Canada's dispute with Brazil over subsidies for regional aircraft has delayed talks with Bombardier on government funding support to develop the proposed BRJ-X 90/110-seat regional airliner.
The Canadian Government is appealing against a World Trade Organisation (WTO) ruling that its Technology Partnerships Canada (TPC) programme constitutes an export subsidy. "We will not discuss [funding for] the BRJ-X until the WTO rules on TPC," says Bombardier Regional Aircraft president Robert Gillespie.
The Canadian manufacturer received C$84 million ($57 million) from TPC towards developing its 70-seat Canadair Regional Jet Series 700. This constituted about 25% of Bombardier's share of the C$650 million development cost, with risk-sharing partners supplying the rest.
Development of the BRJ-X-90 and the larger BRJ-X-110 would cost about C$1.2 billion, says Gillespie. About half is expected to come from risk-sharing partners. "The BRJ-X is a big investment for the company," he says. "We are confident the Government will -continue its support."
TPC provides funding for product development by repayable loans. Because repayment as a royalty on sales depends on the product's success, the WTO ruled that the programme is an export subsidy. Canada appealed against the decision, but will modify the programme if necessary to make it WTO-compliant.
Source: Flight International