New study demonstrates high-level impact of Canadian Photonics Fabrication Centre

The chances of continued support for Canada's photonics sector are a lot brighter following the October 27 release of a glowing impact study that praises the role played by the National Research Council's Canadian Photonics Fabrication Centre (CPFC) in stimulating industry growth and competitiveness. Coming as the NRC is seeks to renew its cluster strategy — of which CPFC is a part — the ringing endorsement of the facility is part of a coordinated effort to convince decision makers of its key place in a diverse sector that is often not well understood.

Conducted by KPMG, the study asserts that CPFC has fulfilled its role of providing expertise, state-of-the-art facilities and services that most photonics-based companies would not have access to otherwise. At least 50 companies a year move through the CPFC with fee-for-service contracts to develop prototypes or conduct small pilot production runs of devices that find their way into thousands or products.

The study was commissioned by CPFC and examined 12 of the facility's key clients. The laudatory response was likely more than CPFC officials could have wished for, with the authors exclaiming that "CPFC is seen as having the highest level of intelligent, professional expert, and helpful individuals, who are running the most sophisticated, highest quality, and well-run facility imaginable".

major economic benefits

KPMG found that the 12 firms examined stand to benefit from using CPFC to the tune of $500 million in gross economic impact between 2009 and 2014, boosting sales, attracting significant investment, stimulating new R&D initiatives and collaborations and realizing cost savings. The net benefit to the firms is estimated at $250 million (assuming a 50% profit margin) with net benefits of $22 million in 2009 alone.

Industry benefits are generated with a relatively modest outlay of about $9 million annually, with $7.4 million in government funding ending March 31/10 (see related article this page).

Yet financial benefits are only one measure by which CPFC should be evaluated, according to Dr Sylvain Charbonneau, NRC's director of applications technologies with responsibility for CPFC. Charbonneau says CPFC 's overarching objective is to maximize the impact of photonics on the Canadian economy through its ability to de-risk technologies and company investment, provide an environment for networking, professional development, access to highly qualified personnel and the overall success of companies in the marketplace.

"The whole life cycle of companies is what I'm after here, not the money exchange … These kinds of semi-commercial entities are very important for the growth of the photonics cluster," he says. "It's getting harder to meet demand so a second extended shift has been added, I needed to raise the impact and customers take the life cycle very seriously. Product time to market is key, so I needed to reduce the time."

CPFC is staffed by 25 technicians, most of whom are ex-employees of Nortel Networks Corp who worked on the firm's groundbreaking OC-192 transport equipment. Fees for services have doubled year-over-year since CPFC began operations in 2005 and are now about $3 million annually and are expected to reach $4 million in the coming years. Fee revenue is returned to operations and used for new equipment to keep the facility on the cutting edge. In addition to industry revenues, CPFC also has contracts with the Department of National Defence and the Canadian Space Agency, which are now ramping up and could generate significant money for re-investment.

new national study

The importance of the CPFC to the Canadian photonics industry is reinforced in a major new report from the Canadian Photonics Consortium (CPC). The largest study of its kind in Canadian history provides an in-depth analysis of photonics activity from coast to coast and urges the government to further stimulate commercialization.

Produced at a cost of more than $200,000 and entitled Illuminating the World of Opportunity, the CPC study says there are nearly 400 Canadian firms generating photonics products for the manufacturing, energy, aerospace, environmental, automotive and aerospace sectors, to name a few. Revenue is estimated at $4.5 billion with 85% coming from exports. CPC plans a further study of photonics users, which are estimated to at 10 to 20 times the number of firms generating products.

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