VICTORIA, British Columbia – The Canadian and British governments are combining forces against Boeing in a trade dispute that threatens the purchase of fighter jets as well as aerospace jobs in both countries.
In April, Boeing asked the U.S. Commerce Department to investigate Bombardier, claiming that Canadian government subsidies for that Quebec-based firm allow it to sell its C-Series passenger aircraft in the U.S. at cut-rate prices.
A decision on Boeing’s complaint, which could see punitive tariffs applied to Bombardier planes, is expected Sept. 25.
In retaliation for Boeing’s actions, Canada put on hold its purchase of 18 Super Hornet fighter jets. That $5.23 billion acquisition, which is seen as a stopgap until a future fleet of fighter jets can be bought, was approved by the State Department on Sept. 12 but there are now doubts among Canadian government officials whether it will ever proceed.
The British government, worried Boeing’s actions will result in job losses at the Bombardier plant in Northern Ireland, has also entered the fray.
Prime Minister Theresa May phoned U.S. President Donald Trump on Sept. 5 to raise the Boeing issue.
May and Canadian Prime Minister Justin Trudeau will also meet Sept. 18 to discuss how to move on the Boeing complaint.
“We have indeed been working closely with our British allies on this issue,” Canadian Global Affairs Minister Chrystia Freeland told reporters. “They have a strong interest in Bombardier and I think it absolutely makes sense for us to work in close partnership, and that’s exactly what we’ve been doing.”
Canada’s ambassador to Washington, David MacNaughton, said it was the UK that approached Canada to volunteer its help. “I think the biggest help is making Boeing realize that being unreasonable and arbitrary about this is not in their best interests,” he told journalists. “The U.K. is a big buyer of Boeing aircraft and if I were Boeing, I’d be paying attention to it.”
British officials have told the Trump administration that Boeing’s actions could also end up harming the U.S. aerospace industry since more than 50 per cent of the Bombardier C-Series passenger jets are made of U.S. parts.
Other political pressure has also been applied. Trudeau on Sept. 5 phoned Eric Greitens, the governor of Missouri, to reiterate his disappointment with Boeing and point out the number of jobs in St. Louis that depend on the manufacturing of Super Hornets that Canada could purchase in the future.
Canadian defense officials have privately warned that Boeing’s actions could harm its future attempts to sell Canada refueling aircraft and additional fighter jets.
Boeing, however, says it has no intention in backing down. Company representatives argue that the Bombardier issue should not be linked to a fighter jet purchase or any other defense acquisitions.
Marc Allen, Boeing’s president of international business, said the firm believes that a level playing field is necessary in the global aerospace market. “We faced a tough decision as a company,” he acknowledged. “(But) we recognized we just couldn’t stand by. It’s very important to us that the industry as a whole get to a place where there are clear rules that everyone plays by.”
He said Bombardier is not following those rules because of the subsidies it receives from Canada.
Canada is now examining whether to buy used F-18s from Australia.
Meanwhile, Lockheed Martin says it can fill the fighter jet order with F-35s. Jack Crisler, vice president of F-35 business development, said the offer of the F-35 has been made to the Canadian government.
Crisler said the delivery of those aircraft would match the proposed delivery timetable the Canadian government had planned for the Super Hornets.