The federal government MUST invest in Bombardier. Here’s why.

Piece by Michel Leblanc, President and CEO of the Board of Trade of Metropolitan Montreal and Perrin Beatty, President and CEO of the Canadian Chamber of Commerce, and published in La Presse+.

February 25, 2016


The federal government MUST invest in Bombardier. Here’s why.

Bombardier and its C Series program are good for Canada. They are good for the economy, will create jobs and be beneficial to public finances. And they are good for progress and innovation.

It is time for the federal government to announce its support for Bombardier and invest the US$1 billion needed to give our world aerospace leader the edge it needs.

Good for the economy and jobs:

The aerospace sector is a major player in the Canadian economy. It represents 180,000 jobs and generates $29 billion to the GDP, an enormous amount.

As a flagship of the industry, Bombardier contributes $8.3 billion in GDP to the country and provides high-quality jobs to 20,000 Canadians. Having the company here makes us the envy of the world, an asset we must protect.

Plus, the aerospace industry, Bombardier in particular, sells most of its products beyond our borders. For Bombardier and for Canada, this represents annual revenue of $9 billion of export income from foreign companies.

Furthermore, there is a need to diversify the Canadian economy. The federal government simply cannot allow such a leading sector to falter when it has the means to give it the boost it needs.

Good for public finances:

Bombardier pays around $370 million annually in federal tax. The Canadian government also collects $334 million in income tax from the company’s employees. This is in addition to tax revenue generated by over 1000 Bombardier suppliers across Canada. If Bombardier shuts down the C Series program for lack of cash flow, 2200 jobs will be lost. The resulting losses would cost Canadian taxpayers more than the assistance being called for.

Conversely, an injection of capital from the Government of Canada will have a positive impact on the country’s public finances. In peak production, the C Series program will create up to 12,500 jobs in Canada and generate positive returns. Past experience has shown that supporting key manufacturing sectors, as was the case when the Government of Canada invested $10.8 billion in the auto sector, yields positive outcomes and contributes to making our economy stronger.

Good for progress and innovation:

It is in Canada’s interest to support innovative, visionary businesses since this is how we can gain an advantage over competitors. Bombardier is the Canadian company that spends the most in research and development, reaching a staggering total of $6.3 billion in the past 10 years.

The C Series is the result of many years of R&D and it has resulted in one of the best aircraft out there. The C Series are the highest performing in their category. More economical and energy efficient than their competitors, they have the potential to win major market share from Boeing, Embraer and Airbus. Air Canada’s announcement last week that it intends to buy up to 75 C Series aircraft illustrates the potential of this 100% Canadian innovation.

We are at a crucial stage in the commercialization of the C Series. This is not the time to abandon the project, when the goal is within reach. Bombardier has a solid plan for success. All that is needed is the support from the federal government to implement it. This is essential to strengthen Bombardier, reassure potential buyers and keep thousands of jobs in Canada. It is also what will make Canada’s economy stronger.

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