U.S. trade commission will proceed with Bombardier investigation

The U.S. International Trade Commission has voted to continue its investigation into the trade practices of Bombardier Inc.

U.S. company wants anti-dumping and countervailing duties against Bombardier's passenger aircraft

Bombardier's efforts to find a major U.S. airline to purchase its CSeries jets drew a complaint from U.S. rival Boeing that the Canadian planes were unfairly subsidized. (Ryan Remiorz/Canadian Press)

The U.S. International Trade Commission has voted to continue its investigation into the trade practices of Bombardier Inc.

"There is a reasonable indication that a U.S. industry is threatened with material injury by reason of imports of 100- to 150-seat large civil aircraft from Canada that are allegedly subsidized and sold in the United States at less than fair value," a release from the commission said.

Boeing, Bombardier's rival, filed a petition with the USITC in April asking it to consider anti-dumping and countervailing duties against the Canadian company's CSeries passenger aircraft.

The unanimous decision by the five commissioners follows hearings last month. A report on the ITC's finding of injury will be made public after July 10.

Friday's vote means a separate investigation by the U.S. Commerce Department will continue. 

A preliminary determination on countervailing duties is expected on or about July 21. A decision on anti-dumping duties will follow in early October. This chain of decisions leads to a final levy set against the Canadian aircraft.

Boeing is calling for countervailing duties of 79.41 per cent and anti-dumping duties of 79.82 per cent.

The U.S. company accuses Bombardier of running "an aggressive campaign" to dump its civilian aircraft in the U.S.

'Without merit'

In its search for a major American airline to purchase its new plane, Bombardier is alleged to have set its pricing below cost to squeeze out competitors.

But Bombardier does not believe its aircraft compete with Boeing's 737 planes. Instead, this action is seen as an attempt to block the CSeries from the U.S. market.

"Today's preliminary decision was expected given the very low bar for Boeing in this first step of the process," spokesman Simon Letendre wrote in an email to The Canadian Press.

"Going forward, we are confident that a detailed review and analysis of the facts will demonstrate that Boeing's claim is without merit."

Foreign Affairs Chrystia Freeland announced last month that the Canadian government is reviewing its procurement contracts with Boeing in light of the U.S. company's trade complaint against Bombardier. (Adrian Wyld/The Canadian Press)

"The U.S. has its own process and they're going through the process," Foreign Affairs Minister Chrystia Freeland said Friday in an interview with CBC Radio's The House

"We absolutely reject this complaint. We think it is absolutely groundless."

Controversial government support

In February, the federal government announced a loan package for Bombardier's aircraft worth over $370 million.

Last year, the Quebec government invested $1 billion US in the CSeries program in exchange for a 49.5 per cent stake.

In the face of this trade action, Canadian military and federal government officials have suspended discussions with Boeing on a previously announced "urgent" purchase of 18 Super Hornet fighter jets to fulfil what the Liberals called a "capability gap" in its military fleet.

After hearings on the Bombardier complaint at the U.S. Commerce Department last month, Freeland said Canada would defend its aerospace industry and review its military purchases from Boeing.

She repeated Friday that future government procurement from Boeing is under review.

"We've also pointed out to our U.S. partners that the aerospace industry in Canada and the United States is a highly integrated industry that supports jobs on both sides of the border," she said.

Her office told CBC News that components for the CSeries are supplied by American companies from Connecticut, Florida, New Jersey, Washington, New York, Ohio, Iowa, Kansas, Pennsylvania and Colorado.

Boeing spokesman Dan Curran said the aerospace giant values Canada as a customer and partner for its commercial and defence businesses.

"It's a relationship that has existed since 1919 and that will continue to thrive long after this commercial trade matter is resolved," he wrote to The Canadian Press in an email.

With files from The Canadian Press