Brazil files WTO complaint against Canada after aid for Bombardier


The complaint, which Brazil has been threatening for months, was officially opened Wednesday, hours after the Canadian government announced that it will give Bombardier $372.5 million in repayable loans over four years. "New contributions have been announced, which may further deepen distortions in the aircraft sector, to the detriment of Brazilian interests".

The provincial government of Quebec, where Bombardier is based, already had injected $1B into the CSeries program, and the province's largest pension fund invested $1.5B in the company's rail unit a year ago.

Last year, the company received a US$1 billion investment for the CSeries passenger jet from the Quebec government in exchange for a 49.5 percent stake.

Under WTO rules, if Canada and Brazil are unable to reach agreement in the next 60 days, the complaining party - Brazil - may request adjudication.

Quebec's spending on the CSeries, along with a separate $1.5 billion investment by the province's largest pension fund in Bombardier's rail division, already risks triggering a trade feud between the company and Brazilian planemaker Embraer SA EMBR3.SA .

Canada Government science and economic development innovation minister Navdeep Bains said: "This contribution from the the government of Canada will secure the highly skilled, well-paying jobs for middle-class Canadians who work in the aerospace sector".

Embraer chief executive officer Paulo Cesar Silva said the subsidies have helped the CSeries program survive and allowed Bombardier to sell the planes at below market low prices.

Canada and Brazil have had a long-running dispute over government backing of Bombardier and Embraer, with both sides filing complaints against the other.

Bombardier has received at least 360 firm C Series orders, including from Air Canada and Delta Air Lines, and few delivery slots are now available in the early production run.

Bombardier CEO Alain Bellemare was similarly defiant.

The latest WTO standoff follows almost a decade of sparring between Brazil and Canada over state financing for Embraer and Bombardier's exports in the 1990s.

"We want good-quality jobs", he said on February 7.

However, the current dispute is closer in substance to the clash between the United States and the European Union over allegedly unfair support for Boeing and Airbus.