Brazilian WTO complaint has no merit: Bombardier

MONTREAL — Brazil vowed on Monday to launch a trade challenge against Canada before the World Trade Organization over financial support for Bombardier, a move the Montreal-based company said was without merit.

“We are very confident that all investments associated with Bombardier are fully compliant with all WTO rules and regulations,” Olivier Marcil, vice-president of external relations, said in an email.

Bombardier responded after Brazil’s Foreign Ministry issued a statement saying it will proceed with a WTO challenge, alleging that financial support for the aerospace giant has affected market conditions in a way incompatible with Canada’s commitments to the WTO. Brazil is complaining about $2.5 billion US in investments in Bombardier this year to help it survive.

Bombardier received a $1-billion US investment in the CSeries passenger jet from the Quebec government in exchange for a 49.5 per cent stake in the plane.

Ottawa is also looking to invest $1 billion US, which Brazil alleges is designed to “ensure the viability of the new CSeries aircraft and its placing on the market at artificially reduced prices.”

Late last year, Bombardier sold a 30 per cent stake in its railway division to Quebec pension fund manager the Caisse de dépôt for $1.5 billion.