By Allison Lampert
MONTREAL, March 17 (Reuters) - The Canadian government has
finished studying a request from struggling planemaker
Bombardier Inc BBDb.TO for $1 billion in aid and is preparing
to make an announcement within weeks, according to a source with
direct knowledge of the situation.
Bombardier wants the money to help finance its new CSeries
passenger jet, which faces tough competition from majors Airbus
Group SE AIR.PA and Boeing (NYSE:BA) Co BA.N .
The firm is based in Quebec, which last October invested $1
billion in the CSeries, and now both the company and the
province want Ottawa to follow suit to help protect thousands of
well-paid aerospace jobs.
"The due diligence is done. The government is preparing to
make an announcement in a matter of weeks, not months," said the
source, who is familiar with the negotiations.
Bombardier formally asked for federal help on Dec. 11 and
the two sides are still talking about what form possible aid
could take, the source added.
Prime Minister Justin Trudeau was quoted last month as
saying an announcement on Bombardier aid would be made before
the March 22 budget. But Innovation Minister Navdeep Bains, who
has direct responsibility for the file, on Monday said this was
not the case, throwing the timing of the decision into
uncertainty.
Asked for comment, Bains spokesman Philip Proulx said talks
between the two sides were continuing.
"There has been progress in the discussions but a decision
has not been reached," he said.
A Bombardier spokeswoman declined to comment.
Senior government sources said last month that while Ottawa
was very likely to offer some sort of aid to Bombardier, they
did not like the way the $1 billion Quebec deal had been
structured.
Quebec wants the CSeries project to be spun off into a
separate entity, with Ottawa taking a one-third stake. This
would take the troubled 100-150 seat jet program off the firm's
books and boost its short-term financial results.
The first of the CSeries jets is entering service in 2016
after years of delays. Bombardier has booked just 243 firm
orders. It currently controls 50.5 percent of the CSeries, while
Quebec has a 49.5 percent stake.
Under the Quebec proposal, if Ottawa did match the
province's $1 billion contribution, both governments would end
up with a one-third stake in the CSeries with Bombardier left
with the remaining one-third share.
Bombardier would have minority representation to the two
governments on a separate CSeries board, sources told Reuters in
February. by James Dalgleish)