In a recent letter to the Toronto Sun, Aaron Wudrick uses the sale of the CRJ program as a pretext to argue that Bombardier is “[cashing] out while taxpayers get stiffed.” While Mr. Wudrick is entitled to his opinion on whether or not governments should support strategic industries, he picked the wrong target. With 1,950 aircraft ordered to date, the CRJ program was a great commercial success, and this resulted in significant reimbursements to governments. In fact, Bombardier received approximately $180 million in loans for this program and reimbursed $315 million – representing a 175% return for taxpayers.
It’s true that Bombardier has benefited from government support over the years. Our 21,400 Canada-based employees and our hundreds of Canadian suppliers are very grateful for this support. However, we reject assertions that Bombardier has cost taxpayers billions while giving nothing back.
Mr. Wudrick and others argue that Bombardier received “$4 billion from Canadian taxpayers” since 1966, but this amount is obtained through a questionable methodology. First, it includes more than $400 million in public support granted to two separate companies before they were even acquired by Bombardier. Second, the $4 billion figure includes over $1 billion in inflation adjustments.
If we look at actual numbers, from 1986 to 2009, Bombardier received a series of reimbursable loans totaling $596 million. These loans were repaid with interest through royalties on aircraft sales. Bombardier repaid $760 million (or 127% of the amount initially received).
Then, Bombardier received additional loans in 2009 and in 2017, totaling $816 million, to support the research and development of two Canadian game-changing aircraft programs: the C Series and the Global 7500. As with past loans, repayments are made through royalties. These new aircraft are just starting to gain traction on the market as production ramps up, and repayments have begun.
Finally, in 2016, the Québec government made a $1.3 billion equity investment in the C Series (now the A220) program. With Airbus now on board and the order momentum building up since the recent Paris Airshow, we can be confident that the province will recover its investment.
To recap, over 30 years, our federal and provincial governments approved $1.4 billion in loans to Bombardier and a $1.3 billion equity investment for a total of $2.7 billion. Now let’s talk about how much Bombardier invested over that same period to develop 34 aircraft programs, create thousands of jobs and generate economic growth for our country: more than $27 billion. That’s ten times what the company obtained. In addition, our governments received over $18 billion in taxes and refunds since 1986.
If we look around the world, we see every government supporting their country’s strategic clusters because they know exporters of high technology products will create jobs and wealth for their citizens. The handful of nations that have an aerospace industry also consider the cost-benefit ratio and put forward aggressive industrial policies to ensure its growth. Much more than Canada does.
By contributing to Bombardier’s development efforts through loans and equity investments, Canadians are not only getting their money back in full, but also creating value. Facts are stubborn things: supporting Bombardier and the aerospace industry is a profitable investment for Canada.
Vice President, External Relations