Federal government to announce $372 million in loans for Bombardier: source

By on February 7, 2017

MONTREAL –The federal government will give Bombardier $372 million in repayable loans, according to a source who requested anonymity because they weren’t authorized to speak on the matter.

Several cabinet ministers including Innovation Minister Navdeep Bains and Transport Minister Marc Garneau have scheduled a news conference Tuesday at 6:30 p.m. ET at a Bombardier facility in Montreal.

Bombardier (TSX:BBD.B) has been appealing for US$1 billion in federal assistance since late 2015.

Last year, the company received a US$1-billion investment for the CSeries passenger jet program from the Quebec government in exchange for a 49.5-per-cent stake.

The CSeries, which entered commercial service last year, was mired in delays and cost overruns. As of late November, Bombardier received at least 360 firm orders for the jets.

Any federal assistance for the Montreal-based aerospace manufacturer could rile foreign competitors.

Brazil has said it would launch a trade challenge against Canada before the World Trade Organization over financial support for Bombardier, which competes with Brazilian-based Embraer. Bombardier said such a move would be without merit.

Brazil has complained about US$2.5 billion in investments in Bombardier, including money to “ensure the viability of the new CSeries aircraft and its placing on the market at artificially reduced prices.”

In December, Prime Minister Justin Trudeau said he was hopeful a deal with Bombardier could be reached before the spring federal budget, adding that all countries, including Brazil, help their aerospace sectors.

Bombardier has jobs cuts totalling 14,500 positions over the last two years in an effort to regain its financial footing.