STEVEN CHASE AND NICOLAS VAN PRAET
OTTAWA and MONTREAL — The Globe and Mail
Published Thursday, Jun. 01, 2017 11:43AM EDT
Last updated Thursday, Jun. 01, 2017 7:57PM
EDT
The Trudeau government has suspended
negotiations with Boeing Co. to purchase fighter planes as it continues to play
hardball with the Chicago company over a U.S. trade complaint the firm lodged
against Montreal aircraft maker Bombardier Inc.
Steven MacKinnon, parliamentary secretary to
Public Services and Procurement Minister Judy Foote, announced Thursday that
Canada has paused talks with Boeing as the dispute shows no signs of winding
down.
The Liberals have long planned to buy 18
Boeing Super Hornet jet fighters to fill what they say is a gap in Royal
Canadian Air Force capabilities while Ottawa deliberates on a longer-term plan
to replace this country’s aging CF-18 warplanes.
“We have a capability gap, we outlined a
process, our partner in that process is not acting like a valued partner right
now, so we’ve suspended discussions with that partner,” Mr. MacKinnon told
reporters after a speech at the CANSEC arms fair in Ottawa, sponsored by the
Canadian Association of Defence and Security Industries.
There have been no meetings between the
Trudeau Liberals and Boeing since the company first threatened to jettison the
contract, a person familiar with the matter told The Globe and Mail.
Scott Day, a spokesman for Boeing, said
direct communication is important but the company would not necessarily be
communicating regularly with the Canadian government on the Super Hornet
purchase in any case because it is a government-to-government transaction.
“There are different avenues to get to a
foreign military sale,” Mr. Day said. “Sometimes, the contractor is involved in
those sale purchases and sometimes they’re not.”
Mr. Day said Boeing continues to work with
the U.S. Navy, its American government partner, on concluding the sale to
Canada. “We’ve not been told to stop producing materials for the Navy,” Mr. Day
said. “We’re happy to answer questions when the government of Canada has them for
us.”
News of the impasse comes one day after
Canada’s Defence Minister doubled down on Ottawa’s threat to jettison the
multibillion-dollar purchase if Boeing doesn’t withdraw a complaint with U.S.
trade regulators that could lead to duties being slapped on Bombardier planes.
Harjit Sajjan suggested in a speech Wednesday that Boeing – which has benefited
from billions of dollars of sales to Canada over the decades – is not behaving
like a “trusted partner” of Canada.
On Thursday, Boeing cancelled an announcement
it was going to make about the Super Hornet jets at the arms fair in Ottawa.
The plane maker was set to provide details about Canadian-based suppliers
benefiting if the contract was finalized, but scrapped the announcement “due to
the current climate,” it said in a statement. Boeing has roughly 560 aerospace
suppliers in Canada and says its commitment to the country remains unwavering.
In May, the U.S. Department of Commerce
announced it will investigate accusations from Boeing that sales of Bombardier’s
new C Series jetliner constitute dumping into the U.S. market at “absurdly low
prices,” because the plane is subsidized by the Canadian and Quebec
governments.
The Department of Commerce and the U.S.
International Trade Commission are probing the allegations. A preliminary
determination on Boeing’s petition is expected by June 12.
In a written response to Mr. Sajjan’s speech
Wednesday, Boeing offered no indication that it was considering backing down on
its trade complaint against Bombardier. The company said its complaint is a
commercial matter that it is seeking to address through proper channels.
Canada’s initial purchase of these Super
Hornets could cost $2-billion, but their maintenance, support and upgrades
could cost as much as $10-billion over the full period of their use. That could
mean billions of dollars more in parts and support for Boeing beyond the
initial capital investment.
Original post: theglobeandmail.com
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