Feb 7 Canada's federal government on Tuesday
announced C$372.5 million ($283 million) in repayable loans for
two of Bombardier Inc's jet programs, far less than
the $1 billion originally sought by the Canadian plane and train
The loans, which come from a Canadian aerospace and defence
fund targeting research and development projects, will be used
for Bombardier's CSeries family of narrowbodies and the Global
7000 business jet, according to a statement from the government.
The contributions will be provided over four years, in a
number of installments, with the majority allocated to the
Global 7000 program.
"The repayable contributions announced today will help to
ensure that Canada remains at the centre of Bombardier's
research and development activities," Bombardier Chief Executive
Alain Bellemare said in a statement.
Bombardier initially asked Canada to match a $1 billion
injection in the CSeries program from the province of Quebec in
2016. But negotiations dragged on for more than a year as the
Liberals made requests of the company, such as changes to its
dual class governing structure.
Prime Minister Justin Trudeau's government is under pressure
to invest in Montreal, Quebec-headquartered Bombardier, after
his ruling Liberals unexpectedly won 40 of the province's 78
Parliamentary seats, far more than expected, in an October 2015
Bombardier, which briefly considered bankruptcy protection
last year after simultaneous airplane developments caused a cash
crunch, is now in a better position financially than when it
asked for the matching $1 billion.
Quebec's spending in the CSeries, along with a separate $1.5
billion investment by the province's largest pension fund in
Bombardier's rail division, could trigger a new trade feud
between the company and rival Brazilian planemaker Embraer SA
Brazil's foreign ministry in December authorized World Trade
Organization proceedings against Canada over Bombardier's
roughly $5.4 billion CSeries jetliner program, which competes
with some Embraer jets as well as the smallest products of plane
giants Boeing Co and Airbus Group SE.
Reimbursable loans are a key pillar of the world's largest
trade dispute, involving mutual transatlantic claims of unfair
support for aircraft makers Airbus and Boeing.
The WTO found that government loans used by European Union
member states to support Airbus airplane developments
constituted unfair subsidies, prompting the threat of U.S.
sanctions. But, after more than a decade, the case has yet to
complete lengthy WTO legal and compliance processes.
($1 = C$1.3182)
(Reporting By Allison Lampert in Montreal, Additional reporting
by Tim Hepher in Paris and Sweta Singh in Bangalore; Editing by