Government of Canada to loan $283m to Bombardier

The move comes just a day after the Montreal-based company announced C$372.5 million ($283 million) in repayable contributions from the Canadian government for development of Bombardier's C-Series aircraft and Global 7000 business jet.

To be provided over four years, the fund will be used in the research and development for Bombardier's new Global 7000 business jet, as well as the ongoing activities related to the development of the company's C Series aircraft programme.

While the state aid is far less than the $1 billion originally sought by the Canadian plane and train producer, Chief Executive Alain Bellemare called it "the right level of support".

Bombardier initially asked Canada to match Quebec's investment in the CSeries, but negotiations dragged on for more than a year as the Liberal government made requests of the company, such as changes to its dual-class governing structure.

Canada's Trade Minister Francois-Philippe Champagne said the loans complied with WTO rules and the government would defend itself against litigation.

The South American government says in a news release that it has requested consultations with Canada under the WTO dispute settlement system.

"In Brazil's understanding, Canadian subsidies artificially affect the worldwide competitiveness of the sector, in a manner incompatible with Canada's obligations to the WTO", Brazil's Ministry of Foreign Affairs said in a statement.

Brazil is challenging Canadian and Quebec government financial support for the C Series, saying it has enabled Bombardier to sell its CS100 and CS300 commercial airliners at "artificially low prices". He said the support conforms to WTO rules, adding that all countries, including Brazil, help their aerospace sectors.

Aviation industry observers said it's hard to conclude that public aid allowed Bombardier to pursue aggressive pricing in contract bidding. "So people are finding ways to come after us".

Reimbursable loans are a pillar of the world's largest trade dispute, involving mutual transatlantic claims of unfair support for aircraft makers Airbus and Boeing.

Embraer was particularly annoyed by an order for 75 CSeries aircraft from Delta, which it thought Bombardier was able to offer at below cost price because of Quebec's funding. The case has yet to complete lengthy WTO legal and compliance processes.

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