The Quebec government is upping the ante in the Bombardier bailout, saying it would like to see Ottawa match the province’s $1-billion lifeline for the Montreal company.
It is a tall order for the federal government. According to Industry Canada, Bombardier still has significant outstanding loans it must repay to Ottawa.
“From 1966 to date, Bombardier has repaid $543-million of the $1.3-billion received,” Industry Canada spokesman Derek Mellon said on Friday.
Quebec’s Economy Minister, Jacques Daoust, told Bloomberg News on Friday the province plans to ask the federal government also to make a $1-billion investment in Bombardier’s troubled C Series jet program.
“If the federal government comes in, the notion of risk completely changes,” Mr. Daoust said. “If the federal government also put in $1-billion, that would mean the C Series financing package would be complete.”
Mr. Daoust said he would telephone the Trudeau government’s new industry minister once the cabinet is appointed.
“In one week, we will know exactly who we’re working with in Ottawa,” the Quebec politician said. “I can assure you that in the following half hour, I’ll get his or her phone number and put in a call.”
The Globe and Mail has reported that the aircraft maker earlier this year asked Ottawa for a cash injection of $350-million in repayable loans to help it keep operating while finalizing the C Series. The industry department hired an external auditor to examine Bombardier’s finances, but the federal election campaign delayed a response from Ottawa.
Bombardier, the world’s only manufacturer of both planes and trains, is in the final stages of development and testing for the C Series, the biggest passenger jet it has ever produced. The airliner, which can seat as many as 160 people, is the company’s main hope for generating revenue over the next decade. Thousands of aerospace workers in Quebec, Ireland and China will make parts for the aircraft and assemble it. The company has so far received 243 firm orders for the C Series.
The plane is two years behind schedule and considerably over budget.
A spokesman for Justin Trudeau’s government, which will be sworn in on Nov. 4, said the Liberals are paying close attention to the Bombardier file and will decide on assistance after taking power.
“We are in the process of being briefed on the file, are following it closely, and a decision will be made after the government is sworn in on Nov. 4,” Liberal spokesman Daniel Lauzon said.
It is hard to imagine the Liberals saying no to Bombardier after the party won 40 Quebec ridings in the recent federal election, running on a platform that emphasized fiscal stimulus to help weak economic growth.
Reached later on Friday, Mr. Daoust’s office was more circumspect about what Quebec wants from Ottawa.
“We are open to have another partner contribute to the success of the C Series. We will therefore help Bombardier in reaching any potential partner on whom we can have a positive influence, including the federal government,” Daoust aide David Provencher told The Globe and Mail.
He said another investment partner is “not essential to the success of the C Series program.”
The Conservative government announced in 2008 it would lend up to $350-million to Bombardier. Paul Martin’s Liberal government had set aside the money in 2005, and it sat on federal books for three years because Bombardier’s plans were delayed as the company struggled to line up suppliers and customers.
News of the Quebec investment in Bombardier this week comes as the Couillard government faces increasing pressure for its attempts to put a lid on spending. All week, unionized public-sector workers, including most of the province’s teachers, have been on rotating strikes after negotiations hit an impasse.
The last major joint investment between Ottawa and a province was the auto sector bailout of 2009. Ontario and the federal government invested $13.7-billion to keep Chrysler and General Motors afloat, but recouped only about $10.2-billion.Report Typo/Error
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