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Canada considering credit financing for troubled Bombardier

New Liberal government could opt for loan over bailout to cushion blow for taxpayers

By Yvette Shapiro

Published 13/01/2016

The CSeries has been hit by repeated delays
The CSeries has been hit by repeated delays
Justin Trudeau

Struggling aerospace firm Bombardier is still holding out hope for a billion dollar bailout from the Canadian government.

Reports in Canada say the new Liberal administration, led by Justin Trudeau, is considering several options to shore up the loss-making planemaker.

Last October, the regional government in Quebec pledged $1.3bn (£660m) to help Bombardier bring its long-delayed CSeries jet to market, taking a 49.5% stake in the programme.

Mr Trudeau - whose home province is Quebec where Bombardier employs at least 18,000 people - has been under pressure to match that amount with federal funding since he took up office in November.

The Globe and Mail newspaper has reported that government officials are actively examining whether to provide direct investment or credit financing to Bombardier.

According to an unnamed senior federal official: "It will move fairly rapidly. If anything happens, it's going to happen this winter."

Credit financing would be the less controversial option because it does not involve Canadian taxpayers' money.

There has been a fierce debate in the country about the Bombardier bailout request.

A strongly worded editorial in the Toronto Sun newspaper in November urged the Trudeau government not to hand over money to what it called "a failing aerospace company".

It added: "Trudeau should keep his hand on his wallet and make sure federal taxpayers don't sink another huge pile of cash into a company that is lurching from one self-inflicted crisis to another.

"Bombardier has become a byword for corporate welfare, having been on the take from Ottawa since 1966."

So far, the new jet has failed to meet commercial expectations, with just 243 firm orders. It is now over three years behind schedule and more than £1bn over budget. The first CSeries jets are due to be delivered shortly to Swissair, and should be in service next year.

Around 300 people work on the CSeries production line in Belfast, and the Belfast Telegraph understands that wing and fuselage parts for around 20 jets have been completed at the firm's plants here.

The company employs approximately 5,000 people in Northern Ireland, although there has been a series of lay-offs in the past 18 months.

Last week, it was confirmed that 60 agency workers would lose their jobs because of a downturn in customer demand.

Bombardier's Belfast operation is trying to cut operating costs by a fifth over the next two years, but staff recently rejected a two-year pay freeze.

The Enterprise Minister, Jonathan Bell, has held talks with senior Bombardier managers in Canada and Belfast.

He said both he and Invest NI would "continue to support the company across a number of areas".

Belfast Telegraph

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