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YOW not willing to get into Bombardier bidding war

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Ottawa not willing to get into Bombardier bidding war, says Lapierre

11:46 PM EST Nov 08


MONTREAL (CP) - Federal Transport Minister Jean Lapierre reiterated Monday that Ottawa won't get into a financial bidding war as Bombardier Inc. seeks government funding to help the company build a new-generation aircraft.

"You've always got to remember this is public money and that taxpayers want us to be responsible," he told reporters at a transport conference. Several midwestern American states are reportedly courting Bombardier subsidiary Bombardier Aerospace to land its new assembly plant.

"As I said before, it's not an open bar but I understand the importance," Lapierre said. "The aeronautical industry is to Quebec what the automotive industry is to Ontario."

Montreal-based Bombardier is having discussions with the federal and Quebec governments to secure financial support for a new, larger aircraft.

The $2.1-billion US project includes provisions for $700 million in government money, $700 million from suppliers and $700 million from Bombardier itself.

Lapierre all but ruled out the possibility of Ottawa taking an equity investment in Bombardier as part of the overall economic package.

"I guess everything could be considered but, personally, that's not what we're talking about," he said.

"We're talking about repayable loans and things like that."

The government is expected to make a decision before Bombardier's Christmas deadline.

The $700 million is on top of $1.5 billion in loan guarantees that Ottawa is offering Bombardier to support the sale of regional passenger jets to Air Canada.

Despite his concerns about industry subsidies, Conservative Leader Stephen Harper said he hasn't ruled out supporting a plan to help the Quebec company.

"Our position is we are going to continue to study this thing," he said after a private meeting with the Conseil du patronant, Quebec's largest employers' group.

"We've met with officials from Bombardier. We're getting our own assessment of the merits of their request and we will see what the government actually decides upon."

The Bloc Quebecois has repeatedly pressed Ottawa to support Bombardier, which has been involved in a bitter subsidy dispute with Brazilian rival Embraer for years.

Any refusal by the Conservatives to support financial support for Bombardier risks alienating voters as the party attempts to rebuild support in the riding-rich province.

"I remain a skeptic of these kinds of policies, but we'll ultimately assess any final decision on its merits," Harper said.

The Alberta MP said he recognizes certain competitive pressures necessitate subsidies for groups, including the farm community.

Conseil du patronat president Gilles Taillon said the business lobby supports loan guarantees and research funding for Bombardier.

"I think we have to support a company like Bombardier in a way it will not cost anything for taxpayers."

© The Canadian Press, 2004

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