Eyes on Airbus mega-deal

Photo: The Canadian Press

The federal Liberals have promised to build in safeguards to make sure this week's stunning deal between Bombardier and European rival Airbus helps — and doesn't hurt — Canada's aerospace industry.

Airbus wants to buy a majority stake in Bombardier's CSeries commercial planes, whose future has been in question after U.S. officials proposed a hefty 300 per cent import duty on the jet program.

The two plane makers hope that by working together, they can skirt the duties by building CSeries planes for U.S. customers in Alabama instead of outside the U.S.

But the proposal, which still needs federal approval, has raised questions about whether it will result in job losses in Quebec, where Bombardier is based, and weaken Canada's aerospace industry.

Economic Development Minister Navdeep Bains promised Tuesday that the Trudeau government would require several long-term promises from Airbus before signing off on the deal.

Sources say those undertakings were negotiated in advance by the government and Airbus, and include keeping 100 per cent of those employed at Bombardier's main CSeries assembly plant in Mirabel, Que.

Airbus would also keep and even expand production at the Mirabel plant, which is currently running under capacity, while also adding an assembly line in Alabama to meet demand from U.S. customers.

Canada will also become the company's fifth "home base," and first outside Europe, to allow Canadian industry to tap into the company's supply chain, while the CSeries headquarters will remain in Quebec.

The European company will also take over repayment of the federal government's $372-million loan to Bombardier for research and development of the 100- to 150-seat commercial planes.

Bains said the government was looking for "long-term production guarantees in Canada" that would run "at least a minimum of 20 to 25 years," though an official said that was still to be negotiated.

The minister was more guarded about employment levels, though he hoped the deal result in thousands of CSeries planes being ordered and built in Montreal.

"We think the potential sales opportunity in this segment is up to 6,000 over the next 20 to 25 years," he said.

"So that means there'll be stable, predictable production opportunities in the Mirabel facility ... and that means more jobs, up to 5,000 jobs in that facility."