MONTREAL – Canada’s government has finished studying a request from struggling planemaker Bombardier Inc for $1 billion in aid and it is preparing to make a comment within weeks, according to a resource with direct understanding of the situation.
Bombardier wants the cash to help finance its new CSeries passenger jet, which faces lots of competition from Europe’s Airbus Group SE and the United States’ Boeing Co .
The company is based in Quebec, which last October invested $1 billion within the CSeries, and today Bombardier and the province want Ottawa to follow along with suit to assist protect thousands of well-paid jobs.
“The due diligence is performed,” the origin said. “The government is preparing to make an announcement in a matter of weeks, not months.”
Bombardier formally asked for federal assistance on Dec. 11, and also the two sides are still referring to what form possible aid might take, the origin added.
Prime Minister Justin Trudeau told Bloomberg Television on Thursday that the CSeries was a “fabulous” plane and cited what he explained was significant support planemakers Airbus, Boeing and Brazil’s Embraer SA received from their respective governments.
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Pressed around the timing of a possible announcement about aid, he replied: “We’re taking our time … to ensure we’re doing what’s right within the interests of the Canadian industry and high-quality jobs” as well as respecting taxpayers.
A spokesman for Innovation Minister Navdeep Bains, that has direct responsibility for that file, said talks forwards and backwards sides were continuing.
“There has been progress within the discussions, but a choice has not been reached,” he explained.
Senior government sources say that while Ottawa will probably help Bombardier, it dislikes how the $1 billion Quebec deal was structured.
Quebec wants the CSeries to become spun off right into a separate entity, with Ottawa taking a one-third stake. This could remove the 100-150 seat jet program from the company’s books and boost its short-term financial results.
The first CSeries jet will enter service in 2016 after many years of delays. Bombardier has booked just 243 firm orders. It currently controls 50.5 per cent from the CSeries, while Quebec includes a 49.5 percent stake.
Under Quebec’s proposal, if Ottawa matches the province’s $1 billion contribution, both governments would own one-third stakes within the CSeries. Bombardier might have the remainder.
? Thomson Reuters 2016
