OTTAWA — The federal government is facing growing pressure to provide financial assistance to Bombardier Inc., even as the Montreal-based aerospace giant inked a multi-billion-dollar agreement to provide its CSeries aircraft to Delta Air Lines.
The deal announced Thursday with the U.S. airline is estimated to be worth US$5.6 billion and will include the purchase of 75 CS100 aircraft beginning in 2018, with options to buy more.
But that still leaves the future of Bombardier in question, with rising costs and the possibility of layoffs looming.
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The federal government is currently in talks with Bombardier concerning a bailout, estimated to be at least $1 billion — matching the cash infusion pledged by the Quebec government last year.
The negotiations are being led by Economic Development Minister Navdeep Bains, who was travelling outside of Ottawa and not available for comment Thursday.
But Transport Minister Marc Garneau said “it is up to us to talk to Bombardier to discuss their request, to find out what they really want, but also to consider our responsibilities at the federal level — and that’s what the government and minister Bains are currently doing.”
“The discussion is still going on between Mr. Bains and Bombardier. It’s an active discussion, and Mr. Bains will comment on it when a final decision is taken,” Garneau told reporters in Ottawa.
“But I’m celebrating today a fantastic piece of news,” Garneau added. “This is a beautiful example of Canadian innovation. I couldn’t be happier for Bombardier. I happen to love the aerospace world, and I think this is the best airplane in the world.”
Quebec Premier Philippe Couillard said his government does not want “to become makers of airplanes, but we want to support innovation.”
“Governments in a situation like this should not behave like investors or bankers, but economic agents,” he told reporters Thursday in Quebec City.
Bombardier’s president and CEO, Alain Bellemare, said the company “has been in in discussions with the federal (government) for many months.”
“So far, we haven’t found the right solution,” he told reporters in Montreal.
“I’m hopeful that we can find a win-win solution moving forward and again. . . . This will further strengthen our ability to keep investing in the future in aerospace right here in Canada and this financial flexibility is something that is good to have when you operate in a very complex and technological environment.”
Another potential source of support for Bombardier’s efforts to sell the CSeries could come from financial incentives to purchasers, through the Export Development Canada, the federal credit and lending agency.
Phil Taylor, EDC’s manager of external relations, said the agency has so far provided funding of between $8.8 billion over the past five to six years to help the company secure deals.
“That is providing financial support to the buyers, not Bombardier — so no direct financing with Bombardier,” he said.
“The CSeries is a brand new aircraft and not one has rolled off the lot. So, there’s nothing for us to finance because the aircraft has not been delivered to the customer.”
EDC gets involved “much closer to when they actually handover the aircraft,” he said.