-- 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 announcement from International Trade Minister Pierre Pettigrew (in concert with Industry Minister Brian Tobin) that the Government of Canada will offer up to a US $1.2 billion loan to Northwest Airlines to purchase 75 CRJ440 aircraft, a variant on Bombardier's popular 50-seat CRJ200 aircraft.

According to a news release from Bombardier, the total value of this contract with Northwest is estimated at US $1.68 billion.

Canadian aerospace giant Bombardier is competing against Embraer SA of Brazil to secure contracts from airlines around the world in the competitive regional jet market. Governments from both countries have elevated this trade war at the World Trade Organizations (WTO) accusing each other of engaging in illegal state-sponsored export financing and subsidy schemes.

"Why should individual entrepreneurs in Halifax or a small company in Calgary continue to subsidize deep pocketed - not to mention hugely successful - transnational corporations such as Bombardier " asked CTF federal director Walter Robinson.

"The Canadian government should instead be advocating for a level, subsidy-free international playing field, so Canadian companies can compete on price, quality, superior product design and unparalleled service agreements," Robinson added. "Using the leverage of government financing deals to secure competitive advantage does not serve Canada's long-term economic interests."

"To be fair, we may indeed be able to fight a short-term subsidy war with the Brazilians. But in the larger context and the longer term such a strategy does not help Canada in its trade wars with the United States or the Europeans in other fields of international procurement and competition," added Robinson. "The Canadian government is engaging in chequebook competition instead of rewriting the rules to once and for all close subsidy banks around the world."