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19 May 2017, 11:43 | Jan Cross
A Bombardier CS300 jet
Canada's government warned Thursday it could cancel a planned US$2 billion purchase of 18 Super Hornet fighter jets from Boeing Co. because of U.S. Department of Commerce anti-dumping investigations against Canadian plane maker Bombardier.
US jet maker Boeing alleged this week that the Canadian government is unfairly subsidizing its CSeries jets, which allows the company to sell them at below-market prices.
In the wake of the decision by the Department of Commerce to initiate an investigation targeting Bombardier's C Series aircraft program, Caisse de dépôt et placement du Québec (CDPQ) will prove conclusively that its investments in the company were always done on commercial terms.
Foreign Minister Chrystia Freeland issued the threat in a statement about Boeing's complaint against Bombardier.
Canada unveiled plans to buy the Super Hornets last November as a stop-gap measure while it prepared an open five-year competition to replace its ageing fleet of 77 Boeing CF-18 fighter jets. "Boeing consistently places substantial amounts of commercial and defense work in Canada and has a supply chain across all regions", Scott Day said by email Thursday evening, noting "our partnership dates back to 1919".
Freeland said Boeing's petition is "clearly aimed at blocking Bombardier's new aircraft, the CSeries aircraft, from entering the USA market". A preliminary determination on the petition is expected by June 12.
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"Our government will defend the interests of Bombardier, the Canadian aerospace industry, and our aerospace workers", Freeland's statement read. But Bombardier won a 75-plane order for the CSeries from USA -based Delta Air Lines in 2016.
If the ITC determines there is a threat of injury to the US industry, preliminary countervailing duties could be announced in July, followed in October by preliminary anti-dumping duties, unless the deadlines are extended. She also hinted that Ottawa might take action against the United States company.
According to The Canadian Press, Boeing is calling for countervailing duties of 79.41 per cent and anti-dumping charges of 79.82 per cent if authorities uphold its complaint. Bombardier said its planes never competed with Boeing in the sale to Delta.
Bombardier said last month it worked to ensure compliance with the laws of countries where it operates and spent about US$3 billion annually with American suppliers.
Bombardier lawyer Peter Lichtenbaum said the plaintiff is a global powerhouse that hasn't lost any sales as a result of Bombardier, has an enviable order backlog and doesn't even compete with Bombardier in the sales campaigns it has complained about because the CSeries is smaller than Boeing's 737-800 and Max 8 planes.
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