Bombardier's CS300 Aircraft, sits in the hangar prior to a test flight in Mirabel, Quebec, in this February 27, 2015 file photo.CHRISTINNE MUSCHI/Reuters
The Quebec government is preparing a special exemption for Bombardier Inc. that will allow it to reduce its employee pension funding obligations by $40-million for the year 2014.
The Montreal-based aerospace and rail-equipment giant requested the exemption and it has been granted, a spokesman for the provincial Régie des rentes du Québec said.
Under existing legislation, companies must carry out actuarial valuations on their pension plans every year – as opposed to every three years, as proposed by Quebec in new legislation that has been introduced. The annual valuation puts Bombardier's Quebec operations at a disadvantage compared with its businesses in Britain or Ontario, where no such annual requirement exists, said Régie des rentes spokesman Pierre Turgeon.
The exemption means that Bombardier will be on the hook for about $40-million less in funding requirements for the year ended Dec. 31, 2014, a year that saw reduced investment returns, Bombardier spokeswoman Isabelle Rondeau said.
"We will fully respect our [funding] commitments," she said. "They will be spread out in future in a much more predictable fashion."
The move has no connection to the current state of Bombardier's balance sheet, Ms. Rondeau added.
Bombardier's biggest project to date – the single aisle C Series commercial jet – has been hobbled by delays and a steep ramp-up in capital costs. The company has also slowed the pace of activities on its business-jet programs and production. Several analysts and observers have expressed concerns over the company's liquidity, but Bombardier insists it is not in trouble.
Earlier this week, Bombardier and European plane maker Airbus Group SE said they had discussed the possibility of Airbus buying a stake in the C Series program but that they were no longer in talks.
Trade industry publication Flightglobal said on Friday – citing unnamed sources – that Bombardier has approached Chinese aerospace manufacturer Comac as well as Airbus regarding the possibility of taking a majority stake in the C Series program and that it is "looking at a more comprehensive investment into its commercial aerospace division" as well.
Bombardier, which makes the Q400 family of turboprops, has also been talking to turboprop rival ATR, according to Flightglobal.
Bertrand Marotte