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Canada urged to throw a £650m lifeline to crisis-hit Bombardier


Bombardier’s C Series aircraft

Bombardier’s C Series aircraft

Billy Bishop airport in Toronto

Billy Bishop airport in Toronto

Incoming prime minister ofCanada, Justin Trudeau

Incoming prime minister ofCanada, Justin Trudeau


Bombardier’s C Series aircraft

Canada's new liberal government - led by the charismatic young premier Justin Trudeau - will today be asked to provide a massive bailout for the crisis-hit planemaker Bombardier.

Prime Minister Trudeau will come under pressure to throw the company a financial lifeline of up to $1bn (£650m) after the Quebec regional government pledged a similar amount last week by taking a 49.5% stake in the troubled CSeries programme.

The wings for the new jet are made in Belfast where Bombardier employs more than 5,000 people.

Quebec's Economy Minister Jacques Daoust said last week that he will ask the incoming Ottawa government to match the regional funding. "If the federal government also put in $1bn, that would mean the CSeries financing package would be complete." He added that he would be on the phone to the country's industry minister "within half an hour" of the swearing-in ceremony.

Quebec is Mr Trudeau's home province and Bombardier is regarded as an economic "jewel", employing tens of thousands of people there. The Liberals made huge gains in the province and during his campaign Mr Trudeau made major speeches about supporting infrastructure and protecting jobs.

But a strongly-worded editorial in yesterday's Toronto Sun newspaper urged him to reject bailout pleas.

"Trudeau and his new industry minister - whoever he or she turns out to be - can make a good start by not handing a billion dollars to Bombardier Inc to rescue the failing aerospace company," said the paper. "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."

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The Trudeau government faces another tough decision that will also impact on the Bombardier CSeries programme. It's been reported that the Liberals remain opposed to extending the runway at Toronto's Billy Bishop Airport to allow CSeries jets to take off and land. It's feared that this would kill an order by Porter Airlines Inc which is prepared to buy as many as 30 CSeries planes if the waterfront runway is extended. The federal government is one of three parties - along with City of Toronto and Ports Toronto - that will rule on whether that extension can go ahead.

Earlier this week, a spokesman for Justin Trudeau published a letter that appeared to reinforce the Liberal Party's position of not extending the runway. However, observers believe that the Ottawa government would be in an awkward position if it decides to approve funding for Bombardier, but still blocks the runway extension, thus scuppering a much-needed order worth up to $2bn.

Bombardier has 243 firm orders for the CSeries, which is 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.

The commercial aviation consultancy AirInsight says the future of the CSeries programme "may not be as bleak as some observers believe".

In a lengthy analysis published on its website the company said: "The 'bailout' by the government of Quebec should help, and sends the message that Quebec considers Bombardier "too big to fail" and that it expects the programme to succeed.

"They remember the start of the CRJ programme, which had only a handful of orders when it was certified, but later turned into a resounding success.

"With numerous (marketing) campaigns (we have heard of six), the opportunity for a bellwether order exists, and can't come soon enough to begin to change the momentum of the programme."