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Bombardier to repay $372.5M in federal loans over 15 years

Bombardier CEO Alain Bellemare steps off of a model of a Global 7000 jet before making a press conference in Montreal on Feb. 7, 2017. THE CANADIAN PRESS/Paul Chiasson

Bombardier’s chief financial officer says it will take 15 years for the company to repay the $372.5-million loan from Ottawa that was announced last week.

During a quarterly earnings conference call, John Di Bert said there won’t be any repayments to federal coffers for two years.

Di Bert said repayments will be based on the number of Global 7000 business jets and CSeries commercial aircraft sold.

He said the Montreal-based aerospace giant expects to receive the money in instalments over four years, with anywhere between $70 million and $100 million flowing to the company annually.

The aid to Bombardier has been the subject of much public criticism, but the federal government and the company have both defended the merits of the assistance, saying it’s needed to preserve jobs and compete globally.

Brazil has filed a complaint before the World Trade Organization, accusing Canada of unfairly subsidizing Bombardier, an allegation both the company and the federal government reject.

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Brazil files WTO complaint over Canadian aid to Bombardier

Ottawa announces $372.5M in loans to Bombardier

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The odd to see the $$ paying back to the lender is very unlikely IMO.

February 16, 2017 at 4:21 pm

I don’t think the loan repayment will happen. Bombardier constantly asks for government funding. Perhaps Bombardier should cut the salaries of the upper management as a first step in cutting costs. Secondly, stricter Quality Control and reorganization to streamline the production lines would save money in the long run. If Bombardier can keep production moving efficiently, while delivering their vehicles on time, will save them money as well (eg TTC lawsuit). Also, if Bombardier would source vehicle components from local parts manufacturers instead of from other countries (eg Mexico), support for out-of- specification/faulty components would be better handled.

February 16, 2017 at 5:06 pm