November 12, 2015 / 7:35 PM / 2 years ago

Canada's Trudeau says trade to weigh on Bombardier aid decision

OTTAWA (Reuters) - When the Canadian government decides whether to give aid to aircraft maker Bombardier Inc, it will take into account any possible trade challenge that might arise as a result, Prime Minister Justin Trudeau said on Thursday.

A Bombardier CS300 Aircraft takes off on its' first test flight in Mirabel February 27, 2015. REUTERS/Christinne Muschi

“We will ensure that any decision taken is in the best interests of Canadians based on a strong economic case, but concerns about international impacts I‘m sure will fold into any decision we take in a responsible manner,” the Liberal leader said when asked by a reporter about possible trade action.

Rival plane maker Embraer SA of Brazil expressed concern on Tuesday about the Canadian province of Quebec’s decision to purchase a near-50-percent stake in Bombardier’s struggling CSeries airplane project for $1 billion, and Ottawa is considering whether to give federal aid as well.

Canada and Brazil fought a fierce trade dispute at the World Trade Organization over accusations of subsidies to Bombardier and Embraer in the 1990s.

Any dispute over Canadian aid to Bombardier this time could draw in much bigger combatants, since the CSeries would compete with Boeing and Airbus planes.

“The decision on Bombardier will be taken by the minister (of innovation, Navdeep Bains) based on facts, recommendations and economic reasons. It’s always tempting to take a political decision, or a decision based on symbols,” Trudeau said.

“We will base our decision on economic facts and the benefits for Canadians.”

Veteran trade lawyer Peter Clark, who advised Embraer in the 1990s but is not working for it now, said that while direct export subsidies violated international rules, even government investment in such a project was likely to be challenged.

“It’s keeping an aircraft alive that’s going to compete with Boeing and with Airbus, and I don’t think they’ll sit idly by,” Clark told Reuters.

Reporting by David Ljunggren and Randall Palmer; Editing by G Crosse and Tom Brown

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