Bombardier Pork Billions: Technology Partnerships Program, Export Development Canada EDC, Etc

"The aerospace company's project to manufacture a new regional jet will cost more than US$2.1-billion and is based on taxpayers paying a third of the cost."

For Bombardier, the pork keeps coming John Williamson, National Post, May 14, 2005

John Williamson is federal director of the Canadian Taxpapers Federation.

Federal Transport Minister Jean Lapierre told a big whopper yesterday in Montreal. When the Liberals' Quebec lieutenant announced Ottawa will hand $350-million to Bombardier Aerospace, he described it as a "repayable contribution." The "repayable" qualifier, which Ottawa dangles every time it subsidizes big business, is meant to reassure taxpayers their money is not being squandered by politicians. But Mr. Lapierre knows it's not true. Pigs will fly before tax money paid to Bombardier is repaid to the federal government.

[. . . . ] Taxpayers don't even know the full extent of Ottawa's corporate welfare program. The $1.12-billion subsidy does not include any loans or financing guarantees provided to Bombardier clients through Export Development Canada (EDC), a government-owned company not required to release its loan portfolio. But Canadian Business magazine reported in 2004 that "of the $6.5-billion in gross loans receivable EDC had outstanding to aerospace customers at the end of 2003, 85% went to Bombardier's customers."

Just last week, EDC provided US$230-million to two subsidiaries of Delta Air Lines. The money came from a $1.2-billion fund established by the federal government in 2003 to aid Bombardier's regional jet sales. A similar loan of US$150-million was provided to Delta in July 2004 to purchase jets from Bombardier.

Bombardier chooses Montreal area to build new aircraft; Ottawa pays $350M Allan Swift, CP, May 14, 2005

MONTREAL (CP) - Bombardier Aerospace has decided to build its new CSeries aircraft in the Montreal area, with the support of nearly $900 million in government aid - including $350 million from Ottawa and $110 million from Quebec.

[. . . . ] It has been estimated that Ottawa [That is Canadian taxpayers' $$$] has since 1972 contributed $1 billion to the Montreal-based aerospace company and has received $275 million in royalties from aircraft sales.

Quebec has about 43 per cent of the country's $22-billion aerospace industry, the third-largest in the world after the United States and Europe, employing 80,000 Canadians.

[. . . . ] John Williamson, federal director of the Canadian Taxpayers Federation, denounced the subsidy, saying the money was being squandered in "the federal government's corporate welfare program."

Feds pony up for risky Bombardier jet -- $350M federal investment Nicolas Van Praet, Financial Post, May 14, 2005

[. . . . ] The U.K. government said it would contribute up to $421-million to help Bombardier develop the CSeries. Quebec pledged $118-million, and said it would pay up to $175-million for a factory it will lease to Bombardier to build the planes. In all, governments yesterday promised Bombardier a combined $1.06-billion. Quebec and Ottawa's commitment together is worth $643-million, less than expected.

Federal Transport Minister Jean Lapierre and Environment Minister Stephane Dion proudly announced the aid at a news conference in Montreal yesterday, arguing the money would benefit all Canadians. The financing is to be structured under Ottawa's Technology Partnerships Program. Mr. Lapierre said Bombardier would repay the government through royalties from CSeries sales.

[. . . . ] The Canadian Taxpayers Federation challenged Liberals to release Bombardier's record for repaying subsidies. "Bombardier is a welfare sinkhole," it said.

And the CD Howe Institute said Canadians should view Ottawa's move with suspicion.

"What you want is the accounting, at least a try at showing that this makes any sense," said Finn Poschmann, associate director of research at CD Howe. "The justification [the public] sees is never a proper cost-benefit analysis."

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