(Adds Trudeau comments, updates share price)
By Allison Lampert and Allison Martell
NEW YORK/TORONTO, Dec 15 (Reuters) - Bombardier Inc is still seeking funds from the Canadian government despite improved liquidity, its chief executive said on Thursday, as the company assured investors it is prepared to deal with the cost of value guarantees for older jets.
Alain Bellemare said the plane and train maker is still in talks with Ottawa, with an eye to managing unexpected risks or funding the development of new products.
"Obviously things have changed a lot over the past 12 months, so the discussions are taking a different path," he said at a New York investor event.
Bombardier, which considered bankruptcy protection at one point last year, sold a 30-percent stake in its rail division to pension fund Caisse de depot et placement du Quebec for $1.5 billion last November and got a $1 billion bailout from the Quebec government.
In Ottawa, Prime Minister Justin Trudeau said the government was working "very productively" with Bombardier, which asked for federal aid last year.
"We hope to be making some announcements before the budget," Trudeau told reporters. The federal budget is usually in February or March.
The investor day came two days after U.S. airline SkyWest Inc said it had agreed to terminate a residual value guarantee with Bombardier in return for a $90 million payment from the Canadian company.
Residual value guarantees cover some of buyers' losses if the value of their aircraft drops below a threshold, a potential drag on cash flow for Bombardier as older planes go out of service.
On Thursday, Bombardier Chief Financial Officer John Di Bert said the deal should eliminate about $250 million of potential liability. Bombardier disclosed early this year that its maximum exposure from residual value guarantees was $991 million over four years starting Dec. 31.
"I think we have come to a very positive arrangement with SkyWest," he said, adding that Bombardier has allowed for more settlements in its forecasts.
Asked about debt, Di Bert said the company is likely to refinance maturities coming up in 2019 and 2020, but noted that no final decision has been made.
"What we're putting together is a business that will have strong access to markets," he said. "We don't have to make that decision today."
One factor that could improve Bombardier's cash flow is increased demand for the company's business jets. The new ultra-long-range Global 7000 jet, said by the company to have a strong order book, is expected to play a key part in Bombardier's five-year turnaround plan.
Production of the company's largest business jets, which slowed this year to match weaker market demand for corporate planes, is expected to pick up slightly in 2017, a source familiar with the matter said, although a broader industry rebound is not expected.
Production of Bombardier's Global 5000 and 6000 jets is expected to rise slightly from one in 10 days to one in seven days next year, said the source, who spoke on condition of anonymity because the company does not disclose such figures.
A Bombardier business jets spokesman declined to disclose global production rates for competitive reasons.
Shares were up 2.9 percent at C$1.97, boosted by new forecasts released late on Wednesday. Bombardier said it is aiming for consolidated earnings before interest and taxes and before special items in the range of $530 million to $630 million in 2017. (Writing by Allison Martell in Toronto; Editing by Meredith Mazzilli and James Dalgleish)