Canadian Manufacturing

Bombardier cash reignites provincial, industry fights over government funding

Ottawa was on the defensive Wednesday after critics from all areas of the country questioned how the feds settled on $372.5 million in loans for Bombardier, while neglecting other industries


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The latest Bombardier funding will support jobs in Ontario and Quebec. PHOTO: Bombardier

OTTAWA—From the West came the calls of a double standard: why are the federal Liberals giving Bombardier Inc. a $372.5-million loan while thousands of jobs in the oil and gas industry remain consigned to the dustbin?

From Quebec, cries that the loan for the aerospace company was nothing compared to what the federal government has giving the Ontario auto sector.

From behind closed Liberal caucus doors, it was internal pressure from the Quebec caucus that partially forced the government to finally agree on some sort of financial assistance for the company, nearly a year and a half after it first began agitating for support.

And in front of those doors Wednesday morning, the same Liberals were fending off accusations that the loan was nothing more than a political play.

There seem to be few companies in Canada that can set off more political bombs than Bombardier.


Related: Brazil files WTO complaint against Canada over Bombardier assistance
The company’s repeated return to the federal till for extra funding—it has been receiving government loans since at least the mid-1990s—has made it a target for legitimate questions about how Ottawa doles out cash, said Martha Hall Findlay, the former Liberal MP who is now chief executive officer of the Canada West Foundation.

“How are these decisions made? What are the criteria?” Findlay said.

“What really happens is the more people realize that there’s no consistency, that there’s no real basis in evidence in the larger sense for subsidizing X as opposed to Y, or A sector as opposed to B sector, people see the incredible level of subsidization . . . more and more people ask questions. And that’s exactly what you’re seeing again now.”

Round after round of questions were asked in the House of Commons Wednesday on the Liberals’ decision to extend the company a $372.5-million loan through a government fund set aside for initiatives in the defence and aerospace sectors.

That fund sets specific terms on what the money can or can’t be used for, as opposed to the government merely handing over the cash the company wanted. As it stands, it is still far less than the $1 billion the company wanted when it first began making its pitch for federal assistance in 2015.

“I understand that the situation is changing, it is evolving, but obviously the federal government is not supporting a Quebec company the same way it supported cars in Ontario, oil in the west, Muskrat Falls in the Maritimes,” said Bloc Quebecois leader Rheal Fortin.

That it’s a loan keeps the money off the Liberals’ deficit tally, since it is registered as an asset. Not that they can count on the repayment to bolster their bottom line in the immediate future—the company will repay the loans through royalties on each aircraft sold.

But surely the government obtained some immediate benefit for Canadians? asked the NDP.

“You know what? We have no idea what’s actually in that deal,” said NDP leader Tom Mulcair.

“And there appears, from what we have been told, that there’s no guarantee of maintaining those jobs in Canada.”

Innovation Minister Navdeep Bains insisted the funds—being handed out in instalments over four years to support the Global 7000 and CSeries aircraft projects—will secure at least 4,000 jobs.

While the planes are built and finished in plants in Ontario and Quebec, the economic spinoff will benefit the country, Bains said.

“We’re seeing aerospace sector companies emerge across the country. It’s not only about Montreal, Quebec. It’s not only about Ontario. It’s about western Canada. It’s Atlantic Canada,” he said earlier Wednesday.

“It really speaks to the different regions, and these jobs are dispersed across the country, which is really important for our supplier base, which is so integrated with the aerospace sector.”

Still, it was only members of the Liberal Quebec caucus that got a special mention for their work on the agreement.

“I would like to thank the members, the 39 MPs from Quebec, who played a leadership role in the significant investment that we made in the aerospace sector,” Bains said.

Interim Opposition leader Rona Ambrose said the prime minister was sending a dangerous signal.

“Has the prime minister thought through the message that he’s sending to Canadians across the country when one favoured business, Bombardier, receives hundreds of millions of dollars in taxpayer handouts while he’s punishing others with higher taxes and a carbon tax?,” she asked.

“Does he plan to also bail out the dry cleaning shop in Fort McMurray or a diner in Stratford that’s gone out of business because of his bad decisions?”


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