Ep. 95 – The Machining Business in Canada with Sander Boelen

By Noah Graff

This week we head to Canada, as we continue our season exploring the diverse world of machining around the globe. Our guest is Sander Boelen, founder of Allegiant 3D in Montreal, Canada. Allegiant 3D engineers and produces prototypes for OEMs in the photonics industry around the world; companies making products like lasers, medical instruments and dental scanners. 

As a used machinery dealer I’ve sold a lot of machines into Canada over the last few years. From my vantage point, the machining business generally seems to be doing quite well north of the border, and I wanted to find out why that is.

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Main Points

Noah talks about meeting Sander Boelen when Sander inquired on Graff-Pinkert’s Trumpf TruLaser Station 5005 Laser Welder it has for sale. (2:40)

Sander talks about the origins of his company, Allegiant 3D, which began in the mid-2000s as an engineering firm. The company designs products and manufactures prototypes for the photonics industry, including lasers, receivers, and various types of medical equipment. (4:00)

Sander gives an example of the types of businesses he works with, including a local producer of intraoral scanners used in dental work. ( SEE VIDEO BELOW – 6:30)

Sander talks about the machine tools that Allegiant 3D has in house to make prototypes for customers. (8:00)

Sander talks about his personal experience growing up in the southern region of the Netherlands, which he calls a great breeding ground for technology. In his college years, Sander moved to Canada to take an apprenticeship in the Physics department at McGill University, located in Montreal, Quebec. (9:00)

Sander talks about higher education in Canada. He says public education there is free and universities are inexpensive, with tuition costing around $2,500 CAD per year. He says many Americans study in Canada because of the low cost. He also says Canada has good trade schools, including one close to his shop. (11:30) 

Sander talks about Montreal, located approximately five hours from Toronto. He says in Quebec French is spoken in the street and signs are in French, but everyone knows English. (13:00)

Sander says that Montreal’s machining industry is mainly in the aerospace sector, while machine shops in Toronto, which aren’t far from Detroit, primarily work in the automotive industry. He talks about some of the aerospace suppliers in his area which range greatly in size.

Sander says Canada is a good place to start a machining company but at the same time it’s complicated to start a business anywhere in the world. (16:30)

Sander talks about the Canadian government. He says Canada has good programs that encourage business. He talks about R&D tax credits that encourage companies to be innovative and work together. (17:50)

Sander says he believes that running a machining company in Canada is not that different from running one in the United States. In fact, currently he is looking for potential opportunities to start a company in the US. He also says that Canada’s economy is very socialist, particularly Quebec. He says not needing to provide health care for employees was one reason it was easier for him to start a company in Canada, which has a public health care system. He says that successful companies in Canada often offer supplemental insurance as an extra benefit to employees. (19:00)

Sander talks about the higher tax rates in Canada. He says at a certain income bracket tax rates can be 50-55% but there are ways to decrease taxes such as investing in pensions plans. (21:40)

Sander says that the machining industry in Canada will be prosperous for the next few years and that he sees work coming back to North America. He says that though the value of the Canadian dollar is much lower than the American dollar the lower value is beneficial for exporting. He says currently the aerospace industry is taking a hit, but his business is busy right now. (23:00)

Sander talks about the advantages of having a niche, making parts for the photonics industry. (24:50)

Sander says a big challenge he is facing is having to say no to the demands of smaller customers as his company continues to grow. He also says it is a challenge to produce the right parts consistently all of the time. He says making one part well is easy, but making a lot of different parts consistently is difficult. (25:30)

Sander says the most interesting thing he learned recently is that pushing employees to work longer hours often has diminishing returns. (27:00)

Question: Is doing business with Canadian companies important for your business?

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