Trudeau Plans Aerospace Support After Bombardier Request

  • Prime Minister hopes to make announcements before next budget
  • Montreal firm sought $1 billion in federal aid one year ago

Canada's Prime Minister Justin Trudeau

Photographer: Rick Madonik/Toronto Star via Getty Images

Canadian Prime Minister Justin Trudeau hopes to make aerospace announcements in the coming months, as Bombardier Inc. Chief Executive Officer Alain Bellemare said discussions on the company’s year-old aid request are “taking a different path.”

Trudeau spoke to reporters in Ottawa Thursday after Bellemare gave a presentation to investors in New York. The Bombardier head said discussions continue as the company looks at “adding flexibility” to weather unexpected risks and new product launches.

Asked about Bombardier, Trudeau said Canada wants to support aerospace jobs in the short-term and the viability of the sector over the long term. “That is exactly what we are working on and we hope to have announcements to make before the budget,” he said.

Bombardier, working to turn around its C Series program, made a $1 billion aid request last year, shortly after Trudeau took office. The prime minister’s point-man on talks, Innovation Minister Navdeep Bains, said in October it’s a matter of how, not if, the country will support the manufacturer. Canada’s budget document is typically released before April 1.

‘Different Path’

Separately, Bombardier received $1 billion in aid from the Quebec government earlier this year. As talks continue for further assistance, Bellemare said the company’s existing financial plan is “well provided” to launch its next platform.

“It’s all about confidence. Having additional cash to the business gives us additional confidence to launch the next platform earlier, but I feel that in our base plan we are in a good position right now,” he said.

The company’s shares have increased 47 percent since the start of 2016 and it sold $1.4 billion in bonds last month, along with the earlier Quebec cash injection.

Speaking to reporters on Thursday, Bellemare said the company’s situation has changed since the aid request, complicating federal talks. “Bombardier today is not the same as Bombardier in mid-2015,” the chief executive said, adding it’s important to have a federal partner in the aerospace sector due to support other governments give to their national aerospace companies.

“Our focus is also shifting. We kept a very close dialog with the federal government, and I think we’re making progress,” he said.

Bombardier has already started thinking about building a new-generation aircraft once development work on the Global 7000 business jet concludes toward the end of 2018, Bellemare said. Options include a new commercial aircraft and a private plane, he said, declining to be more specific because studies are continuing.

Quebec’s government has called on Trudeau to make a decision as soon as possible. Bains has said jobs, research spending and keeping a Canadian headquarters are important components of any Bombardier deal. The federal government is also said to have pushed for corporate governance changes as part of any aid agreement, including changes to the dual-class share structure that allows the company’s founding Beaudoin and Bombardier families to control it with only a minority stake.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE