The Quebec government is offering up to $1-billion in loans to prospective buyers of Bombardier Inc.'s new commercial aircraft, the C Series.
Premier Pauline Marois's cabinet made the decision on March 7 at the request of Bombardier, but it was only made public Wednesday in the province's official gazette. The new financing is offered "because the final assembly of the C Series is done in Quebec" and because Bombardier's latest aircraft program "represents an important economic interest" for the province, the government said.
The loans will be offered at commercial rates through Investissement Québec (IQ), the province's investment arm. They will represent 10 per cent of the purchase price of the planes, explained IQ spokeswoman Chantal Corbeil.
Export and Development Canada, for its part, will also offer commercial loans to interested buyers that represent up to 75 per cent of the purchase price of the C Series. IQ will limit its total exposure to $1-billion, but there are no limits to the amounts EDC is willing to loan, if the commercial risks are deemed acceptable, said EDC spokesman Phil Taylor.
This a natural extension of both EDC and IQ's roles, which already offer loans to airlines that are interested in purchasing Bombardier's regional airplanes. The loans, which will represent 85 per cent of the purchase price of the CSeries in total, are also consistent with the OECD rules that govern the public financing of planes, Mr. Taylor said.
Bombardier's commercial airplanes are offered in two versions, one that will seat about 110 passengers and another that will seat around 130 passengers. However, the company recently announced that it plans to extend the C Series and configure it to seat up to a maximum of 160 passengers.
The smaller plane, the CS 100, has a list price of $58.3-million (U.S.), while the larger one, the CS 300, has an official price tag of $66.6-million. However, airlines customarily don't pay those prices and get a discount commensurate with the size of the order.
As of Dec. 31, Bombardier had booked firm orders for 148 C Series airliners and had commitments for 234 other of its commercial aircraft. The C Series's maiden flight is scheduled for June.