May 19, 2016 / 10:24 PM / in 2 years

Canada PM does not see Ottawa quitting Bombardier aid talks

OTTAWA (Reuters) - There is little chance Canada will walk away from talks on offering aid to aircraft maker Bombardier Inc (BBDb.TO) because the government needs to secure good quality aerospace jobs, Prime Minister Justin Trudeau said on Thursday.

Canada's Prime Minister Justin Trudeau takes part in an interview with Reuters in his office on Parliament Hill in Ottawa, Ontario, Canada, May 19, 2016. REUTERS/Chris Wattie

Bombardier asked Ottawa in 2015 to match the province of Quebec’s $1 billion stake in the struggling CSeries narrow body jet program.

Talks have bogged down amid disagreements on several issues, sparking speculation that Ottawa might refuse to aid the company.

“I am currently engaged with Bombardier on the best way we can ensure a strong and vibrant future for aerospace in Canada,” Trudeau told Reuters in an interview.

Asked at what point the government might walk away, he replied, “I don’t think there’s any point at which you don’t want to build greater opportunities in the Canadian economy ... we’re always open to looking at ways of strengthening and creating better jobs.”

Government officials said in April that they would not aid Bombardier without assurances on jobs, investment in research and the location of the company’s headquarters in Quebec.

Pressed as to whether Ottawa would help the company, Trudeau said maintaining high quality jobs and world class products “is exactly where the Canadian economy needs to continue to go”.

While Bombardier is no longer desperate for cash after a Quebec pension fund investment, it would like a cushion for operations next year as it burns through money while ramping up production.

Ottawa dislikes Bombardier’s dual-class share structure which gives the company’s founding family effective control. Bombardier Executive Chairman Pierre Beaudoin has said the family has no intention of eliminating the structure.

Chief Executive Alain Bellemare said on Thursday the company did not have a specific deadline to reach an agreement with Ottawa and was not aggressively pursuing other investors.

“It’s complex. It takes time. We’re still in discussion with them, and we’re looking to find the right solution,” he told reporters in New York.

Bellemare declined to say what it would take to reach a deal but said the company did not need to seal an agreement with Ottawa before closing the $1 billion agreement with Quebec in coming weeks.

Asked whether Ottawa would countenance Chinese investment in the CSeries, Trudeau cited “very strict rules around ownership of different Canadian companies that would have to be very much complied with”.

Canadian foreign investment regulations include a national security clause that gives Ottawa the ability to reject investment in crucial industries.

Additional reporting By Allison Lampert in Montreal and Jeffrey Dastin in New York; Editing by Toni Reinhold

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