Pratt & Whitney starts $1B R&D project

Pratt & Whitney is starting a $1-billion project to develop lighter aircraft engines with more power, better fuel consumption and improved durability.

Ottawa contributes $300M as 'repayable investment'

Pratt & Whitney is starting a $1-billion project to develop lighter aircraft engines with more power, better fuel consumption and improved durability, backed by a $300 million federal loan.

The project is expected to "create and maintain an average of more than 700 highly skilled jobs during the project work phase and more than 2,000 jobs during the 15-year benefits phase," the federal government said in a news release Monday.

A company spokeswoman, however, said just 200 new jobs will be created, while the rest will be "maintained." It wasn't immediately clear whether some of the remaining 500 jobs might have otherwise disappeared. Pratt & Whitney laid off employees last year because of weak markets.

Ottawa is putting up $300 million as a "repayable investment," said John Saabas, president of Pratt & Whitney Canada. The CBC's Hannah Thibedeau reported that the repayment terms and interest rate are private. 

The money will be used to improve the company's civil and military aircraft engines, Industry Minister Tony Clement said. That will include parts for the F-35 engine, Saabas said.

The F-35 is the new jet fighter the federal government is buying in a $9-billion deal. Pratt & Whitney is supplying the engines for the Lockheed Martin planes.

The project's R&D work will be done in Longueuil, Que., and Mississauga, Ont., where Clement and Saabas announced the project and the government's support.

About 200 engineers will be hired, half in each plant.

The federal contribution will come from Industry Canada's Strategic Aerospace and Defence Initiative. The program provides about 30 per cent of a project's eligible costs, based on the minimum amount of government help it needs to go ahead.

Program initiatives also have to benefit the country. Clement said the project "will create and maintain Canadian research jobs, encourage public and private partnerships, and keep Canada at the forefront of the international aerospace industry."

Pratt & Whitney is a division of U.S.-based United Technologies Corp.