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The Quebec government’s decision to inject another US$300-million into Airbus’s A220 jet amounts to an all-or-nothing bet on salvaging an investment that has already cost Canadian taxpayers almost $2-billion and counting.

Quebec is hoping the additional public money, which will push the provincial government’s direct investment in the A220 to nearly US$1.4-billion since 2015, will increase its odds of eventually recouping its investment in a venture that has seemed cursed from the outset.

While the plane originally developed by Montreal-based Bombardier Inc. has been hailed as a technological marvel that can help airlines slash their fuel costs and carbon emissions, its success will ultimately depend on Airbus’s willingness to promote it, possibly at the expense of its own A320 family of aircraft. The A220 competes with Airbus’s A319neo, which is assembled in France and Germany, while a proposed stretch version of the A220 would go up against the A320neo.

That is just one reason why investing more public money in the A220 is hardly a risk-free proposition. Quebec has no say in how the program is run. And Airbus alone will determine whether it steers new or existing customers to the A220 from its A320 family of planes, which remains a cash-cow for the company.

For now, the injection of an additional US$300-millon will allow the Quebec government to maintain its 25-per-cent stake in the A220 program as Airbus spends US$1.2-billion to ramp up production of the 100- to 150-seat jet at plants in Mirabel, Que., and Mobile, Ala. Airbus has owned 75 per cent of the A220 program since 2020, when Bombardier ceded its remaining interest in the former C Series aircraft that it had spent an estimated US$6-billion to develop.

The Quebec government put up a cool US$1-billion to rescue the C Series program in 2015, while the federal government provided hundreds of millions of dollars in loans to help Bombardier cross the finish line – a destination the company failed to reach before being forced to surrender control of the aircraft to Airbus for all of $1 in 2018.

The move to pump more public money into the A220 now aims to secure assembly jobs in Canada and increase the odds that Quebec’s stake – which it valued at zero dollars 2021 – will be worth something by 2030. That is when Airbus will now have the right to buy Quebec’s interest, instead of 2026 under the 2018 deal.

“If we hadn’t reinvested, the government’s stake in the A220 would have been practically eliminated and the chances of earning a return on our investment would have been practically non-existent,” Quebec Economy Minister Pierre Fitzgibbon told a Friday news conference alongside Premier François Legault and Airbus Canada president Benoît Schultz.

Under last week’s agreement, Airbus will maintain at least 2,500 jobs at its assembly plant in Mirabel, north of Montreal. If employment falls below that level in 2028, Quebec will have the right to require Airbus to reimburse a portion of the US$300-million it is investing now, based on a sliding scale. Only if employment falls to zero would Quebec recoup the full amount, though it is unclear whether such terms would or could be ever enforced. Companies renege on job guarantees all the time.

Airbus delivered 50 A220s in 2021. That compares with 446 deliveries in the 320-family of planes in 2021, including A319neos. Overall, the French-based aerospace giant has an order backlog of more than 6,300 A320-family planes, compared with about 500 orders for the A220.

Airbus currently offers two A220 models. The A220-100 seats between 100 and 120 passengers, while the A220-300 can seat up to 150 passengers. The company has been non-committal about launching a 160-seat-plus version of the A220, even though it inherited production-ready designs for a A220-500 from Bombardier. The fear of cannibalizing sales of the A320 likely has something to do with that.

Industry experts expect Airbus will hold off offering the A220-500 until customer interest in the A320neo wanes. The longer that takes, the lower the odds that Quebec will recoup its investment by 2030. Airbus is not expected to begin to turn a profit on A220 production until 2025 at the earliest, when it expects to churn out 14 planes a month, compared with five now.

Mr. Legault and his Coalition Avenir Québec were critical of the former Liberal premier Philippe Couillard’s 2015 decision to invest US$1-billion in the C Series and argued then that the government should have instead taken a direct ownership stake in Bombardier. As recently as last year, Mr. Legault said an additional investment in the A220 was “out of the question.”

Mr. Legault and Mr. Fitzgibbon rationalized last week’s about-face by insisting they are better negotiators than Mr. Couillard and his team. It remains to be seen whether Airbus agrees.

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