrophic implications.

Kinew and the NDP want it to seem like this $17 million in funding is good for Manitobans who are concerned about jobs and economic security in increasingly turbulent times.

Yet it’s nothing more than a corporate handout to a billionaire-owned company that won’t provide any real benefits to the province — and instead make the world an even more dangerous place.

James Wilt is a PhD candidate at the University of Manitoba and the author of three books, including Dogged and Destructive: Essays on the Winnipeg Police.