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Canada warns it may cancel US jet buy over Bombardier probe

AP  |  Toronto 

Canada's has warned it could cancel a planned USD 2 billion purchase of 18 Super Hornet fighter jets from Boeing Co because of US Department of Commerce anti-dumping investigations against Canadian plane maker Bombardier.

Foreign Minister Chrystia Freeland yesterday issued the threat in a statement about Boeing's complaint against Bombardier.

"is reviewing current military procurement that relates to Boeing," Freeland said.

Boeing argued at a hearing in yesterday that duties should be imposed on Bombardier's new larger CSeries passenger aircraft, insisting it receives Canadian subsidies that give it an advantage internationally.

Freeland said Boeing's is "clearly aimed at blocking Bombardier's new aircraft, the CSeries aircraft, from entering the US market." She said the strongly disagrees with the Commerce Department's decision to initiate anti-dumping and countervailing duty investigations.

The threat comes amid increasing trade disputes between and the US and on the same day the Trump administration formally told Congress that it intends to renegotiate the North American Free Trade Agreement.

Chicago-based Boeing has petitioned the US Commerce Department and the US International Trade Commission to investigate subsidies of Montreal-based Bombardier's CSeries aircraft. Boeing said Bombardier has received more than USD 3 billion in government subsidies so far that have allowed Bombardier to engage in "predatory pricing."

Brazil has also launched a formal complaint to the World Trade Organization over Canadian subsidies to Bombardier. Sao Paolo-based Embraer is a fierce rival of Bombardier's.

The Quebec government invested USD 1 billion in exchange for a 49.5 per cent stake in the CSeries last year. Canada's federal government also recently provided a USD 275 million loan to Bombardier, which struggled to win orders for its new medium-size plane. But Bombardier won a 75-plane order for the CSeries from US-based Delta Air Lines in 2016. Bombardier said its planes never competed with Boeing in the sale to Delta.

The Canadian government said late last year it would enter into discussions with the US and Boeing on buying 18 Super Hornet jet fighters from Boeing on an interim basis and hold an open competition to buy more planes over the next five years.

remains part of Lockheed Martin's F-35 Joint Strike Fighter program.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 19 2017. 07:28 IST