Looking To Add To Its Aerospace Edge

Quebec is not getting enough of the deal, contend that province's aerospace industry leaders, who have denounced their government's handling of a (US) $2.9 billion deal to purchase military cargo planes.

"We, as an industry, are so strong, we need to protect ourselves," said Sue Dabrowksi, general manager of the Quebec Aerospace Association (AQA). "And if the Canadian government isn't going to help us do that we're going to do it on our own."

Under the agreement announced Friday and reported by ANN, U.S.-based Boeing will supply the military four C-17 Globemaster III transport planes [other story for today]. Although they will be built in the US, Boeing pledges to spend an amount equal to the purchase price on Canadian projects.

With nearly two-thirds of Canada's aerospace companies located in Quebec (see chart below), advocates havae lobbied intensely to get the government to guarantee that 55-60 percent of the economic spinoffs from the deal come to Quebec.

Unsubstantiated rumors allege the deal was delayed by almost two months as Manitoba and Quebec fought for larger shares of the spinoff subcontracts, known as industrial regional benefits, or IRBs. According to reports from the Candaian Broadcasting Corporation, CBC, Quebec is expected to get only about 30 per cent of the value of the contract in spinoffs.

The government said Friday, however, that it was leaving the allocation of the subcontracts up to Boeing. Boeing is expected to announce in the next few weeks how it will distribute the spinoff contracts across Canada.

Industry Minister Maxime Bernier would not give the percentage or which projects would go to Quebec versus aerospace companies in Western and Atlantic Canada. He only said, "This will benefit Canadian companies coast to coast."

Quebec Association of Chambers of Commerce's Bernard Hogue asserts that's not good enough.

"Canada has an industrial policy and we are a sovereign country, so we think that the Canadian government could ask Boeing to do a little more for Quebec," he said. AQA's Dabrowksi said the industry would try to convince Boeing to spend big in Quebec.

Dabrowksi and Hogues point to actions taken by the government to protect the automotive industry in Ontario and the forestry industry in British Columbia.

They said they don't understand why Ottawa isn't willing to do the same for the aerospace industry in Quebec.

"It seems obvious that Quebec should benefit in a substantial way," Quebec Premier Jean Charest told Radio-Canada Friday. "They [the government] have the responsibility to make sure that it has an impact on jobs, [and] on the economy in Quebec," Parti Québécois finance critic Francois Legault told CBC News.

Manitoba Premier Gary Doer said Friday he already knows there is good news for his province in the deal.

"What does that mean for Manitoba? It will mean that Boeing, over the next period of time, will go from 1,200 good-paying jobs at the Boeing plant here in Winnipeg, to 1,400 good-paying jobs in this province," he said.

"It will last for a long period of time because of the length of the contract and the length of the offsets. So we're very pleased about that."

Canada either rents big planes commercially or seeks help from allies, often the United States Air Force, for the transportation of heavy military equipment.

The high-wing, 4-engine, multi-service C-17 military-transport aircraft can carry large equipment, supplies and troops directly to small airfields in harsh terrain. The massive, sturdy, long-haul aircraft has delivered cargo in every worldwide operation since the 1990s.

The first of the four planes is expected to be delivered to Canada by the end of August.

FMI: www.aqa.ca,  http://iar-ira.nrc-cnrc.gc.ca