Canada Treads Softly with Bombardier Funding

The Brazilian Government's understanding, shared by Embraer, is that the Canadian Government's subsidies to Bombardier violate Canada's WTO obligations.

Brazil is challenging Canadian and Quebec government financial support for the C Series, saying it has enabled Bombardier to sell its CS100 and CS300 commercial airliners at "artificially low prices".

"We are very confident that all of the investments and programs comply with all WTO and worldwide trade rules", Bombardier said in a statement.

The plane maker has been appealing for US$1 billion in federal assistance since late 2015.

Brazil's Foreign Ministry said in a statement Wednesday that government subsidies to Bombardier have created distortions in the worldwide aeronautical market that are incompatible with WTO rules and that negatively affect Brazil's interests.

The move comes just a day after the Montreal-based company announced C$372.5 million ($283 million) in repayable contributions from the Canadian government for development of Bombardier's C-Series aircraft and Global 7000 business jet.




Under WTO rules, if Canada and Brazil are unable to reach agreement in the next 60 days, the complaining party - Brazil - may request adjudication. "New contributions have been announced, which may further deepen distortions in the aircraft sector, to the detriment of Brazilian interests".

The CSeries programme was supposed to enter service by the end of 2013, but Bombardier encountered technical setbacks in flight test that delayed the programme by 2.5 years.

The Québec provincial government a year ago invested $1 billion to take a 49% stake in the CSeries program. "It is essential to restore a level playing field to the commercial aircraft market and ensure that competition is between companies, not governments".

Embraer offered its support of the Brazilian government's action.

Bombardier spokesperson Simon Letendre said in statement emailed to CBC News that the company is "very confident that all forms of support provided to Bombardier.are fully compliant with Canada's worldwide trade obligations". It is significantly less than the US$1 billion originally requested by Bombardier.

"This is the best plane in its class, so people are finding ways to come after us", he said.

(Copyright © 2015. All Rights Reserved.)
 
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