Feds spent almost $500,000 on Bombardier study
Canadian taxpayers spent almost $500,000 on a study of Bombardier that was launched months before the Montreal company asked the federal government for US$1 billion for its CSeries commercial aircraft, according to documents obtained by The Canadian Press.
April 5, 2016 By The Canadian Press
Industry Canada agreed to pay $499,930 to Deloitte Inc. to prepare a financial and market assessment of Bombardier, said a revised contract obtained through an access-to-information request.
That’s higher than the original contract for $464,430 before Deloitte’s deadline to compile the report by Dec. 4 was extended to March 31.
Details about the objective of the report were redacted. The government declined to provide the final report, citing clauses under the Access to Information Act that prevent it from releasing information that could harm Bombardier’s competitive position.
The study was ordered in August by the previous Conservative government.
The Liberal government later reportedly hired Morgan Stanley to help advise it on the funding request made in December by Bombardier. Details about that contract weren’t immediately available.
A spokesman for Economic Development Minister Navdeep Bains said the government hasn’t made a final decision on Bombardier’s request.
Bombardier is working with the Quebec government to finalize an agreement by June 30 on its commitment to invest $1 billion in the CSeries.
Quebec wants the CSeries venture to be spun off into a separate entity, with Ottawa taking a one-third stake. That would take the troubled jet program off the company’s books and boost its short-term financial results.
The first of the CSeries jets is entering service in a few months after years of delays. Bombardier has received commitments for 678 planes, including 243 firm orders.
It currently controls 50.5 per cent of the CSeries, while Quebec has a 49.5 per cent stake.
Under Quebec’s proposal, if Ottawa matches the province’s contribution, both governments would each own one-third stakes in the CSeries, with Bombardier left with the remainder.