CTF Asks Why Canada Continues to Play A Costly Game of Chicken With Brazil At Taxpayer Expense

OTTAWA: The Canadian Taxpayers Federation (CTF) today reacted to the joint announcement from Industry Minister Brian Tobin and International Trade Minister Pierre Pettigrew that the Government of Canada will offer an estimated $300 million in loan guarantees through the Export Development Corporation (EDC) Canada Account, to an American company, Air Wisconsin Airlines.

Currently Canadian aerospace giant Bombardier is competing against Embraer SA of Brazil to secure a lucrative contract from Air Wisconsin Airlines for 75 regional jets with an option to buy 75 more, valued by industry watchers at $3 billion. To be fair, the Brazilian government sponsored Pro-Ex program currently could favour the awarding of the contract to Embraer SA.

"Why should individual taxpayers in Halifax or a small company in Calgary continue to subsidize deep pocketed transnational corporations such as Bombardier " asked CTF federal director Walter Robinson.

"This type of corporate welfare can not continue each time a Canadian company competes in the field of international procurement. Our successive reports on federal government assistance to industry point to dismal repayment records and with respect to Bombardier in particular, their own website reveals a recent record of success in winning contracts for its jets worldwide," added Robinson.

"Canadian companies should be striving to compete on price, quality, superior products and unparalleled service agreements as opposed to leveraging government financing deals as their primary and sometimes sole source of competitive advantage," added Robinson.

Mr. Robinson also lamented that today's decision sets the tone for things to come from the Industry Minister. "In his first major decision as Industry Minister, Brian Tobin has perpetuated the 19th century practice of trade subsidization and is only continuing the game of subsidy chicken between Brazil and Canada. More in sadness than in anger, we had higher hopes that the Minister would bring a 21st century approach to his portfolio. Ultimately it is taxpayers that lose when decisions such as today's are taken."