DOESN'T FLY
Billions in taxpayer-funded aid couldn’t keep company on course.
OTTAWA • There might be a touch of irony here.
Over the past few decades, Bombardier Inc. has benefitted from more than $2 billion in taxpayers’ funding to grow its business in Canada and globally.
The Montreal-based company first tapped Ottawa for assistance through repayable loan back in 1966.
Along the way, Export Development Canada — the federal financing agency — has also provided billions of dollars to encourage companies around the world to purchase Bombardier planes and related products, among them the CSeries — the company’s much-delayed and overbudget new-generation passenger jet.
Since 2010, Ottawa-based EDC has approved as much as $11.25 billion in repayable loans to Bombardier customers, but the agency emphasized that assistance to all industries has totalled $450 billion over the same period.
“EDC helps Canada’s aerospace sector in a number of ways, from providing financing and insurance to small Canadian aerospace suppliers to financing the customers of Bombardier,” said agency spokesperson Phil Taylor.
“All of EDC’s commercial financing in this sector is designed to do two things — to have more foreign companies buy more Canadian products like BBD jets, Heroux-Devtek landing gears, CAE simulators, and all the great products that 400-plus Canadian aerospace companies create here at home, and to help them expand abroad,” he said.
Meanwhile, Industry Canada said that since 2010 the federal department has provided $310 million in repayable loans to Bombardier related to the development of the CSeries.
But Mark Milke, a senior fellow at the Fraser Institute, a Vancouver-based think-tank, and a political science professor at the University of Calgary, said “repayable is in the eye of the beholder.”
“Over the decades, Bombardier alone has received over $1.1 billion. But what you have to remember is that Bombardier acquired De Havilland Canada in 1992. And De Havilland, over the years, also took in about $1.1 billion from Industry Canada. So that’s over $2.2 billion,” Mr. Milke said.
“Bombardier’s troubles are a good example of why it is nonsensical for the government of Canada — and the provincial governments of Quebec, France, the United States and Brazil — to loan or grant money to aerospace companies, or any company,” he added.
“You end up simply having governments compete for taxpayers’ dollars from a number of jurisdictions.”