POLITICS

Philippe Couillard: Feds Shouldn't Let A 'Bolt' From Boeing Enter Canada Until Dispute Resolved

He wants the government to keep up a hard line against it.

09/27/2017 16:06 EDT | Updated 09/27/2017 18:59 EDT
The Canadian Press
Quebec Premier Philippe Couillard speaks during the final press conference at the Council of Federation meetings in Edmonton on July 19, 2017.

OTTAWA — The Trudeau government faced pressure Wednesday to fire back at Boeing and the Trump administration after the U.S. Commerce Department dealt a huge blow to Montreal aerospace firm Bombardier.

But the Liberals showed no signs they planned to immediately retaliate against Boeing or President Donald Trump's White House, which trade experts say is the right move to ensure the dispute doesn't go from bad to worse.

The call to arms started after the Commerce Department ruled Tuesday that Bombardier benefited from improper government subsidies and proposed a 219 per cent duty on all CSeries planes entering the U.S.

Mulcair: Feds must show 'backbone' and stand up to Boeing


The department's investigation was launched earlier this year after Boeing complained that Bombardier secured a deal for up to 125 of its CS100s with Delta Air Lines by offering the jets at below-market prices.

The penalties won't be official until the U.S. International Trade Commission rules next spring whether the deal hurt Boeing's business, but they sparked strong reactions in Quebec City and Ottawa.

Quebec Premier Philippe Couillard, whose government invested $1 billion for a 49.5 per cent stake in the CSeries line last year, blasted the ruling before urging the feds to take a harder line with Boeing.

"Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way," Couillard said.

"How could we justify doing business with a company that wants to destroy Canadian jobs in aerospace? I'm very happy Mr. Trudeau has reacted until now and I know he will continue doing the same."

Federal NDP leader Tom Mulcair was more aggressive, as he said the government needed to show it "had enough backbone to stand up to the bullying of Boeing and of the U.S. government."

They have to be very careful because let's not forget, there are a lot of Canadian companies that are suppliers to Boeing.

Others such as Jerry Dias, the head of Unifor, Canada's largest private-sector union, also suggested the time had come for a muscular response to Boeing and the White House, which supported the ruling.

Dias was largely appreciative of the federal government's efforts to date, but said: "When you start messing with us in this way, we ultimately have to retaliate. And it's right around the corner."

Yet most of those in favour of stronger action were also vague when it came to specific actions. Dias said the government needs to "think it through" before making any decision.

The government has threatened to scrap the planned purchase of 18 Super Hornet fighter jets and even bar Boeing from federal contracts to pressure the firm to drop its case against Bombardier.

But it did not appear any closer to pulling the trigger on Wednesday and a senior official told The Canadian Press on background that the government intends to keep ratcheting up pressure in other ways.

Prime Minister Justin Trudeau said Foreign Affairs Minister Chrystia Freeland raised the dispute with U.S. Trade Representative Robert Lighthizer during North American Free Trade Agreement talks in Ottawa.

Patrick Doyle / Reuters
Federal NDP leader Tom Mulcair said the government needed to show it "had enough backbone to stand up to the bullying of Boeing and of the U.S. government."

Trade experts said Canada is in a tough spot because while it has options, such as retaliating, talking to Boeing and following through with the dispute process, there is no good way forward.

While it might be tempting to engage in tit-for-tat actions against Boeing and the White House, the experts warn that could quickly escalate and ultimately cause more harm than good.

"There's no reason to respond and basically get Trump and company upset," said Patrick Leblond, a senior fellow at the Centre for International Governance Innovation. "As we know, when he gets upset, that's when he does weird and negative things.

"And to bar the company from doing business? They have to be very careful because let's not forget, there are a lot of Canadian companies that are suppliers to Boeing."

Negotiations are also unlikely to lead to a resolution, Leblond said, as Boeing seems intent on driving Bombardier out of business.

Most experts said the best course of action might be to simply hope that the U.S. International Trade Commission rules next year that Boeing was not hurt by the Bombardier-Delta deal.

"I tell you, I just find it really difficult to make a credible case that there is a genuine threat of injury from these aircraft being sold to Delta," said Daniel Pearson, who served on the commission from 2003 to 2013.

Yet there is also a slim chance that Boeing will win, which could put a stake through the heart of Bombardier and its CSeries jets.

"The problem for Trudeau and Bombardier," said Gary Hufbauer of the Peterson Institute for International Economics in Washington, "is if the ITC rules against them, that destroys the CSeries."

How could we justify doing business with a company that wants to destroy Canadian jobs in aerospace? Quebec Premier Philippe Couillard

Quebec Premier Philippe Couillard says he wants Ottawa to take a hard line against Boeing after the U.S. Department of Commerce proposed a hefty 219 per cent countervailing duty on jets manufactured by Montreal rival Bombardier.

The department's preliminary findings released Tuesday concluded Bombardier benefited from improper government subsidies, giving it an unfair advantage when selling its CSeries jets south of the border.

Couillard disagreed, saying the US$1 billion invested by the province in the CSeries program was not a subsidy and that no other investment in Bombardier was currently planned.

The company is being targeted by its larger U.S.-based aerospace rival even though Boeing has also benefited from decades of government assistance, the premier told a news conference Wednesday.

Boeing may have won this battle, but haven't won the war, he added as he urged the Trudeau government to continue taking a hard line with Boeing until the dispute can be settled for good.

"Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way," Couillard said in Quebec City.

"How could we justify doing business with a company that wants to destroy Canadian jobs in aerospace?" Couillard continued. "I'm very happy Mr. Trudeau has reacted until now and I know he will continue doing the same."

British PM 'bitterly disappointed'


Couillard said Tuesday's announcement was not a positive development in U.S.-Canada relations. Nonetheless, the Quebec government will continue to promote open markets, he said.

The U.S. workforce is also impacted by CSeries to the tune of 22,000 related jobs and an economic impact of $30 billion, he added. "To damage this will be to damage the U.S. economy."

British Prime Minister Theresa May also weighed in Wednesday on the decision, tweeting that she was "bitterly disappointed" in the finding.

She said her government "will continue to work with the company to protect vital jobs for Northern Ireland," where Bombardier employs more than 4,000 people at its factories in Belfast.

Noted Couillard: "Boeing may have created something they won't (be able to) control anymore, and they may come to regret that decision."