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Don't Dismiss Support For Bombardier As 'Corporate Welfare'

03/16/2016 04:52 EDT | Updated 03/17/2017 05:12 EDT
DR

Less than a week before the federal budget comes down, in which Canadians will see how their new Liberal government will fulfill its promise to create good jobs and rebuild the middle class, it is worth looking at support for the aerospace industry.

That's because aerospace needs to be a key part of any such effort.

As debate about federal support for the biggest player in Canada's aerospace industry, Bombardier, has heated up over the last few months, critics have come forward to say that investing in Bombardier would be a mistake, and that the company should be left to sink or swim on its own.

They couldn't be more wrong.

For one thing, Bombardier is one of Canada's largest single employers, with more than 24,000 workers across Canada in all its divisions. And those jobs create other jobs -- from the suppliers Bombardier uses for its plants, to the spending habits of its well-paid workers.

At a ratio of 2.6 jobs created for every one job at the company, there are some 64,800 jobs supported by Bombardier, either directly or indirectly.

As well, Bombardier is a leader in research and innovation -- not only in Canada, but around the world. For a government that has put a strong emphasis on innovation -- even changing the name of the Industry Ministry to "Innovation, Science and Economic Development" -- it only makes sense to support Canada's leader in aerospace research.

For critics to dismiss support for Bombardier as corporate welfare is destructive to an industry that has made Canada a world leader in research and innovation, and provides tens of thousands of good jobs.

The CSeries jet, for instance, represents a major advance in aviation technology. Not only is it Bombardier's first entrance in the lucrative single-aisle commercial aircraft segment -- putting it in the same market as the Boeing 737 and Airbus 319 -- but it is an innovative airliner that uses 20 per cent less fuel.

As such, the CSeries ticks off a few important boxes on the Liberal government's agenda: the research required to develop the plane is in line with the government's desire to see innovation drive the Canadian economy, and the fuel efficiency lines up with its pledge to develop the green economy.

The CSeries is just now moving from design to production. This is where the real job growth is as production jobs are created to meet growing orders for the new airliner. The jobs created won't just be at Bombardier, but also at the suppliers across Canada that Bombardier will rely on to produce the CSeries.

Already more than 200 suppliers are involved with the CSeries project, which means that supporting Bombardier means supporting jobs across Canada at companies that rely on the new airliner for their business.

In the globally competitive aerospace industry, there are some stark realities that must be faced. None more so than the reality that governments around the world support aerospace directly or indirectly:

  • Boeing, Bombardier's main competitor, gets support from the U.S. government in many forms, including NASA, defence contracts and the transfer of research from government institutions.

  • The European Union supports Airbus with aid and loans, plus access to research from both France and Germany. As well, France, Germany and Spain each own a portion of the company, so directly benefit from the investments they make.

  • Brazil provides preferential loans to Embraer, as well as infrastructure concessions, a small government stake in the company and defence contracts.

  • Japan provides direct government support to Mitsubishi Heavy Industries, as well as royalty based launch aid.

  • The Russian company Sukhoi is 100 per cent state-owned and operated.

  • China has emerged as a fierce competitor with COMAC, also a 100 per cent state-owned company.

Governments provide that support because they recognize the sector's importance to innovation and job creation.

For critics to dismiss support for Bombardier as corporate welfare is not only naïve, but destructive to an industry that has made Canada a world leader in research and innovation, and provides tens of thousands of good jobs from Gander to Vancouver.

Let's hope the federal government recognizes that fact in its budget next week.

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